Sitting of 21 October 1985

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  DEATH OF A MEMBER
  Mr. Speaker: I regret to have to inform the House of the death of Harry Lowes Cowans, esquire, Member for Tyne Bridge, and I desire, on behalf of the House, to express our sense of the loss that we have sustained and our sympathy with the relatives of the hon. Member.
Oral Answers to Questions
  WALES

    Labour Statistics
    Mrs. Clwydasked the Secretary of State for Wales if he will make a statement on the unemployment figures for the Cynon Valley.
    The Secretary of State for Wales (Mr. Nicholas Edwards): The number of unemployed in the hon. Lady's constituency was 4,483 in September 1985. Reductions in unemployment in the Cynon Valley, as elsewhere in Wales, must be tackled by policies for promoting sustained growth without inflation and attracting new industry and enterprise. As the hon. Lady may be aware, my office has written to the chief executive of the Cynon Valley borough council giving details of the substantial activities by my Department and Government agencies in support of these aims.
    Mrs. Clwyd: Does the Secretary of State agree that the recent evidence of massive incompetence at the highest levels in the Welsh Office and the Welsh Development Agency in relation to the Parrot Corporation will have massive implications for the attraction of jobs to Wales and the Cynon Valley, and will he please make a statement?
    Mr. Edwards: I have no evidence of massive incompetence of the kind described, but I know that very considerable effort was made by the agency and by the chairman of the company to put together a refinancing package, which I approved. I have every confidence that this will give the company the prospects of a very good future, which I hope will provide jobs and lead to a successful operation.
    Mr. Coleman: In view of the television programme one evening last week concerning the Parrot Corporation, does not the right hon. Gentleman think that it is incumbent on him to make a statement to the House so that the misunderstandings, perhaps, which arose from that programme can be cleared up?
    Mr. Edwards: There is a parliamentary question on the Order Paper for answer later today, and I am very happy to answer questions.
    Mr. Barry Jones: I hope that the right hon. Gentleman will make a statement about the Parrot Corporation, as we wish to hear him. With regard to the valley communities, is the right hon. Gentleman aware that all the valleys of south-east Wales are now very much at risk both socially and economically? May I tell him that on a recent visit to the Cynon Valley I was shown by an able and determined council some of the mountainous problems faced there, especially in housing? Does the right hon. Gentleman agree that by investing in more housing repair activities in the Cynon Valley he could most quickly create many new jobs? Will he give the money to the council for that type of campaign?
    Mr. Edwards: I am glad to say that the local authority is just undertaking its first enveloping scheme, which we have been encouraging it to undertake in the valley. That is part of a very large package of measures which I listed

    3
    in my letter to the Cynon Valley borough council. The chief executive acknowledges in his reply that he is aware of many of the encouraging points that I made in my letter and, indeed, associates his authority with the efforts that are being made.
    Mr. Roy Hughesasked the Secretary of State for Wales what are the latest figures for unemployment in (a) Newport, (b) Gwent and (c) Wales; what were the equivalent figures in May 1979; and what is the percentage increase in each case.
    Mr. Nicholas Edwards: On 12 September 1985 the numbers of unemployed claimants were 13,587, 30,637 and 187,563 respectively. The estimated equivalent figure for Wales in May 1979 is 77,200. On that basis, the increase to date for Wales is 143 per cent. Comparable figures for May 1979 for the Newport travel-to-work area and Gwent are not available because of the move to claimant-based figures and changes to travel-to-work-area boundaries.
    Mr. Hughes: Bearing in mind those deplorable figures, does the Secretary of State appreciate the fresh consternation that has been caused in Wales over the Parrot Corporation affair, which is hardly likely to encourage new investment? When will the right hon. Gentleman face up to his departmental responsibilities and make a full public statement?
    Mr. Edwards: It is a matter for encouragement that, faced by difficulties as a result of police investigations, it has been possible for the public and private sectors to put together a substantial package of refinancing. Through that package, they will go forward together to secure the future of a company that has been attracted to south Wales if every effort is not made by the hon. Member for Newport, East (Mr. Hughes) and his hon. Friends to denigrate and cast doubt on it.
    Mr. Geraint Howells: Assuming that the figures given by the Secretary of State are correct — I am not disputing them — another 20,000 people will be made redundant in south Wales during the next 12 months. What advice has the right hon. Gentleman given the Prime Minister to the effect that she must change her policies if unemployment is to be reduced in the next five years?
    Mr. Edwards: Without understating the seriousness of the problem, when the hon. Gentleman talks about redundancies he should talk also about the substantial series of announcements made during the recess about new investment in the steel industry, and in companies that were previously threatened, such as Borg-Warner, in some of the new technology companies, in the massive redevelopment of south Cardiff, in the new package for Courtaulds in Deeside, and in many more projects. New jobs are being created and New industries and activities are being brought into existence.
    Mr. Abse: The Secretary of State explained to my hon. Friends the Members for Cynon Valley (Mrs. Clwyd) and for Newport, East (Mr. Hughes), both of whom asked about the Parrot Corporation, that he has been picking up the pieces in an endeavour to help my constituency, but why did he not answer the question that they both asked him? Why does he not make a statement, as the matter is not sub judice and the right hon. Gentleman replies to me by saying that there are police inquiries? Why does he permit the Welsh Development Agency to make as many
    4
    statements as it wishes to the press and television, while he remains silent? Why does he not acknowledge the doctrine of ministerial responsibility, come to the House and tell us what his guilt is?
    Mr. Edwards: Here I am, on the first day back, answering freely questions put to me in the House of Commons, which is appropriate. I have answered, first, questions about refinancing. I am glad that the hon. Gentleman inferred that one of my priorities, perhaps the first, was to secure the future of the company and the jobs at stake. My other priority was to ensure that the police undertook the appropriate action in this case and that their investigation was not hampered. I have decided that there should also be an internal investigation to be carried out by an independent person into the handling of the original investment by the WDA, and its subsequent monitoring of that investment. I shall report further to the House on the details of this inquiry as soon as possible. I cannot report to the House on matters that are still the subject of a police inquiry, nor on matters which, because of that inquiry, I have not been able to investigate fully.
    Mr. Sayeed: Does my right hon. Friend believe that the Labour party's proposal for a national investment bank will do anything to ease long-term unemployment in Wales?
    Mr. Edwards: No, I do not, but my right hon. Friend the Chancellor of the Exchequer was right to talk about investment, whether undertaken by public or private bodies, and to say that no system of supervision can be proof against deliberate fraud. Therefore, we must ensure that where there is fraud it is uncovered in a timely fashion and that evidence is acted on expeditiously.
    If the possibility existed, I am sure that we were right to ensure that the police carried out investigations and that we did not interfere with those investigations. I am equally sure that it was absolutely right for the agency, the Welsh Office and the substantial private sector investors involved in this case to put together a package, as that proved possible, to secure the future of the company.
    Dr. Marek: By how much will the unemployment figures increase if the new cuts at the Welsh plant breeding station take place and if the Ministry of Agriculture, Fisheries and Food cuts at Cardiff and Bangor take place?
    Mr. Edwards: I am not prepared to give estimates of future unemployment, but I am certain that the Welsh plant breeding station will continue to play a very important role in agricultural research programmes. It has a vital role to play in the research programmes on the western grasslands and uplands generally, not just those in Wales
    Mr. Raffan: Will my right hon. Friend remind the Opposition that last year Wales obtained nearly one-quarter of the jobs created by inward investment into the United Kingdom — four times as many jobs as the Opposition achieved during their last year in office?
    Mr. Edwards: I am very glad to be able to tell my hon. Friend that the Winvest record is 150 new and expansion projects, which will create 1,100 new jobs and safeguard about 5,600 existing jobs. The Government have a very good record in this respect.
    Mr. Barry Jones: Will the right hon. Gentleman tell us more about the inquiry that he is initiating and who

    5
    might head it? At the appropriate time, does he think that the issue should go before the Public Accounts Committee?
    Mr. Edwards: I am quite certain that the issue will go before the Public Accounts Committee and that the Committee will wish to look at it. That has never been in question. As soon as details of the inquiry have been decided, including the name of the person who is to conduct it, I shall inform the House. We are still discussing with the Treasury the precise details of the inquiry. I am therefore not in a position to give the hon. Gentleman that information this afternoon.

    NHS Staff (Pay)
    Sir Anthony Meyerasked the Secretary of State for Wales what discussions he has had during the summer Adjournment with the chairmen of Welsh health authorities regarding the funding of pay increases for National Health Service staff in Wales.
    The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): My right hon. Friend met chairmen to discuss this and other matters on 26 July, the day on which the House adjourned.
    Sir Anthony Meyer: May I take this opportunity to congratulate my hon. Friend on his very well-merited appointment?
    Is he aware that if local health authorities are obliged to fund nationally-agreed pay increases out of budgets which were not prepared in expectation of those increases. their ability to maintain their level of services may be impaired, including the provision of matching finance for projects for which large sums of money have been raised by local effort?
    Mr. Robinson: My right hon. Friend the Secretary of State for Wales discussed this when he met the chairmen of health authorities on 26 July. It was agreed that health authorities could manage for the year 1985–86 within the resources available to them. Of course we recognise the difficulties when health authorities have to accept pay rises that are higher than those for which they budgeted. My right hon. Friend will continue to keep the matter under review, especially during the current public expenditure round. It would be wrong of me to look forward to 1986–87 while those discussions are taking place.
    Mr. Wigley: I too, welcome the Under-Secretary of State to his new and onerous responsibilities. I hope that he will have an enjoyable, though brief, spell in the Welsh Office.
    Will the hon. Gentleman give an assurance that the meetings that had to be cancelled because of the change in ministerial responsibility, which had been arranged by his hon. Friend the Member for Conwy (Mr. Roberts), will be reconvened as rapidly as possible, in particular the meeting with the Gwynedd health authority to discuss the financial position in Gwynedd arising from the impact of wage increases not being fully funded? Will he ensure that no decisions are taken in Gwynedd until that meeting has taken place and an opportunity has arisen for him to appreciate the full impact of the situation in Gwynedd?
    Mr. Robinson: I thank the hon. Gentleman and my hon. Friend for their kind remarks in prefacing their questions. In response to the point raised by the hon. Gentleman, I am conscious that my hon. Friend the
    6
    Member for Conwy (Mr. Roberts) was due to have a series of meetings with the health authorities. We plan to go ahead with those meetings. As for any changes that may be made to the services in Gwynedd, this is a matter for that health authority to decide. I am prepared at that meeting to discuss with it any issues that may arise.
    Mr. Best: May I also congratulate my hon. Friend and wish him success in his new job? He will receive much personal support from his right hon. and hon. Friends.
    Is my hon. Friend aware that the National Health Service staff pay problem has put particular strain on the new hospital at Ysbyty, Gwynedd? Although that hospital provides facilities in excess of those provided previously. does he accept that when facilities are provided the public do not understand why they cannot be used to their full potential?
    Mr. Robinson: We are aware of the difficulties caused by the pay settlement. However, the issue must be seen against the background of increases in resources for the health authorities. The real growth in resources for Gwynedd between 1978–79 and 1984–85 was about 30 percent.
    Mr. Allan Rogers: May I also congratulate the hon. Gentleman on his appointment?
    Does the hon. Gentleman acknowledge that pay increases for nurses in south Wales can be achieved only if major cuts are made in the Health Service and in facilities for patients? Is it not hypocritical of the Government to suggest that they are making extra money available when they are not even funding the full pay review award originally granted to nurses?
    Mr. Robinson: Following the meeting with the chairmen of the health authorities it was made clear that the increases could be absorbed in the current year without making the changes to which the hon. Gentleman refers

    Council House Sales
    Mr. Knoxasked the Secretary of State for Wales how many council houses have been sold to sitting tenants in Wales since May 1979.
    Mr. Mark Robinson: About 43,568 council dwellings were sold to sitting tenants in Wales between May 1979 and 30 June 1985. In addition, 2,538 dwellings were sold by the Cwmbran development corporation and Mid-Wales Development.
    Mr. Knox: How many complaints about delays in dealing with applications to buy have been made by tenants in the past 12 months?
    Mr. Robinson: Only eight complaints about delay have been received in the past 12 months. Instances of delay are far fewer now than in the initial period following the introduction of the right-to-buy scheme. We look into each individual case that is brought to our attention. We believe that the system is working satisfactorily and we are pleased with the way in which local authorities are operating it.
    Mr. Anderson: Is the Minister aware of the report by the chief housing officer for Wales in which he says that we need to spend £3,000 million in the next 15 years if existing council stock is not to slip into slumdom? Would that not be a better priority for the Government than their obsession with the sale of council houses?
    Mr. Robinson: I have seen the chief housing officer's report and newspaper reports on the subject. Between

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    1979 and 1984 the Government spent £34 million annually on repairs to public sector housing compared with £17 million during the period in which the last Labour Government were in power. In the private sector we spent £46 million compared with £12 million spent when the Labour party was in office.
    Mr. Best: Does my hon. Friend accept that receipts from council house sales should be used to fund further building and urgent repairs?
    Mr. Robinson: As my hon. Friend knows, the receipts can be applied to many purposes. The Government are restricting the amount that can be used in the current year to 15 per cent. Local authorities are, however, able to make use of other receipts in terms of their borrowing requirement. That is also important.
    Mr. Roy Hughes: I add my congratulations to the hon. Member for Newport, West (Mr. Robinson), but remind him that after the next general election he is likely to be looking for greener pastures.
    May I take this opportunity to remind the hon. Gentleman of the terrible housing crisis that is developing in Wales? This is happening at a time when thousands of our building and construction workers are standing in the dole queues and when building materials are stacked in builders yards. Selling council houses is no substitute for building houses.
    Mr. Robinson: I thank the hon. Gentleman for his kind remarks about my appointment. I remind him that there is another marginal seat in Newport, and we are looking forward to an exciting battle there.
    On his point about housing stock, I must tell him that the sale of council houses in no way diminishes housing stock.

    Secondary Schoolchildren
    Mr. Gristasked the Secretary of State for Wales if he will give the numbers of 15-year-olds attending state secondary schools in Wales in 1981 to 1985. and the estimate for 1989, respectively.
    The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): With permission, I shall publish the figures for each year from 1981 to 1985 in the Official Report.
    In January 1981 there were 44,659 pupils aged 15 in maintained secondary schools in Wales, and at January 1985, 42,836. The estimate for 1989 is about 36,000.
    Mr. Grist: Does my hon. Friend agree that as those figures are no secret and have been known for a long time, quite a number of local authorities—including my local authority of South Glamorgan—have seriously failed to consider the merging of schools to enable the provision of a more varied range of subjects and more funding to be spent on teaching and less on mortar and bricks?
    Mr. Roberts: My hon. Friend is quite right. It is, of course, the responsibility of each local education authority to secure the best educational provision for children in the most cost-effective way. In 1981 we advised local education authorities to take account in their planning of the declining trend in pupil numbers, when we recommended that two out of every five surplus school places should be taken out of use by 1986.
    Mr. Alex Carlile: Is the Minister aware of the very poor level of funding available for the education of 15-year-olds in Wales, especially in a sparse county like Powys, where in many of the high schools the heads of spending departments such as physics, chemistry and French have no more than £1 per pupil per year to spend on materials? Does the hon. Gentleman agree that that is disgraceful?
    Mr. Roberts: I cannot agree with the hon. and learned Gentleman. In Wales in general, spending per head has increased from £767 in 1978–79 to;£877 in 1983–84—and that is at 1983–84 prices. There has been a similar increase in Powys from £879 to £953 per pupil. The hon. and learned Gentleman is incorrect in what he claims.
    Mr. Roy Hughes: Has the Minister studied the report, published a few days ago, of the National Confederation of Parent Teacher Associations, which concludes that the overall picture is of an alarming deterioration in our schools and that no amount of statistical juggling can disguise that? Certainly our teachers and local education authorities concur with that. When will the hon. Gentleman's Department ensure that our educational services in Wales are properly funded?
    Mr. Roberts: Indeed, I have a copy of the very slim document to which the hon. Gentleman referred. My description of it, quite frankly, is that it flies in the face of facts. Furthermore, it acknowledges that in its conclusions. I have no further comment on a document that states that.
    Sir John Stradling Thomas: I agree with my hon. Friend and disagree with the hon. and learned Member for Montgomery (Mr. Carlile), but do not local education authorities have a problem of resource management? Talk of cuts is political nonsense. The figures speak for themselves. They are figures put out, not by the Welsh Office, but by the LEAs. Will my hon. Friend give the assurance for which I very much hope, that he will continue to discuss with the LEAs the very' difficult problem of resource management against the background of falling rolls, which is at the heart of the problem faced by LEAs in Wales?
    Mr. Roberts: My hon. Friend, whom I am glad to hear, particularly as he is so conversant with this subject, had started on these very discussions with local authorities and had met the Gwent and Clwyd local authorities. I fully intend to carry on the good work that he began and to meet the remaining local education authorities.
    Following are the figures
    The number of pupils at maintained secondary schools in Wales in January of each year who were aged 15 at 31 August in the previous year was as follows:

    Number

    1981

    44,659

    1982

    43,649

    1983

    42,977

    1984

    42,500

    1985

    42,836

    From mid-year home population projections it is estimated that the corresponding figure for 1989 will be about 36,000.

    Labour Statistics
    Mr. Ron Daviesasked the Secretary of State for Wales if he will state the number of school leavers

    9
    registered as job seekers in Rhymney Valley, Mid-Glamorgan and Wales at the latest date for which figures are available.
    Mr. Wyn Roberts: On 12 September 1985 the number of school leavers under 18 years of age in Rhymney Valley, Mid-Glamorgan and Wales who had not entered employment since completing full-time education were 624, 2,712 and 11,327 respectively. Many will find employment or return to full-time education. For the remainder, there is a guarantee of the offer by Christmas of a place on the youth training scheme.
    Mr. Davies: Does the Minister accept that, according to the October figures, 1,500 young people are registered as job seekers in Rhymney Valley and that in Mid-Glamorgan as a whole there are about 7,000? Is he aware that for those 1,500 in Rhymney Valley there is one vacancy at the careers office and that for the 7,000 in Mid-Glamorgan only 17 vacancies are registered with the careers service? In the light of those figures, will the Minister dissociate himself entirely from the view of the vice-chairman of the Conservative party, Mr. Jeffrey Archer, that the problem with young people is that they will not do a day's work and that they should get off their backsides and find a job?
    Mr. Roberts: The hon. Gentleman will be aware that we are very concerned about the high number of unemployed school leavers that appear at this time of year on the register and account for a considerable part of the increase. Indeed, they are responsible for about 5,530 of those registered in Wales. However, I am glad to say that that number is 701 fewer than last September's figure. There are consolations for these young people, because I am glad to say that vacancies are up, being 1,500 higher this September than in September 1984. While we still regard the figures as being too high, there is hope for every youngster who has left school and is now without a job.
    Mr. Rowlands: Will the Minister now answer the question posed by my hon. Friend the Member for Caerphilly (Mr. Davies) and say whether he dissociates himself entirely from the insulting remarks of the vice-chairman of the Tory party, Mr. Jeffrey Archer, which caused a great deal of anger and bitterness among the young people in our community?
    Mr. Roberts: I did not hear the vice-chairman's remarks. I have only seen them reported and, as often as not, I am sure, reported totally out of context. [HON. MEMBERS: "Oh."] I have my own views, which I have declared, about young people who are unemployed in any part of Wales. While we are deeply concerned about their predicament, their prospects are somewhat better now than they were a year ago.

    Wages Councils
    Mr. Colemanasked the Secretary of State for Wales whether he has received any representations on the effect upon Welsh workers of the Government's proposed abolition of wages councils; and if he will make a statement.
    Mr. Nicholas Edwards: My Department has received eight letters direct and a further 19 have been passed on by hon. Members. I have also received a petition with 96 signatures. In the light of the views expressed during the
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    consultation exercise about wages councils, the Government announced on 17 July that they were to be retained but reformed. Legislation will shortly be brought before the House.
    Mr. Coleman: I thank the right hon. Gentleman for being good enough to write to me on this matter. Does he think that the people of Wales will swallow his explanation and accept that new jobs will be created if we remove the minimal protection that is enjoyed by low-paid workers? Does this mean that the Welsh unemployed can look forward to jobs that are low paid without regulated protection?
    Mr. Edwards: No. There is clear evidence from this and many other countries that high initial rates of pay as employees enter industry without skills result in more unemployed youngsters. Labour Members have expressed concern in previous supplementary questions about unemployed youngsters. They should take serious note of the fact that these youngsters are more likely to get jobs if they start at lower rates. They will then have better prospects for the future. To discount the overwhelming evidence of that fact is not to do any service for those of whom Labour Members speak.
    Mr. Grist: Is my right hon. Friend aware that in Germany young workers start at rates between 20 per cent. and 25 per cent. of an adult wage and ultimately secure far higher paid jobs than British workers?
    Mr. Edwards: That is true. There is no doubt that high basic rates for youngsters in relation to rates for adults are a key factor in deciding whether firms take on young people. There is no doubt also that the rates that have been paid to youngsters have been a factor in discouraging their employment. We should do everything that we can to bring them into work where they can be trained and where they can earn much higher rates in future.
    Mr. Ray Powell: Does the Secretary of State realise that the wages councils protect about 500,000 employees and that one out of five of those who are protected are young people? Does he understand that they have suffered enough under this Government and that they do not want to return to sweatshops? I ask the right hon. Gentleman and the Government to reconsider their decision to recommend the abolition of the wages councils.
    Mr. Edwards: If the hon. Gentleman had listened he would have heard me say that we shall not abolish the wages councils. If he wishes to talk about the protection of young people, I must put it to him that those who do not have jobs are not being protected by the wages councils. Indeed, their prospects of employment are being threatened by many of the actions of the councils. That is what we are seeking to change.

    NHS Expenditure
    Mr. D. E. Thomasasked the Secretary of State for Wales if he will list the expenditure on the National Health Service in Wales for each fiscal year since 1978 in 1985 prices.
    Mr. Mark Robinson: As the answer contains a number of figures I shall, with permission, circulate it in the Official Report. But, taking account of general inflation, as measured by the GDP market price deflator,

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    expenditure on the National Health Service in Wales at 1984–85 prices rose from £710·8 million in 1978–79 to £862·0 million in 1984–85.
    Mr. Thomas: How does the Minister equate the propaganda from his Department and the Department of Health and Social Security about maintaining the level of expenditure in the NHS with the real experience of those of us who during the recess have visited hospitals, spoken to Health Service workers and had the privilege of attending massive public meetings in our constituencies and elsewhere at which objections have been raised to proposals for hospital closures and changes in the ambulance service? Why are health authorities in Wales going through these consultation exercises on closure proposals if there is not a real financial crisis in the NHS?
    Mr. Robinson: The consultations to which the hon. Gentleman refers are part of the management process of health authorities in organising their priorities. He should know that five major hospital schemes have been completed since 1979, which is evidence of the Government's commitment and that of my right hon. Friend to the NHS in Wales.
    Mr. Gwilym Jones: Will my hon. Friend accept that there is a warm welcome for the expansion of the NHS, especially the significant increase in bone marrow transplant operations at the University hospital of Wales in my constituency?
    Mr. Robinson: The answer to my hon. Friend's question is yes. My right hon. Friend made an announcement on 17 October confirming the plan to set up a bone marrow transplant unit at the University hospital of Wales. This is an enormously important activity and we shall be monitoring the initiative closely.
    Mr. Barry Jones: I congratulate the Under-Secretary of State on his appointment, and I thank his predecessor for his courtesy. Will the Under-Secretary of State heed the SOS from Mid-Glamorgan, Gwynedd and South Glamorgan? Are not patient services at risk? Should not more cash be made available to the health authorities in Wales?
    Mr. Robinson: I thank the hon. Gentleman for his kind words. He has referred to the shortage of resources for health authorities in Wales. I said earlier that Gwynedd's resources had increased by 30 per cent. Mid-Glamorgan's resources have increased by 19 per cent. The first phase of the Deloitte report has been completed and the Mid-Glamorgan health authority will have to consider it. My right hon. Friend the Secretary of State and I will monitor the position closely.
    Following are the figures

    The expenditure on the NHS in Wales at 1984–85 prices is as follows:

    Year

    Expenditure (£m)

    1978–79

    710·8

    1979–80

    712·0

    1980–81

    770·8

    1981–82

    798·0

    1982–83

    819·9

    1983–84

    833·0

    1984–85

    862·0

    Actual expenditure has been adjusted to take account of general inflation as measured by the GDP market price deflator.

    Courtaulds Plant, Greenfield
    Mr. Raffanasked the Secretary of State for Wales if he will make a statement on the progress of discussions between his Department and Delyn borough council on Government measures to alleviate the effects of the closure of the Courtaulds plant at Greenfield.
    Mr. Nicholas Edwards: Full agreement has been reached between the Delyn borough council, the Welsh Development Agency and the Welsh Office about the detailed implementation of the package of assistance which I announced in June this year. With the very welcome recent announcement by Courtaulds of its contribution to the total effort in the area I look forward to rapid progress on the agreed programme.
    I am pleased to announce that a further £200,000 urban programme capital allocation is to be made available to Delwyn borough council for the further development of the Greenfield site for a major European company, subject to that company locating at the site. For reasons of confidentiality, I cannot say more at this stage.
    Mr. Raffan: I thank my right hon. Friend, and through him the Prime Minister, for the pressure that they brought to bear on Courtaulds to produce its comprehensive regeneration package for Greenfield. I thank my right hon. Friend also for today's announcement, which will be welcomed in my constituency, and for the Government's contribution to the regeneration of the Greenfield site. This will create a healthy private and public sector partnership. Can my right hon. Friend give a commitment with respect to the necessary continued urban aid and capital allocation support in the longer term so that we can speedily build on the foundations that have been so successfully laid?
    Mr. Edwards: I thank my hon. Friend for his comments on the intervention by my right hon. Friend the Prime Minister and myself. I am grateful to the chairman of Courtaulds for having listened to what we said and for responding in a way that has earned the congratulations and thanks of the local authorities involved. I think that my hon. Friend can be assured by what we have done so far and our announcement this afternoon that in reaching our decisions we shall continue to take full account of the changing situation in the area.

  CHURCH COMMISSIONERS

    Parsonages and Bishops' Palaces
    Mr. Greenwayasked the hon. Member for Wokingham, as representing the Church Commissioners, how much was spent on the dilapidations of (a) parsonages and (b) bishops' palaces during the past year; and if he will make a statement.
    The Second Church Estates Commissioner, representing Church Commissioners (Sir William van Straubenzee): The 1984 figures for parsonages are £7·7 million and for diocesan bishops' houses £338,000.
    Mr. Greenway: Will my hon. Friend assure me that the considerable sums spent on parsonages and bishops' palaces, which in 1984 included £70,000 on the palace of the Bishop of Durham, will ensure that there are adequate study facilities for all parsons and bishops, to enable more of them to comment on moral rather than political issues, including the narrow decision last week by the Law Lords to abolish the age of consent?
    Sir William van Straubenzee: All parsonages and bishops' houses have provision for studies. I do not think that it would be in accordance with the general attitude of the clergy if the Church of England tried to ordain or lay down the thinking that should take place in their studies. Total expenditure on Auckland castle is much greater than my hon. Friend has indicated, because of the historic nature of that ancient place.

    Stipendiary Ministry (Pay, Pensions and Housing)
    Mr. Peter Bruinvelsasked the hon. Member for Wokingham, as representing the Church Commissioners, if there are any plans to increase the amount of the commissioners' income applied towards the support of the pay, pensions and housing of the stipendiary ministry of the Church of England.
    Sir William van Straubenzee: Yes. We were able to increase the income we applied towards the pay, pensions and housing of stipendiary ministers of the Church of England by 8·5 per cent. in 1984 and a further increase of 8·6 per cent. will have occurred in 1985. Similar increases are planned in future years. In all, over 80 per cent. of our income is used for these purposes.
    Mr. Bruinvels: I thank my hon. Friend for that answer. First, I welcome the fact that the Church Commissioners are paying more than the rate of inflation to support the ministry and the pay of incumbents. Does he agree that some anxiety should be shown, because about 1,000 members of the clergy have given notice that they will leave the Church of England if women are ordained and admitted to the priesthood? Will he confirm that special consideration will be given to keeping those members and the rest of the clergy happy, because we do not wish to lose more members of the clergy?
    Sir William van Straubenzee: The Church Commissioners' duty is to make moneys available for the remuneration of the full-time clergy. As my hon. Friend is aware, more than half the overall burden, including pensions, is now also carried by the laity. I do not believe that considerations of what will happen in the future enter into that calculation. My hon. Friend is now uniquely well placed to make his views known because of the welcome news that since we last met he has been elected to the General Synod.
    Mr. Cormack: When my hon. Friend and his colleagues next discuss these matters, will they give further thought to the compulsory retirement age of 70, bearing in mind the fact that many men who are just over 70 are well able to look after a small rural parish, and that mother Church is often better served by a resident father than by a peripatetic priest of whatever sex?
    Sir William van Straubenzee: I am obliged to my hon. Friend. I listened carefully to what he said. The difficulty is, as he will know from close experiece, that there are few instances where one man looks after one fairly small rural parish. That is not the experience that most of us share. The work is demanding physically and mentally.

    St. Alban's Church, Teddington
    Mr. Jesselasked the hon. Member for Wokingham, as representing the Church Commissioners, what is the current position in relation to the redundant church of St. Alban's, Teddington.
    Sir William van Straubenzee: At the invitation of the commissioners, my right hon. Friend the Secretary of State for the Environment has decided to hold a non-statutory public local inquiry into the proposed demolition of this building. The inquiry will be held on 22–23 January next year.
    Mr. Jessel: Can my hon. Friend give the latest official estimate of the cost of putting St. Alban's into a safe, sound and decent condition and of obtaining a fund to keep it that way? Is he aware that there are signs that the Greater London council might put up £300,000 towards it? Would that be anything like enough?
    Sir William van Straubenzee: My hon. Friend will understand that I must be careful to say nothing that will prejudice the inquiry. I have seen published figures which show that the cost, as at January 1985 prices. including VAT and fees, of putting the building into repair is between £800,000 and £1 million. My hon. Friend can well judge from that what any projected contributions would achieve.

  WALES

    Labour Statistics
    Mr. Barry Jonesasked the Secretary of State for Wales how many people in Wales are jobless; how many were jobless in May 1979; and by how much the jobless have increased since 1979 expressed as a percentage and as a total.
    Dr. Marekasked the Secretary of State for Wales what are the latest unemployment figures for Wales; and how this compares with the same period in 1979.
    Mr. Nicholas Edwards: On 12 September 1985 there were 187,563 unemployed claimants in Wales. The estimated equivalent figures for May 1979 and September 1979 are 77,220 and 79,600. The percentage increases are 143 per cent. and 135·6 per cent. respectively.
    Mr. Jones: On the subject of the Parrot Corporation, will the right hon. Gentleman guarantee that, through the usual channels, he will discuss the judicial figure whom we expect to head the inquiry which the right hon. Gentleman announced earlier today during Question Time? Regarding the disgraceful and frightening unemployment figures, can he tell the House why he has been prepared to join the infamous star chamber committee? Is he not the Prime Minister's chief hatchet man?
    Mr. Edwards: On the first point, we are dealing with an internal inquiry. I do not believe that the form of consultation suggested by the hon. Gentleman would be appropriate. Matters that could involve the judiciary are already subject to normal police investigation. On the subject of public expenditure, I should have thought that the hon. Gentleman would recognise that we are interested in the choice and allocation of priorities and that he would welcome the fact that the Minister who has a wide area of responsibility should be taking part in those decisions.
    Dr. Marek: Does the Secretary of State realise that these figures are the worst ever for the Principality, and that it is wearing the patience of Welsh people thin in that the Government appear to be doing nothing at all to try to ease the burden of unemployment levels? When will the Secretary of State pursue policies that will genuinely bring down the level of unemployment? Why is he pursuing policies that will increase unemployment, through closures at MAFF at Cardiff and Bangor and the Welsh plant breeding station at Aberystwyth?
    Mr. Edwards: For four years now we have seen growth of over 3 per cent. per annum. Within Wales, and particularly in areas such as those represented by the hon. Gentleman, we have seen substantial public sector effort. Public sector investment in the Clwyd area since this Government came into office amounts to some £350 million. The hon. Gentleman ought to know that Wrexham is now proving to be one of the most attractive areas for investment in Britain.
    The hon. Gentleman should welcome, for example, the decision of Hilton Mining to take over the former Firestone factory, which promises up to 350 jobs, the further investment to be undertaken by Sharp and others in the area, and the fact that considerable proportion of those recently made redundant by Courtaulds have already found jobs. The hon. Member should welcome those indications that our policy is working.

  THE ARTS

    Regional Arts Associations
    Mr. Meadowcroftasked the Minister for the Arts what recent representations he has had on the allocation of resources to regional arts associations.
    The Parliamentary Under-Secretary of State for the Environment (Sir George Young): Unfortunately, my hon. Friend the Minister for the Arts was taken ill today and I am standing in for him at short notice. He sends his apologies to the House.
    My hon. Friend met the chairmen and directors of all the regional arts associations on 18 October. He has also received a deputation from Merseyside arts bodies, and has corresponded with representatives of other regions. The allocation of resources is a matter for the Arts Council.
    Mr. Meadowcroft: I hope that the Under-Secretary of State will convey to his hon. Friend our regret that he is unwell. We particularly wish to assist him in his new task. Is the Minister aware that in West Yorkshire, as in other metropolitan areas, there is worry about what will happen when the metropolitan county councils are abolished? When will the Minister respond to the Arts Council's bid for £35 million to replace the metropolitan county money, and what further guidance is to be given via the rate support grant formula to assist district councils in developing their arts funding?
    Sir George Young: I am grateful to the hon. Member for his kind words about my hon. Friend. I spoke to my hon. Friend a few minutes ago and I found him very much like Florestan at the beginning of the second act of Fidelio. I am sure that he will recover. On the second point, my hon. Friend hopes to make an announcement about the allocations for next year, in December. On the matter of
    16
    post-abolition funding, as the hon. Member knows, we have already committed £34 million of additional central funding for the arts after abolition. The Arts Council subsequently made a bid for more resources, which we will have to consider in the context of the public expenditure discussions. As I think the hon. Member will know, that will have to await the broader considerations that are being discussed at the moment.
    Mr. Nelson: Since my hon. Friend is in such close and frequent contact with the newly appointed Minister for the Arts, may I ask him to transmit the message that many of us hope that he will be rather more a champion at the Chancellor's door than a supplicant and defendant in the star chamber?
    Sir George Young: Of course I shall pass on those sentiments. No one wishes my hon. Friend a speedy recovery more than I do.
    Mr. Buchan: We are all pleased to learn that at least the Minister for the Arts is in a better condition than I fear most of the arts are. We pass on our good wishes, and no doubt we shall meet him in a few weeks' time. Will the Under-Secretary of State remind him that the arts crisis, the cataclysmic collapse in arts funding. is the worst ever? Will he also remind him that this is due to the abolition of the metropolitan counties and the GLC? Thirdly, will he remind his hon. Friend of the promise given to me on 2 August last year by the previous Minister that the present level of public support for the arts would be maintained? When are we to get that assurance from the present Minister?
    Sir George Young: I reject the assumption behind the hon. Gentleman's question. In our manifesto in 1983 we said that we would keep up the level of support for the arts, and our record shows that we have done better than that. From 1978–79 to date the central Government arts budget has more than doubled in cash terms, that is, a real terms increase of nearly 18 per cent. This year's budget is almost 6 per cent. up in cash terms on last year's budget. In the context of the very difficult decisions that the Government have had to take on public expenditure, the arts have done quite well.

    Private Sponsorship
    Mr. Murphyasked the Minister for the Arts what response he has received to the publications issued by the Office of Arts and Libraries to stimulate private sponsorship of the arts.
    Sir George Young: I am delighted to say that the business sponsorship incentive scheme continues to be highly successful. It has brought £5·5 million of new money into the arts since it began a year ago, £4 million from businesses, to which £1·5 million has been added under the scheme. The House will be glad to know that, in view of the success of the scheme, my hon. Friend is transferring an extra £250,000 to it to meet the demand. He is today announcing 57 more awards in respect of over £800,000 new sponsorship; the new list includes 54 brand new sponsors from all parts of the country.
    Mr. Murphy: Will my hon. Friend convey to the new Minister the good wishes of Conservative Members and our regret that he is indisposed? Will my hon. Friend also convey our congratulations on the stimulation of the arts,

    17
    which has been an admirable feature of the Government's record since they came to power and is further evidenced by this afternoon's announcement? Will my hon. Friend guarantee that such matters will be given the correct amount of publicity, because that will help to stimulate the arts further?
    Sir George Young: I am grateful to my hon. Friend for his kind words. The scheme has done more than anything previously to raise public awareness of business sponsorship schemes. The arts organisations are enthusiastically selling the scheme to sponsors, but I shall raise with my hon. Friend the Minister the subject of publicity, to see whether more might be done.
    Mr. Tony Banks: I should like to be associated with the good wishes being sent to the new Minister, and I recommend that in future he should not eat in restaurants recommended by Lord Gowrie.
    How much business sponsorship does the Under-Secretary think will be necessary to keep open the South Bank, particularly the Royal Festival Hall. if the money that the Arts Council is asking for is not forthcoming from the Government?
    Sir George Young: I am confident that under the new regime that we have announced the South Bank will be run responsibly and efficiently and that some of the scares raised by the GLC will be shown to be unrealistic.

    National Heritage Fund
    Mr. Adleyasked the Minister for the Arts if he will estimate the number of hours spent by officials of the Office of Arts and Libraries on matters relating to the National Heritage Fund in the last 12 months.
    Sir George Young: The National Heritage Memorial Fund is an autonomous body administered by its own staff. Government responsibility for it is shared between the Department of the Environment and Office of Arts and Libraries. The responsibilities of the Office of Arts and Libraries in relation to the fund take up a small amount of the time of my hon. Friend's staff, which cannot readily be quantified.
    Mr. Adley: I thank my hon. Friend for that reply. Bearing in mind that he has various hats, can he confirm that funds are and will be available for appropriate railway structures, including the Ribble head viaduct and, under another hat, will be ensure that the future of the Settle-Carlisle line is kept in mind by the bodies with which he has contact?
    Sir George Young: There is nothing to prevent the NHMF from funding railway-related projects, and I was pleased to see that in 1983–84 a grant from the fund saved the Haymarket train shed in Edinburgh, which is now in Bo'ness.
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    As my hon. Friend knows, British Rail proposed the closure of the Settle-Carlisle line and my right hon. Friend the Secretary of State for Transport has a quasi-statutory role, which makes it difficult for Ministers to say anything at the moment. However, I assure my hon. Friend that the heritage and tourist aspects of the line will be taken into account when my hon. Friend makes his decision.

    Private Sponsorship
    Mr. Freudasked the Minister for the Arts if he will report on take-up of the pound-for-pound matching scheme for arts sponsorship; and if he will make a statement.
    Sir George Young: Since 1 April 1985, £1·5 million has come in new sponsorship. Of this, £700,000 has come from 112 first-time sponsors taking part in the pound-for-pound matching scheme.
    Mr. Freud: Does the Minister agree that the statistics that he has just given, together with those that he gave earlier to the hon. Member for Welwyn Hatfield (Mr. Murphy), show what a tremendous value-for-money exercise it is to match private sponsors with public money? Does he accept that it is counter-productive not to invest more money in the scheme, because the amount of work that it takes to hook a potential sponsor and the damage done by losing him if there is insufficient money will do little to futher the scheme?
    Sir George Young: I agree with that, which is why I have just announced a further £250,000 for the scheme. One of the beneficiaries of the scheme has been Jill Freud and company, which won an award of £4,000 for a production of "Under Milk Wood", touring south and east England and Wales at the moment.
    Mr. Freud: Bournemouth this week.
    Sir George Young: On the current list of winners is the Ettrick Shepherds Festival, sponsored by Mrs. David Steel, so it would appear that the Liberal party has done quite well from this Government initiative.
    Mr. Crouch: Is my hon. Friend aware of the considerable achievements of regional opera in this country, not least the resounding success of Kent Opera in no less a place than my constituency's Canterbury Festival this year, and will he continue to see that regional opera is given generous support?
    Sir George Young: The regional allocations of funds is primarily a matter for the Arts Council, but I shall make sure that the council is aware of the enthusiastic support that my hon. Friend has mentioned for the arts in Kent, and particularly in Canterbury.

Palestine Liberation Organisation
3.31 pm
Mr. A. J. Beith(by private notice) asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement about the cancellation of the meeting between himself and representatives of the Palestine Liberation Organisation.
The Minister of State, Foreign and Commonwealth Office (Mr. Tim Renton): Following my right hon. Friend the Prime Minister's announcement in Aqaba on 20 September, it was agreed that my right hon. Friend the Foreign and Commonwealth Secretary would receive a joint Jordanian-Palestinian delegation led by the Jordanian Deputy Prime Minister and Foreign Minister and including two Palestinian delegates whose names had been put forward on the understanding that they personally supported a peaceful settlement of the Arab-Israel dispute on the basis of the relevant United Nations resolutions and were opposed to terrorism and violence. Our ambassador at Amman negotiated with the Jordanian Prime Minister the text of the statement which it was agreed would be issued by the delegation after their talks in London.
Unfortunately, after their arrival in London, one of the Palestinian members of the delegation said that he could not accept a specific reference in the agreed statement to Israel's right to exist. We concluded that in these circumstances the meetings with the joint delegation could not take place.
We are deeply disappointed by this setback but remain convinced that the international community must be ready to encourage those who are working for a peaceful settlement in the middle east.
Mr. Beith: Since many people doubted whether it was realistic to expect the PLO representatives formally to denounce violence and to accept Israel's rights at such an early stage in the peace process, should not the Government have insisted on publicising any agreement that they made at the time that they made it rather than relying on unpublicised and later deals made through the Jordanians? Do such statements not, in any case, look meaningless while a substantial section of the PLO is clearly trying to overturn the peace process with such acts of violence as the Cyprus murders and the murder of Mr. Klinghoffer? Do the Government believe that those Palestinian leaders who genuinely want peace had much freedom to renounce violence after the Israeli bombing of Tunis? Will the Government now devote their efforts to persuading the Soviet and American leaderships to devote their attention to the middle east crisis which clearly represents a threat to both of them as well as to the rest of the world?
Mr. Renton: We have received an unequivocal assurance from Amman that all the members of the delegation were prepared to sign the text of the statement. We concluded that it was better to continue our negotiations through one channel only to Amman rather than through a multitude of channels. I take the hon. Member's point about the terrorist incidents and about the extremist elements in the PLO, but we took the view that moderates, be they Palestinian, Israeli or Jordanian, should be encouraged, in the hope of moving forward the peace process. That remains our position.
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Obviously, we must now take stock as to how this process can be carried further forward. The main influence lies not with us but with the United States, Jordan and Israel. Nevertheless, anything that we can do in due course to help the process forward we shall do.
Mr. Julian Amery: Is my hon. Friend aware that I was severely critical of the Government when they put forward the Venice declaration, which, in my view, was flawed because it gave unconditional recognition to the PLO as a necessary negotiating partner? May I congratulate them on this occasion, in that they made the degree of recognition that a meeting with the Foreign Secretary would have involved strictly conditional on the renunciation of violence and the acceptance of the appropriate United Nations declarations? Am I not right in thinking that in no way were the PLO representatives prepared to subscribe to those declarations? Indeed, have we not been put absolutely in the clear by King Hussein? Am I not right in thinking that it is the PLO which has lost credibility as well as the military power and political unity that it once had, and that in this matter Her Majesty's Government have behaved themselves absolutely correctly?
Mr. Renton: I thank my right hon. Friend for his remarks. I should like to correct him on one point. Bishop Khoury and Mr. Milhem came here not as representatives of the PLO but as members of a joint Jordanian-Palestinian delegation. That is an important distinction to continue to make. The only people who can take comfort from the failure of the talks last Monday are extremists on both sides. It is against that background that I support my right hon. Friend's remarks. I hope that moderates will think further as to how the process can be carried forward.
Mr. Robert C. Brown: Whatever possessed the Foreign Secretary to believe that members of the PLO would ever renounce violence and grant Israel the right to live freely within firm frontiers? If he ever believed that, he must believe that pigs will fly?
Mr. Renton: I think that. on reflection, the hon. Gentleman might regret some of those remarks. The fact is that we were supporting an initiative that King Hussein had started in February, which was an attempt to break the log jam in the current middle east process. We believed strongly that that was a risk for peace that was worth taking. I assure the hon. Gentleman again that the specific words that I have used — we were assured by the Jordanians — had been accepted by the Palestinian delegates before they came here. Against that background, I have no regrets that we entered into that process, accepting always that there is a risk in trying to obtain peace, not least in the middle east.
Mr. Michael Latham: I welcome my right hon. and learned Friend the Foreign Secretary's decision to refuse to meet the PLO representatives, who have clearly shown that they could not deliver a deal even if they wanted to. Will my hon. Friend ensure that when the Prime Minister meets Mr. Peres in New York this week she will advocate that there should be immediate direct negotiations between King Hussein and the Israelis?
Mr. Renton: I note what my hon. Friend says. I respect and understand his close interest in this matter. We of course look forward to the visit of Mr. Peres. the Israeli

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Prime Minister, here in January. However, with regard to direct talks between the Israelis and Jordan, we cannot be oblivious of the position of King Hussein. We have to think of the practicalities for that king, who is in many ways the leader of the moderates in the Arab world, of entering into such direct talks.
Mr. D. N. Campbell-Savours: If the renunciation of violence is to be the overriding criterion determining whether those meetings take place, what advice will the Minister give to his own Back Benchers, Conservative Members of Parliament who regularly visit the middle east. and who meet PLO people, as I did with them four years ago? If it is good enough for them to meet representatives of the PLO in all-party delegations, why is it not good enough for the Government?
Mr. Renton: I thought that I had explained to the hon. Member who asked the question the precise reasons why we could not meet the joint Jordanian-Palestian delegation —a decision that has been welcomed by hon. Members. On the further point raised by the hon. Member for Workington (Mr. Campbell-Savours) I should make it clear that renunciation of violence and terrorism was not the only point in the statement that had been agreed. In it also was the balance of recognition between Israel's right to exist within secure and recognised borders and the Palestinians' right to self-determination. Those were the twin pillars of the statement and both were very important.
Rev Ian Paisley: I support the Government in their action, but I ask whether the Minister is aware that the people of Northern Ireland find it extremely strange that the Government take that action when the Government are currently compelling elected representatives of the people of Northern Ireland to sit down with the terrorists in the councils of Northern Ireland?
Mr. Renton: I see absolutely no analogy whatever between the position of the IRA, for example, and that of the PLO. I understand that Sinn Fein, which is the political arm of the IRA, holds some 10 per cent. of votes in Northern Ireland elections. I should point out that the Palestinians in the occupied territories have no right to vote in Israel at present and have no seats in the Knesset.
Mr. Tam Dalyell: Will the Minister forgive us for being a little puzzled about his statement? Are we to understand that an agreement was made some months ago in Amman to the effect that there would be a specific communiqué after the London talks regardless of what had happened at those talks? Is it normal Foreign Office practice to agree a statement to be made after talks some months before the talks take place, and will the Minister clarify exactly who agreed to what? With whom was the agreement reached that there should be that particular form of words?
Mr. Renton: I should dearly like some day to make a statement with which the hon. Member for Linlithgow (Mr. Dalyell) could find himself in full accord and harmony. I hope that that will one day be my pleasure. I will give him the answer. I made it quite clear in my statement, and a study of the facts will certainly make it clear, that what the Prime Minister agreed in her announcement in Aqaba on 20 September was the willingness of the Foreign Secretary to meet the joint delegation and the broad principles of what that delegation
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would say. Subsequently there was much discussion between ourselves and the Jordanian Government, including the Jordanian Prime Minister, as to precisely what the agreed text should be. I think that the date on which the agreed text was agreed——
Mr. Dalyell: By whom?
Mr. Renton: The agreed text was agreed between ourselves and the Jordanian Government on the understanding, as I have already told the House, that all members of the delegation were willing to go along with it.
Mr. Campbell-Savours: When?
Mr. Renton: Speaking from memory, it was agreed on 10 October.
Mr. Andrew MacKay: Notwithstanding the negative carping of some Opposition Members and notwithstanding the initial setback, having taken stock of the present position will my hon. Friend assure the House that the Government will do everything in their power to move towards another peace initiative in the middle east which will be acceptable both to the Israeli people and to moderate Arab and Palestinian opinion?
Mr. Renton: Yes. I thank my hon. Friend for those words. When I met King Hussein in London last Wednesday it was precisely to discuss the next steps forward. That was one of the main purposes of our meeting. It is clearly right that we should all take stock at the present time, but we would certainly be willing to give further help that we usefully can to the middle east peace process.
Mr. Donald Anderson: What began as a courageous initiative by the Prime Minister—a risk for peace—has ended in total diplomatic shambles. Is the Minister seriously claiming that no blame whatever attaches to the Government in this? Is it not true that Mr. Mohammed Milhem was never directly or personally asked about the document and, if so, was there not an unrealistic assumption on the part of the Government that the Jordanians could speak on his behalf — in effect, very poor preparation on the part of the Government—with the effect that the Government have managed to annoy both pro and anti-Arafat elements in the PLO and damage the Mubarak-Hussein peace process possibly beyond repair? How much of that was due to intense American pressure to cancel the meetings?
Mr. Renton: I disagree with much of what the hon. Gentleman said. I do not accept that the Foreign Office has any blame in this regard. I remind the hon. Gentleman that both the Jordanian delegation and the Jordanian king made it plain that not only was our version of the facts correct, but that, in the words of the Jordanian king, we had acted very honourably.
I know that Mr. Milhem, to pick out one of the hon. Gentleman's points, has subsequently said that he never saw the text of the statement. We cannot know whether he did, because we were relying on one source of negotiation — the Jordanian Government. The Prime Minister agreed to this meeting on their initiative. Any one who knows the complexities of the middle east will know that for us to accept negotiations through many diverse channels would have confounded the matter, or at least made it very confused indeed.

23
On the hon. Gentleman's last point, I can assure him and the House that no pressure whatsoever was put on us by the Americans. Far from it. Mr. Shultz, the Secretary of State, welcomed the Prime Minister's decision to receive the Jordanian-Palestinian mission.
Mr. Michael Meadowcroft rose——
Mr. Speaker: Order. Private notice questions are an extension of Question Time. We have had 15 minutes on this one, and, in view of the other business before us, we must move on.

Oral Questions
3.46 pm
Mr. Ray Powell: On a point of order, Mr. Speaker.
Mr. Speaker: Order. Does this point of order arise directly out of questions?
Mr. Powell:Yes, Mr. Speaker it does. I have raised a similar point of order with you before, and I raise it again so that I may have your guidance on it. It concerns the time allocated for Welsh questions. We reached only question No. 11 today. Question No. 12 was mine, and it was on a very important matter affecting the Ogmore constituency — unemployment — which is rife throughout south but particularly in Ogmore. A further question had been partially dealt with by the Secretary of State.
Mr. Speaker: Order. We cannot go beyond that because that would be an extension of Question Time. I realise that we did not get far in Welsh questions. That was because I made a judgment, in which I hope that I was correct, that the Parrot Corporation issue was of considerable importance to a number of hon. Members. Therefore, I allowed a rather long run of questions on it. In fairness, I called the hon. Member for Ogmore (Mr. Powell) on question number 8, and I thought that he made rather a good contribution.
Mr. Powell: Further to that point of order, Mr. Speaker. I hope that, as the Leader of the House is here, he will undertake to consider whether we may have an extension of time for Welsh Questions beyond the current 35 minutes.
Mr. Speaker: Order. That is patently not a matter for me, although I have sympathy with the hon. Gentleman.
Mr. Leo Abse: Further to that point of order, Mr. Speaker. I wish to ask about the propriety of the Secretary of State's behaviour. In answering the many questions about the Parrot Corporation, he left a firm impression that an independent inquiry was to be appointed. By that it was understood by everybody, I am certain, that the inquiry would be independent of the Secretary of State, the Welsh Office and the WDA. However, as you will recall, Mr. Speaker, when my hon. Friend the Member for Alyn and Deeside (Mr. Jones) pressed the point, he was told that the inquiry was to be internal. By its very nature, that will be a whitewash.
I appreciate that that is not a matter for you, but I ask about the propriety of a right hon. Member either deliberately or inadvertently misleading the House into believing that an inquiry will be independent when, by the end of questions, it was abundantly clear that nothing of the kind was to take place. My second point is that I hope that you will not discourage the Secretary of State from making the statement that he has refused to make up to now which would clarify this issue and, I hope, the whole of the miserable Parrot issue.
Mr. Speaker: Order. I do not think that very much of that point of order has anything to do with me. It is entirely a matter for the Government as to whether statements are made.
Mr. Barry Jones: Further to that point of order, Mr. Speaker. In Question Time, the Secretary of State for Wales described the inquiry as "independent". How can an internal inquiry be independent? Why cannot the Secretary of State ensure

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that a judicial figure heads the inquiry? We fear a whitewash. We wish to hear the Secretary of State putting things right.
Mr. Speaker: Order. It is not good practice to continue Question Time by means of points of order. None of that is a matter for me.

Business of the House
3.51 pm
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): With permission, Mr. Speaker. I should like to make a short business statement. The Business for Wednesday 23 and Thursday 24 October will now be as follows:
WEDNESDAY 23 OCTOBER — Opposition day (20th Allotted day); until about seven o'clock there will be a debate on the crisis in southern Africa followed by a debate on the need for an independent judicial inquiry into the recent urban disturbances. Both debates will arise on Opposition motions.
Motion on the Nursing Homes and Nursing Agencies (Northern Ireland) Order.
Motion on the Parliamentary Constituencies (England) (Miscellaneous Changes) Order.
THURSDAY 24 OCTOBER—There will be a debate on a motion to take note of the outstanding reports of the Committee of Public Accounts to which the Government have replied.
Commons consideration of Lords amendments to the Water (Fluoridation) Bill.
Remaining stages of the Housing Bill (Lords), the Housing Associations' Bill (Lords), the Housing (Consequential Provisions) Bill (Lords), the Landlord and Tenant Bill (Lords) and the Weights and Measures Bill (Lords), which are all consolidation measures.
Mr. Peter Shore: I thank the Leader of the House for making that business statement. In view of the Prime Minister's extraordinary and damaging antics at the Commonwealth conference, her apparent change of stance on the question of economic sanctions against South Africa, her agreement, with Commonwealth colleagues, to impose sanctions last night and her scornful dismissal of the same agreement this morning, can we have an early statement to clarify what the Government's policy really is, certainly before Wednesday's debate on South Africa?
Secondly, while we are to have a statement later today on the inner cities, given the scale and gravity of the disorders in which four people have died, hundreds have been injured and tens of millions of pounds' worth of property destroyed, is it not disgraceful that the Government have not rearranged this week's business so that we could have a full day's debate in Government time instead of having to rely upon half a day in Opposition time?
Thirdly, now that the Secretary of State for Employment is no longer a Member of this House, will the right hon. Gentleman arrange for an early statement to be made or, better still, provide time for us to debate this unprecedented, unsatisfactory and, to this House, insulting arrangement? Can he at least ensure that the new Secretary of State does not continue to offload his responsibilities for answering questions on unemployment in the other place, as he did last Tuesday, when the Minister of State for Defence deputised for him? It is reported that he intends to do so again tomorrow.
Finally, given the strong views that are held on fluoridation, can the right hon. Gentleman assure the House that no guillotine will be applied to curtail the debate next Thursday?
Mr. Biffen: The right hon. Gentleman earns, properly, the affection of all parts of the House, but he is one of the most reactionary people ever to have sat on the Opposition Benches. It is extraordinary if, within our constitutional arrangements, it is not possible for the Secretary of State for Employment to sit in the other place when that Department and its responsibilities are also represented in this place at Cabinet level. May I say to him—since I am, as ever, conciliatory in such matters — that of course his request can be considered through the usual channels.
We have all come back desperate to fashion our ploughshares into swords, but to describe the Prime Minister's stout championing of the national interest at the Commonwealth conference in that way shows a little unnatural bellicosity. I shall inquire about the possibility of an early statement by the Prime Minister about the conference.
As to a debate on the inner cities, I recognise the House's good fortune in that the Opposition day on Wednesday is to be partly devoted to that topic. Like the right hon. Gentleman, I recognise its importance. On Thursday, we have to consider eight Lords amendments to the Water (Fluoridation) Bill. They do not involve any new matters of substance and I hope that the House will be able to address itself to them fully but responsibly.
Several Hon. Members rose——
Mr. Speaker: This is a business statement, not business questions, and therefore supplementary questions must be related to what the Leader of the House has just said.
Mr. Robert Sheldon: Will the right hon. Gentleman confirm that the Public Accounts Committee debate on Thursday will draw particular attention to six of the matters contained in its report so that the House might be aware of the topics that are of particular interest to the Committee and therefore to the House? Will the right hon. Gentleman confirm that the Order Paper will contain reference to vehicle excise duty and its evasion, the sale of Government shareholdings in nationalised industries, the effectiveness or otherwise of regional industrial incentives, housing benefits, the control of nationalised industries and the serious shortcomings in the dental service?
Mr. Biffen: Yes, I can confirm that that is the proposal. I thank the right hon. Gentleman for the part that he has played in making this come about.
Mr. Julian Amery: Is it not intolerable that so serious a matter as southern Africa, which seems to have occupied much of the discussion at the Commonwealth Heads of Government conference, should be considered only until 7 o'clock? If the Opposition think it important, had we not better give it a whole day?
Mr. Biffen: No. We are at that time in a Parliament when the time available is at a great premium. The House is indebted to the Opposition in this respect. I am certain that the matter will come before the House when the Prime Minister returns and, more particularly, when we debate the Queen's Speech.
Dr. David Owen: Would it not have been more appropriate for the Government to make time available for a debate on southern Africa when the
28
Prime Minister was here to answer for the fact that she has now accepted the Reagan economic sanction package on South Africa? Since the Prime Minister spends most of her time trying to line up the Government behind every initiative taken by President Reagan, would it not be helpful for the House to understand why she took so many months to do that on this occasion?
Mr. Biffen: With an effortless air of superiority the right hon. Gentleman is able to make his point about the Prime Minister and the policies for which she stands. I believe that all these matters can most appropriately be debated in the context of the report that the Prime Minister will make to the House and in the debate on the Queen's Speech that will follow shortly.
Mr. Anthony Nelson: Is it not the case that the matter will have to come before the House in Government time because many of the specific sanctions imposed on top of those that which are part of the European Community package will have to be approved by the House? I think in particular of action under the Sale of Goods Act to prevent certain trading transactions. Is my right hon. Friend aware that those of us who have serious misgivings about the wisdom or effectiveness of imposing sanctions on any country will welcome the opportunity to express their views?
Mr. Biffen: I am not in possession of sufficient facts to enable me to say authoritatively that my hon. Friend is right about the need for legislation, but his general point must be correct.
Mr. Derek Foster: Is the Leader of the House aware that many Opposition Members found deeply offensive his response to the remarks by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) about the Secretary of State for Employment being in another place? Is the right hon. Gentleman aware that 800 redundancies in consumer electronics have been declared in my constituency in the last week? Is it not a disgrace that the Secretary of State for Employment cannot come to the House to answer questions on this subject?
Mr. Biffen: There is a Cabinet Minister sitting in this House who is fully able to deal with these points, and the hon. Gentleman knows that perfectly well.
Mr. John Evans: Is the right hon. Gentleman aware that Labour Members find it an outrage that at a time when 4 million people are unemployed, the Secretary of State for Employment does not sit in this House to answer for the Government? Will he give a categorical undertaking that if there are any statements on employment matters on Wednesday or Thursday of this week—or, indeed, at any other time—they will not be made in the other place before being given in this House?
Mr. Biffen: As I said to the right hon. Member for Bethnal Green and Stepney (Mr. Shore), these sort of matters can reasonably be discussed through the ususal channels. I want to say again that, once upon a time, those on the democratic end of the spectrum in public life believed in the doctrine of the man for the job. If there is someone who—[Interruption.] Oh yes—[Interruption.] If we believe—[Interruption.]
Mr. Speaker: Order.
Mr. Biffen: I believe that it is perfectly possible for these matters to be properly concluded when a Cabinet Minister representing the interests of that Department sits in this House.
Mr. David Alton: I thank the right hon. Gentleman for his statement on what the Prime Minister has been discussing at the Heads of Government Commonwealth conference. However, does he believe that the withering condescension with which the Prime Minister described the package of proposals for sanctions on the radio this morning will have done anything but comfort those in the Botha regime in South Africa?
Will the right hon. Gentleman give an assurance that the effectiveness of the package, which many of us doubt, will be discussed again in the months ahead so that we can be sure that everything possible is being done to give support to those fighting for the right of the the majority in South Africa to have a say in the running of their country?
Mr. Biffen: I can say without any equivocation that the decisions reached at the conference will be debated in the House.
Mr. Douglas Hogg: Does my right hon. Friend accept that his hon. Friends believe that the appointment of two Cabinet Ministers responsible for unemployment emphasises in a positive and dramatic way the emphasis that the Government place on that problem?
Mr. Biffen: Absolutely.
Dr. Jeremy Bray: Will the changes in business allow time for the Secretary of State for Trade and Industry to come to the House to make a statement on the progress of negotiations on steel production quotas in the Steel Council of the European Community? Is the right hon. Gentleman aware that at the beginning of the recess the Government announced major proposals, including the closure of the Gartcosh works, with its consequences for Ravenscraig and flat products generaly in this country? Are not those decisions being taken without the necessary information being given to the House? Will he ensure that an early statement on that matter is made?
Mr. Biffen: I realise the importance of the subject generally, and specifically in relation to the hon. Gentleman's constituency. I shall certainly draw his remarks to the attention of my right hon. Friend.

Inner City Disorders
4.3 pm
The Secretary of State for the Home Department (Mr. Douglas Hurd): With permission, Mr. Speaker, I should like to make a statement on the recent disorders. During the past six weeks there have been three serious nots — in the Lozells road area of Birmingham, in Brixton, and Tottenham. Four people have died, one a police constable who was savagely killed. There have also been disorders in Liverpool, Leicester and Peckham in south London. Many police officers and others were injured. There were appalling attacks on the police with petrol bombs and other missiles, and especially in Birmingham and Brixton there was extensive looting of and attacks on shops and cars.
All responsible members of our society will condemn the disgraceful criminal behaviour which has occurred and all responsible members of our society will applaud the courage and dedication of the police in doing their job of maintaining and restoring order on the streets and the housing estates of our major cities. Public order is essential for the maintenance of a civilised way of life and for the safety of individual citizens—on that there can be no compromise. So far 700 people have been charged with offences arising from the disorders.
The riot in Brixton was triggered by the tragic shooting of Mrs. Groce, and the riot in Tottenham followed the death of Mrs. Jarrett after a search had been made at her home. These police operations are being investigated by senior officers from other police forces under the supervision of the independent Police Complaints Authority. These arrangements will ensure that they are fully investigated and that any necessary action is taken. In the case of the Lozells road riot, the chief constable of the west midlands is preparing a report which will be published. Her Majesty's Inspector of Constabulary is being associated closely with the preparation of that report.
So far as police operations are concerned, although the other disorders were serious enough, the riot at Tottenham stands out for the problems which it presented to the police. In that riot, a police officer was killed, firearms were used and the police had to face a ferocious barrage of petrol bombs and other missiles. The design of housing estates like that at Tottenham poses particular difficulties in such circumstances. The Metropolitan police commissioner is urgently reviewing the tactics of the force on such occasions. There must be no no-go areas in any of our cities.
The riot at Tottenham was the first occasion in Great Britain when the chief officer of police gave authority for plastic baton rounds to be used if necessary, though in fact they were not used. Plastic baton rounds and CS gas were made available to the police in Great Britain for public order use following the riots in 1981. They may be used only in the last resort, where conventional methods of policing have been tried and failed, or must from the nature of the circumstances be unlikely to succeed if tried, and where the chief officer judges such action necessary because of the risk of loss of life, serious injury or widespread destruction of property. That threshold was reached at Tottenham. The commissioner had my full support in making it clear that such weapons would be deployed if similar circumstances arose in the future.

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Other matters need to be looked at. The defensive equipment introduced in recent years—helmets, shields and protective overalls — proved its worth. Without it there would have been more serious casualties. The Metropolitan police are acquiring more shields and other defensive equipment. We have to consider whether any further equipment is required, and that is being done. There may be lessons to be learnt in relation to police training and deployment. The commissioner is pursuing these matters and I am in close touch with him. I shall ensure that any lessons learnt are disseminated nationally.
This Government have done more to meet the needs of the police than any in recent history. Since 1979 the Metropolitan police have increased in strength by nearly 4,500 officers; and other forces in England and Wales are stronger by a similar number. Including civilians, strength has increased by some 12,000. Even after a welcome intake of recruits, the Metropolitan police still have scope to increase strength by about 300 within its present establishment of 27,165. I support the commissioner in his efforts to make good this shortfall as quickly as possible. The force's reorganisation should, in addition, release 200 officers for operational duties; and I have authorised an increase of nearly 50 in the civil staff ceiling next year for further civilianisation.
Following my predecessor's announcement in July on drugs, I have told the commissioner that I am prepared in principle to agree to an increase of 50 officers in the establishment next year specifically to strengthen his efforts against drug trafficking. Taken together, these steps mean that there will be a substantial strengthening of the Metropolitan police in the months ahead. Beyond that I have set urgent work in hand to assess where there are specific needs for further increases in the Metropolitan police establishment, and I shall consider applications from provincial police authorities on the same basis—namely, that the police should have what they need in the fight against crime.
In recent years, much effort has been put into establishing good liaison and consultation between the police and the community in inner city areas, particularly, for example, in Brixton and Handsworth. These disorders must be—I know that they are—deeply depressing for those community leaders and police officers who have put so much effort into establishing a better understanding. But it would be wrong to assume that these efforts were misplaced. On the contrary, they must be continued and redoubled if the police are to protect and serve the community efficently.
More broadly, the Government will continue their strong commitment to urban regeneration. The urban programme has more than tripled, from £93 million in 1978–79 to £338 million in 1985–86, and there has been substantial expenditure in all the riot areas. The Department of Employment and the Manpower Services Commission are spending more than £100 million in the partnership areas, and my Department plans to spend some £90 million in 1985–86 through section 11 grants.
We must ensure that the very substantial sums that now go, and will continue to go, to inner city areas are spent to the best advantage and directed to the real needs of the people who live there. The city action teams have been set up to improve the co-ordination and targeting of
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Government programmes in the partnership areas. We shall do everything to ensure that our objectives in the inner city areas are achieved.
These disorders are shocking events. It is of paramount interest of us all, young and old, people of all ethnic backgrounds, that public order should be maintained. I acknowledge—we all acknowledge—the social problems which exist in these areas, but it is no solution to loot and burn shops which serve the area or to attack the police. Mob violence must be dealt with firmly and effectively and criminal acts punished according to the criminal law. The police should have the support of all of us in striving to maintain order and uphold the law. It is their first priority. It is the Government's also.
Mr. Gerald Kaufman: I congratulate the right hon. Gentleman on his appointment to his high office and I regret, as I am sure he does, that his first duty in that new office is to come to the House on such a wretched occasion.
Five people have died in sad and savage circumstances, and the first duty of the House today is to send sympathy to those who are mourning Mr. Kammalia Moliedina, Mr. Amir Moliedina, Mrs. Cynthia Jarrett, Police Constable Keith Blakelock and Mr. David Hodge. We send our concern and best wishes for a speedy and full recovery to Mrs. Cherry Groce, a tragic victim of these dreadful events, and to all others—police, firemen, ambulancemen and ordinary innocent citizens—who have suffered injury in disturbances which have included arson, looting and the dreadful crime of rape.
Many have undergone serious financial loss, and I must first ask the Home Secretary what action can be taken to speed up the payment of compensation under the Riot (Damages) Act 1886 and to expand that Act's scope to take account of loss of income after the riots.
The House will be debating these matters on Wednesday, and I must repeat the anger that is felt on this side at the failure of the Government to provide time, which has meant that the House will have only half a day on each occasion to debate this profound issue and the crisis in southern Africa.
Grave questions arise from these disorders and it is essential that the country receives answers on matters which have caused profound national concern. These relate to the nature of policing during riots, and such questions come from the populations of the affected areas and from the police themselves. What the Home Secretary said today will not allay any of these anxieties. They relate to the relationship between the police and the community, in the inner cities and elsewhere. They include disquiet over the spreading use of firearms by the police, the background to the riots, mass unemployment, especially among teenagers, bad housing, environmental decay and dereliction and racial discrimination.
The Home Secretary boasted today about funds provided under the urban programme, but such sums are only a fraction of the money that has been taken away from these areas in abolished housing subsidy, reduced rate support grant and rate support grant penalties. It is an absurdity that the Home Secretary boasted at Handsworth of the money going to Handsworth when in this financial year alone more money is being taken away from the city of Birmingham in rate support grant penalty than all those sums given over a period of years.

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Only two days after the Brixton disorders, in April 1981, Lord Whitelaw, as Home Secretary, announced to the House an inquiry under Lord Scarman to start right away. After the latest riots, however, the Government stubbornly refuse an inquiry. The Police Complaints Authority inquiries do not begin to be a substitute because, as Lord Scarman in his report insisted,
"It is necessary before attempting an answer to the policing problem to understand the social problem."
It is all very well for the Home Secretary to boast of the increase in police resources under the Conservatives, but he said nothing about the terrifying crime wave from which the county is suffering and which the clear-up rate shows the police are increasingly unable to combat.
The social problem referred to by Lord Scarman has broadened and deepened. in the four years since his report, and the need for action is that much greater. Lord Scarman warned in his report that
"to ignore the complex political, social and economic factors … is …to put the nation in peril."
Our fear is that, unless the Governments response is much more far-seeing than has so far been demonstrated, Lord Scarman will have been right in his grim warning that
"disorder will become a disease endemic in our society."
Those are the dimensions of the challenge which we face and which the nation expects us to meet.
Mr. Hurd: I am grateful to the right hon. Member for Manchester, Gorton (Mr. Kaufman) for his opening remarks. I share his desire, on the question of compensation, that the 1886 Act should be implemented in such a way as to bring as effective and prompt relief as possible. I am in touch with the receiver of the Metropolitan police, who is responsible in London, and my hon. Friend and I had a meeting with the West Midlands county council, which is responsible in Birmingham.
The right hon. Gentleman referred to the use of police arms and I agree that if there are lessons to be learnt from the two incidents that are now being investigated we should not be afraid to learn them. The latest available figures show a reduction in the issue and use of arms by the police. In 1983, firearms were issued to police officers in England and Wales in 3,180 operations, while in 1984 the figure fell to 2,667.
The right hon. Gentleman said that I should have gone beyond quoting the figures in the urban programme, by which I stand, and he referred in particular to the question of penalty under the block grant. My right hon. Friend the Secretary of State for the Environment is in his place.
I remind the right hon. Gentleman that the basic arrangements for block grant distribution redistribute resources substantially in favour of areas, such as the inner cities where needs are high. The inner city authorities—not all of them, but too many of them—are opting to throw some of this potential benefit away by spending at levels which they know will reduce their grant entitlement and impose extra burdens —[Interruption.]—on their local police and businesses.
Regarding an inquiry, about which the right hon. Gentleman and his hon. Friends have tabled a motion for Wednesday, it is clear that when things go wrong, we must inquire into what went wrong and what can be done to put matters right. That is happening through the criminal investigations by the police, through the investigation, under independent supervision, of complaints against the police, through the review of tactics in London, through
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the review of manpower, about which I have spoken, and through the review of spending, which I also mentioned, to make sure that it is effective. These are all inquiries or reviews which are going on among those responsible so that they can get on with doing their job effectively.
I do not accept the case for a long judicial inquiry overshadowing the efforts that are now being made to learn the lessons which must be learnt. As the right hon. Gentleman knows, such an inquiry would prejudice the possibility of criminal proceedings in some instances. Apart from that, it would impede the effective follow-up action at which we are aiming.
Several Hon. Members rose——
Mr. Speaker: Order. I remind the House that there is to be a debate on this issue. I ask hon. Members to address their questions to it directly rather than make the speeches that they may make on Wednesday.
Mr. Mark Carlisle: Is my right hon. Friend aware that I believe he has, as the new Home Secretary, the wholehearted support of all of my right hon. and hon. Friends in his wholesale and unreserved condemnation of the appalling acts of violence, arson and criminal damage that have taken place, which cannot be justified even on the grounds mentioned by the right hon. Member for Manchester, Gorton (Mr. Kaufman)? Can my right hon. Friend assure the House that the Government will, by the provision of men and equipment, ensure that the police have, and continue to have, all the equipment that they need to deal with any similar incidents in future?
Mr. Hurd: As my right hon. and learned Friend has observed, it is a matter of men and equipment. The only test is that of need and that is the only test that we shall apply.
Mr. David Steel: In view of the Home Secretary's statement that all responsible members of our society will condemn the disgraceful behaviour that has occurred, will he agree that it was especially sad that not everyone in elected positions in local and national politics did so at the time? We must start by uniting in condemning such behaviour. Will he agree also that our prime responsibility as politicians at local or national level is to cure the bitterness and deprivation on which, unfortunately, criminality feeds in our inner cities? In that connection, I shall ask the right hon. Gentleman a couple of questions that arose from my visit to Handsworth last week.
Does he accept that there is much criticism that in the past the action that has been taken through self-help schemes and the urban aid programme has been directed to outside contractors, who use outside employees and take away the profits that could be earned by local people? Does he agree that we should be looking for schemes that are designed to continue employment and business in the inner city areas? Will he undertake to talk to his colleagues in the Departments that are concerned to ensure that that is done in future?
Secondly, is it the right hon. Gentleman's interpretation of the 1886 Act that the insurance cover there provided does not include consequential loss of business and loss of vehicles? People are waiting for answers to these questions.
Mr. Hurd: The extent of the insurance cover provided under the 1886 Act needs looking into. I had a preliminary

35
discussion with the West Midlands county council and the council touched on that issue and a number of others. I should like to consider the matter. Having done so, I shall write to the right hon. Gentleman.
The right hon. Gentleman's point about local labour is important. It was made to me as well while I was in Handsworth. As we examine the effectiveness of the spending of the moneys that we are putting into inner city areas, my right hon. Friend the Secretary of State for Employment is especially anxious that the spending should be directed towards people and not only physical conditions. The point about local labour falls very much into that category.
Unfortunately, it is true that not all the relevant locally elected representatives have condemned violence. I did not go into that in my statement and we may have to inquire rather more carefully into the issue during the Supply day debate.
Sir Dudley Smith: When considering these serious matters, will my right hon. Friend not forget the areas in which there are large ethnic minority communities where the citizens are well behaved and extremely responsible? Will he consult his colleagues to ensure that the necessary financial aid that these areas receive is not cut merely because those who live in them do not cause trouble?
Mr. Hurd: I quite agree. My hon. Friend is on to an important point. The last thing that would be needed would be some sort of blanket assumption that all those who are members of the ethnic minority communities have a part in these troubles.
Mr. Merlyn Rees: The Home Secretary has been firm from the beginning that there is no need for an inquiry, suggesting that he and his advisers have sufficient information. If that is so, what is the reason for the vast increase in crime since 1979 and the regular rioting in the streets, which was not a feature of life in Britain in the 1960s and 1970s?
Mr. Hurd: I rejected the idea of an over-arching judicial inquiry partly on the ground that there have been a host of inquiries by those who have responsibilities in these matters to ensure that they can carry out their responsibilities more effectively. That process is continuing, and rightly so, as part of the general pattern of our response to the problem that the right hon. Gentleman has mentioned, which is that of an increasing rate of reported crime. Many different authorities are in this business. We must build a coalition of partners against crime. I do not see that that will be helped by the Opposition's proposal for an over-arching judicial inquiry.
Mr. Ivor Stanbrook: I agree with my right hon. Friend about the efficacy of the shields and other defensive equipment that is provided to the police, but may I suggest that it might be dangerous to promote a defensive mentality on the part of police commanders, and that the sight of policemen cowering behind their shields under a rain of missiles from hooligans in the street was an offensive and humiliating spectacle? Will he bear in mind that the proper function of the police is to enforce the law and arrest wrongdoers at the time, and that that should be more vigorously pursued?
Mr. Hurd: It is difficult to generalise in advance about the operational decisions that a police commander will have to make. We must leave operational decisions to those who are in charge of operations. However, I agree with my hon. Friend that the spectacle that we witnessed at Tottenham on the Sunday night was intolerable. I believe that the commissioner said so in his statement.
Mr. Jeff Rooker: Does the Home Secretary appreciate that my constituents, employed or unemployed, black. Asian or white, have everything to gain from the maintenance of law and order and everything to lose by the rioting that took place recently? That was also the position in 1981. What is in his statement to assure my constituents that the Government are seized of the need to ascertain what has happened so that we can take the necessary steps across all areas of policy to ensure that it does not happen again?
Is the Home Secretary aware that in June there were still about a dozen claims outstanding under the Riot (Damages) Act 1886 in respect of the events that took place at Toxteth in 1981? Can my constituents expect a more speedy response in the implementation of that Act than the Toxteth people have experienced?
Can the Home Secretary identify any misuse of spending by the Birmingham city council, which it seems is implied in his statement? What is the council spending money on improperly and what has it taken away from the inner city? If the right hon. Gentleman does not understand what I am saying, will he obtain the relevant figures from the Department of the Environment before Wednesday to ascertain the level of net expenditure in the inner cities, taking into account the cuts in rate support grant over the past two or three years?
Mr. Hurd: I am not making any accusation against Birmingham city council. I am merely saying that all responsible authorities, including Government Departments and local authorities, need to look again at the way in which substantial sums have been spent, to ensure that the moneys help those who are affected. I found in Birmingham that there was a ready acceptance of the need to look again at the way in which money is spent.
The hon. Gentleman is quite right in saying that there has been delay in dealing with compensation claims under the 1886 Act following the Toxteth riots in 1981. I am anxious that on this occasion the proceedings should be more promptly carried through. Of course, the relevant authority — in the hon. Gentleman's case the West Midlands county council—has to check claims to ensure that there is not abuse. The projections that the West Midlands county council gave me last week show that a substantial sum will be paid out in this financial year.
Mr. Jonathan Sayeed: Is my right hon. Friend aware that there is no doubt in my mind or in the minds of my right hon. and hon. Friends that we have seen our police force behave with considerable restraint and courage? I doubt whether any police force anywhere else in the world would have been able to behave in such a manner. Does he agree that the cause of inner city calm is not helped by certain Left-wing councillors? Neither is it helped by the one or two rotten apples, or inadequately trained policemen, who sometimes harass blacks in parts of Britain in the inner cities. May I draw my right hon. Friend's attention to a television programme entitled "Do They Mean Us?", which showed a West Indian being

37
harassed by police unnecessarily? I ask that my right hon. Friend looks at that particular film clip and considers having it shown at the police college to show others what should not happen.
Mr. Hurd: I agree with my hon. Friend. The selection and training of police officers is enormously important. Since the Scarman report both aspects have been transformed. The change in the complaints procedure which Parliament made last year is enormously important. We have brought forward to the first stage the independent supervision of investigation. I hope that as that major reform sinks into people's consciousness they will have more confidence in the procedure for investigating complaints. Those are two ways in which we are meeting my hon. Friend's point. I should like to look at the film to which my hon. Friend referred.
Mr. Allan Roberts: Is the right hon. Gentleman aware that, whereas the people in Toxteth complain about insensitive policemen and a heavy police presence, my constituents in Bootle complain that they do not see sufficient policemen. Surely the Merseyside chief constable has got it wrong if one area complains of too many police and another is under-policed. Is the right hon. Gentleman aware that heavy drug pushers have moved from parts of Liverpool to Bootle knowing that, because of the heavy police presence in Toxteth, there are insufficient police to do the job and that they can get away with their activities? Will the right hon. Gentleman review the policing policy with the chief constables in the metropolitan counties and the Commissioner of Police of the Metropolis? Will he for once accept that insensitive policing in areas where there have been riots, disturbances, violence and looting—we all condemn this —has something to do with the problem? Will the right hon. Gentleman accept that the Government are to some extent responsible for this because of their policies for urban Britain? If the Government can do nothing about the problem, why do Conservative candidates always fight elections on the issue of law and order?
Mr. Hurd: My experience is that, after events of this type, some people say that too few police were involved and others say of the same incident that too many were present. I do not think that one could generalise or step into the shoes of the chief constables or the Commissioner of Police of the Metropolis who have to decide how to deploy the forces that are available to them. We authorise the forces. Merseyside, like London, has had a substantial increase in numbers. I do not think that a Home Secretary or the House can tell chief officers how to deploy their resources town by town.
Mr. Michael Mates: If alienation between young blacks, young Asians and the police is part of the trouble, cannot a good deal of the blame be attributed to those local authorities which will not allow police into schools to explain to young people their rights and responsibilities in society? Will my right hon. Friend do all that he can to convince those local authorities of the error of their ways?
Mr. Hurd: The vendetta that some Labour London boroughs—aided in the past few weeks by some local branches of the NUT— pursue against the police has been carried to the lengths of preventing schoolchildren under their charge from knowing what a policeman looks
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like, what he does and why he is on the same side as they are. So long as the main Opposition party tolerates such activities it cannot be taken seriously in these matters.
Mr. John Fraser: I am sure that the Home Secretary will recognise that, for Socialists in a democratic society, rioting, burning, looting and murder play no part in our political life, not least because they intensify, as has happened in Brixton, the vortex of unemployment and despair. Does the right hon. Gentleman recognise that in the inner city riots are becoming the standard response to deprivation and to the consequences of the Government's economic and social policies? We want an open inquiry following on Scarman because there is an inevitable and inescapable link between areas of rioting, catastrophic unemployment, cuts in housing investment, especially on problem housing estates, and the Government's conduct on law and order. Those links—even if they do not justify what has happened— are inescapable. Because we do not want the Government to hide behind secret reports, such as the repressed report on housing expenditure, we ask for a reforming of a Scarman-type inquiry to try to understand the volcanic forces that are increasing the fragility of our social harmony. Will the Home Secretary have the courage of his predecessor, Lord Whitelaw, and set up a public judicial inquiry?
Mr. Hurd: I am grateful to the hon. Gentleman and to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) for their stance in public on these matters. Undoubtedly that stance has been helpful on the ground. However, I do not accept the generalisations of the hon. Member for Norwood (Mr. Fraser). I do not accept that the standard response in Lambeth to deprivation is a riot. That does not square with any accurate description of what happened the other day in the hon. Gentleman's constituency. The looting, attacks on people and the terrible crimes committed cannot in any way be justified or explained by talking about deprivation. I do not, therefore, accept the hon. Gentleman's generalised explanation. There are many areas of deprivation where there have not been riots. There are many areas with large concentrations of ethnic minorities where there have not been riots. That type of generalised explanation simply will not do.
Mr. Richard Page: I thank my right hon. Friend for his welcome statement. Is he satisfied that the massive support which we have already given in the past five years to the police force is being used most effectively? Is more money really the answer?
Mr. Hurd: When we assess the need for additional resources for the police we must at the same time assess whether they are making efficient and effective use of the resources that they already have. During the past year or so a great deal of progress has been made in that direction by all police forces in England and Wales. I am anxious that that progress should be maintained.
Mr. Dave Nellist: While no Socialist or Marxist would condone the rioting or deaths in recent weeks, is it not a fact that massive youth unemployment, deteriorating housing conditions, falling living standards and the racist attitudes of many police officers are the political petrol that the Government have

39
poured on Brixton, Toxteth, Tottenham and many other areas in recent years? That is the real reason why the youth of Britain are exploding in anger.
Mr. Hurd: I reject that analysis. It is interesting that, when I was in Birmingham the day after the riots, that type of verbose analysis was rejected by almost everyone in Birmingham. People said, "You will hear a lot of that blather, but don't take any notice of it."
Sir Peter Emery: Will my right hon. Friend condemn absolutely any person who suggests that the standard reaction to anything is a riot? That suggestion is not only wrong, but condones and encourages that action. This must be stopped. Will my right hon. Friend make it clear that any attack on the police, whether physical or verbal, must be condemned? The police need all the support that we can give them. Will my right hon. Friend recognise that the vast majority of the people expect the precepts of Anglo-Saxon behaviour and of law and order to be maintained? These standards must be maintained. despite what other ethnic minorities want. [Interruption.] That needs to be said, and it is not racist to say so.
Mr. Hurd: I agree with the first two points. On the third point, I think that the position is clear. People who have legally settled here and made their homes here are entitled to the full protection of the law, including the law against any form of discrimination on grounds of colour. In return, it is right and reasonable to expect not only that they and those whom they influence obey the law but that they co-operate with the institutions that are designed to protect them, including the police.
Mr. Robert Maclennan: In the face of these grave criminal challenges to effective policing in our desolate urban areas, will the Home Secretary take steps to extend and improve the quality of initial and in-service police training? Does the right hon. Gentleman recollect that, following the 1981 riots, it was recommended that the initial training period should be doubled? The Government have not acted on that proposal. Does the right hon. Gentleman recognise the importance of this aspect, especially if there is to be any question in the future of using plastic bullets or CS gas? What steps can the right hon. Gentleman take in consultation with the chief constables and the Commissioner of Police of the Metropolis to improve the ethnic balance of the police?
Mr. Hurd: The period of initial training has been substantially increased, and it is not too much to say that its content has been transformed since the Scarman report. partly because of Lord Scarman's recommendations. If the hon. Gentleman goes, as perhaps he already has done, to Hendon or any of the other main training centres, he will see that training in action, and he will see members of the ethnic minorities talking to young police officers. A major effort is being made in the direction that he mentioned. There has been some progress in increasing the numbers of black and Asian police officers, but it is tiny compared to the need. Police forces understand the need and will do that they can to recruit without lowering the standards on which they rightly insist.
Mr. Michael Colvin: Is my right hon. Friend aware that many Conservative Members
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consider the remarks made by Opposition Members about riots being the stock reply now to inner city deprivation as insulting to many inner city areas that face what could be described as deprivation and that contain many ethnic minority groups but whose law and order record is excellent? Does he also acknowledge that the antidote to fire is water? Will he, therefore, confirm that one of the items of equipment that his Department will be considering introducing to police forces is water cannon, which can have the effect — no matter how difficult deployment may be on some occasions — of not just damping down tempers but damping down fires?
Mr. Hurd: I agree with my hon. Friend's first point. As to his second point, yes. we are considering water cannon. There is a debate within the police forces about them. On the whole, I believe that the debate is rather turning against water cannon, partly because they are difficult to manoeuvre and partly because I do not believe that many people supposed that water cannon would have been much use in the conditions prevailing at Tottenham on that Sunday night. We must conclude the debate and reach a decision.
Mr. Ernie Roberts: Will the Minister not rely on water cannon, plastic bullets, tear gas, flat-nosed bullets and flails to solve the problems to which he has referred. and instead remove the obstacles that he has placed in the way of the local police in Hackney, Tottenham and such places meeting the borough council police committees to achieve the kind of co-operation that he wants? The fact that he has objected to police having any meetings with publicly elected representatives helps cause the problems that he says he is worried about.
Mr. Hurd: That is obfuscation. The London borough police committees do not have, and have not been given by Parliament, a role in this matter. I object strongly to the implication that they are entitled to obstruct police efforts to reach a friendly understanding and a better level of agreement with the people who live in those areas. I am surprised that the hon. Gentleman, with whom I have discussed these matters in earlier years, should continue to take such a hostile line.
Mr. Alex Fletcher: Is my right hon. Friend aware that there is strong evidence that the best way to direct the public funds that he mentioned to help inner city deprivation is through a Government-sponsored development agency, not least because such an organisation can attract a great deal of private sector funds? I am not raising a theoretical matter. There is ample evidence to show that Glasgow is miles better, thanks to Government policies, than cities such as Liverpool and Birmingham which, despite the funds that they have had, have not made the same good use of them.
Mr. Hurd: I am interested in my hon. Friend's point, born of his experience, but it would be rash of me to be tempted down that road this afternoon.
Mr. Eric Deakins: Is the Home Secretary aware of the growing anger and anxiety felt among our Asian communities about another type of inner city disturbance, which was not mentioned in his statement but which should have been—the growing amount of racial harassment and the number of attacks on Asian

41
families in the streets and in their homes, especially in north-east London and perhaps in some of the areas that he has mentioned? Is he aware that there was a spate of such attacks in my constituency this summer? It is a miracle that no one has been killed through having petrol poured through the letter box and set alight at one o'clock in the morning. If we go on in that way, we shall shortly have mass murder on our hands. Will he give the House an assurance that strong action will be taken to protect Asian families in the street and in their homes from the evil racists in our midsts?
Mr. Hurd: Yes, Sir. I entirely agree with the hon. Gentleman. He is justified in using such language to draw the attention of the House to that matter. It is one of the subjects that has grown strongly in importance during the time that I was in Northern Ireland. It has been drawn vividly to my attention since I returned. I have discussed the matter with my advisory committee on race relations and with the police. He will be aware that the Association of Chief Police Officers is issuing some strong and effective guidelines. We must ensure that those guidelines are reflected in action on the spot. With the help of people such as the hon. Gentleman. I believe that we can do that.
Mr. Peter Bruinvels: I represent part of the city of Leicester which has one of the largest ethnic communities in the country. The people of Leicester do not want more money put into the urban aid programme. They want many more police, the certainty that once detected accused people will be prosecuted successfully, stiffer sentences and more people imprisoned. That will bring about the peace that the people of Leicester want and expect.
Mr. Hurd: I note what my hon. Friend said about the police force in Leicestershire. He would not expect me to comment on sentences imposed by the courts. It is the job of this House to provide the courts with what we believe to be adequate and effective maximum sentences. We still have some ground to make up in that respect.
Mr. Tom Cox: Is the Home Secretary aware that those of us who represent inner cities very much share his feelings? We deeply deplore recent events. I beg him to listen to the comments that black and Asian residents often make to us when they criticise police methods of searching property, when front doors are kicked in and property is destroyed. That is what causes such bitterness within black and Asian communities. They do not object to the police searching. Unfortunately, it is the method of searching that the police so often use that causes such bitterness. I beg him to consider that.
Mr. Hurd: I am sure that the hon. Gentleman is right to say that we in the Home Office should spend a great deal of time listening to authentic points of view on those matters. I am aware of the worry about police methods that he has mentioned. It is difficult to pin down, as he is aware. I hope that his constituents and others will take sensible advantage of the new complaints procedures that Parliament has approved. They will provide a way of sorting out what is nonsense from what is true and I hope that they will gradually gain public confidence.
Mr. Douglas Hogg: When my right hon. Friend talks to senior police officers, will he make just two points? The first is that the House expects the police, when they are carrying out their search and arrest policy, to
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exercise every possible restraint and to show due regard for the rights of the community in which they are moving. Secondly, will he also make the point that, not withstanding the fact of the riots, the House and the community as a whole expect a policy of vigorous policing to be continued and, where necessary, a vigorous search and arrest policy to be used to apprehend drug pushers and those other people responsible for serious criminal offences?
Mr. Hurd: I agree with the general thought behind my hon. Friend's remarks and the phrasing of them.
Mr. Jeremy Corbyn: Does the Home Secretary accept that his statement points to much greater suppressive action by the police and a serious lack of understanding of the problems that lie behind the riots? Will he tell the House whether, further to his statement, the issuing of water cannon and plastic bullets is now standard practice for the police force and Home Office policy? Secondly, have any police officers been suspended following the events surrounding the death of Mrs. Cynthia Jarrett in Tottenham, and what inquiries have been made about that? Thirdly, is he prepared now to visit Tottenham seriously to examine that area's social problems, the background surrounding Mrs. Jarrett's death and other matters that led to the tragic events two weeks ago?
Mr. Hurd: My hon. Friend the Minister of State has visited Tottenham and discussed these matters insofar as they lie within the responsibility of the Home Office. That responsibility does not go as wide as the hon. Member's question. There is an investigation into how the tragic death of Mrs. Jarrett occurred and, as I have already said several times, that investigation is under the immediate and independent supervision of the Police Complaints Authority.
Mr. Jonathan Aitken: I welcome the firm tone of today's statement and its commitment to increased police training and resources, but will my right hon. Friend take care to include in those improvements the special constabulary, which can be such a useful bridge builder between the police and the communities they serve?
Mr. Hurd: Yes, I agree. Recent figures that I have seen are reasonably encouraging, but I agree that the special constabulary has an important role to play.
Mr. Reg Freeson: Will the Secretary of State accept that while none of us wishes to give any kind of sympathy to a practice in some quarters of police bashing, at the same time just strengthening the police force and altering tactics will not resolve the problems that have to be dealt with? It would be asking the police to do things they cannot possibly do to solve the problems of these areas. The Secretary of State will not accept a further inquiry. Will he then please re-read the many reports which have been published since the '70s and possibly earlier? There have been inner city studies, the Scarman report, the Select Committee reports and many others, and they have not been acted upon by Government. Will he please re-read them and get action to bring about proper integration of Government policy? Will he get more resources into these areas and see what can be done to

43
reorganise methods of local government to tackle inner city renewal on the scale that is required if we are to avoid any further developments down this path of riot?
Mr. Hurd: The day after the Handsworth riot I re-read the Scarman report, which I read at the time it was published, and I commissioned a study about how far it had been implemented. The policing side is the particular responsibility of my Department. In many cases, the police forces and the Home Office have carried through the spirit and in many cases the letter of what Lord Scarman recommended.
The vaguer, non-policing sections of this report, which are also important, are the responsibility of my other colleagues, but there again I would argue, as I have today, that the rapid expansion of the urban programme and the efforts which have been made in the employment field are within our responses to the spirit of Lord Scarman's report. Certainly, let us take down these reports, look at them again and consider them in the light of modern circumstances and update our policies. That is the line which my colleagues and I are taking.
Mr. Alan Howarth: Will my right hon. Friend continue to emphasise that, while it is imperative that we do not fail to provide the Government resources necessary for the sustaining of peaceful and decent conditions in our cities, it is also our duty to ensure the best value for money from the substantial additional resources the Government have already committed for this purpose?
Mr. Hurd: I quite agree with my hon. Friend. We have to make sure that throughout the public sector the taxpayer is getting value for money and that applies to the police. They are a priority in our minds. They were a priority before and that continues to be so. We have to assess on an up-to-date basis after the riots the nature of police needs and that has to be looked at alongside the effectiveness in use of the resources they already have.
Mr. Robin Corbett: Does the Home Secretary recall that when he was in Handsworth he rejected an inquiry into the events there for the reason —I think I quote him properly—that the ground had been well ploughed by Lord Scarman? Can he please tell the House whether a majority or a minority of the recommendations of Lord Scarman have been implemented by the Government?
Mr. Hurd: I devoted a lot of my answers to the last question but one on that point, but I am perfectly willing to elaborate on it on Wednesday. When I looked into the specific questions raised by the hon. Member I was quite surprised by the extent of implementation.
Mr. Bowen Wells: Will my right hon. Friend accept congratulations, first, on his assumption of office and, secondly, on his obvious determination to enforce the rule of law which must be a precondition for progress in this matter? After investigation, will my right hon. Friend be bringing forward the overall proposals of the Government for dealing with this situation? If he is, will he bear in mind there is serious educational under-achievement in the sector of West Indians living in those areas and that, of course, is the tinder from which violent protest is generated?
Mr. Hurd: I see the connection my hon. Friend is making and I endorse it, but I would get into difficulty if I started to trespass in the province of my right hon. Friend the Secretary of State for Education and Science.
Mr. Max Madden: Is the Home Secretary aware that his comments about recruitment to the police from the ethnic minorities will appear rather complacent? Does he accept that there is a lack of confidence between substantial numbers of people in the ethnic minorities and the police? Will he accept that the recruitment of more people from the ethnic communities to the police would considerably help confidence, and will he take determined action to increase recruitment from the ethnic minorities?
Mr. Hurd: Yes, indeed. I am glad to correct the impression which I gave the hon. Member. I am not in the least complacent about this: I am simply using the figures to show that there has been an increase, but it is not nearly strong enough. I hope we will have the support of the hon. Member and people like him in Bradford in bringing about this increase, which is in the interests of everybody.
Mr. David Sumberg: Is it not wholly hypocritical of the Opposition to pose as the defenders of law and order when they continue to give support to Labour-controlled police committees throughout the country who bash and criticise the police at every conceivable opportunity?
Mr. Hurd: I entirely agree. Opposition right hon. and hon. Members will have to sort this out if they are to be listened to with any kind of respect or understanding on these matters. There are far too many police authorities and committees in London who have no responsibility whatever for policing under the law, and those bodies are doing their best to complicate and frustrate the work of the police.
Mr. Harry Cohen: I, of course, deplore the riots, the deaths and the injuries, but is not the Home Secretary's earlier description of the riots as being due to greed and criminality a cover-up for the principal causes, poor police community relations and what Lord Scarman called the tinder box of urban deprivation? Is not the real answer to the first to have proper police accountability to the local community, community policing, and to the second for the Government to reverse their disastrous policies of cuts, housing decline and unemployment?
Mr. Hurd: No. I disagree with every syllable that the hon. Member has uttered.
Mr. Eric Forth (Mid-Worcestershire): Whatever may be our response to recent events, can my right hon. Friend assure the House that we will not be seen in any way to reward riot, arson and murder with additional attention or resources lavished on just that sort of area, because that would surely lead to greater trouble in future?
Mr. Hurd: My hon. Friend has brought out a good point and it is one which is in the minds of my colleagues and myself.
Mr. Michael Meadowcroft: Does the Home Secretary agree that the widespread police view that they should distance themselves from a legitimate role in the development of public policy is one of the reasons why they are sometimes seen as an alien group? Would he recommend chief constables to involve themselves in

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ideas about housing and particularly planning that are designed to develop a secure and stable community? That is the only way in which we can develop self policing and enable local communities to develop their own secure relationships rather than having to rely on an outside force coming in to pick up the mistakes that have gone before.
Mr. Hurd: The first job of the police is to uphold the law and maintain the Queen's peace. Those are their twin priorities. It may well be that chief officers or chief superintendents in carrying out those responsibilities find themselves, quite sensibly, drawn into other activities of the kind the hon. Gentleman has mentioned. That must be a matter for local judgment. Such activities underpin but are not a replacement for the two jobs I have mentioned.
Mr. Jerry Hayes: I am sure my right hon. Friend will be the first to agree that the vast majority of ordinary, decent citizens, black and white, will support entirely what he has said about giving resources to the police. Will he not agree as well that it would certainly help to clear the air and help to reassure communities of all ethnic origins if investigations into police complaints were dealt with thoroughly and speedily.
Mr. Hurd: I quite agree with my hon. Friend and direct his attention to the new PCA, the Police Complaints Authority, under the former Ombudsman, Sir Cecil Clothier. Mr. Roland Moyle, who is known to Opposition Members, is the deputy chairman. The brisk way in which they are setting about their new job is encouraging.
Mr. John Butterfill: I congratulate my right hon. Friend on announcing the setting up of the special units to co-ordinate various Government agencies and assistance in urban renewal. He declined to be drawn on the subject by my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher), but will he confirm that the agencies will have within their remit not only the co-ordination of assistance, but the targeting
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of that assistance and whether any further statutory powers will be necessary to ensure that Government aid is more effective?
Mr. Hurd: My hon. Friend and The Times today are galloping well ahead of events. I have set up no new units; it is not within my competence to do so. I have said that I am sure that we must bend our minds to whether the resources that we are devoting to the inner cities are well targeted. That certainly includes the question of the machinery.
Mr. Harry Greenway: Can my right hon. Friend tell us approximately when the newly announced offence of disorderly conduct will become law? Does he agree that it will have a valuable effect in controlling the sort of wickedness that we have seen?
Does my right hon. Friend also agree that if the Labour party were genuine and serious in wishing to do something to help law and order Labour Members would press their crazy colleagues at the GLC to withdraw the viciously anti-police video that they have been pushing in schools and everywhere else?
Mr. Hurd: My hon. Friend is right on that last point. It is a clear illustration of one of the themes that I have been making.
On my hon. Friend's first point, I cannot prejudge the decisions of the House or of another place. The proposal for an offence of disorderly conduct will be included in the public order Bill about which, I dare say, we shall hear more fairly soon. However, it is not connected with riot control or the serious disorders that we have been discussing today. We see the offence, as discussed in the White Paper on public order, as essentially a necessary weapon against hooliganism and minor kinds of violence which, although minor, seriously offend, distress and alarm our fellow citizens, particularly, perhaps, old people living alone.

Board and Lodging Payments
5.3 pm
The Secretary of State for Social Services (Mr. Norman Fowler): With permission, Mr. Speaker, I should like to make a statement about supplementary benefit board and lodging payments.
In April the Government took action to control rapidly increasing expenditure and to help curb abuse. Between December 1982 and December 1984 spending rose from £166 million a year to £380 million a year. At the same time, the number of boarders under 26 had more than trebled from 23,000 to around 85,000.
Regulations were introduced which provided for the maximum weekly amounts for board and lodging to be determined by Ministers, rather than by local offices. In addition, the regulations limited the period during which certain unemployed people under 26 could be paid as boarders. There was a wide range of exemptions to protect the most vulnerable who needed to be boarders, such as families with children. The regulations were scrutinised by the Joint Committee on Statutory Instruments and debated and passed by both Houses of Parliament.
On 31 July, after Parliament had risen, the High Court decided an application for judicial review on the regulations. Mr. Justice Mann rejected the argument that we had failed properly to consult the Social Security Advisory Committee, and he also rejected the argument that the time limit of four weeks applied in this case was unreasonable. The judge did, however, find that the powers in the Supplementary Benefits Act 1976 were insufficient to make regulations enabling Ministers to determine board and lodging areas and limits. In other words, the judge's view was that the regulations would have been in order if they had themselves contained the board and lodging areas and limits. Mr. Justice Mann declined to make a formal order, on our undertaking not to apply the time limits pending the making of new regulations or the outcome of any appeal. Immediate action was taken to put this undertaking into effect and I should like to pay tribute to the efforts of our local office staff in carrying out this work.
We have lodged an appeal against the judgment and arrangements have been made for an early hearing in the Court of Appeal. This will take place at the end of November. However, as Mr. Justice Mann specifically recognised, there is a need for a sensible interim operation. It is in the general interest that there should be stability during which the outcome of the appeal can be given proper consideration and the review, which we are committed to carrying out, completed.
I have accordingly laid draft regulations today. They include temporary provisions—which will expire at the end of April 1986—to meet the judge's points. There are two important differences from the regulations passed by the House in April. First, time limits will not apply to existing boarders on benefit. They will apply only to new claimants.
The second important difference is that I am also taking powers, in addition to the exemptions in the previous regulations, to exempt from the time limits claimants who would otherwise suffer exceptional hardship.
The House will appreciate, in view of what I have said, the need to clarify the position. The regulations achieve
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this without in any way prejudicing the outcome of the appeal. The House will have the opportunity to discuss the new regulations when they are debated next week.
We hope in this way to restrain spending, tackle abuse, but at the same time protect the interests of genuine claimants.
Mr. Michael Meacher: Is the Secretary of State aware that in the past three months he has twice been found by the courts to have acted illegally in cutting board and lodging payments? On the issue of obedience to the law, about which the Government talk so much, the right hon. Gentleman has been found to have laid illegal regulations which have led to the deaths of at least three young people and have caused public outrage because of the untold hardship and distress inflicted unnecessarily and wrongly, as it turns out, on thousands of others.
Is the right hon. Gentleman aware that. following the two legal decisions, only one of which he referred to today, the board and lodging regulations are in a shambles? After the second case on 18 September. Mr. John Laws, the Treasury counsel, conceded that the previous High Court hearing had effectively quashed the cash limits as well as the time limits in the regulations. How can the Secretary of State claim today that he is regularising the position when his new draft regulations affect only the time limits and do not touch the illegality of cash limits, especially given that it was on that latter point that the social security appeal tribunal found against the Department on 18 September?
More significantly, is the Secretary of State aware that my initial legal advice is that there may be grounds for holding that the new draft regulations are also illegal, because, contrary to the Minister's statement, they still do not address a main reason why Mr. Justice Mann ruled in the High Court on 4 August that the original regulations were illegal? Mr. Justice Mann said:
"Those questions"
he was referring the grounds on which regulations 2(1)(a) applies—
"are questions in regard to individual cases and are not questions as to the entitlement to benefit of a class of claimant which are answerable in terms of rules of general application."
In other words, the judge concluded that the regulations were illegal, not simply because, as the Minister said, they did not contain the board and lodging areas and limits, but because they were applied to classes of individuals, and the Secretary of State had no power to do that. Is the Secretary of State aware that, on that basis, we shall be taking legal advice before next week's debate about whether the new draft regulations may also be ruled to be illegal and invalid?
As the new regulations are clearly still shot through with legal flaws as well as—more importantly—being morally and socially indefensible, will the right hon. Gentleman accept that the only honourable course for the Government is to withdraw the regulations in full and to replace them by the alternative remedies recommended by the Government's own Social Security Advisory Committee? How many times must the Government be told that the reason why total board and lodging payments have grown so sharply in years is no fault of individual claimants, but is almost entirely due to the huge increase in unemployment, especially youth unemployment, and the almost complete collapse of the housebuilding programme, especially flats for single people to rent?

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Will the Minister accept that the new, revised regulations are still not in any way addressed to the root causes of the problem, but simply twist the knife in those who have already been victimised? Will he therefore take the only proper and honourable course available to him and suspend these cruel and unreasonable regulations straightaway?
Mr. Fowler: I will not, and I am sorry that the long lay-off has not made the hon. Gentleman's judgment any better than it was before. The Cotton case resulted from the regulations which were passed by both Houses of Parliament and were scrutinised by the Joint Committee. Three issues were raised—consultation with the Social Security Advisory Committee, the unreasonable time limit and the fact that my own powers are not of a general nature so that I could lay down time limits and board and lodging areas. It was only in the last case that Mr. Justice Mann found for Mr. Cotton. That position is covered by the new regulations which specify the areas and the limits.
I hear what the hon. Gentleman says about what he terms his initial legal advice. We will obviously want to study what that initial legal advice amounts to. However, there is absolutely no question of our wanting or seeking to withdraw these regulations for the very good reason that the position before we acted was quite insupportable. Payments had increased out of all proportion. When the hon. Gentleman says that the number of boarders, for example, under 26 had trebled, that is far more than can be explained by housing problems or unemployment. We had a situation where the maximum amounts payable were determined by local offices, charges were being pushed up, and there was fraud and abuse. In other words, there was a case for action, and the Government have taken it. We shall seek to protect the interests of claimants, but the hon. Gentleman's basic case is insupportable.
Sir Hugh Rossi: As the regulations also cover payments for people in residential homes, does my right hon. Friend agree that part of the problem relating to abuse arises from overcharging, very often for extremely substandard services and accommodation for elderly people? Does he agree also that the answer is not a standard payment, which can disadvantage genuine charities which are struggling to provide a good service but are unable to do so within the standards laid down, but rather a form of investigation or inquiry into the different homes and laying down perhaps what each home should be able to charge for the service that it provides?
Mr. Fowler: Yes. I have a great deal of sympathy with that point, and that is the position to which I should like to move, but my hon. Friend, whose knowledge of these matters is substantial, will understand that it is not possible to move to that in one step. Nevertheless, there is a great deal in what he says and it is part of the review that we are conducting. I am sure my hon. Friend will also agree that one of the permanent parts of these regulations is the new increased financial limits. They will apply to residential homes and to nursing homes, and they will, I think, be welcomed by the voluntary bodies.
Mr. Simon Hughes: Will the Secretary of State take the opportunity that the court case now gives him to reconsider the whole question of time limits, particularly as before the reshuffle one Department told people to get on their bikes, and his
50
Department then told them that they could not stay where they had arrived, thus showing some inconsistency in Government policy?
In the new draft regulations the right hon. Gentleman took on board one of the points made by my colleague the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) about extending the regulations to youngsters on bail. Will he tell us whether exceptional hardship cases will cover young people who find either a job or a home, but cannot take up either until after the time limit, so that they can be counted as being in exceptional hardship for the continuing period, which may well exceed the time limit which the regulations would otherwise lay down?
Mr. Fowler: I considered the last point that the hon. Gentleman makes, but the purpose of having an exceptional hardship clause is to give even more discretion to the exemption classes which already exist, and that is the spirit in which they have been introduced. However, I shall give further consideration to that.
As the hon. Gentleman will know, the time limits are currently suspended. Under the new regulations, the time limits will remain suspended for existing boarders. The difference is that new boarders — those who become boarders after the regulations come into force, if passed by Parliament on 4 November—will be subject to time limits unless they are exempt. Financial limits have never been suspended, and of course they continue to apply.
Mr. Roger Sims: Can my right hon. Friend confirm that the reason why he brought in the regulations is that there was ample evidence of abuse? If the regulations are technically defective, surely the answer is not to withdraw them, as the Opposition suggest, but to bring them into line with legal requirements, which is exactly what he is proposing.
Mr. Fowler: Yes, I think that that is the position. There is, as we all know, evidence of abuse——
Mr. Meacher: By landlords.
Mr. Fowler: The hon. Gentleman speaks of abuse by landlords, and that, of course, is correct. We all know of the advertisements that have been placed. However, l have to tell the hon. Gentleman that there is clear evidence of abuse by claimants as well. I shall give one example. [Interruption.] If the hon. Gentleman will listen, he may learn something. A special fraud investigation earlier this year in Euston showed that about half of those claiming to be resident at particular hotels were no longer there—about 600 cases out of 1,200. As a result, we have asked for other checks to be carried out in all regions. So the hon. Gentleman's immediate and superficial response, that claimants are not abusing the system, is shown, I fear, to be totally wrong.
Mr. Andrew F. Bennett: Will the Secretary of State give very careful consideration to the way in which he is attempting to railroad these regulations through the House this week and next? He prayed in aid the Joint Committee on Statutory Instruments to suggest that he got them right last time round. He is now placing on that Committee an extremely heavy burden in carrying out its duty to scrutinise the regulations properly. As the Committee meets tomorrow, it will be very difficult for it to consider all the points put to it as a result of the right hon. Gentleman laying the regulations today, and if the Committee waits until next Tuesday it will be difficult to

51
produce an accurate report to enable the House to have an informed debate. Will the Secretary of State therefore consider delaying the introduction of the regulations until the House returns in the new Session?
Mr. Fowler: There is no question of my seeking to railroad this through. The Court of Appeal will be looking at the position since April. There is nothing in any action that I am proposing that will affect that, or any rights that might result from that, but it is clearly in everyone's interest to have as much certainty in the matter as possible, and the new regulations are designed to take us through the period of appeal. That avoids the prospect of confusion. It allows the Government, Parliament and the public to consider the next step, and it also avoids what could be the absurd position of going back to the situation prior to April 1985, which would mean a reduction in some of the limits — for example, in the nursing and residential homes referred to by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi).
Mr. T. H. H. Skeet: Whilst appreciating that the matter is to be settled by appeal in November, and also appreciating the extent of the abuse, may I ask my right hon. Friend to bear in mind the totally unsatisfactory background to this problem, which is that mobility will never give a young man of 26 or under the opportunity to be in a place long enough to secure a job? This is a very real problem which my constituents face.
Mr. Fowler: That is certainly not the intention of the regulations. We have to strike a balance between allowing young people the opportunity to find a job—something which we aim to do, and will obviously encourage them to do—and avoiding a situation where, as has been shown, some have turned to a permanent way of life in which, if they find a job, they will not be able to sustain the standard of living which they have been enjoying.
Mr. Harry Cohen: Was not the Prime Minister most unwise, and characteristically inflexible, to say within days of the court decision that the regulations would be reintroduced? Are they not a source of great fear for the young homeless, and are they not detested by all the organisations that seek to help them? Are they not a recipe for more homelessness, vagrancy and crime among young people?
Mr. Fowler: For the second time this afternoon, the hon. Gentleman is exaggerating the position. It is absurd to believe that there is no problem or that things could be kept as they were, because that is clearly not the case. I think that that is recognised, perhaps even on both sides of the House. The hon. Gentleman claims that hardship has been caused. The early results of our monitoring do not show evidence of general hardship being caused by the policy. The survey in southern England showed that a quarter of claimants were covered by exemptions and that over one third, approximately, continued to live in the same accommodation. Therefore, it is not anything like the picture that the hon. Gentleman is painting.
Mr. Richard Holt: My right hon. Friend knows that many of us will support the general thrust of the new regulations, but when examining the detail, not only the time limits but the geographical definition of areas should be looked at. I am sure my right hon. Friend will
52
agree that one can hardly regard the north-east coast of England as a seaside resort in its historical context, so the four-week limit will have to be changed. Will my right hon. Friend also examine cases of people being disadvantaged when they have to leave the homes where they have been raised because of the brutality and ignorance of their parents? They will be forced to move away from all their friends, relations, churches, clubs and everything else as a result of what is liable to happen under the regulations.
Mr. Fowler: The final point raised by my hon. Friend might be dealt with under the existing exemption policy, but if it is not, that is the point of adding to the exemptions a provision whereby such exceptional hardship can be dealt with.
Mr. Charles Kennedy: Will the Secretary of State explain how he can argue, as he did this afternoon, that he is trying to represent and "protect"—to use his word—the interests of claimants when the only reason why he is here making a statement is that it is the courts that are representing the interests of claimants against his intentions?
Mr. Fowler: That is not the position. Mr. Justice Mann envisaged the possibility of amending regulations, and he framed his judgment accordingly. It is in no one's interest that there should be uncertainty over the next months. The new regulations that I am proposing will expire after six months. That is the period in which the Court of Appeal will decide, and the parties can decide on further action. The regulations will not affect those living in board and lodging accommodation at the time they come into force.
Dr. Brian Mawhinney: Bearing in mind the extra work that the regulations have generated, will my right hon. Friend pay special tribute to the officers in Department of Health and Social Security offices around the country who, at least in my constituency, have handled the extra work with professionalism and good grace? Will my right hon. Friend explain who will have the right of judgment in cases of exceptional hardship?
Mr. Fowler: I shall have the residual discretion on exceptional hardship. I should like to underline what my hon. Friend said about the staff. The staff in the DHSS have worked magnificently to deal with the situation.
Mr. D. N. Campbell-Savours: How much will this reversal in the courts cost the Government? Where will the money come from within the right hon. Gentleman's budget? What is happening in DHSS offices? Is it true that in many offices staff are working day and night to clear the backlog of cases that have come forward?
Mr. Fowler: I have no evidence of the final point raised by the hon. Gentleman. With regard to what he said at the beginning of his question, I should tell him that the matter is the subject of an appeal. We are appealing to the Court of Appeal, so before the hon. Gentleman tries to count the cost the ultimate decision must be made.
Mr. Jonathan Aitken: Will my right hon. Friend ignore the shrill and exaggerated barrack room legalisms that we have heard from the Opposition Front Bench and accept congratulations on what is a sensible, interim, tidying-up measure? From now on, will my right hon. Friend concentrate on a point that is worrying many in the communities most affected—the much suspected

53
incidence of fraud and abuse? My right hon. Friend has said that he has positive proof of such fraud. Will he say a little more about that and what he will do about it in south coast seaside towns, such as my constituency, which have been affected by it?
Mr. Fowler: I am grateful to my hon. Friend. As I said, we have conducted a special fraud investigation in Euston, which showed, by any measure, a totally unsatisfactory position. The result is that I have asked for other checks to be carried out in all the regions. We would be failing totally in our responsibility if we did any less than that. In addition, there is evidence of different charges being made, with DHSS claimants being charged a higher rate than ordinary residents. That all adds up to the fact that it is not enough to say that the existing situation can be preserved, because the position before we took action was totally unsatisfactory.
Mr. John Butterfill: I should like to be associated with the representations made to my right hon. Friend by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) on residential rest homes. I congratulate my right hon. Friend on what he is doing for cases of exceptional hardship. However, representing as I do a seaside town, I should like to say that we still have a considerable problem which is not entirely solved by my right hon. Friend's statement today.
I was in my local DHSS office in Poole only on Friday, and the staff were not, as was suggested by Opposition Members, inundated with a backlog, but they do have a considerable problem. There are still thousands of claimants in my constituency, many of whom have no intention of seeking work. That is evidenced by what my local DHSS office tells me. It also told me on Friday that there is no doubt that charges by boarding houses in my constituency were put up substantially, to the maximum level. In fact, that became the minimum level. Therefore, we have an acute problem, and I urge my right hon. Friend to deal with it as quickly as possible.
Mr. Fowler: I hear what my hon. Friend says, that a balance must be held, but the evidence that the Department
54
and I are receiving is that some of the major problems, particularly in some of the seaside resorts, have become considerably easier over the past month. However, I shall look further at the point raised by my hon. Friend.
Mr. Meacher: May I ask three questions arising from earlier questions? How will the Secretary of State seriously exercise the discretionary exemption himself? Did I hear him say that he would reserve that power to himself? How will that operate in any widespread way? Secondly, does the right hon. Gentleman really believe that two, four or even eight weeks is enough time for a young person to get a job, when no fewer than a quarter of young people leaving school are unemployed? Thirdly, will the right hon. Gentleman tell us how many young people have been forced out of their bed and breakfast accommodation, or board and lodgings, since 29 April as a result of the regulations'?
Mr. Fowler: On the last point, we have only the early results of our own monitoring at present, but I shall try to make the evidence that we have available to the House before the order is debated next week. For example, as I have said, our monitoring in southern England showed that one quarter of claimants were covered by exemptions, and that more than one third continued to live in the same accommodation. It has also shown that no general hardship is being caused by the policy.
The time limits, again, are a matter of judgment. We have debated this time and again and my hon. Friend the Minister for Social Security has gone over this on countless occasions. I believe that reasonable time is allowed for people to look for jobs in a particular area.
On the question of discretion, the exemption policy already covers a wide range of situations, and probably about one quarter of all cases are covered by the existing exemption policy. In addition, I shall now have discretion to exempt cases of exceptional hardship. Clearly. such exemption will be exercised through the DHSS, and particularly through the headquarters division of the DHSS.

Steel Industry
5.30 pm
Mr. Tom Clarke: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"British Steel's intention to close the Gartcosh plant and the implications for the future of the steel industry."
At this moment, a number of my colleagues — including my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and my hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and for Motherwell, South (Dr. Bray)—are meeting the TUC steel committee to discuss the decision, announced by British Steel during the parliamentary recess, to close the Gartcosh plant in my constituency by 31 March next year. That decision came as a great blow to my constituents and caused great concern to many people in Scotland. British Steel says that just over 700 jobs will be lost, but we know that, because of the knock-on effects, we are thinking in terms of more than 1,000 jobs in a very hard-pressed area, which is looking for new jobs rather than wishing to experience the loss of any of the jobs that we now have.
In addition, there is extremely grave concern about the Ravenscraig complex of which Gartcosh is very much a part. Gartcosh is the cold finishing mill for Ravenscraig and clearly its biggest customer. If Gartcosh is removed and there is not the reasonable investment in Ravenscraig that Scottish people rightly demand, there will be great worry across the whole political spectrum in Scotland about the future of this very important plant, the closure of which would be devastating for the industrial future of west central Scotland.
On 2 July the Prime Minister told us that the House would be made aware of British Steel's plans for these matters, but, although the announcement was made in the recess and is now being implemented, the House has had
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no discussion whatever on this major decision by British Steel. It seems to me right that there should be discussion and debate on this and that we should consider the implications, not just for my constituency, important and profound though they are, but for the whole of the British steel industry — in Wales and England as well as in Scotland. I believe that the steel industry and its future is essential to our manufacturing base and I know that this is of the utmost importance in the priorities that the House has set.
In Scotland we are gravely concerned about the unemployment situation that we face. In my constituency, because of the decline of major industries in an area that was once prominent in the mining, steel and iron industries, there have been so many closures that one village after another has faced devastation, and what was once known as the "iron burgh" of Coatbridge has hardly a steel job left. In those circumstances, a debate on the future of the British steel industry is of the utmost importance.
I thank you, Mr. Speaker, for listening and I know that the House will give due regard to the case that I have made.
Mr. Speaker: The hon. Member for Monklands, West (Mr. Clarke) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"British Steel's intention to close the Gartcosh plant and the implications for the future of the steel industry."
I have listened with great care to what the hon. Member has said. He knows that my sole duty in considering an application under Standing Order No. 10 is to decide whether it should be given priority over the business already set down for this evening or tomorrow. I regret that I cannot find that the matter raised by the hon. Member meets all the criteria laid down in the Standing Order and, therefore, I cannot submit his application to the House.

Design and Innovation
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]
5.35 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I am delighted that at long last the House has an opportunity to debate the very important industrial issue of the role of design and innovation in the economic wellbeing of our nation.
I am delighted to report that in Washington DC in August this year I was honoured to receive, on behalf of the Government, a unique award from the Congress of the International Council of Societies of Industrial Design. In his generous tribute, the congress chairman, Mr. Deane Richardson, said that the award recognised the British Government's
"long term and increasingly active support of design"
and their
"unparalleled commitment to the contribution design can make, not only to industry, but to people the world over".
Putting this award in its context surely sets the scene for today's debate.
The performance of our manufacturing industry is of critical importance to the United Kingdom's future economic strength and, of course, to standards of living. Manufactures account for 68 per cent. of our total exports of goods and services. Manufacturing is exposed much more directly than many service industries to international competition and its competitiveness is therefore critical to the future of the entire economy. Together with capital investment, the exploitation of innovation provides the driving force for maintaining and increasing our share of today's fiercely competitive world markets.
The importance that the Government attach to manufacturing is shown by the wide range of schemes of assistance provided by the Department of Trade and Industry. Direct financial assistance to industry amounted to around £1,500 million in 1984–85 with over 90 per cent. going to manufacturing. My Department's support for the innovation programme supplements the general assistance available for research and development under the Science and Technology Act by a number of specific schemes aimed at encouraging greater awareness of the new technologies, at providing help with consultancy services and training and, where necessary, at giving assistance with research and development investment.
This Government's support for innovation in industry has increased from almost £94 million in 1980–81 to some £240 million in the current year. In 1978–79, the previous Administration were spending less than £40 million on innovation in industry. This was complemented by a variety of sectoral schemes to encourage short-term capital investment in industries such as drop forging and red meat slaughterhouses. The Government have turned their back on short-term sectoral measures and are encouraging innovatory application of a wide range of enabling technologies that cut across the needs of all innovative industries. Our aim is to ensure a lasting contribution to competitiveness. Support for robotics, microelectronics, biotechnology and optical fibres, for example, has continued to grow and has demonstrated its effectiveness in industry.
We are redirecting our innovation support to deal with the major inhibitions to exploitation and use of technology
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in industry. Companies are now much more profitable than they were during the recession, when they were investing in short and medium-term product developments in order to stay in business. We now want United Kingdom companies to get ahead of the game and so are encouraging, through publicity and consultancy schemes, an awareness of the new technological products. We want to encourage innovatory, collaborative research and development projects to enhance confidence in market prospects for new products. We want to help companies to extend their technical base through collaboration with universities and polytechnics. For example. our teaching company scheme budget will expand from £3 million now to £5·2 million in two years' time. In cash terms, the Department will be increasing its support of these non-project activities by 50 per cent. by 1987–88. In addition, we are stressing the vital importance of adequate supplies of trained manpower through studies such as the information technology skills shortages committee — which I chaired — which has been instrumental in helping the higher education sector respond more rapidly to the changing needs of industry.
Through these schemes, we are encouraging the development and use of key enabling technologies — information technology, fibre optics and robotics, for example—which draw on several scientific disciplines and which have applications across the mature as well as the new industries. The aim is to help companies over the first hurdle in the acquisition and application of new technology, after which companies can be expected to use their own resources.
Sir Terence Beckett said recently that a company that operates in a competitive environment must innovate to keep up with its rivals. In the modern world, a company's intellectual capital—its designs, patents, know-how and knowledge—are more important than its fixed assets in determining its earning power and even its capacity to survive.
Innovation in British companies, therefore, should not he regarded as a one-off event separate from the rest of business. Innovation should be treated as an essential feature of company operation. The problem is deep-seated, and we must work to bring about the necessary change of attitude. There are now encouraging signs that bankers and financial advisers are paying more attention to intellectual capital in their analysis of investment opportunities.
In the main, today's successful trading nations are categorised by their close attention to the rapidly changing demands of the market place and by the quality and design of their products. In fulfilment of this principle, my Department has been running its quality and design campaigns, both of which are aimed at changing management attitudes.
The British Government are very aware that in design, and in the skill of our designers, industry has the ideal mechanism to reforge and reinvigorate our economy. This mechanism needs constant attention. Having held the Government's design portfolio for three and a half years, I have learnt that there must be a long-term commitment to design from Government if our economic recovery is to be sustained on meeting new and growing sectors of market demand.
We have that commitment. We have a policy that includes a new recognition of the importance and desirable status of engineers, designers and technologists. The

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Government are committed to maximising the role of all design disciplines in improving our country's economic health and in supporting a higher quality of life.
What is more, we now have the three major building blocks that we need to ensure success. First, we have a design education and training system which is one of the best in the world and recognised as such by our big competitors overseas, many of whom employ British designers in key positions. Secondly, we have the successful industrial firms with established worldwide reputations for excellent design, firms, which can act as standard bearers for the rest of industry. To take the automotive and aerospace industries, for example, we have Jaguar whose XJ12 is, if hon. Members will forgive a little personal prejudice, the finest production sports-saloon car in the world. There is also Hawker Siddeley whose Harrier jump jet is internationally renowned, and the March 84C racing car designed by March Engineering using the world-famous Cosworth engine. The car won the 1985 Duke of Edinburgh prize for design excellence. There were 14 finishers at last year's Indianapolis 500, all of which were March 84Cs.
Thirdly, we have the professional organisations such as the Society of Industrial Artists and Designers, representing 7,000 industrial designers and the representative bodies of engineering designers including the Institution of Engineering Designers. There is also the Design Council, which is the Government's principal agent in design, and which, as the House knows, plays such an important role in promoting the benefits of good design. It is essential that these building blocks are put together in a coherent way if they are to form the foundations upon which success can be built.
My right hon. Friend the Prime Minister chose to discuss this subject at a seminar on product design and market success at 10 Downing street in January 1982 with a group of 60 industrialists, designers, educationists and Ministers. The holding of that seminar was to prove a crucial turning point in this country's attitude to design.
When I studied the outcome of the seminar, the first point that struck me was the extent to which design influences nearly all aspects of manufacture. It affects the ease and economy of manufacture, ease of maintenance, reliability, choice and use of materials, appearance. presentation, ergonomics, fitness for purpose and corporate identity. The second point was that designers and their supporters are full of innovative ideas. We had some 40 suggestions at the seminar and nearly all turned out to be suitable for Government action. It was my responsibility to see that we got on with the job.
We set out within a few months of the seminar to encourage the enlightened use of design consultancy. With the Design Council acting as our agents, we set up the design advisory service-funded consultancy scheme — now part of the Department of Trade and Industry's business and technical advisory service — which provides small and medium-sized firms with financial assistance to use top-flight designers. So far, I am delighted to report, the scheme has received more than 3,200 requests for assistance and nearly 2,000 projects have been completed. Projects completed during the first year are already demonstrating increased market share, increased profits, increased sales, increased production and, of course, increased jobs.
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The scheme was not introduced to give birth to a Harrier jump jet or a Rolls-Royce engine. Its purpose is to encourage management in small and medium-sized firms to recognise the practical. balance sheet benefits of design input, and to realise that good design improves market share, is a good investment and should be a crucial part of their business.
I am delighted with the results so far. Apart from the benefits to a firm's bottom line, consultants are reporting that they have formed long-term relationships with new clients and that they are being used to help companies strengthen their in-house design capabilities. Many managers are reporting a higher level of design activity in their companies. To help publicise all these benefits an exhibition of case studies is touring the country.
Having got the funded consultancy scheme off the ground in 1982 we turned our attention to parallel methods of raising senior management's awareness of design. In early 1983 we mounted a brief but intense advertising campaign, its purpose being mainly to get people talking about good design. We put advertisements in national newspapers and specialist magazines over a period of three weeks. We followed that with a series of seminars all over the country throughout 1983 under the title "Design for Profit". They were aimed at senior managers, particularly chief executives and finance directors. They were attended by nearly 1,500 managers and they led to a doubling of applications for help under the funded consultancy scheme.
In February 1984, we held a design seminar for financial institutions to encourage them to take a firm's product design and development policy into account when making investment decisions. We have recently supported a series of four seminars on design management organised by the Society of Industrial Artists and Designers.
There has been a considerable increase in design coverage by press, radio and television since the campaign began. Many managers are reporting a higher level of design activity in their companies and many designers are reporting a greater demand for their services. This is all very welcome.
Alongside the awareness activities we have also begun to support a wide range of activities in education and training. In the context of education, one of our most important tasks is to encourage the sort of cultural change that is needed to ensure that future generations have an inherent understanding of design and an appreciation of the value of well-designed objects. We also need to develop a national culture that honours manufacturing industry as much as it honours pure research or the established professions such as law and medicine. Let me mention just some of our design education initiatives where we have deliberately chosen to work at every level from infant education to postgraduate and post-experience training.
We have asked the Design Council to study existing practice in all design-related education in primary schools and to prepare a report recommending action that should be taken to ensure that best practice is disseminated right through the primary education system. We are concerned in this initiative with design as part of general education, thus helping the cultural change we wish to bring about. We have also noticed that such education can have a dramatic effect on the performance of students assessed as below standard against conventional academic criteria. Ability in reading, writing, drawing and mathematics

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improves considerably when taught in the context of a design-related subject. For example, a project on the pyramids can and should involve all these skills, as well as the historical dimension.
We are giving support over a six-year period to a curriculum development project which is aimed mainly at helping to fill gaps in the vocational design education curriculum at secondary and tertiary level. Other organisations are playing their part. For example, the Business and Technician Education Council, through vigorous leadership from its board for design, is endeavouring to promote quality in design education by concentrating on the range of skills that a designer should have. In particular, BTEC is promoting the need for students to have as part of their design courses relevant work experience so that their education is set in the context of the real commercial world; "hands on" experience of various forms and uses of new technology and the requirement to develop basic skills in business to relate design to costs and competing in the market place.
At the far end of the scale, we are supporting both the work of the design management unit at the London Business School and the implementation of a report by the Council for National Academic Awards on design management education in polytechnics and colleges. Both of these activities fit in with our aim of increasing the awareness among managers of the benefits of good design by ensuring that they then have the skills to absorb the design input into their corporate strategy.
A pilot scheme, entitled "Young Designers into Industry", has just begun. Under the scheme 12 new textile graduates will spend six months to a year in selected companies on a carefully planned and monitored programme of industrial experience. If the pilot is a success, we hope to extend the scheme gradually to other industry sectors involving up to 200 young designers.
Last year I was satisfied that we had got things moving on a number of fronts. A wide variety of useful initiatives had been taken. The time had come to ensure that the initiatives were all pulling towards commonly agreed aims and objectives. I therefore prepared and published a policy document entitled "Design for Design: A framework for Action". I believe that this is unique and that no other Government have put design into their industrial strategy in this way before.
Hon. Members who have seen a copy of that document may also have noted that it bears the stamp of a designer. It is the first Whitehall policy document whose layout was designed by an outside designer. No doubt its clarity speaks for that particular input. In it, I set out the Government's principal objectives in their design policy. They were, first, to continue to increase awarenesss in industry and commerce of the benefits of good design; secondly, to encourage greater consciousness of good design by customers; and, thirdly, to reinforce the importance of design education and training at all levels.
We sought a mechanism that would structure all future design initiatives so that they met these objectives. As a result, a strategy group was established, based in the Design Council, which reported at the end of 1984. Detailed recommendations for action were prepared and were put to Government for decision. At a meeting with the Design Council several months ago, I was able to welcome the report and provide the council with an additional grant of £500.000 to enable it to get further activities started.
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We have achieved quite a lot since the Prime Minister's seminar in January 1982. I think it is clear that we could not have done so without wholehearted support from designers and from their representative bodies such as the Society of Industrial Artists and Designers, from other bodies such as the Royal Society of Arts and colleges such as the Royal College of Art. And, above all, we have had the firm and staunch support of an experienced design promotion body, the Design Council.
We can be proud of this achievement. We can be proud of our designers. We car be proud of our successful manufacturers, whose design and quality-led attack on international markets is winning back for us some of our lost market share. They are the companies where jobs are secure because they are based not on artificial subsidies but on real profits derived from success. We want more companies to follow this example, and that is what we are working towards.
By the end of this financial year the Government will have trebled the spend on design initiatives since 1982 and helped over 3,000 firms to improve their design capability and therefore their profitability.
This Government have a unique commitment to the sponsorship of design as a major force for industrial innovation, and so over the last four years the Government have increased expenditure on design promotion from £4 million in 1982 to nearly £12 million in 1985–86. I can think of no more cost-effective item of public expenditure on the industrial front.
I welcome — if that is what is happening this afternoon — the politicisation of the design debate, though not in party political terms but as a method of raising the general awareness of the importance of good design as a key factor in improving the competiveness of all sectors of industry and commerce.
Britain's industrial problems are largely due to a mismatch in our economy — that is, an economy which has until recently committed too many of its national human and capital resources to the production of goods for which demand is low or stagnant and not enough of such resources to the production of goods for which demand is high and growing. Our talented designers are the key link between market demands and a company's production facilities. As such, they are a key element — in my view, the key element — in leading our national industrial fight back.
5.59 pm
Mr. Geoffrey Robinson: The whole House will agree that today's debate is important. It is the first time in about 20 years that we have debated industrial innovation and design in a linked context. it is unfortunate that today's debate has been so severely contracted by the important preceding private notice question and statements. Nevertheless, in the time that is still available to us certain important points need to be made direct to the Parliamentary Under-Secretary of State for Trade and Industry who seems to be living in a completely different world from that which is known to me as it concerns manufacturing industry in the west midlands, through the continuing loss of market share and the continuing inadequacy of product and process innovation in British industry.
It does the Minister no good to indulge in orgies of self-congratulation and complacency, because he knows that innovation in design, particularly in manufacturing, has

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never been worse. A recent report on overseas trade by the Select Committee on Trade and Industry makes it dramatically clear that the crisis facing British industry, particularly in those areas to which the Minister referred as being growth areas, is acute and becoming worse. Under unchanged Government policies it can only become even worse, to the point of being terminal.
The Minister rightly directed most of his remarks to industrial innovation. Before dealing with that I shall refer to the Design Centre and the Society of Industrial Artists and Designers, to which the Minister also referred. We welcome the award to the Government and we do not wish to spoil the flourish and obvious personal delight that the Minister took in going to Washington to receive the award.
I shall put to the Minister some questions which have been put to me by various bodies, notably by the Society of Industrial Artists and Designers about its centre for design studies.
Throughout the debate we shall come up against the Government's credibility gap — the gap between what they say and what they do. Unlike President Truman, who advised observers of the political scene in America not to read his speeches but to look at his budgets and spending, this Government plead with us to believe their speeches despite the directly contradictory evidence of their Budgets and spending cuts.
Within the greatly increased design budget. will the Minister support the SIAD initiatives in establishing a centre for design studies? I am sure the Minister is aware of the purposes for which that centre is being established. It aims to bring design more closely in touch with manufacturing industry, to bring the institutions teaching design in closer touch with the manufacturing sector and to bring design studies more closely within the secondary education system. They are laudable aims. Does the Minister intend to commit himself to provide money to support his words?
Can the Minister explain why design, which has been declared a priority in education, has not been allocated a penny piece? I accept that this is not the Minister's direct responsibility, but there is an overlap in which he has a direct interest. Priority for this Government simply means to be spared the chop.
The Government's cuts are having a severely deleterious effect in other areas. One has only to look at the bleak, forbidding appearance of the Tottenham Court road police station and contrast it with the private sector modernisations in the Tottenham Court road shopping area—Habitat, Heal's and Laskys—to realise how far the Government are from setting an example in design.
The economic benefits of good design are becoming increasingly accepted and understood, thanks to the excellent work, despite the hostility displayed by the Secretary of State for Education and Science, of the science policy research unit at Sussex university. Social benefits could be exploited by a Government committed to relating in a meaningful, human way to the people whom they represent and with whom, through various offices, they are daily in direct and widespread contact.
In computer parlance, the Government should go for a "friendly approach", but that language and such concepts are foreign to the Government's ideology. The quality of
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the social environment—the interface in hospital waiting rooms, police stations and jobcentres—could be much improved. The scope is enormous.
Such an achievement requires the Government to practise what they preach. Like any other service, good design needs customers and purchasers. The Government could and should be major purchasers of good design. They could influence and promote good design by an enlightened and benign public sector building programme. The Government cannot adopt such a policy because they are hung up on the perverted logic that Government spending destroys jobs and inhibits initiative. Meanwhile, fully trained architects and designers join the brain drain or the dole queue. About 500,000 construction workers are eager to be back at work.
Design, important and central though it is, and integral as it must be to the manufacturing and process industries, cannot be a substitute for product and process innovation. Britain has a proud history of industrial innovation. We are pioneers of the industrial revolution. Britain is the land that gave birth to the jet engine and radar, to penicillin and cephalosporium. It has made a long and proud contribution to the world's industrial and medical progress.
More recently, publicly funded research through the Medical Research Council discovered the fundamental genetic code of human life, the double helix. Crick and Watson are two outstanding Nobel prize winners. Their work has been continued by Cesar Milstein, who is also a Nobel prize winner and is also working at the MRC laboratory at Cambridge. On his fundamental research into monochromal antibodies will be built not only life saving drugs to cure cancer, and to prevent rejection in transplants, but the industries of the 21st century and the forthcoming biotechnological revolution which will equal, if not surpass, the microelectronic revolution of today in its implications for food production, energy creation and the prolongation of life itself.
The continuation of that proud heritage of outstanding intellectual achievement, derived from unique scientific research and development, is put at risk by the Government's policy. The perversity is hard to believe. The Government, recognising the achievements and even, as today, schizophrenically proclaiming them, are cutting back systematically and destructively year in and year out on Britain's scientific research effort. I say that the Government are perverse because their simpliste argument is that. because we are good at research and not so good at exploiting it, if we cut back on research we shall achieve better development and application. That argument is all wrong. It is a total non sequitur.
Certainly, our basic research has been good. Certainly, we have not exploited it as we should. There is no reason for us to be complacent about our achievements in basic research, but the Government's cuts in research budgets in all the research councils, the cuts in the universities' capacity to promote research and the cuts imposed on the University Grants Committee have not been made good in real terms through product innovation, as the Minister knows.
I shall deal later with the five months moratorium and the disastrous effect that it had when the Minister of State succeeded his predecessor and promptly undid the little good work that had been done previously. To emphasise the importance of the commercial exploitation of research, and indeed, as I would, to go further and accord to it as great an intellectual and cultural distinction as that

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traditionally recorded to basic scientific research. does not, and cannot be allowed to, lead to the destruction of the latter. However, that is where the Government's policies are leading us. If the Minister does not believe me or the clear statements made by the Labour party and the TUC, he should listen to the most distinguished scientists charged with the research and development effort throughout the country, who for the last three years have been pleading with the Government for a change of policy.
The president of the British Association for the Advancement of Science threw away a prepared speech and delivered an impassioned plea to the Government to reverse their policies. In its heavy document "Future Business", the TUC pointed out only too clearly that the future was being prejudiced by short-term cuts.
Sir John Kingman, chairman of the Science and Engineering Research Council, and Sir David Phillips, chairman of the Advisory Board for the Research Councils, have pointed out that the Government are hacking away at the scientific base to a point where Britain will no longer rank among the best in the world. They have said that, not only because it is right that Britain should be at the forefront of fundamental scientific research in its own right, not only because we are good at doing that, not only because British fundamental research and science have been the envy of the world, but because they understand that we should not hinder or stand in the way of the application of that research and development but that, on the contrary, without it we should have even less chance of proceeding and developing as an industrial nation.
Those were the very words used by Sir Hans Kornberg, president of the British Association for the Advancement of Science, when he threw away his prepared speech at Strathclyde university a month or two ago, and said:
"I am convinced that in the long term we cannot hope to prosper as exploiters of imported ideas, any more than we can hope to prosper as the assemblers of imported parts."
That is the message that the Government must take on board. Our future must lie in exploiting the fruits of basic theoretical research. We cannot do that by cutting research. It is not a question of robbing Peter to pay Paul; it is robbing Peter to starve Paul.
Where have Government policies led us? Has there been any switch from theoretical fundamental research into applied research and development in manufacturing industry? Of course there has not. What has happened to research? The Minister talks about record profits and industry now being able to embark on a process of industrial and product innovation, product improvement and the things vital to the recapture of industrial markets in a highly competitive world economy, but what has happened? Overall, the figures since the Conservative party took office show that research and development have fallen in manufacturing industry by no less than 6 per cent. In the sector with the highest growth rate worldwide, information technology, since the Government took power a relatively neutral position in our balance of trade has been turned into a deficit of £2·3 billion. With unchanged policies, that deficit is projected to reach £10 billion. Employment in that sector has fallen by 12 per cent. since 1980 and British production has increased by only 44 per cent., while imports have increased by 110 per cent. That is the real world, and the one which the Minister appears to be ignoring. If there is time, when he replies to the debate, I hope that he will address himself to that world.
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Every impartial observer knows that the position is grave. What is true of information technology is true of the whole spectrum of British manufacturing industry. Lack of industrial innovation is pervasive and increasing. The United Kingdom is losing out because of lack of product and process development in one market after another.
Let us again consider information technology and look at the NEDO report published at the end of last year, entitled "Crisis facing UK Information Technology". It states that it is
"concerned that the industry is close to a threshold below which an independent, broad-based UK IT industry would no longer be viable."
Perhaps the Minister will square that with his earlier remarks. The report continues
"We believe that new policies are urgently needed, on the part of industry and of government, to attempt to reverse the decline before it is too late."
The decline is there, and it is pervasive. It is happening in information technology and microelectronics, and the only reaction from the Government was a five-month moratorium imposed at the end of last year and surreptitiously introduced while my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) was at the Dispatch Box, the outcome of which was to cut the already grossly inadequate support for industry by £10 million. Those are the facts and the figures which we have put across from the Dispatch Box time and time again.
If the Minister does not believe me, he should read what the former Secretary of State, predictably elevated to chairman of his party, said—that there would be less in real terms. Of course there is less in real terms—that is the whole burden of this Government's policy. It is to provide less and expect industry to do more. That would work if other countries felt the same way, but we know that they do not. Other countries are investing far more in their support for innovation and the design and development of new products and processes in their industries. It would work if there was any evidence that industry was, in fact, making that investment, but all the evidence is to the contrary. Research and development investment is down 6 per cent., and investment itself is down 25 per cent. From where will the rebirth and the regeneration come?
If the Minister does not accept what I say, let him read what Richard Bullock has said. I believe that he was a deputy secretary in the Minister's Department. He is a formidable mandarin and no supporter of my party. He is now secretary of the Electronic Components Industry Federation. He said about Government support for innovation:
"We are pleased the electronics grants have been released from the moratorium but in comparison with our European competitors the money looks pretty feeble."
Of course it does, because it is.
Last year—the most recent figures available—the Government invested £38 million in electronics — a growing sector and the centre of what is happening in information technology. That compares with West Germany's support of £61 million and French support of £188 million. That is the true face of Government support for industrial innovation—accept the minimum that the Treasury will concede and then cut it further to show the Prime Minister what good boys they are. We expect the Department of Trade and Industry to support innovation in industry, not to kow-tow cravenly to the Treasury's obsessive preoccupation with cutting Government expenditure.

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The Labour party believes that it is not yet too late to deal with the fundamental problems. There is no need yet to become fatally pessimistic about British industry's capacity to innovate and regain markets in key technologies. The key technologies are well known to all hon. Members — microelectronics, computer-aided design and manufacture, second generation robotics that have vision, biotechnology and fibre optics. What is needed is a policy along the broad lines of the Lords' report, which comes hard on the heels of numerous other reports—to all of which the Government have turned a deaf ear before they have read them.
We need a sound basis of continuing and greater Government support. We need the creative, positive use of Government purchasing power to back British products and British innovation. We need the provision of medium-term risk capital, working capital and capital for investment in plant, machinery and marketing over a medium-term period, at modest rates of interest. We need also—over a period of time because it will be difficult to get it—a determined effort to switch the emphasis of Government-funded research and development away from defence to civilian projects.
As all Opposition Members will be aware, the Minister's speech was an abject exercise in self-congratulatory illusions—illusions that the Government are supporting British design, when the public sector, its architecture, premises and facilities offer some of the lowest standards of design. When confronted with an opportunity to extend the economic case for good design to the social enhancement of people's relationship with Government Departments, with inevitable bureaucracy the Government have resolutely refused to put their money behind their words of support.
Even worse than the Government's refusal to take a lead and set an example in the area of design has been their three-pronged attack on Britain's ability to carry out industrial innovation. They have cut our research establishments, cut the research carried out at universities, and cut the output of key graduates in the key technologies that we need for the future. There are fewer people now graduating in engineering, electronics and computer technology than when the Government took office. Above all, they have reduced their support for innovation.
Those policies must be reversed. We must have a positive planning mechanism for deciding key innovative technologies for the future. We must have the will to finance them, jointly with the private sector, in a medium-term programme. We must have a sustained programme of support for fundamental research in the universities and research councils. All of that can be done only by a Government who believe in working with industry, who believe that British industry can innovate and compete, who believe that British industry can regain lost markets and who believe that it is the job of the Government to work with industry to enable that to be done.
The present Government have lost faith in British industry. Nothing that we heard from the Minister today can lead us to any other conclusion, ignoring the rhetoric and considering only the facts. Before the doom-laden prophesy of the Lords' report is borne out, the Labour party will be returned to power to carry forward industrial product and process innovation as a basis for rebuilding our manufacturing sector.
6.21 pm
Mr. Kenneth Warren: We thought that this would be a quiet debate at the end of the Session, but it is clear from the peroration of the hon. Member for Coventry, North-West (Mr. Robinson) that it is likely to be livened up somewhat. However, it is not inappropriate to hit at the question of innovation and design because the subject has been neglected for long by the House. I suppose that, as a subject, it stretches all the way from Habitat, the company, to Hiroshima, because there are good and bad things about design.
While I have no desire to upstage the hon. Member for Coventry, North-West following his remarks about the report from the House of Lords, he should recall that the House of Commons Select Committee on Trade and Industry, of which I have the honour to be Chairman, reported on the subject matter of the debate a year ago and drew the attention of hon. Members to the fact that we are in a parlous situation in terms of our manufacturing industry.
The Lords pointed out that if our oil ran out at the end of this century, we should be faced with a balance of payments problem, which would have to be solved, of about £10 billion a year. This represents about 1 million jobs. We shall have to solve that problem, but it will not be solved in the way in which some of the economics twitterers sitting on the safe perches in Fleet street believe it can be solved, simply by switching to service industries.
Following the excellent start that the Minister gave the debate, I hope that my hon. Friend will appreciate that those of us who are deeply interested in the success of manufacturing in Britain are concerned about the wellbeing of the skills that are in industry and about the way in which, we hope, we can revive those skills to improve the employment and the wealth of the nation. While we have time to recognise the problems and do something about them, we do not have time to believe that such problems do not exist.
At the conclusion of this debate we shall probably all agree that action is essential, and I hope that the Minister will assure the House that the comments of hon. Members will give rise to action, because there is much in the fertile seeds of innovation that lie in the palm of the Government to develop, the Government being the bigget single customer in Britain and having the duty, whether they are or are not interventionist, to be an entrepreneur. In other words, the Government have a duty to respond to the opportunities that can be presented and to lead by example.
I declare an interest as an engineer with several patents to my name or to which I have contributed and as a Fellow of the Royal Society of Arts. I have noticed in the work of the Royal Society of Arts during the five years or so during which I have been a Fellow that each year the society turns its attention to the way in which for many decades innovation has been neglected in Britain. I am pleased, therefore, that the Government are today rising to the chance as well as to the challenge of making innovation and design a catch phrase in their programme.
It is certain, in historical terms, that whether the opportunities of design and innovation come from the cultural and historical style of the Renaissance or from the needs of war, encouragement is essential and patronage by people and Governments has been proved in the past to be essential to make that flower flourish. One cannot make

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people innovative. They can only be encouraged to do so. It is fascinating to note, for example, that more than a century ago a Select Committee of this House looked into the whole problem of arts and manufactures and the way in which to encourage innovation. Sir Lyon Playfair said at about that time:
"The engines of Watt and Stevenson have already expanded the wealth and resources, and even the territories, of England more than all the battles fought by her soldiers or all the treaties negotiated by her diplomats."
The Prime Minister did a marvellous job yesterday in the Bahamas, and I hope that the Foreign Office is on her side. The fact remains that in the present situation, which is not new, the contributions from the back benches of industry have advanced the abilities and wealth of the nation much more than they have been given credit for doing.
Innovation takes time. From invention to innovation — the encouragement of invention so as to achieve innovation — can take a great time. Simple and commonplace devices can take much longer to reach the market place than one might imagine. For example, the ballpoint pen took 58 years from invention to reaching the market place, and where would the House of Commons be today without that device? Detergents took 42 years to reach the market place. Magnetic tape recording — beloved by many of us, though I must be careful about the way in which I put this, considering the interests of our secretaries—took 39 years. The jet engine, to which the hon. Member for Coventry, North-West referred, took only 13 years, but with the incentive of war. The zipper, without which we could not do anything, took 32 years to reach the market place.
There is a long time constant between the reality of saying what we want to do and the actuality of a good product at a recognisable price in the market place. It is true, however, at the other end of the scale that commodities such as oxygen in steelmaking took only three years, and synthetic penicillin, thank goodness, took only two years to get from the invention stage to the market place.
I endorse the praise of the Minister for the Royal Society of Arts, the Design Council, the Society of Industrial Artists and Designers and BTEC. A clear theme emerges. We know how to innovate, how to design and how to get the tasks completed by producing products in the market place. The trouble is that time and again—this was stated in 1835 when, as I said, a Select Committee of the House looked into the very subject that we are debating today—we seem to have to invent the wheel. I am almost inclined to feel that a wheel is circular because it is a compromise of design, with hon. Members sitting round it trying to work out the optimum shape.
Six aspects are clear as to how to get good design going. The first is to achieve well designed artifacts. That means the ability to exchange knowledge about markets, designers, engineers and profit in such a way as to balance the whole. That is a feature of good companies strong in innovation and design, and it is nothing new.
The second aspect is good market research — an understanding of what people want — because the problem with innovation and design is to make sure that there is not just scientific push put market pull. The video cassette recorder is a good example of that. Wherever it was invented, Mr. Morita of Sony realised that the public
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wanted it before they knew they wanted it, and he pulled them towards the cassette recorder. Hence Japan's domination of that market.
The third aspect is product support; the fourth is represented by the good old word "flair"; the fifth is design authority to make sure that somebody at the top of a company knows that there is a requirement for design authority and sees that it is exercised; and the sixth, probably the most important, is the need in companies to make sure that there is commitment and concern throughout top management to good practices. These requirements apply to manufacturers and to service industries such as tourism where the customer measures his own investment by the quality of the product. It all adds up to an attitude of mind.
There is another problem and it was identified by the Select Committee a year ago. The Select Committee in another place has also drawn Parliament's attention to it. Over the past 30 years the West Germans and the Japanese have increased their market share to the level that Britain enjoyed 30 years ago. Over the same period Britain's market share has just about halved. These are figures that cannot be ignored. They reflect the realities of competitiveness in the market place.
Over the past 30 years import penetration in manufactured goods has increased. In the 1950s, only about 5 per cent. of our manufactures were imported, but imports are now 30 per cent. What are the reasons for that?
Everyone argues that we must be competitive, and I suggest that there are two features to which we must pay attention, the first being price competitiveness. We are all familiar with the well-rehearsed arguments that are advanced on both sides of the House about inflation rates, the cost control of wages and the value of fluctuating exchange rates. I suggest that we do not pay enough attention to non-price factors.
It is unfortunate that there is not enough information on non-price factors and that that which is available is not particularly recent. The most recent information that I have found relates to 1965 and 1971. I ask my hon. Friend the Under-Secretary of State to consider turning the resources of Government to the task of ascertaining what is going on in this area. About 20 years ago the following question was posed: "Why buy foreign machine tools in Britain?" Since then the machine tool industry, especially in the midlands, has suffered dramatically from not understanding the problem. Delivery, specification and the superiority of product support accounted for 84 per cent. of customer choice. Opportunities for reciprocal trade accounted for 11 per cent. and the price factor accounted for only 5 per cent. We must not believe that to contain ourselves within a low wage economy will make us export competitive. I believe that everyone should give a fair day's work for a fair day's pay, but there should be a fair day's pay for a fair day's work.
Customer choice of non-price factors may explain why we see so many over-priced German cars on our roads. The Americans found that they were successful exporters when they had a high-wage economy. It is extraordinary that the non-price factors account for nearly two thirds of customer choice. It seems that price is not the most significant factor. If a company offers a good quality product and supports it well, it will attract customers. If price is so important, surely the United States, Switzerland and Sweden should have as much unemployment as we have.

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My hon. Friend the Under-Secretary of State made an excellent speech but I must challenge what he said about designers going abroad. He claimed that it was a good thing, but I find it a dangerous trend. Designers have gone abroad — the Royal Society of Arts conducted an investigation into this—because they are underpaid in Britain. Those with higher degrees or degrees find that they are earning only 5 per cent. more than those who have not bothered to qualify. That leads many to ask, "Why qualify?" About 60 per cent. of those who have qualified in fashion design are unemployed. I am sure that my hon. Friend does not wish skilled people to be faced with such a shortage of employment opportunities.
There are real problems for the future and this can be measured by the way in which patents are being registered. In 1984, six out of the top 10 companies in the United States registering patents were foreign owned and there was not one British company among them. The Americans are worried because they had only four out of the top 10. I am worried because Britain was not represented at all.
We have real opportunities to innovate and to use the skills of our designers. I commend to my right hon. Friend the Secretary of State the work of the science policy research unit at Sussex university, which is examining how design and innovation can be encouraged. We have the ability to grow faster than we have so far. I am not happy with the present position. We must look to the Government to re-think their investment programme in terms of education and investment in basic science and technology. I commend that approach to the House.
6.36 pm
Mr. Ian Wrigglesworth: I am pleased to be able to take up some of the remarks of the hon. Member for Hastings and Rye (Mr. Warren), who has reminded the House of some of the harsh realities that face the country. He chairs the Select Committee on Trade and Industry, which has often done the same.
On behalf of the Social Democratic party and the Liberal party I welcome the debate, which is directed to a subject that is sadly neglected by the House and, unfortunately, by many sectors of British industry. If the debate helps to draw attention to the importance of design in industry, it will have performed a useful function.
I welcome the support which the Government have given to design and which the Minister outlined. The role that he and the Prime Minister have played in supporting design and seeking to highlight the importance of it in industry is commendable and to be welcomed. I welcome their endeavours to draw more attention to the importance of innovation. I shall be critical of some aspects of Government policy, but I hope that the Minister will take my remarks so far as encouragement to do more and to do better and not as negative criticism. As I have said, I believe that the Government have taken on board the importance of design and innovation in their policy.
Why are industrial innovation and design so important? Visual enjoyment is important in all our lives. We must not lose sight of the fact that good design, whether it he in industry or any other part of our lives, helps to improve the quality of life. Good design is about more than creating new businesses or new jobs, although that will be the main focus of the debate. We should seek to encourage good design generally. I am sure that the main thrust of the
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debate will be on the contribution that design can make to the creation of jobs, new businesses and the improvement of the economy.
In the good old days, whenever they were, great importance was attached to design in industry, especially in the Victorian period. I read a book over the weekend in which there was an account of the Royal mining engineering industrial exhibition of 1887 in Newcastle. I read another report of the great exhibition which took place in 1908. The Anglo-French exhibition gave an area of London — it is one with which many of us are familiar because it includes the site of the BBC television centre—the name of White City. It was an enormous exhibition which included fine arts, visual arts, design, engineering and all other facets of British and French industry. It was much larger than the great exhibition of 1951. That reflects the spirit of those times and the importance which was attached to innovation and design. The new products and innovations that were such a hallmark of that period were brought into being and brought to the attention of the public generally by the professional institutions that are to be found in Newcastle, the area of Teesside which I represent, Darlington, other parts of the northern region and many other areas throughout the country.
I hope that the message to go out from this debate will be that, through innovation and good and new design, we can create jobs and new businesses. New businesses, products and technologies are important, but we sometimes spend so much time talking about new technologies that we forget that old products with new designs have enormous markets overseas and at home. Sometimes we forget that the new design of old products is important to the success of our industry.
Last Christmas I was sent a remarkable Christmas card from the Middlesbrough college of art and design. A small flat object snapped out into a box when it was taken out of the envelope. One side of the small tag on the red string hanging from the box said, "Here is a Christmas box for you." The other side said, "Have a drink on us." When the red string was pulled from the box there was a tea bag on the end of it. That was an ingenious attractive design with a potential for business success, but, as a Christmas card, it was not a new product. The Scandinavians, Italians, French and other overseas competitors have become leaders in the sale of domestic products because of the inventiveness of their designers.
There are many examples of similarly successful businesses in Britain. Sir Terence Conran's Habitat and similar businesses have good design as their hallmark. The marvellous Laura Ashley business—it is sad that Laura Ashley has died — is based upon good and striking design. Such design has created a successful business in rural Wales. Tremendous Government support was not needed to get it off the ground—innovation and design did so. There is a message for the regions: Through such design and innovation businesses can be developed—not in new but in old products—to satisfy customers in a manner that we would all welcome.
Design is an important aspect of our industrial life. Anyone who is tempted to underestimate its importance should remember its role. We should remember the superbly designed Concorde and the crowds of people who went to airports just to see it. That is what our businesses

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must take on board if they are to compete with the Benettons of this world which place so much emphasis on design and succeed as a result.
The Government have taken this point on board. They have started to provide additional support to the Design Council. I understand that this year they will give an additional £1·5 million to the council, bringing its central funding up to £4·8 million. The precariousness of this funding is illustrated by the fact that it has only just now recovered to its 1980 level after substantial cuts in previous years and the fact that it is renewed on a year-by-year basis. I hope that the Department of Trade and Industry will give the Design Council longer-term security in the schemes and promotions in which it is involved. Uncertainty about future budgets inhibits the council's work.
I welcome the backing given to the £350,000 campaign to promote the use of industrial product design by United Kingdom managers. This is a welcome development, but there is no guarantee about how long it will continue. It would be helpful if the Under-Secretary of State were to look at the longer term when giving such grants to the Design Council and similar bodies.
Industrial design and innovation are important aspects of a strategy to promote competitiveness which should include other non-price factors such as quality, reliability, delivery, marketing and after-sales service. Such a total product approach involving services and goods is essential if the decline in Britain's manufacturing competitiveness is to be reversed.
Horrendous figures face us on this front. In recent years, our manufacturing competitiveness has declined dramatically. The Design Council's report "Design and the Economy" shows a reduction over the past 30 years from 25 per cent. to 9 per cent. in the United Kingdom's export share of world trade in manufactured goods. This contrasts with an increase in imports from about 6 per cent. to about 30 per cent. of total sales. The import figures for some of the worst product areas show an increase in imports of 84 per cent. for music centres, 80 per cent. for scissors and 43 per cent. for electric cookers. Home production of many products has been almost decimated. We face an enormous task if we are to overcome the effects of the blow that has hit British industry during the past decade.
Cuts in training and education have played a major part in this decline. The United States, with approximately 60 scientists and engineers employed in research and development per 10,000 of the labour force, has roughly twice as many people employed in this work as the United Kingdom. Japan leads the field in expenditure on research and development, having almost doubled research and development expenditure in a recent eight-year period. Other countries cited in the Design Council's report have made significant increases. The United Kingdom alone decreased expenditure by more than 20 per cent. Distribution in other countries of research and development expenditure differs significantly from the United Kingdom where three sectors alone — chemicals, electrical engineering and aerospace—account for 71 per cent. of total research and development activity. Figures on research and development and on the number of engineers and others who are crucial to innovation and design show Britain's devastating position.
I hope that the Under-Secretary of State will encourage those of us who want a comprehensive training and education system—rather than the ad hoc-ery of the past
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few years—the restoration of some grants to research councils and a proper dovetailed system of training and education so that those on YTS are given credit for the work that they have done, enabling them to qualify in other spheres. This is part of the building-block approach to education which can help Britain to involve similar numbers of people in training and education as are involved in Germany, Japan and the United States. Without that basis of innovation and industrial design policy and the education to back them up, we shall not achieve any of the goals that the Government have set themselves and that the rest of the country would like to be achieved.
6.49 pm
Mr. Tim Rathbone: I should like to return to the subject of design and mention first the considerable achievements that we have made in this country in recent years. Her Majesty's Government are doing more than any other Government in the world to promote design as an instrument of competition. Following my right hon. Friend the Prime Minister's celebrated design evening at Downing street, an immense flood of activity has poured forth.
My hon. Friend the Minister, despite the mealy-mouthed condemnation of the hon. Member for Coventry, North-West (Mr. Robinson), should receive credit for what has been achieved. There is not a soul in the design world who would not wholeheartedly acknowledge his tireless work. That was marked internationally when in August he received, on behalf of Britain, an award in recognition of services to design. There is no credibility gap there, as suggested by the hon. Gentleman: there is world acknowledgement.
Next summer, the annual design conference, which includes architecture —not so far mentioned—will be held in Aspen, Colorado, and four and a half days will be devoted entirely to design in the United Kingdom. There is no credibility gap there either.
A great deal is going on abroad, but a great deal is going on at home. For example, over 2,000 companies have benefited from the Department of Trade and Industry's funded consultancy scheme. That is design in action. The British Institute of Management is increasing its activity on this subject. NEDO has established a working party to review the state of design in Britain and how it can become a more integral and effective part of manufacturing. It will report next summer. That is also design in action.
We also have design in education, as my hon. Friend the Minister said. While the National Advisory Body is reviewing the distribution of courses, it is clear that the general thrust is to make design courses relevant to work. In March this year, a two-day conference of principals of colleges in the United States met in Philadelphia to discuss the new style of design education evolving in the United Kingdom. There is no credibility gap there. The results of a job survey held among all students who completed BTEC higher national diplomas in design last year were especially encouraging. Within three months four fifths of the students had full-time jobs and 95 per cent. of those jobs were in the subject studied. A further 13 per cent. of young designers had started their own firms or were freelancing. That may be a new trend in our society.
Hon. Members will also be aware of the highly successful series of "Design by Experience" seminars held around the country last year. Organised by BTEC, their

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aim was to bring companies and colleges closer together. That initiative was supported by my hon. Friend the Under-Secretary of State at the Department of Trade and Industry, my hon. Friend the Under-Secretary of State at the Department of Education and Science, who was listening to the debate earlier, and my hon. Friend the Member for Hastings and Rye (Mr. Warren.)
At a different level, the London Business School runs an oversubscribed course of design management in its Master of Business Administration programme, and a few other business schools are beginning to do the same. That all illustrates design in action. There is no credibility gap there. However, despite all that push and action, there remains a huge gap between the enthusiasm of the protagonists and the reluctant behaviour of large swatches of manufacturing.
We are approaching the start of 1986, which is designated as industry year as an initative of the Royal Society for the Encouragement of the Arts, Manufactures and Commerce. That is a rather quaint old name, which disguises enormous vitality and energy. Its aim is to increase understanding of industry's role and its service to this country. We must ask why industry is still reluctant to embrace good design. Why can that be? Britain has the designers. There is no other place on earth where one can find such a concentration of internationally experienced designers. They may sometimes be found within the House, but certainly they may be found within one or two miles of it. It is a pity that a major nationalised industry such as British Airways felt it necessary to go abroad for its recent major livery redesign when Great Britain can offer the best in the world. Our designers' skill is often better understood in other countries, as my hon. Friend the Member for Hastings and Rye said.
In the past year alone, the top six offices earned some £50 million in foreign revenue. That helps the balance of payments, but it also means that we are helping our competitors. It has been said that there is no important automotive firm in Europe and no important fashion house without British designers in senior positions.
If we have those resources, skills and effort, why do not more British firms accept the role of design in their affairs? Could it be that too many companies are run by financial men, who care more for cutting costs than the products they make? That perhaps goes for the Treasury as well. Is it because the City has such a short time-frame that it does not encourage companies to invest in new products, but rather looks for short-term profit, or is it because business men think of design as art—nice, but not necessary, the type of trim that is added to make something look nice? Is it the old belief that the public do not like good design? My goodness, if Sony, Suzuki and Toyota produced ugly goods that would prove it, but they do not. Is it that even our engineers believe that design is peripheral, as if people, users, and customers do not matter?
The problem is a management one. In that regard, it is notable that the London Business School funded the world's first design management programme. Manchester
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is now following. The essential task is to bring understanding into business that design matters—design not as decoration or taste, but in the fuller sense of thinking matters through and creating the goods that people want and will pay for.
Mr. Robert Banks: I am following with care what my hon. Friend is saying. I agree with what he says. Does he agree that it is symbolic that British industry rarely has a designer on the board of directors?
Mr. Rathbone: That is a good illustration of the point that I was making. I hope that industry will follow the example of motor companies in the United States, which do not just have designers on the board but have designers as chairmen.
While much excellent work is being done, a note of warning should perhaps be sounded. Design by itself will not do the trick, nor will the notion that design is about taste. I do not mean that design should be ugly, but rather that its purpose, like the purpose of industry, is to satisfy customers. Products make profits only when effectively marketed through proper packaging, brand identification and communication. Brand reputation depends to a large degree on corporate reputation and identity. I wonder whether the consultancy scheme is sufficiently directed to such ends. I speak as someone involved with a company that undertakes such consultancy programmes and one who hopes that the scheme will be promoted in that way.
If there is one other practical step that my hon. Friend the Minister could now accomplish it would be to encourage the Design Council to regard design as part of a process for satisfying customers. The relationship between that process called marketing and design is too little understood.
To conclude, I should like to return to my first point. My hon. Friend the Minister is doing a famous job by encouraging better design, ably assisted by my right hon. Friend the Prime Minister. This evening, my hon. Friend has outlined how he is planning further encouragement of design and manufacturing. More strength to his elbow.
6.59 pm
Mr. Robert Banks: This is a historic debate, as the hon. Member for Coventry, North-West (Mr. Robinson) said. It was rather surprising that there was not one single Back Bencher on the Labour Benches during the whole of the hon. Gentleman's speech. He was rather like a parade sergeant on an empty parade ground barking orders with no one to hear. It is right that we should be debating this subject because it is of immense importance for the creation of new jobs and for the regeneration of our industry. It is perhaps strange that in the long history of this parliamentary body that industry, during the time it was supreme in the world, during the Victorian period and in the early part of this century——
It being Seven o'clock, and there being private business set down by THE CHAIRMAN OF WAYS AND MEANS under Standing Order No. 7 (Time for taking private business), the motion for the Adjournment of the House lapsed, without Question put.

Felixstowe Dock and Railway Bill
Motion made, and Question proposed,
That the promoters of the Felixstowe Dock and Railway Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all fees due on the Bill up to that date be paid;
That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;
That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;
That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed);
That all Petitions relating to the Bill presented in the present Session which stand referred to the Committee on the Bill shall stand referred to the Committee on the Bill in the next Session;
That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited within the present Session or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;
That in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words "under Standing Order 126 (Reference to committee of petitions agaist bill)" were omitted;
That no further fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
That these Orders be Standing Orders of the House.—[The Chairman of Ways and Means.]
7 pm
Mr. Deputy Speaker (Mr. Ernest Armstrong): I should inform the House that Mr. Speaker has not selected the amendments. I call Mr. Tim Yeo.
Mr. Tim Yeo: I do not believe that it is necessary to have a debate.
7.1 pm
Mr. Ken Weetch: I have not participated in a debate of this kind, objecting that a motion be carried over, since I have been a Member of the House, and it is certainly not my intention to be obstructive. The number of times I have spoken on private Bills is very small. Nevertheless, I am speaking on this one because I have a critical constituency interest in the matter and there is still an enormous amount of dissatisfaction from environmental groups and others in my part of East Anglia about the substance of this Bill.
I do not intend to waste the time of the House, but certain issues arise and I am objecting to the carry-over motion, if I can put it like that, because of the material that still remains in this Bill and for the arguments that are still being used to put this Bill through the House. I am given to understand that it is a matter of usage that these matters are carried over, usually on the nod. I do not see why that should always be so, nor why it should be automatic, particularly if new material has arisen on the issue under discussion.
I shall not speak at any great length, but new factors have arisen since the Bill was debated on Second Reading, and it is because of that new material that I wish to make a short speech of objection to the whole principle of the carry-over motion.
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The Felixstowe Dock and Railway Company should be made to argue the case again. The three-hour debate we had before was wholly insufficient to give critical scrutiny to the arguments made in the House. We have another chance, which I welcome, of debating the controversial material contained in the propositions for the Bill. Undoubtedly, some people will find the whole issue tiresome and think it would be far more convenient for us all to push the thing through and carry it over because that is the axiomatic precedent. I do not agree, because last time we had limited time at our disposal and many things were not discussed adequately.
I do not want to go over the material I went over last time because I have fresh things to say and fresh arguments to put before the House on the terms of my objection to this motion. I wish to do so for general reasons, but also because my constituency is directly affected and the dissatisfaction still remains. One new piece of material has arisen from the discussions on the guarantees relating to navigation and the Orwell estuary. When I spoke on Second Reading, my objections to the Bill centred on three areas. The first was the effect on the port of Ipswich, especially but not solely as it was affected by navigational matters. Secondly—and I have new material on this point too—I objected on environmental grounds because environmental opinion in the area is overwhelmingly against the Bill. It was then and it is now.
My third point relates to arguments centred upon developing balanced ports capacity, and the possible repercussions that a laissez-faire approach to port development will have on the industry as a whole. I am still not convinced on any of these grounds, but I recognise that assurances have been given and accepted about the possible navigational interference with ships, particularly grain vessels, using the Orwell estuary. I am pleased to say that and, without making too much of it, I understand that the Felixstowe Dock and Railway Company through the Harwich harbour authority is willing to give the Ipswich port authority financial and priority guarantees about the passage of vessels. This carne about in discussions since the Bill was last before the House.
I am pleased to see the Minister in his place and should like to ask him for a piece of information which he could perhaps give me when he speaks in the debate. I am given to understand, quite literally in the last 24 hours, that it will not be possible to give legislative authority to the guarantees under or within the framework of any Harwich harbour legislation because such guarantees, particularly with financial backing, would be ultra vires. I would appreciate the Minister's information on that. I was pleased to see these guarantees, or promises of them at least. As I understand it, they will have to be as part and parcel of private legislation sought by the Ipswich port authority when it seeks additional powers some time in the next Session.
Mr. Andrew F. Bennett: Will my hon. Friend give way? This concession is obviously important, but does it not illustrate the problem? The Bill made virtually no progress other than getting its Second Reading in the last Session, and it will be easy for the promoters to drop it and introduce in the next Session a new Bill which could, of course, have a much wider scope than this one and could take into account the point made by my hon. Friend. If they persist in going for the carry-over over motion, the Bill will have to remain in its narrow

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form and it will not be possible for the House to amend it to take into account even the concession the promoters now want to make.
Mr. Weetch: I thank my hon. Friend for his intervention. What he says is certainly correct. If a new Bill were drafted incorporating all the assurances that have been given and perhaps any assurances that would arise from new discussions, which I would welcome, it may be that the new legislative shape of this measure could be put before the House to some advantage. I certainly accept what my hon. Friend has said.
I am dissatisfied with the current situation and one of the things I want to do is to challenge the whole of the economic case for the expansion of the port. The issue at the centre of the economic part of the debate is how many jobs the new extension at Felixstowe will create. In fact, the issue is narrower than that, because the relevant question is how many real new jobs will be created.
I argued in our previous debate that the Bill would not create many new jobs and would merely shift jobs from place to place and have detrimental repercussions on other ports, particularly Liverpool, Tilbury and Southampton.
A real increase in employment possibilities will depend on the traffic throughput of Felixstowe. I have new material in support of my objections to the motion. No statistical case had been made to the House in favour of the expansion of the port and the claim that net new jobs will be created. I have examined everything said in the previous debate and all the comment in newspapers and specialist journals. It is 100 per cent. assertion, and partial and slanted assertion at that.
We did not have time in the previous debate to challenge the statistical merits of the case and the assumptions on which arguments were mounted. I intend to do that today. Statistics in the ports industry are enormously complicated. They depend on the capacity of a port and the capacity of other ports, as well as on the capital intensity of improvements, the mix of traffic and any changes in that mix.
The crux of my attack on the economic case of the Felixstowe Dock and Railway Company is that much will depend on Felixstowe's ability to attract real trade growth as opposed to attracting trade away from other ports in East Anglia and elsewhere.
Independent experts who have studied the subject—I quoted two in our previous debate, so I shall not quote any more—believe that no real jobs will be created and that it is likely that there will be a shift in jobs from area to area with detrimental repercussions on ports elsewhere. We need information and details and I regret that we are unable to get from the company the necessary information to make a decision in principle. We lacked that information during our previous debate and it has not been provided for this debate. I can see that I could be said to be putting forward a case that is partial in a constituency sense, but I have tried to get the information required by writing to the company. It seemed to me that, as the shortest distance between two points is a straight line, if I wanted to know the likely new throughput of traffic as a result of the expansion of the dock and the creation of three new berths, I should write to the company.
Therefore, I wrote to the company on 25 April and asked for its estimate of the new traffic that it thought
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would arise from the expansion outlined in the Bill. That would have enabled me to make a responsible estimate of whether the case would stand on its economic base. I received a letter from the managing director who said that he did not feel disposed to supply the information to me because I appeared to be an "implacable opponent" of the Bill, because of my "profound ignorance" of the British ports system and because I was the recipient of "mischievous advice" from third parties.
Mr. Andrew F. Bennett: Does my hon. Friend agree that people who make such insulting remarks are usually trying to put up a smokescreen over the fact that they do not know the answers? Is it not true that the promoters do not have a clue about how many extra ships or containers they want to get, because they have no idea what developments will occur over the next two years? For example, the building of a fixed link across the Channel would have fundamental implications for British docks and would make the Felixstowe development highly questionable.
Mr. Weetch: That is right. I thank my hon. Friend for that intervention. I appreciate that the company will present a detailed case if the Bill reaches its Committee stage. I am not asking for a Committee debate at this stage. I ask merely for sufficient information to enable us to decide whether the Bill should go ahead.
I asked the company for answers and for statistical projections so that I could set out the case for independent examination. I did not get those answers and the House and I are left with mere assertions that there will he substantial economic benefits that will make the enterprise worth the violation of an area of outstanding natural beauty in Suffolk and a site of special scientific interest.
As I received no answers from the company. I had to look for statistical information that was available in public places, and there is plenty of that. First, in a letter received by the planning committee of Suffolk county council before its meeting on 9 October last year, the company said that it expected that the full development proposed in the Bill would produce a net increase of 500 in the company's own direct work force. That is set out in the planning committee's report and evidence, which I have read carefully.
However, the company subsequently advised the Suffolk county council that the figure was not 500, but 1,000. In the space of a relatively few hours, the job creation part of the estimate had doubled, for no apparent reason except a drumming up of support for a doubtful case.
It was also said that 400 new jobs would be created by further investment in the Languard and Dooley terminals and the construction of the Trinity terminal. That brought the grand total of new jobs to 1,400. The Felixstowe port users' association was reported in the East Anglian Daily Times as expecting the employment of an additional 1,400 people directly. In the same newspaper on 6 November last year, Mr. Derek Kingston of the company predicted 1,100 new jobs, based on known manning levels and predicted levels of technology.
Those are four or five examples of where the estimate of the number of new jobs to be created has differed every time someone has spoken. They think of a number and multiply it by two. I hope that the House will agree that this is a pretty doubtful statistical case to put in order to obtain permission from the House for a Second Reading.
Mr. Peter Griffiths: Does the hon. Gentleman agree that those of us who know about ports and their growth realise that it may be very difficult indeed to establish exactly how many jobs would be created under certain hypothetical growth conditions. On thing, however, is quite certain: if a port is constrained so that it cannot grow there will be no growth of jobs there. The jobs will he created in other ports overseas.
Mr. Deputy Speaker: We seem to be straying a little out of order. When the hon. Member for Ipswich (Mr. Weetch) puts forward his argument that a new Bill should be presented because of new material, that is in order, but when we go outside that argument to refer to matters that could very well have been discussed on Second Reading that is out of order.
Mr. Weetch: I tried to show that the material was simply not available on Second Reading. With the material not being available, how could we discuss the exact terminology of this Bill and what it seeks to do? I am arguing therefore that the Bill has no justification in reason at all. Every proposition in this Bill has to be reasoned out in some way or another. What I am trying to point out to the House is that the whole basis is the swamp that Felixstowe used to be 20 or 30 years ago, and we are being asked to put our names to a pretty gimcrack case in this carry-over motion.
Mr. Roger Stott: I am grateful to my hon. Friend the Member for Ipswich (Mr. Weetch) who has touched on a very important matter in relation to the projected number of jobs likely to be created if this Bill were to proceed unimpeded. If my hon. Friend were to cast his mind back to six weeks ago, he would agree that what can be described as new and fresh evidence was brought to light in respect of the proceedings on this Bill, and he and I will share the same concern. The Department of Transport issued a circular indicating that it had appointed specialists to advise the Secretary of State about the viability or otherwise of the various projects on the Channel fixed link. I was in Dover three weeks ago——
Mr. Deputy Speaker: Is the hon. Gentleman making an intervention? If so, he must be brief.
Mr. Stott: Verbosity is not the least of my victims, Mr. Deputy Speaker. I am attempting to be brief, but, in order to assist my hon. Friend on the point that he is making, it is important to recognise that the port of Dover in terms of volume and value moves more cargo than does Felixstowe.
Mr. Deputy Speaker: Order. I cannot see that this has anything to do with the motion before the House.
Mr. Stott: I would not wish, on the first day back, to be in your bad books, Sir, but I think that it has everything to do with the point that my hon. Friend was making.
Mr. Deputy Speaker: It may have everything to do with the point that the hon. Member was making, but it has nothing to do with the motion before the House.
Mr. Andrew F. Bennett: On a point of order, Mr. Deputy Speaker. We are, as I understand it, debating a carry-over motion. I think that some of us observed that the hon. Member for Cambridge (Mr. Rhodes James) came down to do a bit of quiet lobbying, but it seemed to me that we were going along very nicely ——
Mr. Deputy Speaker: Order. I hope that I am not misunderstanding the reference to the hon. Member for Cambridge (Mr. Rhodes James). Neither he nor anyone else has lobbied me about anything today.
Mr. Andrew F. Bennett: I was not suggesting that he had lobbied you, Sir, but it seemed to me that we were firmly in order in that on the Opposition side we were objecting to the carry-over motion on the basis that there was new evidence which had come forward. My hon. Friend referred to the fact that it was a statutory instrument. My hon. Friend the Member for Wigan (Mr. Stott) and I have referred to the possibility of the Channel fixed link, information which was not available at the Second Reading. These were all reasons that could be put forward as to why the Bill at this stage should not proceed further and why the promoters should come forward in the new Session with a new Bill and provide the House with new information, or let the whole matter drop. It seemed to me that we were not straying out of order.
Mr. Deputy Speaker: I suppose that we are in the area of opinion, but it is my opinion that the hon. Member for Wigan (Mr. Stott) was getting out of order insofar as it would be open, I suppose, given the constantly changing nature of ports and other features of the economy, to argue that any change in any port or any evidence of change in the economy would have relevance to the matter that we are discussing. If that were the case and were accepted by the Chair, I do not think that we would get to the motion tonight. We cannot stray so far out of order. I felt that I was being very flexible and tolerant to the hon. Member for Ipswich (Mr. Weetch). He recognises that. I think that we ought to get closer to the argument being originally advanced by him.
Mr. Weetch: After that exchange, Mr. Deputy Speaker, I welcome your tolerance because I am no constitutional expert on the procedures of the House, and I constantly need advice. However, I try to avoid wasting the time of the House with arguments that I have put forward before. I looked up the precedents—and there are not many—for this type of debate and looked at some of the speeches made on previous occasions when this type of motion was debated. The speeches usually say that the objection to the carry-over motion is for reasons a, b, c and d; and one of those reasons is usually new material that has arisen in the course of time.
I put that to the House not in any sense of constitutional chicanery or because I want to make a long speech, but because I genuinely believe that new issues have arisen which critically affect the substance of this Bill. I do not want to abuse the time of the House. I am, therefore, willing to give way. But let us take it to its logical conclusion. If all we are going to debate is a few lines of constitutional patter, there will be no argument about the Bill on a valuable occasion like this so that in the end we might as well pack up our marbles and go home. I give way again.
Mr. Stott: When we debated this matter on 13 May, the Government had not issued their instructions or guidelines to the particular company charged with evaluating the various schemes that the Government have asked for on the fixed Channel link. We did not have at that time, therefore, any indication of whether the Government were going to support in principle the fixed

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Channel link. It is obvious from what they have done since then, in spite of what anybody may or may not think, that the fixed link may very well go ahead. If it does, it will have tremendous ramifications for our ports policy in the United Kingdom. What my hon. Friend the Member for Ipswich (Mr. Weetch) is attempting to adduce this evening is that the projections given by the Felixstowe Dock and Railway Company could be put in serious jeopardy if the fixed Channel link were to go ahead, because the volume of cargo currently going through the port of Dover is greater in both value and volume than that going through the port of Felixstowe. That must have consequences for what is happening in the House tonight.
Mr. Weetch: In the flurry of exchanges which we have had in the last few minutes, I neglected to answer the intervention of the hon. Member for Portsmouth, North (Mr. Griffiths). It was a fair intervention and he made a fair point. Of course one cannot with any certainty predict how many jobs, down to the last 10, 20 or 30, will be created. This is a very hazardous business and it is fraught with uncertainty. I may say, however, that none of the uncertainties has been mentioned in the press or elsewhere by the Felixstowe Dock and Railway Company. It has been putting forward these economic arguments with the certainty of a weighing machine on Victoria station that speaks one's weight. It has been saying that the statistics mean that employment in East Anglia will take a substantial lift. All that I am doing is to challenge that assertion and say that, if that is so, could we have approximate chapter and verse?
The hon. Member for Bury St. Edmunds (Sir E. Griffiths), who moved the Second Reading of the Bill, referred to 2,400 jobs created indirectly because of a multiplier effect. However, he did not refer to 500, 1,000, 1,400 or 1,100. I have taken the statistics available and 'phoned round a large part of the ports industry, and nobody will believe that those figures are at all credible.
Mr. Yeo: The hon. Gentleman said that he had made inquiries of the dock company about the benefits of the scheme. Did he also make inquiries of the East Anglian branch of the Transport and General Workers Union? If so, did the union explain to him, as it has explained to others, that it is in favour of the Bill?.
Mr. Weetch: The national TGWU is opposed to the expansion because it will create even more capacity at a time when there is already excess capacity in Britain's docks. I have been to see the shop stewards from the TGWU in Ipswich three or four times. It is largely on their behalf that I am speaking. I also invited my hon. Friend the Member for Wigan (Mr. Stott), our Front Bench spokesman, to check the situation. I do not know where the hon. Member for Suffolk, South (Mr. Yeo) got his information about the TGWU in East Anglia. I have been seen not only by the TGWU's general secretary but by the union's eastern regional organiser. The only group of people in the TGWU who are in step are those on Felixstowe dock itself. Perhaps my hon. Friend the Member for Liverpool, Garston (Mr. Loyden), who is a member of the docks group of the TGWU, will refer to that. However, I appreciate the intervention because that point should be clarified.
Mr. Andrew F. Bennett: Does my hon. Friend agree that the area with the lowest unemployment and therefore the least need for new jobs is Felixstowe? Almost all the other docks that have been mentioned have higher unemployment, and it would be unfortunate if the jobs were taken from docks that have a far greater need of them and transferred to Felixstowe. According to the figures that my hon. Friend mentioned, how many would be new employees and how many people would be simply transferring from one dock area to another?
Mr. Weetch: I shall come shortly to a statistical argument which is based on figures that I have, and that were taken from public places.
Since 1979, unemployment in the Ipswich and Felixstowe area has increased by 300 per cent. Whose fault is that? The statistical validity of the dock and railway company's case is doubtful. Let me come to the brass tacks. It is important to realise that the relationship is concerned not necessarily with port capacity, but with the estimate of throughput of extra traffic related to the numbers employed. That depends on a complicated set of equations. Nevertheless, we can have a go.
From 1979 until July 1984 the company had increased its direct work force by 200 in round figures. During that period the throughput tonnage, taken from the company's handbook, grew from 5·5 million tonnes to 8·5 million tonnes. The important relationship, assuming similar labour and capital intensity—in fact, the figures go my way if there is any more capital intensity in the development—is that between the cargo throughput and the number employed. Therefore, an increase of 3 million tonnes in throughput was needed to bring about 200 new jobs. We are being promised 1,400 jobs— 1,000 at the three new berths and 400 at the Languard and Dooley terminals. Given the same relationship, an extra 21 million tonnes will be needed to create an extra 1,400 direct jobs at the dock. If one adds the present output of 8·5 million tonnes, in round figures one is calculating on a total Felixstowe throughput of about 30 million tonnes. To put that in perspective, that is three times the current throughput of all the haven ports put together — Harwich, Felixstowe and Ipswich.
I can find no serious statistician who actually believes that case. Nevertheless it is being foisted on the East Anglian public with the argument that if the development does not go ahead there will be a shortage of this and that, and a jobs catastrophe. The job creation exercise of the Felixstowe Dock and Railway Company is sheer moonshine. That is all it is. However, although I have put my case as strongly as I can, I stand to be corrected by statistical argument from Conservative Members, to which I would listen carefully.
The statistical case is pretty doubtful. Not only is the development of the further extension of Felixstowe outlined in the Bill at a time of excess deep sea container capacity elsewhere, but it is becoming even more questionable in the regional context of East Anglia. Another new piece of information that I wish to put before the House is that across the estuary from us, at Bathside bay, is being developed a deep sea container port described by Mr James Sherwood of British Ferries as a container port that will rival Felixstowe itself. Parliamentary powers already exist for that expansion.
The latest information on the development is contained in the magazine Containerisation International, which

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says that Sealink British Ferries has announced plans to expand its Harwich Parkeston quay terminal with the ambitious aim of transforming it into one of Europe's largest container ports by mid-1987. It will be based on considerable land reclamation. It will cater for the biggest deep sea vessels, and expand massively the deep sea container throughput. Given that the dock and railway company's case is doubtful anyway, when one considers the capacity being developed just across the water, what will happen? There will be excess capacity in East Anglia, a crippling price war and a gross waste of resources.
I should like to reply to one argument because it has been put to me so many times. Indeed, it has been brought up in the debate as a piece of new information. At the Labour party conference, I went to a presentation by Flexi Link. One of its props is European Ferries, the people promoting the Bill. At that meeting, there was a presentation of the reasons why the fixed link should not go ahead. The Felixstowe Dock and Railway Company, opposing the fixed link proposals, is already beginning to recognise how traffic will be affected. As my hon. Friend the Member for Wigan pointed out in his intervention, the whole passenger and freight picture in this country could be transformed. The Government said absolutely nothing about that in the earlier debate, so I hope that the Minister will put that new material into the framework of his remarks when he is good enough to comment on the debate.
Mr. Andrew F. Bennett: A great deal of the argument on Second Reading about extra traffic congestion being caused in East Anglia was based on the argument that ships which had come considerable distances to Europe would be off-loaded and the cargo sent on in smaller ships to other ports in Europe. Does my hon. Friend agree that if the fixed link were imposed it is likely that the majority of container cargo coming into Felixstowe would not go out again in smaller boats to Europe but would travel by road through East Anglia to the London basin and then through the fixed link at Dover? That would have far-reaching implications for congestion and the road network. We were told on Second Reading that congestion would not be a problem. but the new information shows that it may well be far more serious than was thought at that time.
Mr. Weetch: I accept the substance of my hon. Friend's intervention. The repercussions may well he as he describes. The substance of my argument is this. Without wishing to make predictions, the fixed link seems for the first time in my short political life to be a viable starter likely to attract private money and entrepreneurial initiative. The fixed link would put every port in the country, in East Anglia as much as anywhere else, in a completely new ball game. I do not agree that the situation outlined by my hon. Friend the Member for Denton and Reddish (Mr. Bennett) is bound to occur because the whole situation is unpredictable, but I have read two stock market financial analyses of the prospects for European Ferries, both of which stated that the fixed link could be a major factor affecting the company's profitability.
All those factors will affect the Bill. All this new information — the statistical case, the fixed link and everything else—affect the argument in principle as to whether the Bill is necessary or not.
A constituency aspect is also affected. The argument involved is an insult to the intelligence of the people of
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Ipswich, but it has been so widely put about that I must try to deal with it seriously. It is widely argued that there could never be any active commercial threat to Ipswich from Felixstowe because the ports are complementary and not competitive. The hon. Member for Bury St. Edmunds said that, in effect, there was no commercial rivalry because;
"Felixstowe would be handling ships of a draught which could not navigate the upper reaches of the river." — [Official Report, 13 May 1985; Vol. 79, c. 75.]
In other words, there is no need to worry because large ships cannot use Ipswich anyway. But small ships can use Felixstowe. Ipswich is the number one port in the United Kingdom short sea container trade, but if there were pressure on the Felixstowe Dock and Railway Company's profit margins—if times became hard and competitive and the situation looked black—let no one imagine for a moment that that company would not directly affect Ipswich. Anyone who believes that will believe anything. Is the company really saying that it will never encroach any further on the type of trade dealt with at Ipswich? No commercial concern could ever say that. If it was in difficulties, it would do exactly that.
The point was summed up on page 17 of the January 1985 issue of the trade magazine Cargo Systems International, which states that
"if there is available capacity at Felixstowe, shipping lines will be tempted to stop there rather than carrying on another ten miles to reach Ipswich."
I shall not take that constituency point any further. but the argument has been put so often that I had to deal with it.
New material on the environmental case has also emerged since the issue was last debated. On 20 August the Orwell estuary was formally notified as a site of special scientific interest under section 28 of the Wildlife and Countryside Act 1981 and a report of this appeared as an item on the agenda of Babergh district council planning committee. That was not the case when the Second Reading debate took place. A press report subsequent to the district council planning committee meeting conveyed some incomplete information, implying that only the south shore of the estuary had been notified as as SSSI. Today's debate gives me the opportunity to put on record that both banks have been notified, including the area proposed for the Felixstowe docks extension. If there is any doubt about that in anyone's mind the Nature Conservancy Council, which was responsible for the notification, will give full information.
The arguments adduced in the last debate for sweeping the whole environmental case under the carpet have been bitterly resented in some parts of East Anglia. It was argued that as only a small part of the estuary was involved there could not be much of a case. In fact, the site was selected by the Nature Conservancy Council after the most thorough scientific survey and evaluation. It is important to remember, too, that such designations are usually made because the areas concerned contain important concentrations of bird life.
In addition to being notified as a site of special scientific interest, the Orwell-Stour estuary has been put forward to the Department of the Environment as a wetland of international importance under the Ramsar convention and as a special protection area for birds under an EEC directive of 1979.
Time and again in the last debate Conservative Members argued that the area to be taken for the port extension—Fagbury flats—was only a small part of the

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estuary and therefore of little consequence environmentally. The hon. Member for Cambridge—I am not sure whether he is here today—reminded the House that at one time he had United Nations environmental responsibilities. In a nostalgic way, he said:
"The hon. Member for Ipswich may not be aware of the fact that I know the river well. I have sailed on it since I was a child. It is one for which I feel strongly. I also feel strongly about the local environment. To go as far as he did about a scheme which covers one third of a square mile and only half a mile of 22 miles of rather grotty shoreline is carrying argument a little too far."
I see that the hon. Member for Suffolk, South (Mr. Yeo) is here. I hope that after the debate he will take the hon. Member for Cambridge aside and explain that the shoreline is not regarded in East Anglia as "grotty". It is enormously valuable for all sorts of environmental reasons. Perhaps the hon. Member for Cambridge has not been to the area for some time, and needs reminding of this fact.
When the hon. Member for Bury St. Edmunds moved the Bill on 13 May, he said:
"First, the shoreline of the River Orwell is 22 miles long. The proposed extension covers half a mile of that shoreline—2·5 per cent. of the total area."—[Official Report, 13 May 1985; Vol. 79 c. 77–91].
He went on to say that the area to be taken is only one-third of a square mile out of the total of 151 square miles.
That is an argument typical of people who talk about areas of international wildlife importance as though they are talking about percentages in a ledger. It is not surprising, because the Felixstowe Dock and Railway Company works from ledgers, while others see the environmental problems. If the Bill is passed, everything that the company has said about protecting the environment will be conveniently forgotten.
The main environmental organisations in East Anglia are against the Bill to a man and a woman. They will believe that nothing that has been said in the first debate or the arguments that have come out since it has put them off their original environmental case. In fact, they have been strengthened in their determination.
In one breath, the Felixstowe Dock and Railway Company is saying both that the area is not important because it is small in relation to the whole, and that it regards the area of such importance that it intends to plant 500,000 trees, and provide a bird count and so much enthusiasm that, by the sound of it, the company will be twining honeysuckle around the cranes. It is doing this to try to win some environmental respectability.
The debate has been valuable because it shows that the Felixstowe Dock and Railway Company will say anything to get the Bill through the House, and that that will be conveniently forgotten. The environmental interests in East Anglia span all political persuasions. The people who have most strongly urged me to keep going have been card-carrying members of the Conservative party for nearly all their lives. I have told them that I shall gladly do that on their behalf. The Bill should not succeed and I sincerely hope that the House agrees with me.
7.53 pm
Mr. James Hill: I am sure that, by the end of my speech, less charitable Members will think that I have an enormous bias towards the port of Southampton. However, I have tried to approach this in
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a logical and worthwhile manner. The hon. Member for Ipswich (Mr. Weetch) spoke several times about the environment, and the problems affecting it have not been given the same publicity as, for example, those affecting the bypass around Okehampton and Dartmoor. The environmental point has been let go by lack of argument. Later, I shall refer to some of the comments made by the Royal Society for the Protection of Birds.
I am sure that my Government will be the first to support me in my logical commercial argument. Is it wise, when we are suffering from a lack of investment in industry and are trying to compete with overseas markets, to take a vast percentage of that investment money and put it into mud flats—against the environmental argument—to produce more container port capacity when there is over-capacity in the existing container ports?
Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman must address himself to the motion before the House and not the motion that the Bill be given a Second Reading. That has been debated and decided on by the House. If the hon. Gentleman were to advance the argument that there are now factors that could not have been known when the House made that decision, and that might have affected that decision, that would be in order. However, it is not in order to rehearse arguments or to make new ones about Second Reading.
Mr. Hill: Thank you for your guidance, Mr. Deputy Speaker. The new facts emerged in the speech of the hon. Member for Ipswich, who spoke about the new European link. I remember when the proceedings on the Channel tunnel were stopped by the then Secretary of State for the Environment in the Labour Government, the late Mr. Crosland. I had written a document about the bridges and tunnels of Europe, in which I proved conclusively what an enormous effect a Channel tunnel would have, even then, before we had got into the container age that exists in the seaports now.
There is no doubt that if the Euro-link goes ahead in any form it will act as a magnet for container traffic. We are talking in the main about container traffic. It would be subterfuge by the Felixstowe Dock and Railway Company to pretend that it is interested in devising another port for all types of user. It is merely aiming at the substantial market. With China about to emerge as a world industrial giant and with Taiwan and Japan flooding the United Kingdom and the European seaboard with containers, the company's sole motive is to concentrate on profit through containers.
Mr. Deputy Speaker: Order. I find it difficult to relate the hon. Gentleman's argument, interesting though it is, to the debate about whether the Bill should be carried over into the next Session. The hon. Gentleman must address himself more closely to the terms of the motion.
Mr. Hill: I suppose that I am becoming over-eager on the subject. When it was debated on 13 May, because of parliamentary commitments I was unable to attend the debate. However, I know that that will be no argument for you, Mr. Deputy Speaker, although, naturally, it tempts me to drift into other subjects from time to time.
The European link will have a great effect and the statistics that will be available if the debate is held over will benefit all political parties. I particularly fear that the job protection statistics have not been gone into with the

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latest figures in mind. There has been a terrific change in seaports policy since May. For example, the statistics for Southampton are quite different from those in May. The port is now humming with work, and it has an anxious labour force which is viewing the debate with concern because it fears that the real statistics of job protection have not been analysed. It is not only a question of job creation. There will be job losses throughout the United Kingdom, some of them in the worst affected parts of the country.
The difficulty in arguing the case for more statistics is that they can be swayed one way or another, depending upon the attitude of the debater. The statistics which have been produced by the environmentalists, certainly by the Royal Society for the Protection of Birds, should be closely analysed. We can see this evening the lack of attention that is being paid to this private Bill, so its Second Reading may have been passed by the House almost by default. There may not have been a full analysis of the figures. It may not therefore have been possible to weigh the pros and cons——
Mr. Deputy Speaker: Order. No matter for what reason, the fact is that the House has debated the Second Reading of the Bill and has come to a decision upon it by granting it a Second Reading. We cannot have a postmortem upon it now.
Mr. Hill: Thank you, Mr. Deputy Speaker, for putting me back once again on the rails. Perhaps the recess has made my steering gear a little rusty. I fully take your point. I have raised the subject many times. I wonder whether private Bills would not have to be introduced if there were a United Kingdom ports policy. I have asked for such a policy dozens and dozens of times. Unfortunately, my right hon. Friend the Leader of the House has, with great courtesy, said that there is no time next week for such a debate to take place. If we were to be given an opportunity to discuss the Bill more thoroughly, could it not be combined with an appraisal of ports policy? Felixstowe is to be given more capacity——
Mr. Deputy Speaker: Order. That is not the issue before the House. The issue is whether this Bill, to which the House has given a Second Reading, should be allowed to be continued in the next Session of this Parliament. We are not discussing the merits of the Bill.
Mr. Andrew F. Bennett: Can the hon. Gentleman tell me whether the people of Southampton petitioned against the Bill? I suspect that they did not do so because they did not understand its ramifications when the Bill was presented last autumn. If the motion were to be defeated, the Bill would have to start again and the hon. Gentleman's constituents would have an opportunity to present a petition. If the hon. Gentleman were to develop the argument about extending the rights of petitioners, he might be on safe ground.
Mr. Hill: I am getting advice from all sides. This is the true comradeship of the House. I said earlier that I thought that the Bill had not received full scrutiny before it obtained its Second Reading. I do not believe that some of the ports that will be jeopardised by the Bill were able to get their statistics, facts and petitions together in time for a thorough-going debate on Second Reading. The small points that I am raising tonight inevitably mean that the Bill should be carried over into the next Session of Parliament.
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May I now deal with the statement that I have received from the Royal Society for the Protection of Birds. The area in question has recently been notified as a site of special scientific interest. That was not so previously. This matter should be discussed in more detail. The proposed development also encroaches upon an area of outstanding natural beauty. To hardhearted Members of Parliament these points may seem of little consequence, but in Japan environmental problems are now so great that they wish that they had considered the protection of the environment instead of indulging in a Gaderene rush to develop industry in order to compete with the rest of the world. The Royal Society for the Protection of Birds would want to provide more facts and to involve more learned people in listening to and lobbying the Committee. That is why we must not be seen to be rushing through something upon which the fulcrum of a ports policy would depend. We would be the first to be accused of acting as vandals. Job projections are suspect and the House must discuss them more deeply.
I thank you, Mr. Deputy Speaker, for your consideration——
Mr. Stott: As the hon. Gentleman is reaching the end of his contribution, may I say that I agree with every word that he has spoken this evening, but why on Second Reading did he not vote for or against the Bill, while the hon. Member for Southampton, Itchen, (Mr. Chope) voted in favour of the Bill?
Mr. Hill: I said earlier that I was away on parliamentary business. I take great interest in the Council of Europe and the Western European Union. Although we are rightly paired with Labour Members of Parliament, it is not always possible to be in the House for every vote. The debate was underplayed. There was no great unrest about it in my constituency, but there is now a great volume of protest. My constituents feel, as I do, that there has been insufficient discussion of the new statistics.
If the Bill is carried over into the next Session, democracy will have been served this evening. One has to take into account the environmental considerations, the various statistics, the effect of the Euro-link and several other points with which I shall not weary the House. I do not know whether they will be accepted by my hon. Friend the Member for Hampshire, North-West (Mr. Mitchell), in whom I have great faith on ports policy and shipping matters. If, however, I do not receive satisfaction this evening and there is a vote, I shall be forced to vote against the motion.
8.8 pm
Mr. Andrew F. Bennett: The question to which we ought to address ourselves tonight is whether we should agree to this carry-over motion or to any other carry-over motions on Bills of this type. It will encourage a different approach to legislation if it should become common practice for the House of Commons to agree to carry-over motions. The Government have to get through their legislation in one Session of Parliament, which imposes a considerable discipline upon them. It also gives the Opposition an opportunity to ensure that there is a good debate and sometimes to extract concessions so that the legislation may be passed in one Session. It also means that the general public know that there is a 12-month period—sometimes longer if a parliamentary Session is

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extended—during which a Bill is being debated and is likely to be changed. However, under a carry-over motion that discipline disappears. Proposals can be changed without people being certain of how they affect them.
In recent years, more and more legislation of this type has been carried over. Sometimes legislation has been carried over to a third Session of Parliament. That is undesirable. The Government have to complete their legislation in one Session. Back Benchers who introduce private Members' Bills have to succeed within one Session if they do not want to lose their proposed legislation. That imposes an effective discipline. However, private legislation can be carried forward from one Session to the next.
I understand the argument that private legislation is not the same as other parliamentary business. Petitioners might have to engage people to speak on their behalf, and Committee proceedings can take a long time. On some occasions the promoters will have done everything possible to speed up a Bill's progress. They will have met objectors, tried to reach compromises and suddenly a general election will intervene. In such circumstances, there is an argument for such a motion. However, in this case the promoters had 12 months to make progress with their Bill. So far the Bill has received only its Second Reading.
A Committee was appointed, but one of its members had an interest and was declared ineligible to serve. So far the promoters have not become involved in the expense of acting upon petitions. The promoters have made little attempt to make progress. On the whole, they have brushed aside the objectors or ignored them. My hon. Friend the Member for Ipswich (Mr. Weetch) described what happened when he asked for information. He was told that since he was against the Bill the promoters wanted nothing to do with him.
If we are to continue with the private Bill procedure, we should impose the same discipline on the promoters as we impose upon ourselves. They should aim to put their Bills through in one parliamentary Session.
We must consider what are suitable measures for private legislation. In the past, the House spent more time on private legislation than it does today. Canal, turnpike and railway measures took up more time than public business. Even then the promoters were expected to make concessions to get their legislation through the House in a reasonably short time.
The Manchester ship canal was the subject of a private Bill which was presented to the House on three occasions last century. Each time the aim was to put it through in one Session. There was no question of a carry-over motion. Each time the promoters sought concessions, in spite of considerable opposition from the port of Liverpool to the idea of Manchester having its own canal and port. In the end, a Bill was passed within one Session. If that was reasonable then, we should today examine carry-over motions carefully. In recent years the House has often approved such motions on the nod.
If we are to continue to allow private Bills, we must ensure that they are not controversial. There should be a reasonable opportunity for give and take between all the parties concerned so that a compromise can be arrived at. We should question whether the private Bill procedure is acceptable for controversial measures. If the House refuses
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to grant carry-over motions automatically, people will begin to consider whether we should establish a more effective procedure.
Last century there was no procedure for major planning inquiries. We now have such a procedure. We hold planning inquiries into major proposals. For example, an inquiry was held into the proposals for the development of Stansted, taking into account their implications for airports policy.
In this case, it would have been better if a planning application had been called in by the Minister and a major planning inquiry held into whether the proposed facilities were required. That would have given an opportunity for all the issues to be aired. An inspector would have taken evidence from all the interested groups, whether from individuals representing themselves or being represented legally. They would have had an opportunity to ask questions. The inspector would have listened to all the evidence and prepared a detailed report for the Secretary of State, who would have issued a decision, and if the House disagreed it would have been given an opportunity to debate the matter. In theory, there would have been an opportunity for the House to reach a different conclusion from that reached by the Secretary of State.
The promoters chose not to go through that procedure and they have denied many people the opportunity of making known their objections. The private Bill procedure is not widely understood. Perhaps that is because so many major decisions have been the result of a planning inquiry instead of the archaic private Bill procedure.
The promoters have to advertise their Bill in the locality which in their view is affected. That would be acceptable in this case if the objectors came only from the Felixstowe area. It is not easy to advertise the proposals in Southampton, for instance, or in all the other areas with ports which might lose out as a result of the Bill. The Bill might be well publicised locally, but it might not be advertised in other affected areas.
The small group of parliamentary agents and those who retain them scrutinise such Bills carefully. We are fortunate that groups such as the Royal Society for the Protection of Birds notice when such legislation is proposed and alert other environmental bodies. However, I suspect that the dock workers were not alerted to the proposals at a time when they might have submitted petitions. They found out about the Bill through publicity following the Second Reading. If a planning inquiry had taken place, they would have had more opportunity to find out about the Bill and to petition against it.
I tabled an amendment which was not selected. It attempted to allow new petitions to be submitted even at this late stage. I understand that the Committee will have a discretion to hear new arguments. I hope that if the Bill reaches the Committee hon. Members on the Committee will be generous and will allow people to put forward their views. The simple solution would be to throw out the Bill. The promoters might then consider a planning application rather than a private Bill. That would make it easier for the many people concerned about the legislation to petition. I accept that there is still a limited opportunity to petition because the Bill must go to the other place. However, there are problems with petitions.
The private Bill procedure does not ensure that all those entitled to know about it and its implications are so informed. Unless people petition at the beginning of the procedure, their opportunity to make representations is

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very limited. The Bill has a Second Reading, which, by tradition, tends to last three hours. When this Bill was debated, many of those who wanted to argue against it were unable to do so and a closure motion was obtained at 10 o'clock.
We must carefully consider the procedures of the House. Last century, when large numbers of private Members' Bills were introduced, there may have been Members of Parliament with little to do who could afford the time to sit, almost like a judicial committee, for several weeks, hearing the evidence and weighing up the case of the promoters and the objections of the petitioners. Whenever I have spoken to people about serving on a private Bill Committee, I have found them concerned about what that involves. It is said that one of the powers of the Whips is to apply pressure on an individual Member to serve on a private Bill Committee as a punishment. It is a fairly onerous duty. The folklore of the House is that if a Member does not turn up to a Committee sitting he can be fined. Of course, that is not really the correct procedure. I understand that the Chairman of the Committee is entitled to report such a case to Mr. Speaker and that it is for the House to decide whether he should be fined. However, that is an indication that the House considers it a serious matter if an individual does not turn up at Committee sittings.
It may take several weeks to hear the evidence and weigh the arguments of the promoters and the petitioners. That is a great imposition on any Member of Parliament who has considerable constituency commitments and other commitments to debating public legislation.
One of the conditions for serving on a private Bill Committee is that an hon. Member should not have the remotest knowledge of or interest in the matter under debate, because if he had he might be partial.
Traditionally, there are four Members on a Committee. The implication is that they will try to arrive at a consensus. If two people vote in favour and two against, it is not easy to arrive at a conclusion. I know that under Standing Orders the Chairman has a casting vote, but there is a feeling that it would not be in the best interests for the Chairman to cast a vote and for the legislation to continue on the basis of a three-two vote.
The procedure is designed to produce a Bill where there is consensus, and where the promoters will have been able to meet the petitioners on various matters. If we are to achieve as full a debate by this procedure as we would through a public inquiry, we must place an onerous task on the four Committee Members to spend a long time in Committee listening to all the arguments.
With this Bill, there would be many environmental arguments—for example, the damage to the estuary and the fact that the wildfowl would lose a substantial part of their habitat. There could also be an argument about docks policy, and the fact that the Government do not actually have one. That would take a long time. There could be an argument about the implications of taking jobs away from Tilbury, Southampton or other ports and moving them to Felixstowe. That is a controversial issue.
There is, of course, the question of the fixed Channel link and the consequences for our ports. If Southampton were to lose a great deal of its trade to Europe, it would be tempted to compensate for that by competing for the trade that Felixstowe claims it is seeking through the proposed development. It would be easy for ships coming from many parts of the world to dock at Southampton and
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the containers then to go by road to Europe, using the fixed link. Such arguments could be developed at considerable length.
Which four Members would really be happy to sit on a Committee listening to evidence week after week, and then have to arrive at what is virtually a judicial decision? This is not the sort of procedure ideally suited to such a proposal. We should choose the alternative procedure of a public inquiry, which would involve people with expert knowledge and provide an opportunity for people to put their evidence in a more satisfactory manner.
When a private Bill has completed its Committee stage—assuming that the Committee believes that it should go forward—it returns to the House for another short debate on Report. The Report stage is not a suitable opportunity to air the basic principles. We have had unfortunate debates on narrow, procedural issues rather than on the meat of the Bill. The Bill then moves to Third Reading.
The scope for amendment is a problem. If there is a public inquiry, an inspector can make a series of recommendations, which can range over a wide area, and the Minister can either issue instructions that embody those recommendations or he can overturn them. However, the private Bill procedure provides that at all stages the scope of the Bill must be narrowed rather than extended. In theory, that is to protect the rights of the petitioners, because if the scope were extended someone might feel that had he known that it would be so extended he would have wished to petition.
If, in Committee, someone suggested that the Bill should have added to it a clause saying that if the fixed Channel link was built the Bill should be regarded as null and void, that would provide a simple precaution. When the Bill was first put forward there was little realistic possibility of a fixed Channel link, but it now appears that it is a more likely prospect. The conditions under which the House gave the Bill a Second Reading, and under which people prepared their petitions, would be altered if, when the Bill left the Committee, there was a clear Government decision on the fixed link. It would be reasonable to include an amendment to say that once construction of a fixed link had begun the powers in the Bill should lapse. Because of the parliamentary convention that legislation must become narrower and not be extended, I suspect that such an amendment would not find favour. Therefore, I believe there to be considerable problems with this system.
It would be far better to throw out the Bill and force the promoters to start again. That would not impose any major financial problem, because the Bill has made little progress. If they did not wish to start again, they could drop the Bill and use the alternative procedure of a planning application, which would ensure that, in due course, there would be a public inquiry. If they do not do that, there will be many problems for petitioners and would-be petitioners. It is a pity that the amendment has not been selected, because it would have enabled people to have their objections heard at the next stage.
I am increasingly dissatisfied with the private Bill procedure, in view of the time of hon. Members that it occupies. Indeed, I have heard hon. Members serving on such Committees say that if only the lawyers representing the various petitioners got on with their case more quickly they would be more sympathetic to the arguments. I have some sympathy with that view, but is it a satisfactory way

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to consider petitions? After all, from the objectors' point of view the arguments being adduced on their behalf are extremely important.
We should, therefore, defeat the proposed carry-over motion and oblige the promoters to return to a public inquiry. They would then have to debate whether the measure was necessary or whether we already had a surplus of port facilities for containers, meaning that it would not be in the national interest to have further capacity. I argue that it is more in the national interest to protect a major estuary that is a natural habitat for waders and wildfowl. Let us retain this area of outstanding natural beauty.
I remind the House that the attraction of an area such as this is its wilderness nature. Once a large container port is established, even if trees and other environmental characteristics are placed round it, the nature of a wide area is changed. I suspect—my hon. Friend the Member for Ipswich could tell me—that this development will involve floodlighting at night, enabling 24-hour operation of the facility. That would extend the effects on the area even further. It would be unfortunate if we exchanged attractive mud flats for unused concrete hardstanding, especially if unused capacity exists elsewhere.
A proper public inquiry would also enable those concerned to examine the traffic effects of the development. If a fixed Channel link is built, we shall have to consider not only the traffic effects on East Anglia, but the implications for the Dartford tunnel and the road links down to the point at which the fixed link crosses the Channel. Those issues would be better debated at a public inquiry, where all the implications — including the possibility of a second Channel tunnel — could be considered.
At a public inquiry, full consideration could be given to the impact on competitor ports. For example, how far would the development draw trade away from Tilbury and Southampton, and how far would it affect ports to the north of Felixstowe all along the East Anglian coast right up to Humberside?
A public inquiry would have the opportunity to consider the likely future demand for containers. There is considerable evidence to show that many goods are now being transported in smaller volumes. As trade develops in, say, the coming 20 years, volumes may reduce, meaning that fewer containers will be required. Such arguments could be examined closely at a public inquiry. Another important aspect which an inquiry could consider is how far existing dock facilities are being utilised and what could be done to increase their use, at Felixstowe and elsewhere.
For those reasons, the House should be unwilling automatically to grant carry-over motions of this type. Bills should not be allowed to meander through Parliament, with the public tending to lose track of what is happening and having fewer opportunities to voice their feelings.
If we are to retain the private Bill procedure, it should exist only for Bills which have a wide measure of consensus. In those circumstances the promoters, knowing that they can achieve a wide measure of consensus, have a realistic opportunity of getting their measure through in one Session of Parliament.
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Hon. Members should also examine carefully the environmental issues that are involved. We read in the press during the recess that the Government had suddenly become concerned about the "green" issue. The trouble with their concern is that all their actions point in the opposite direction. For example, we were told of the Government's great concern for the national parks. Then the Secretary of State for Transport announced during the recess not only that he intended to build a bypass through the national park at Okehampton, but that he envisaged getting the necessary legislation through almost on the nod. That does not demonstrate the Government's concern for the "green" issue.
We have seen the way in which the chairman of the Conservative party is willing to whip his Back-Benchers through the House to achieve legislation. I suspect that tonight, although a few hon. Members who are concerned with retaining the natural habitat have come to hear the debate, the payroll vote, the lobbying by Trinity college, which stands to make a great deal of money out of the development of this land, and various other financial interests, will result in Conservative Members voting for the motion. That will prove how little the Conservative party cares for the "green" issue. Its philosophy is that if, by destroying a bit of Britain, somebody can make a profit, that is all right.
In view of the remarks that I have made about the procedures of the House and the need for hon. Members more frequently to protect the habitat and the natural environment, I hope that the motion will be defeated.
8.38 pm
Mr. Tim Yeo: I regret the need for this debate. I felt that the issue could have been resolved at 7 o'clock without a debate or a Division. The discussion has been occupied largely by the hon. Members for Denton and Reddish (Mr. Bennett) and for Ipswich (Mr. Weetch), both of whom spoke at some length. I shall respond more briefly to the points that they raised.
My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) was in his place earlier. Felixstowe is in his constituency and he has shown a close interest in the progress of the Bill. He has been a consistent supporter of it and it is a source of regret to him and to me that he is prevented by virtue of the high office that he holds from taking part in the debate tonight. However, there is no question but that he shares my view that Felixstowe and the prosperity and expansion of the town is of the greatest importance to our constituents, to East Anglia as a whole and to the people of many other constituencies.
My hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) was the promoter of the Bill. He is presently elsewhere on what I believe to be parliamentary business. However, I understand that he hopes to reach the House before the conclusion of the debate.
I strongly support the carry-over motion and there seems to be no reason to withhold it. I regret the speech of the hon. Member for Ipswich, which was completely unworthy of him. His record inside and outside the House led me to expect rather better things from him.
It is noteworthy that no representatives of the Liberal party or the Social Democratic party are in their places. That is exactly what happened on Second Reading. Very few of their number voted in the Division when the Question was put on Second Reading despite their professed concern for unemployment, which is clearly one

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of the issues at stake. They tell us also that they are concerned about "green" issues and infrastructure, but they are unable to muster any attendance for this debate. It should be said that after the debate had started a couple of Liberal Members entered the Chamber, occupied their places, spent a few minutes chatting to each other, looked around and apparently realised that they had come for a different debate. They have not remained with us. Perhaps their presence was some sort of hangover of enthusiasm from their conference.
I have heard nothing during the course of the debate which makes me believe that the Bill should not enjoy the facilities which I understand are normally made available to other private Bills at this stage in their parliamentary progress.
Mr. Andrew F. Bennett: How many Bills have received the consent of the House to carry over into the next Session which have not proceeded into Committee in the Session in which they were introduced?
Mr. Yeo: I do not have the answer to the hon. Gentleman's question but I consider it to be a rather specious one. He knows as well as everyone else why the Bill did not proceed into Committee. We know that it would have done so in normal circumstances.
Second Reading took place on 13 May and the argument was won overwhelmingly by the Bill's supporters, as was the subsequent Division. It was an extremely good Second Reading debate and all the relevant issues were aired at length. Unfortunately, the arguments of the hon. Member for Ipswich on Second Reading were as specious as his so-called new arguments this evening. He referred to the existence of so-called new material which he explained he wished to introduce into the debate. It became increasingly apparent as his speech continued that he had no new material. That is not surprising because we have had ample opportunity to examine the issues previously. He repeated some of the same unsubstantiated assertions about navigational and environmental concerns, all of which have been fully explored in the past and answered fully by the Felixstowe company.
Mr. Bennett: Can the hon. Gentleman tell us how he and the promoters envisage getting the undertakings on navigation rights worked into legislation?
Mr. Yeo: I believe that the hon. Gentleman has made a Committee point and not one that should be introduced into this debate. He is seeking to deal with a detailed matter and I do not think that it would be appropriate for me to detain the House on that sort of issue. We are here to debate whether the carry-over motion should be accepted by the House.
Mr. Stott: The hon. Gentleman has accused my hon. Friend the Member for Ipswich (Mr. Weetch) of making unsubstantiated assertions. In fact, my hon. Friend has made no assertions in this context and his remarks certainly cannot be described as unsubstantiated. In August the Suffolk Coastal authority declared, together with another body, that the area of estuarial water with which we are concerned should be a site of special scientific interest. That is a fact of life and not an assertion. It is new evidence, which my hon. Friend has brought to light. I wish that the hon. Gentleman would moderate his language when attacking my hon. Friend and accusing him of making unsubstantiated assertions.
Mr. Yeo: The hon. Gentleman has raised a different point from the one advanced by his hon. Friend the Member for Denton and Reddish. What he says about the site being designated as one of special scientific interest is true. I believe that the assurances that were given on Second Reading on behalf of the Felixstowe company were entirely adequate to satisfy those who are concerned about the possible environmental damage caused by the extension of the port. I believe that the environment will be enhanced by the programe of tree-planting and the other measures that the company is proposing to take to preserve the environmental advantages of the area.
The hon. Member for Ipswich spoke at some length about job creation, an issue that is central to the entire proposal. I thought that the hon. Gentleman was genuine in his concern for unemployment and I am surprised that he should now resort to contorted arguments to try to persuade himself that the Bill will not create many new jobs. There may be some variations in the estimates of the number of jobs that we shall gain, but I believe the estimate of 2,500 to be a reasonable working assumption of long-term job creation. However, there will be many indirect spin-offs which may spread into other constituencies as improved infrastructure encourages firms to locate their businesses in places that were previously not attractive.
The House and the voters of Ipswich and Suffclk as a whole should know that the hon. Member for Ipswich is so desperate in his opposition to this measure that he is resorting to obscure procedural devices in his untiring efforts to eliminate jobs from the areas surrounding his own constituency, including Felixstowe and the other nearby ports of Suffolk. The hon. Gentleman referred to the possibility of jobs being switched from one port to another and I accept that that is a possibility. Jobs could be transferred from one port to another if the Bill is not enacted. They could be transferred from British ports to continental ports, such as Rotterdam and Amsterdam. Those of us who support the Bill and the carry-over motion are anxious to prevent the destruction of job opportunities.
I am sad that the hon. Member for Ipswich and his hon. Friends should want to promote the export of jobs from Britain to the continent, but I am not surprised. It was the Labour Government, who were supported for almost two years by the absent members of the Liberal party, who introduced policies that were designed precisely to export jobs from Britain. The implementation of their policies achieved that unfortunate result with remarkable success.
The hon. Member for Ipswich talked about support for his arguments. He told us that he had received support from the Transport and General Workers Union nationally and at eastern regional level. He acknowledged that the group that knows more about the issue than anyone else — the members of the TGWU who work at Felixstowe, who are ably led by their chief shop steward, who has spent much time considering the merits of the proposal — is in support of the Bill. Once again we see the jackboot of national union leadership being used to grind the wishes of rank-and-file members on the spot into the dust. After all that has happened in the past two years, we might have thought that the hon. Gentleman and his hon. Friends had reached some different conclusions. The conclusion could have been that local union membership opinion was worth listening to in proposals of this sort.
Mr. Andrew F. Bennett: I accept that the hon. Gentleman can put the case for the Felixstowe docks. Surely he will accept that my hon. Friend the Member for Ipswich (Mr. Weetch) put the feelings of the rank and file Ipswich dockers.
Mr. Yeo: I merely said that I believed that the members of the TGWU at Felixstowe probably know a fair bit about this proposal and that their views are worth taking into account. I shall certainly take those views into account, even if Labour Members will not.
The fixed link was another item of so-called new material that the hon. Member for Ipswich introduced into the debate. I prefer to call the fixed link the Channel tunnel because fixed link seems to be an absurd bit of jargon. Even if half the construction will be a bridge there will still be a tunnel in the middle. Most people understand more clearly what one means when one refers to the Channel tunnel rather than the fixed link.
It appears from the speeches of the hon. Members for Ipswich and for Denton and Reddish that they will support the proposal for the fixed link. We have had an interesting preview of their attitude. I wonder whether the hon. Member for Ipswich consulted union members who work at Dover harbour, but that is just speculation. I believe that the question of the Channel tunnel is not of great relevance to this issue. It is for the Felixstowe Dock and Railway Company to weigh up the commercial risks and the prospects for the proposed expansion. It is difficult to determine the effects of the Channel tunnel on the future of Felixstowe docks. We are speculating about developments that will not be fully operational for 10, 15 or 20 years. It is not for us to determine those effects; it is for the directors of the company to weigh up the commercial risks.
Mr. Patrick Thompson: Does my hon. Friend agree that the Opposition will drag up any reason or excuse, however irrelevant, to delay the passage of the Bill which is so badly needed to create jobs and make progress in East Anglia?
Mr. Yeo: My hon. Friend has put his finger on the point. We are subjected to many arguments of the most peripheral kind and of tangential relevance to this debate.
Reference has been made to the implications for road networks, traffic levels, and so on. I believe that those factors have been taken largely into account. The A45 is a road of high standard, which does not as yet carry an excessive amount of traffic. The House has already approved the A1/M1 link which will be of material value to Felixstowe, industries in the midlands and some constituencies in between. By the end of next year the Chelmsford bypass will be operating. This project is specially dear to the hearts of those people who, like me, frequently drive up and down the A12.
The environmental issue, which was raised earlier in this debate, was explored in great detail on Second Reading, and I cannot add much to that. I am satisfied that the Felixstowe Dock and Railway Company will take action to protect the environment from unnecessary damage. I am personally concerned with this because my home is in a village called East Bergholt which is only a few miles from Felixstowe on the other side of the estuary. Many of my constituents have spoken to me about this proposal. Many have contacted the company and received constructive responses. The area is beautiful and it is
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important for us to ensure that it is not diminished as an attraction. The tourist business that we attract to East Anglia and Suffolk is important to us.
Some of the arguments that were introduced into the debate by the hon. Member for Denton and Reddish were particularly specious. I acknowledge that he at least tried to address some constitutional aspects. He knows why the Bill has not been able to progress. He appeared to want to overturn a normal procedure. Perhaps if the hon. Gentleman had paid close attention to the hon. Member for Ipswich he would have heard his colleague acknowledge that in initiating the debate he was doing something out of the ordinary in parliamentary terms. It would not be right to conclude that this debate could be used to establish a new precedent for proceeding with private Members' Bills. There is no merit in the suggestion of the hon. Member for Denton and Reddish that a public inquiry should be held. These issues have been adequately debated already. There will be further opportunities in Committee to debate some matters further, assuming that this carry-over motion is passed.
I shall refer to two items of new material that have become available since 13 May. The first is the change in the unemployment figures in Suffolk. New information leads me to believe even more strongly than I did on 13 May that the jobs that would be created if the dock were expanded as proposed are even more important now than they were five months ago. A second item of new material that has become available since 13 May is the improvement in British export prospects because of the movements in sterling. The pound is now much stronger against the dollar, resulting in lower costs for most of the raw materials imported to Britain by manufacturing industry. The pound is now slightly weaker against European currencies such as the deutschemark, making our exports of manufactured goods even more competitive. Those points reinforce the need for the House to approve this motion.
On 13 May the House gave the Bill a Second Reading by a substantial majority after a debate in which the Bill's supporters had the best of the argument. I firmly believe that the Bill should be carried over in the normal way, and I therefore urge the House to approve the motion.
8.57 pm
Mr. Eddie Loyden: I wish to declare an interest in that I am a member of the Transport and General Workers Union docks and waterways section. I do not believe that it would be right to carry over this Bill, and my hon. Friend the Member for Denton and Reddish (Mr. Bennett) has given many reasons for that. The House should be aware of the wide-ranging implications that carrying over the Bill would have. My hon. Friend has put the constitutional points. The House has failed to recognise that the Bill has wider ramifications than those given consideration on Second Reading.
One of the things that I learnt in the port transport industry was that there is no way of predicting the outcome on the river of a construction in a tidal estuary. Despite what has been said by Conservative Members, I have seen no evidence of that. My hon. Friend the Member for Ipswich (Mr. Weetch) mentioned on Second Reading how much hydrographical research had been done into the feasibility of the extension of the port. He was not challenged when he said that he had heard little about any feasibility studies carried out by the port authority.

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There were at least two years', if not more, research carried out on tidal and current effects, siltation and other matters that would affect the meandering of the tidal estuary as a result of the construction of the new dock at Liverpool. There is no way in which we can predict the outcome of such a construction.
There is no evidence of any in-depth examination at Felixstowe. That leads people to wonder whether the port authority is throwing itself in at the deep end with the extension of the port at Felixstowe.
I do not believe that my hon. Friend the Member for Ipswich has been arguing the case merely on behalf of his constituents. In this place it is right for hon. Members to argue a case for their constituency and in the interests of their constituents. He has pointed out that the proposal would affect not only the port immediately adjacent to Felixstowe but other United Kingdom ports. We have already had massive evidence of the effects changes in the pattern of the port transport industry have had on regional economies especially in the north, north-west and Scotland. We have seen changes that have caused once major ports such as Liverpool, Manchester and the other northern ports to play a minor role. We should all recognise that changes in the port transport industry cannot be seen in isolation. We should not examine one port only and make a case for the extension of that port, because the extension can only be to the detriment of other ports and regions.
I do not believe that sufficient information about the consequences of the proposed change on other ports and regional economies has been given to the House. The Government have failed completely to recognise that the decline that is taking place in some parts of the country is related in many instances to the decline in the port industries.
Mr. John Powley: Does the hon. Gentleman accept that the demise in some of the ports to which he has referred is due largely to bad management practices, bad labour relations, high labour costs and a low turnover in those ports? We wish our ports to achieve the higher efficiency, lower handling costs and greater efficiency in the use of manpower that is evident in Felixstowe at the moment and in several of our other ports, and which has resulted in the changes he has outlined.
Mr. Loyden: I do not accept that. Prosperity in this country was due largely to the major ports. The nation's wealth was based upon ports such as Liverpool, Manchester, the north-eastern ports, Southampton, Bristol and others. It is nonsense to argue that they were not successful in the past.
We accept that technological change and different methods of handling cargo need changes in the composition and layout of ports. At the same time, we have been faced with the movement away from some regions and into others. That has been to the detriment of some ports and regions. I do not want to block prospects for more work in Felixstowe, but I do not wish to see an expansion of work in Felixstowe at the expense of another part of the country. We are not talking about a real increase in jobs. We are talking about the movement of work from one part of the country to another.
One of the important points missed on Second Reading, which gives grounds for at least an inquiry into Felixstowe, is the fact that the Government have continued
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to give benefits to non-scheme ports as a way of allowing scheme ports to wither on the vine. That has been the intention of this Government from the beginning and that is why they support the expansion of the non-scheme ports. That will be done because the Government want to see an end to the National Dock Labour Board scheme and that can be done by extending the non-scheme ports at the expense of the scheme ports. That has clearly been the intention of the Government from the beginning and has wider implications for the whole of the port transport industry and on any planning that may take place in future. There is no evidence that that is taking place at the moment. The Government saw fit to remove the only constraints we had upon planning for the port transport industry when they amended the Harbours Act.
Mr. Patrick Thompson: Will the hon. Gentleman accept that if the result of the Bill passing in the next Session is an increase in exports and therefore an increase in national wealth, then, as surely as night follows day, this will lead to an overall increase in jobs for this country and for East Anglia in particular? That must be good not only for our region but for the nation.
Mr. Deputy Speaker (Sir Paul Dean): Hon. Members are beginning to stray a bit. We are dealing with the carryover motion and I hope that the hon. Gentleman will address his remarks to that.
Mr. Loyden: The intervention was moving away from the point. The point that I am making is that the implications of this Bill are wide-reaching and should not be carried over. I am trying to develop the argument about the wider implications. My hon. Friend the Member for Ipswich argued the case about the adjacent ports, but it is not only the adjacent ports that are affected because other ports in the United Kingdom will be affected and the whole question of any comprehensive plan about the port transport industry will be directly affected by the development not only of Felixstowe, but of the others which will be in the pipeline once this Bill goes through.
There are wide ramifications for the port transport industry and they have been dealt with by my hon. Friends in some detail. The House must recognise the case for the environment. That case has been fully put by my hon. Friend the Member for Ipswich and it is not something that is confined to those people immediately adjacent to the environment that can be despoiled by this development. That piece of environment belongs to us all and we have seen the growing interest by the people in their environment, particularly when they see more and more of it being destroyed.
We are now conscious of the fact that we have to do all we can to preserve those bits of environment that still remain intact, areas which are things of beauty and places where people can take their leisure. That is not a matter for the Felixstowe Dock and Railway Board to consider. It is a matter that affects people throughout the country, who are concerned about the future of their environment. This is proven by the fact that environmentalists are having a greater say in the political direction in which Governments are going.
This Bill does not confine itself to the effects it will have either on the port industry in that area or the environment. This Bill will have a direct effect upon the port transport industry in the widest possible sense. In the post-war period I have seen in the port of Liverpool a

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decline which was partly due to technological change or to the changing pattern in the method of cargo handling. It was mainly due to the development and operation of non-scheme ports and the effect that our entry into the European Community had on those ports. In that sense the port was central to the economy of that area and it is a matter of grave importance to the Mersey Docks and Harbour Company, which is the port authority, when it sees the possibility of its trade being further taken away by the development of ports on the south coast, particularly non-scheme ports.
The Bill should not be carried over. There should be a much closer examination of all the implications that would flow from the passing of the Bill. It would open the floodgates for further applications, because the restrictions would have been lifted and not only northern ports but those on the south-west coast and others would be affected.
The implications are wide and the House would do well to think carefully about the Bill. It would be an abuse of our procedures if the measure were carried over. It will have serious implications for the industry and the country generally and could deal a death blow to ports such as Liverpool. I ask my hon. Friends to oppose the carry-over motion.
9.10 pm
Mr. Christopher Chope: Before explaining why I have grave reservations about the motion, I should tell the hon. Member for Wigan (Mr. Stott) that I did not vote for the Second Reading of the Bill. I abstained because I felt that this was a Bill to promote free and fair competition, but on the basis of what has happened since Second Reading I am worried about whether it really is free and fair competition.
The motion would prevent any new petitioners arguing against the Bill. That would be a grave step. Since Second Reading, a number of people have concluded that they should have petitioned against the Bill. If the Bill had got through in this Session, they could not have complained — they would have missed their opportunity — but it would be unusual for the House to give leave to promoters of a private Bill to have it carried over to the next Session, particularly when there has been no intervening general election and when the Bill has not even been considered in Committee.
This is undoubtedly a controversial Bill. It is not urgent, and major developments in the British docks industry since Second Reading have implications for the Bill. My hon. Friend the Member for Boothferry (Sir P. Bryan) said on Second Reading that the Bill was necessary because many shipowners wished to use east coast ports and some had refused to use ports such as Southampton because of their disastrous industrial relations record.
Since then, Southampton has demonstrated that it has put its house in order. Many of the stop stewards who have helped to bring about the changes there are in the Public Gallery for this debate. Unit costs at Southampton have been reduced substantially — from about £110 per container to about £70. At that figure, the port was attracting business away from Felixstowe. The evidence is that Felixstowe is having great difficulty in finding customers for its new Trinity terminal.
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Paragraph 2 of the original statement by the promoters in support of the Bill said:
"existing facilities in Felixstowe are barely sufficient to meet the current needs of port users and by mid-1986 the Port of Felixstowe will have completed its growth within its present limits. Further expansion will only be possible after that year if the Bill is enacted."
However, information provided for me today by shop stewards from Southampton shows that the situation in Felixstowe is so desperate that, far from existing users saying that there is insufficient capacity, the port is short of users and is prepared to approach Trio and Saecs, the two main users that keep Southampton going. The port of Felixstowe has come to those two customers and is threatening to undercut the prices substantially. I believe that a figure of something like £50 per container has recently been mentioned.
There is no way in which any large container port in Europe can operate on that sort of basis, and there is certainly no way in which any container port in this country can do so if it is playing fair. My fear is that the port of Felixstowe is trying to create a private monopoly for itself. On the basis of the information that I have been given, what is contained in paragraph 2 of the promoters' statement—whether it was true at the time, I would not like to judge, but certainly on the basis of recent evidence — it needs to be closely examined. The opportunity should be given for more people to come forward to petition against the Bill, to try to examine that allegation further.
The port of Southampton is now viable, but if it loses the business that Felixstowe now threatens to take from it there will effectively be only one major container port in this country. In my submission, that would be in neither the national interest nor the local, particularly in Southampton. It is pretty galling when a group of people who have made the sort of sacrifices that many of my constituents in Southampton have made find that they are threatened in the way that now seems likely.
The attitude of the Transport and General Workers Union on this is not one that I wholly endorse because, on the one hand, the local TGWU in Felixstowe is saying that it is heartily in favour of this whilst, on the other, some members of the TGWU national committee, as I understand it, are threatening a national dock strike in the event of this Bill getting on to the statute book. That is grossly reprehensible. I hope that no one working in Southampton would have anything to do with it.
At the same time, however, national members of the TGWU and the Labour party itself are committed to a policy of imposing sanctions against South Africa at a stroke. If such sanctions were brought in it would destroy the port of Southampton — the people in the Public Gallery today know that—because it would take away one third of the container traffic going through Southampton at the moment. So we do not want to have too much humbug about this.
I hope that, in the light of the new developments that have taken place since the Second Reading, the House will consider very carefully whether it would be right to allow this Bill to be carried over to the next Session and whether it would not be much fairer for all concerned for it to have to start again then.
9.19 pm
Mr. Roger Stott: The hon. Member for Suffolk, South (Mr. Yeo) accused my hon. Friend the

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Member for Ipswich (Mr. Weetch) of making unsubstantiated assertions. I would like to level the same charge at the hon. Member for Suffolk, South. It is a pity that he is no longer in place to hear it. The reason why my hon. Friend the Member for Ipswich continues to represent that splendid constituency is that he assiduously defends his constituents' interests. That is why they continue to support him no matter what adversity may be affecting the Labour party nationally at the time. My hon. Friend was absolutely justified in saying what he did in relation to what is, after all, substantial new evidence that has come to light since we debated this matter on 13 May this year.
Your predecessor in the Chair, Mr. Deputy Speaker, indicated that all Members who took part in this debate this evening—and rightly so—must confine their remarks to the issues which are currently on the Order Paper. None of us has any quarrel with that at all. Our difficulty, however, is that this is a rather unusual situation. It is certainly unusual for many of my hon. Friends, and I notice that the hon. Member for Southampton, Itchen (Mr. Chope) found a little difficulty in staying in order when trying to say the things that he wished to say. I understand the position of the Chair. If, during my brief contribution, I wander outside the terms of reference of the debate, it will be because I find it somewhat difficult to address my remarks to the narrow proposal before us.
The parliamentary and constitutional issue was best spelt out by my hon. Friend the Member for Denton and Reddish (Mr. Bennett) when he said that if the House prevented the Felixstowe Dock and Railway Company from carrying this private Bill through this evening's procedures into the next Session of Parliament, in a sense that would be offending the traditions of the House of Commons. I believe that, too, for several reasons, some of which I shall attempt to adduce.
It is a thoroughly bad practice for anybody to bring a private Bill to the House of Commons that fundamentally—I use the word constructively—disturbs the national pattern of ports policy. The hon. Member for Southampton, Test (Mr. Hill) has belatedly gone down the road to Damascus with regard to ports policy. There are two new reasons for not preventing the Bill going further, and that is the conversion of the hon. Members for lichen and Test who have been lobbied heavily by their constituents. I should say in fairness to them that I made on Second Reading exactly the same points that they both made tonight. I am sorry that they could not join me in the Lobby when we debated that on 13 May.
My hon. Friend the Member for Ipswich (Mr. Weetch) said that one of the issues that has come to light since Second Reading is the decision by the Nature Conservancy Council and Suffolk Coastal county council to designate the area of the estuary of the Orwell a site of special scientific interest, notified under section 28 of the Wildlife and Countryside Act 1981. If a county council and a reputable body have decided so to notify that area of estuarial water as an SSSI under the Act, I should have thought that the House of Commons would take serious cognisance of the fact. That is one of the substantial reasons whey we are taking our present position.
On Second Reading, although petitions were laid by many conservation bodies, that position had not been officially taken by the county council and the NCC. As it has been ratified by those bodies after Second Reading, it is important to outline some of the reasons why that was done. Many Conservative Members have referred to it.
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The hon. Member for Bury St. Edmunds (Sir E. Griffiths) graced us with his presence rather late in the debate. No doubt he will make his excuses if he catches your eye, Mr. Deputy Speaker. He cannot ignore the substantial body of opinion in his own area, together with the fears of the national bodies concerned with the conservation of wildlife, about the dangers to that unique habitat in East Anglia of the extension of Felixstowe. I need not rehearse all the arguments. They are clear and concise. I have no doubt that everybody concerned with the issue and the debate will have received the contents of the petition of the Royal Society for the Protection of Birds, which refers to the unique habitat surrounding the Felixstowe area, which will be irreparably damaged if the Bill proceeds. The House should not consider proceeding further without taking proper cognisance of what that august body has said.
If that claim by the Royal Society for the Protection of Birds is not enough, the House has a duty and responsibility in the national interest. On Second Reading, I drew the Minister's attention at some length to the way in which the Bill would undermine the very precarious national balance in our ports system today. If the Bill is to be allowed to proceed into the next Session of Parliament, the House would have done far better today to say that it should be taken away and submitted to the planning application procedure just as the proposal to extend Stansted airport was submitted to the planning application procedure and to a public inquiry. I believe that developing Felixstowe as proposed will have the same effect on our ports as the Stansted extension will have on our airports and that this is, therefore, a matter of great national interest.
Neither the Minister nor anyone else in the Chamber today has seriously and intellectually challenged the evidence to which I drew attention on 30 May. I refer to the evidence submitted by Dr. Gilman of the marine transport department of Liverpool university. Dr. Gilman has considered the matter very seriously and produced an academic paper on the subject. He has considered the levels of trade and the volume of imports and exports. The hon. Member for Suffolk, South shakes his head, but even he, in his somewhat spurious five-minute contribution today, did not challenge the intellectual basis of the argument that I made on Second Reading, and that is the kernel of our argument today.
Fresh evidence has now emerged in support of the case that we made about total tonnage movable in the United Kingdom. Either it can all be moved through Felixstowe or it can be moved through various other ports in the United Kingdom. The hon. Member for Suffolk, South and the Minister, however, must address themselves to the fact that there is already enormous overcapacity. If the Felixstowe Dock and Railway Bill proceeds into the next Session of Parliament without a wide-ranging planning investigation and without a public inquiry, the five berths at Felixstowe will provide 3·5 million tonnes additional cargo capacity for a system which requires just over 9 million tonnes in total and is already adequately provided for. All the academic research on cargo-handling trends, ro-ro services and containerisation shows that we are handling less cargo than in 1977 and 1979. Indeed, we are probably handling about as much as we did at the start of the container revolution in 1967, so the current handling capacity of our ports requires no additional provision at Felixstowe.
Mr. Yeo: The hon. Gentleman accused me of not responding to his point, but it has not been made in this debate by either the hon. Member for Ipswich (Mr. Weetch) or the hon. Member for Liverpool, Garston (Mr. Loyden). The point was adequately answered on Second Reading by many Conservative speakers, and it was voted on. The hon. Gentleman is now dredging up the Second Reading debate again, and that has nothing to do with this motion. The Felixstowe Dock and Railway Company is the best body to decide on the commercial prospects for an expansion of Felixstowe. If it makes a mistake, it will make a loss. No taxpayers' money is involved in the scheme, and I have no doubt that the company has made a careful judgment about the prospect of future tonnage. On its past record, the company's judgment seems to be remarkably good.
Mr. Stott: That is so, and if the hon. Gentleman had read or heard what I said on Second Reading he would know that I paid tribute to the way in which the Felixstowe Dock and Railway Company had made that port a success —there is no doubt about that. However, one cannot simply approve a project that, in the face of all the evidence available to us both on Second Reading and since then, will have a dramatic effect on the national interest of our ports.
Why does the hon. Member for Suffolk, South think that the hon. Members for Itchen and for Test are now getting cold feet about the proposition? They know the damage that this extension would cause to their ports, as my hon. Friends the Members for Ipswich and Garston know how it would affect the ports in their constituencies.
I accept that the hon. Member for Suffolk, South is ploughing his constituency furrow when he defends the Bill. However, I cannot agree that the Bill would be in the national interest, and therefore——
Mr. Yeo rose——
Mr. Stott: I must finish because the Minister must have time to wind up the debate.
Like my hon. Friend the Member for Denton and Reddish, I believe that there is a constitutional case against the Bill continuing into the next Session. There are also good sound, practical reasons.
I do not commit my party one way or the other. It is essential that we bear a certain factor in mind. The Government have proceeded at a great pace to try to get a resolution of the fixed link. They have encouraged it and set up an organisation that will evaluate the projects submitted to the Secretary of State. Whether or not we agree with the fixed link across the Channel does not affect the fact that if it were to come about it would have profound effects on our port strategy for the south and east coasts of the United Kingdom.
I have no doubt that the Minister has been to visit Dover, as I did early this year. Some 11,000 people are employed in that port, which moves more in tonnage and value than does Felixstowe. If there is to be at some stage a fixed link across the Channel, it will have a profound effect on our ports policy, and on what the Bill is proposing to do.
Like the hon. Member for Test, I believe that there should be a proper national ports policy. We should not proceed through piecemeal legislation such as this, nor should we do something that we should all regret.
9.35 pm
The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): I shall reply briefly to the debate, because this is a procedural motion. I shall simply advise the House of the Government's attitude.
The hon. Member for Ipswich (Mr. Weetch) sought to draw me on the net effect of these proposals on the extension of employment in the ports industry. On another occasion I should be happy to debate the merits of allowing the growth of port capacity where customers want it versus the merits of refusing that development and forcing customers to use existing capacity elsewhere. Tonight I must resist that temptation. I am sure that the hon. Member for Ipswich will understand why. Likewise, I shall not follow the hon. Member for Wigan (Mr. Stott) in his forecast of the capacity required in United Kingdom ports; nor shall I follow his speculation about a Channel fixed link and its possible effects.
The hon. Member for Ipswich asked me about the possibility of legislative backing for the guarantees promised by Felixstowe. My Department takes the view that parts of the harbour revision order are ultra vires as regards guarantees for Ipswich traffic. It is not for me to speculate at this stage about what legislative alternatives may be available to provide the port of Ipswich with the guarantees that it seeks. It is for the parties concerned—Ipswich, Harwich and Felixstowe — to sort out a legislative solution among themselves.
Mr. Andrew F. Bennett: If the House did not pass the carry-over motion today and the promoters had to introduce a new Bill, it would then be possible for them to solve the vires problem.
Mr. Mitchell: As I was trying to say to the House, it is entirely a matter for the parties to decide the way in which they wish to proceed.
To return to the Government's view, I understand that it is not infrequent for there to be a carry-over motion of this kind. From the remarks that I made on Second Reading, the House will be aware that the Government's stand is neutral in relation to the Bill, as is customary in such circumstances. I recommended to the House that the Bill should be given a Second Reading and allowed to proceed in the usual way to Committee where its provisions could be considered in detail. It is consistent with that approach that the Government therefore support the carry-over motion. The case for supporting the motion has been put eloquently by a number of my hon. Friends.
This is an important private Bill, although a controversial one. The House affirmed the principle of the Bill, albeit conditionally, on Second Reading and subject to proof of allegations of fact before the Committee. If the motion is carried, the House will have an opportunity to consider the arguments for and against the Bill on the basis of the current proposals before it in Committee and at later stages. It is perhaps fair to say that it is no fault of the promoters that the Bill has not made more rapid progress in this Session, due to wholly unlooked for problems that arose in connection with the proposed chairmanship of the Committee that was appointed to examine the Bill.
Mr. Andrew F. Bennett: Does the Minister accept that if the promoters had made more of an attempt to meet my hon. Friend the Member for Ipswich (Mr. Weetch) and other objectors, particularly the petitioners, and that if they

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had been able to meet some of the points made in the petitions and got those petitions withdrawn, much more rapid progress could have been made?
Mr. Mitchell: Progress could hardly have been made without the Bill going into Committee. The motion before the House would allow exactly that. It would enable the Committee to consider whether proper arrangements had been made to meet the points that have been raised by hon. Members speaking on behalf of, for example, the port of Ipswich, which clearly is very much involved in the consequences of the proposed measure. The view of the Government is that it would be unfortunate if the House were not to agree to the motion. Therefore, I urge the House to allow the Bill to be carried over in the usual way and to agree to the motion.
9.39 pm
Dr. David Clark: First, I apologise to the House for not being here during the very early stages of the debate. I had to attend an important conference in Newcastle which discussed, interestingly enough, the marine environment. Therefore, it is apposite that I should participate in this debate, albeit on the motion in front of the House, in terms of the marine environment. It is also apposite that I should represent, with my hon. Friend the Member for Jarrow (Mr. Dixon), one of the major ports in this country, which is on the Tyne. I do not speak as a constituency Member or in defence of the Tyne port. I do not need to do so.
The Bill should not be carried over into the next Session. Many developments affecting the Bill have occurred since we had our wide-ranging Second Reading debate on 13 May. Sufficient new evidence and information of national import has been obtained since then to merit my submission. The Bill may appear to be an innocuous, local measure, but it has wide-ranging implications not only for the Felixstowe area but for places such as Southampton and Liverpool.
The changes in economic factors since we discussed the Bill on 13 May were skilfully argued by my hon. Friend the Member for Ipswich (Mr. Weetch). He described the nuances in the changes in the economic arguments, especially in relation to jobs. The hon. Member for Suffolk, South (Mr. Yeo) used the same employment statistics to support his case. The statistics show a worsening economic position. That is why I think that we should refuse to allow a carry-over period.
We are conscious not only of the Bill's economic and conservation implications but of its effect on the leisure industry. Since the Second Reading further aspects have emerged. We were all aware of the navigational problems. We knew that if the river were deepened and the wharfs built the channel would be restricted and that the pleasure boats would have to use the same routes as merchant ships. In addition to that, new marinas are being developed at Dovercourt, Harwich and Shotley, which will have an effect on navigational rights on the river. The Minister made it clear that navigational disputes between Ipswich and Felixstowe are ultra vires and must be settled elsewhere.
Mr. Andrew F. Bennett: The Minister failed to answer my question. I argued that if we had a new Bill it would be possible to include such considerations in that new Bill. I understand that since the promoters gave notice
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in their original proposals that they would include that aspect in the Bill there would be no difficulty. If the promoters took the Bill away and started again they could solve the problem from the start and it would he tied up in legislation instead of being left in such an airy-fairy way that the guarantees sought by Ipswich cannot be given.
Dr. ClarkMy hon. Friend, perhaps. deploys my argument more skilfully than I can. That is the very thrust of the point I intended to make.
In addition to having a responsibility to the good citizens of Felixstowe, the House has a responsibility to the people of Ipswich. The problem of navigational rights is tricky, as I well know from my experience on the Clyde and from our debates on the Norfolk Broads. Indeed, we may have to deal with a private Bill from the Norfolk Broads. Navigational rights are common rights and cannot be bartered over a table. Those rights must be negotiated in this Chamber alone.
I use the Minister's argument to support the point that the Bill should not be carried over. If the promoters feel it proper and right to extend the port, they should return to the House with a new Bill I believe that to be the logic of the Minister's case.
Mr. Stott: My hon. Friend makes a salient point, and I should have touched on it in my contribution. I draw his attention to column 102 of Hansard of 13 May, when I read into the record a letter from Captain Wiechmann, master of the Cast Salmon—a ship that travels up and down the Orwell river regularly. He expressed concern that
"if the proposed extension of the Felixstowe quays takes place into the narrower section of the River Orwell, then the reduced channel will effectively prevent any possibility of passing whilst vessels are berthing or unberthing at the new quays."— [Official Report, 13 May 1985; Vol. 79, c. 102.]
That seagoing master regularly uses the river. He has committed his views on paper in a letter to his employers.
Would it not be better for the Bill to be withdrawn so that we could obtain the views of the pilots, the master mariners and others who use the river about the Felixstowe proposals?
Dr. Clark: I concur with my hon. Friend. I have a report of his speech in front of me now. He makes a salient point. The Minister may argue that the Bill should be allowed to go to Committee, but that does not help the House. As we all know, it is Second Reading that provides an opportunity for a wide-ranging debate.
The rules of the House will not easily allow the introduction of new information. Therefore, we should start again with a wide-ranging debate on the merits of the case. We are this evening discussing a narrow motion on whether the Bill should be carried over.
The hon. Member for Suffolk, South made an interesting point when he said that the proposal did not affect the environment and then referred to the planting of trees. The House might wish to know that it is reported that the port of Felixstowe is prepared to plant 500,000 trees to screen the development. It thinks that that planting would make the scheme environmentally attractive. However, if it takes 500,000 trees to make the scheme environmentally attractive, there must be something environmentally unsound in the first place.
Mr. Andrew F. Bennett: Is it intended to plant broadleaved trees or conifers? Many people have been alarmed about the environmental impact of conifers.
Dr. Clark: My hon. Friend raises an interesting point to which I shall come when I deploy the next stage of my argument.
The hon. Member for Suffolk, South spoke about the development affecting not the environment but the habitat. The whole point about that habitat, which has been declared an SSSI, is that it is not forest but mud flats. That is where birds such as redshanks, turnstones and grey and ringed plovers go. They go there not because there are trees there but because there are not trees there. That is the especial value of the site. That is why that area, rather than, say, the Kielder forest, was declared an SSSI. Put 500,000 trees there and there would be no point in designating it an SSSI. Fleet forest, Galloway, Kielder forest or the New Forest would serve the purpose.
That brings me to the whole question of the new information in relation to the SSSI. I remind hon. Members again that the Second Reading took place on 13 May last. The Nature Conservancy Council, the body responsible for advising the Government and the nation on matters pertaining to the natural sciences and the environment, notified Suffolk county council, the owners, on 20 August that the area should be designated a site of special scientific interest.
Following the passage of the Wildlife and Countryside (Amendment) Act 1985, which received the Royal Assent in June and became effective on 26 August, that site became protected. That is a new development of which this House did not have knowledge when the issue was discussed on 13 May.
The whole scientific reason for that designation was not because there were 500,000 trees in the area but, rather, because there were not 500,000 trees there. That designation was not lightly given. Under the Ramsar convention, the area has been designated an EEC special protection area. It is regarded as an area of outstanding international quality. It is of immense value to wildfowl, waders and other birds.
It is our job in Parliament to deliberate on these matters as a whole, and Back Benchers, especially on the Opposition Benches, depend greatly on information given to us by outside bodies. Reference has been made to the RSPB. I have no doubt that the Transport and General Workers Union gave advice, for example, to my hon. Friend the Member for Ipswich. We have a responsibility to listen to the arguments advanced by outside bodies, especially those that Parliament has set up to advise hon. Members.
In 1973 we established the Nature Conservancy Council to advise us on matters pertaining to the natural sciences. When we debated this issue on 13 May, we did not have the benefit of that council's advice. Its advice was not made public—I do not know whether it was given to the Minister beforehand—until 24 May 1985. Again, that is a pertinent piece of new information.
The council's attitude to the proposal of the Felixstowe company is outlined in considerable detail and with great clarity in four pages. It is the first time that we have been able to discuss the council's analysis. That is a reason why we should start again and have another Second Reading if we so wish. The council has analysed the likely effect of the Bill's enactment on the bird population and the natural habitat. It states that it would be impossible to recreate the present habitat and adds:
"In view of the foregoing, the Nature Conservancy Council must advise that the passage of this Bill would lead to serious
112
damage to nature conservation interests and the national and international status of the Orwell Estuary. Therefore, the Nature Conservancy Council consider that the interests of nature conservation would be best served if the Bill is not enacted."
That was made public on 24 May.
On two national dimensions—the establishment of the SSSI and the evidence of the NCC—it is clear that we should not allow the Bill to go forward. If we allow it to proceed, we shall have only a truncated debate on an issue which has major national ramifications.
The issue is not as simple as that. Since the debate of 13 May other evidence has become available about the establishment of the area of outstanding natural beauty. The area in question was one of the original 36 AONBs which various Governments of both political complexions have seen fit to establish. It is a great pity that the present Government do not have the determination to establish the north Pennine as an AONB without sheltering behind a public inquiry. When they designated the area that we are discussing there was no need for a public inquiry. The Government were so sure that it was an area of outstanding natural beauty that they felt that there was no need to hide behind an inspector. They were able on their own judgment and on the merits of the case to establish the area as one of outstanding natural beauty because of the quality of the land.
It is interesting to consider the importance of an area of outstanding natural beauty. I recommend all Members to read an article that appeared in the County Council Gazette of September 1985 by Mr. Edwin Barritt, the county planning officer of Suffolk. In that article he argues fairly and outlines the conflict between the environment and jobs. He addresses himself to whether new jobs will be created and makes two pertinent points that are relevant to the motion. He quotes the Secretary of State for the Environment, and it is to be noted that no Minister from the Department is on the Government Front Bench this evening. It appears that in 1982 the then Secretary of State for the Environment said:
"It would be inconsistent with the aims of designation"—
that is, designation as an AONB—
"to permit the siting of major industrial and commercial developments in areas of outstanding natural beauty. Only proven national interest and lack of alternative sites can justify"—
Mr. Yeo rose in his place and claimed to move, That the Question now be put.
Question put, That the Question be now put:—
The House divided: Ayes 123, Noes 52.

Division No. 293]

[10.12 pm

AYES

Amess, David

Lang, Ian

Ancram, Michael

Lawler, Geoffrey

Aspinwall, Jack

Lawrence, Ivan

Atkins, Rt Hon Sir H.

Lennox-Boyd, Hon Mark

Atkins, Robert (South Ribble)

Lester, Jim

Baker, Nicholas (N Dorset)

Lewis, Sir Kenneth (Stamf'd)

Batiste, Spencer

Lightbown, David

Beggs, Roy

Lilley, Peter

Best, Keith

Lloyd, Peter, (Fareham)

Bevan, David Gilroy

Lord, Michael

Blackburn, John

Lyell, Nicholas

Boscawen, Hon Robert

McCrindle, Robert

Bottomley, Peter

MacKay, John (Argyll & Bute)

Bowden, Gerald (Dulwich)

Maclean, David John

Braine, Rt Hon Sir Bernard

McNair-Wilson, M. (N'bury)

Brandon-Bravo, Martin

McQuarrie, Albert

Brooke, Hon Peter

Major, John

Brown, M. (Brigg & Cl'thpes)

Maples, John

Browne, John

Mates, Michael

Buck, Sir Antony

Mather, Carol

Burt, Alistair

Maude, Hon Francis

Butcher, John

Maxwell-Hyslop, Robin

Cash, William

Mayhew, Sir Patrick

Chalker, Mrs Lynda

Miller, Hal (B'grove)

Chapman, Sydney

Mills, Iain (Meriden)

Cockeram, Eric

Mitchell, David (NW Hants)

Colvin, Michael

Monro, Sir Hector

Coombs, Simon

Morris, M. (N'hampton, S)

Cope, John

Murphy, Christopher

Couchman, James

Neubert, Michael

Currie, Mrs Edwina

Nicholls, Patrick

Dorrell, Stephen

Norris, Steven

Douglas-Hamilton, Lord J.

Onslow, Cranley

Dover, Den

Page, Sir John (Harrow W)

Durant, Tony

Penhaligon, David

Emery, Sir Peter

Percival, Rt Hon Sir Ian

Fallon, Michael

Pollock, Alexander

Fenner, Mrs Peggy

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

Fookes, Miss Janet

Powell, William (Corby)

Forth, Eric

Powley, John

Fox, Marcus

Raffan, Keith

Franks, Cecil

Rhodes James, Robert

Freeman, Roger

Roe, Mrs Marion

Garel-Jones, Tristan

Sainsbury, Hon Timothy

Gow, Ian

Skeet, T. H. H.

Gregory, Conal

Smith, Sir Dudley (Warwick)

Griffiths, Peter (Portsm'th N)

Stanbrook, Ivor

Ground, Patrick

Stewart, Andrew (Sherwood)

Gummer, John Selwyn

Thompson, Donald (Calder V)

Hamilton, Hon A. (Epsom)

Thompson, Patrick (N'ich N)

Harris, David

Thorne, Neil (Ilford S)

Hawkins, C. (High Peak)

Townsend, Cyril D. (B'heath)

Hawkins, Sir Paul (SW N'folk)

Waddington, David

Hayes, J.

Wakeham, Rt Hon John

Heathcoat-Amory, David

Walker, Cecil (Belfast N)

Hind, Kenneth

Warren, Kenneth

Howarth, Alan (Stratf'd-on-A)

Wells, Bowen (Hertford)

Howarth, Gerald (Cannock)

Wood, Timothy

Howell, Ralph (N Norfolk)

Young, Sir George (Acton)

Jones, Gwilym (Cardiff N)

Jones, Robert (W Herts)

Tellers for the Ayes:

Key, Robert

Sir Eldon Griffiths and Mr. Tim Yeo.

King, Roger (B'ham N'field)

NOES

Bagier, Gordon A. T.

Crowther, Stan

Beckett, Mrs Margaret

Dewar, Donald

Brown, N. (N'c'tle-u-Tyne E)

Dixon, Donald

Callaghan, Jim (Heyw'd & M)

Dormand, Jack

Campbell-Savours, Dale

Dunwoody, Hon Mrs G.

Chope, Christopher

Eastham, Ken

Clark, Dr David (S Shields)

Foster, Derek

Clwyd, Mrs Ann

Foulkes, George

Cocks, Rt Hon M. (Bristol S.)

George, Bruce

Cook, Robin F. (Livingston)

Gilbert, Rt Hon Dr John

115

Godman, Dr Norman

Millan, Rt Hon Bruce

Golding, John

Nellist, David

Gould, Bryan

Pike, Peter

Haynes, Frank

Powell, Raymond (Ogmore)

Heffer, Eric S.

Redmond, M.

Hill, James

Roberts, Allan (Bootle)

Hogg, N. (C'nauld & Kilsyth)

Rogers, Allan

Kaufman, Rt Hon Gerald

Skinner, Dennis

Lambie, David

Smith, C.(Isl'ton S & F'bury)

Loyden, Edward

Spearing, Nigel

McCartney, Hugh

Stott, Roger

McKay, Allen (Penistone)

Strang, Gavin

MacKenzie, Rt Hon Gregor

Wardell, Gareth (Gower)

McNamara, Kevin

Welsh, Michael

McWilliam, John

Marek, Dr John

Tellers for the Noes:

Marshall, David (Shettleston)

Mr. Ken Weetch and Mr. Andrew F. Bennett.

Maxton, John

Maynard, Miss Joan

Question accordingly agreed to.
Question put accordingly:—
The House divided: Ayes122, Noes 53.
Question accordingly agreed to.
Ordered,
That the promoters of the Felixstowe Dock and Railway Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all fees due on the Bill up to that date be paid.
Ordered,
That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House.
Ordered,
That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same in every respect, as the Bill at the last stage of its proceedings in this House in the present Session.
Ordered,
That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed).
Ordered,
That all Petitions relating to the Bill presented in the present Session which stand referred to the Committee on the Bill shall stand referred to the Committee on the Bill in the next Session.
Ordered,
That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited within the present Session or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business.
Ordered,
That in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words "under Standing Order 126 (Reference to committee of petitions against bill)" were omitted.
Ordered,
That no further fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session.
Ordered,
That these Orders be Standing Orders of the House.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Housing Bill [Lords], the Housing Associations Bill [Lords], the Housing (Consequential Provisions) Bill [Lords], the Landlord and Tenant Bill [Lords] and the Weights and Measures Bill [Lords], may be proceeded with, though opposed, until any hour. — [Mr. Solicitor-General.]

Housing Bill [Lords]
Order for Second Reading read.
10.20 pm
The Solicitor-General (Sir Patrick Mayhew): I beg to move, That the Bill be now read a Second time.
I hope that it will be for the convenience of the House if I deal with the Housing Bill and the other three associated Bills on housing — that is, the Housing Associations Bill [Lords], the Housing (Consequential Provisions) Bill [Lords] and the Landlord and Tenant Bill [Lords]—together.
I am sure that the House would wish me to express its thanks, its appreciation and its admiration to those primarily responsible for the completion of this enormous task. These four Bills will consolidate an area of law last consolidated some 28 years ago, since when there have been 17 further Housing Acts and unnumbered other amendments. The Table of Derivations in the Housing Bill alone occupies 47 pages. The four Bills together comprise 778 clauses and 36 schedules.
The subject matter is diverse. The draftsman identified 16 distinct topics within the scope of the existing legislation. Sixteen separate Bills would not have been a practical proposition and the present format was, therefore, chosen. The Housing Bill contains the majority of the provisions within the scope of the consolidation, but within that the draftsman has arranged the parts in such a way that the seeker after enlightenment can approach each part as if it were a self-contained unit.
Two topics were, however, sufficiently distinct to merit separate Bills. The first is the Housing Associations Bill dealing with a clearly identifiable sub-division of the law on housing. It also has a different territorial application. The Housing Bill extends to England and Wales only whereas the Housing Associations Bill extends to Scotland as well.
Secondly, there is the Landlord and Tenant Bill. The last of the four Bills is the Housing (Consequential Provisions) Bill, which deals with technical matters arising from the three substantive Bills, such as repeals, consequential amendments and transitional matters. It is more convenient, in a consolidation exercise of this size, to gather them together in this way.
There are two other matters relating to the exercise that I should mention. First, there was no pre-consolidation tidying-up Bill, so these Bills merely re-enact the law as it stands. However, the Law Commission, for the purpose of a satisfactory consolidation, made a number of recommendations for amendments that would remove technical anomalies and inconsistencies, and for the repeal of a number of provisions of doubtful use. Those amendments have been incorporated. Secondly, the number of Acts to be consolidated and the diverse nature of the subject matter have led the draftsmen to recast the provisions in a more modern and consistent style. In particular, the provisions have been divided up as far as possible into short sections and short subsections, and subparagraphs have been almost entirely dispensed with. I believe that that style is welcome and admirable.
As the House knows, consolidation exercises involve a great amount of detailed and painstaking work. We are particularly fortunate that the Joint Committee on Consolidation, &c., Bills undertakes a careful and detailed scrutiny of the proposals to ensure that, subject to any

117
amendments that it may suggest, the consolidation Bills meet the necessary' requirements. In the light of its report, we were able to consider them with much greater confidence.
Therefore, I should like to thank the committee on behalf of the House for its endeavours on this and other consolidation Bills that the House has considered during the Session. I should also like to thank the Law Commission and Parliamentary Counsel for their efforts and congratulate them on their epic achievement in the preparation of the Bills. It is a superlative piece of consolidation, to use the words of a distinguished Law Lord in another place. It is essential that the law should be accessible and intelligible. This consolidation represents a significant contribution to both these objectives. I commend the Bills to the House.
10.27 pm
Mr. Nicholas Brown: As I have done on previous occasions, I should like to state on behalf of the Opposition our thanks to the Joint Committee for the painstaking work that it does, and our support for that work. It is right that the laws of our country should be set out in as clear and comprehensive a form as possible. It is the task of the Joint Committee to draw together existing legislation in the same area and present the fruits of its labour to Parliament for approval.
Approval is usually forthcoming without a great deal of further debate. There are two obvious reasons for that. The first is that the Joint Committee is dealing with the existing law of the land and not considering controversial new legislation. The second reason why Parliament does not normally subject consolidated legislation to further vigorous scrutiny is that both Houses are represented on the Committee, the Opposition as well as the Government. Indeed, the major advantage of such a Committee is that it scrutinises, on behalf of Parliament, proposals for consolidation and the form that it should take. That relieves Parliament of the necessity of considering consolidation measures in some other way. In short, we rely upon the work of the Committee.
In as far as the Bills now before us represent the recommendations of the Joint Committee, the Opposition are willing to see those recommendations pass into legislation, satisfied that in form and substance they have been subjected to proper scrutiny. However, that is not all that we are being asked to do. The Government have now said that they wish to table a substantial number of amendments to these complex Acts, which are supposed to represent the final views of the Joint Committee on Consolidation, &c., Bills before being presented to the House. It is reasonable to ask what scrutiny the new amendments will receive before being enacted as legislation.
I received a pile of papers 4½ in thick from the Solicitor-General's office for my consideration today before tonight's debate. Until this afternoon there had been no agreement through the usual channels about the proposed amendments to the legislation. The failure properly to consult the Opposition over what should be non-controversial legislation is completely out of keeping with the spirit in which those matters are usually dealt with. It pushes the rights not just of the parliamentary Opposition but of Parliament itself to one side. That is all the more irksome to me in that I telephoned the Solicitor-General
118
in mid-September to clarify the position and received a very pleasant letter dated 24 September stating in relation to the Bills now under discussion:
"The draftsman is endeavouring to prepare the amendments and the accompanying notes by the beginning of October and I hope, therefore, that I will be able to send them on to you in the near future."
Yet the information was dumped on me today, accompanied by a letter dated 15 October saying:
"Insofar as the proposed amendments to the various Housing Consolidation Bills are concerned, these have not yet been finally settled. It will be some time before they are finalised but, in view of their number, I thought you would appreciate having those already prepared at this stage, albeit subject to possible change."
As well as providing the information only hours before the debate, therefore, the Solicitor-General is saying that there is more to come and that what we now have may change. How much confidence can the House be expected to have in a rolling programme of amendments which we are to be asked to pass en masse after a few brief but no doubt reassuring remarks from the Solicitor-General? We shall be discussing more than 100 amendments to four complex Bills. The full list of enclosures that I received today reads as follows:
"Housing Bill, Housing Associations Bill, Landlord and Tenant Bill, Housing (Consequential Provisions) Bill, Law Commission Report on the Consolidation of the Housing Acts, Report and evidence on the Housing Consolidation Bills before the Joint Committee, Notes or. Amendments and proposed amendments to the Housing Consolidation Bills, Weights and Measures Bill, Table of Destinations for Weights and Measures Bill, Draftsman's Notes on clauses for the Weights and Measures Bill for the Joint Committee, Report and evidence on the Weights and Measures Bill before the Joint Committee."
I understand that some of the Government's amendments will relate to matters now outstanding following the abolition of the Greater London council. Parliament will need to satisfy itself that what is proposed represents consolidated legislation and that we are not being invited to legislate anew by the back door. The vehicle for scrutinising these matters is the Joint Committee and I am most unhappy that the procedure is being bypassed in this way.
To conclude, inasmuch as the legislation represents real consolidated legislation agreed in the normal way it has our support on Second Reading, but anything that the Government propose to do which goes beyond that must be submitted to parliamentary scrutiny. I should have thought that discussion through the usal channels might be the best way to facilitate that.
10.33 pm
The Solicitor-General: With the leave of the House, I should like just a minute or two to comment on what the hon. Member for Newcastle upon Tyne, East (Mr. Brown) said.
I am, of course, grateful for what the hon. Gentleman said by way of tribute to those who have been responsible for this massive work of consolidation. The hon.. Gentleman was also kind enough to refer to the fact that on 24 September I wrote to him to say that something in. the order of 100 amendments would probably need to be made.
The amendments are of two kinds—amendments to take account of the provisions of the Local Government Act 1985, and minor drafting corrections and improvements. It is not uncommon in consolidation legislation for a consolidation measure to be amended after it has passed the Joint Committee to take account of the most recent

119
state of the law represented by new legislation. That is what is proposed here and the relevant amendments take account of the provisions of the Local Government Act 1985 in a manner wholly appropriate to a consolidation Bill, that is to say, to reflect the state of the law.
The amendments came forward from the parliamentary draftsman and as soon as they were available we took steps to see that they were placed before the hon. Member for Newcastle upon Tyne, East. Unfortunately, for the reasons that he has explained to me, and which I wholly understand, they came into his possession only today. In the letter of 24 September, I say:
"On Second Reading I would merely propose to give a brief outline of the ground that the consolidation covers, look ahead to the amendments at the Committee Stage, and leave it at that."
That seems to be the sensible way to approach this consolidation measure.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Archie Hamilton.]
Committee tomorrow.

Housing Bill [Lords]

  HOUSING ASSOCIATIONS BILL [LORDS]
  Read a Second time.
  Bill committed to a Committee of the whole House. —[Mr. Archie Hamilton.]
  Committee tomorrow.

  HOUSING (CONSEQUENTIAL PROVISIONS) BILL [LORDS]
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Archie Hamilton.]
  Committee tomorrow.

  LANDLORD AND TENANT BILL [LORDS]
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Archie Hamilton.]
  Committee tomorrow.

Weights and Measures Bill [Lords]
Order for Second Reading read.
10.35 pm
The Solicitor-General (Sir Patrick Mayhew): I beg to move, That the Bill be now read a Second time.
The Bill is a consolidation of the law relating to weights and measures, which was last consolidated in 1963. It has been examined by the Joint Committee on Consolidation, &c., Bills, which has reported that, as amended by it, it represents pure consolidation.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Archie Hamilton.]
Committee tomorrow.

Dartford Tunnel
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
10.36 pm
Mr. Cyril D. Townsend: I am grateful to have this opportunity, on the first day that the House is back from the long summer recess, to raise an issue of considerable interest and importance to my constituents in Bexleyheath, Barrehurst and Welling, and to the travelling public—the Dartford tunnel. To be more precise, there are two deep-bored tunnels between Dartford and Purfleet, just to the east of my constituency. The first was opened in 1963, the second in 1980. They are the joint responsibility of Kent and Essex county councils, which built them and operate the toll booths. The Dartford tunnel joint committee acts in a proper and prudent financial manner.
Technically, the two-lane tunnels are part of the A282, which runs from the M25/A13 junction to the M25/A2 junction. They are not part of the new, and yet to be completed, M25, which is a Department of Transport responsibility. They have a unique position in the national motorway network, and one that is clearly ludicrous and should have been tackled years ago by a Secretary of State for Transport.
Rightly, the M25 is the Government's motorway priority—the jewel in the motorway crown. The delays in its construction—a regular subject for Adjournment debates over the years—are a national disgrace, but we all hope that by Christmas next year we in Greater London will at last have a bypass. When it is complete, there will be much trumpeting by Transport Ministers, both male and female, and much joy among Britain's ever-expanding army of drivers. However, that army will soon become painfully aware that the jewel is flawed, and that while the motorway may be splendid, the growing queues at Dartford are certainly not.
The success of the M25 in attracting traffic, and each year more traffic is attracted, is far beyond that originally envisaged. The density at the Dartford tunnels is becoming similar to that on parts of the M1 and the M4. Inevitably, breakdowns in the tunnels are becoming more frequent. The highest recorded figure so far for vehicles travelling through the tunnels was 83,379 on 25 August this year, a bank holiday weekend, when traffic, involving many of my constituents, queued for five miles north of the tunnels. Regularly, the Department's forecasts of traffic flows have been absurdly low. A Government-commissioned traffic forecast study was published in July. It predicts long delays at Dartford by the late 1980s and the early 1990s. After making some sensible assumptions the report suggests that about 85,000 vehicles per day will want to use the tunnels on an average day in six years' time. The study states:
"By the end of this decade excess demand is likely to be causing summertime delays of between one and two hours."
This is on a major motorway. It claims that when the annual average weekday traffic reaches 70,000, public complaints about the traffic delays will become fierce because drivers will have become accustomed to fast and free-flowing progress along the M25. The report thinks that when the annual average weekday traffic reaches 75,000
"conditions will be unacceptable through the summer months."

121
"Unacceptable". Exactly so. Already the Government have foolishly left it too late to avoid these problems, because it would take about seven years to construct another deep bored tunnel. Last week The Economist said 10 years. The Department has blundered and people know it. We debate tonight bad Government administration. The motorist and lorry driver will pay the price for years ahead—and British industry, too.
The Dartford tunnel began life as a purely local crossing. The planners should have seen the clear need for the M25 to have its own crossing. The Dartford tunnel is Britain's biggest planned bottleneck. Future queues may be 10 miles long. Time won by the £1 billion M25 will be turned into time lost at Dartford. It is futile for the Department to go on talking about median flows and isolated peaks. At this late hour the Minister of State must carefully consider all the possible new ways of improving the M25 crossing at Dartford, and some of them are most interesting. A bridge at Dartford, either suspension or stayed girder, might be constructed. This might take less time and money than a tunnel. The local topography would make it difficult to align the bridge approach roads with the A282 in Kent. Perhaps the private sector could take up the challenge and fund and build a new crossing, using the very latest technology. The great need is for action. That is what I call for tonight.
In a recent letter to the British Road Federation the Minister of State wrote:
"We are well aware that time is not on our side in the Dartford tunnel and we do not intend to let more of it slip past without taking action in this matter."
With the greatest respect to my hon. Friend — I am grateful to her for coming along tonight to reply to this debate—that is exactly what my constituents fear will happen.
The Minister will remember that I led a delegation from Movement for London, which has done excellent work on this subject, to raise this matter in November 1984. I have had lengthy correspondence with her Department. She has taken the trouble to visit the tunnels but I do not need to tell her that the Government's response to this long-contemplated congestion has been ridiculously inadequate, presumably because she has not had the support of the Treasury.
The Government gave a grant of about £7 million to build 12 extra toll booths, making 24 in total, which opened in July, and to widen the approach roads. This temporarily relieved the pressure, but it was like thickening the walls of a sandcastle as the tide comes in. Six lanes of motorway cannot go into four lanes of tunnel, and sometimes one tunnel is blocked for repairs.
I should be grateful if the Minister of State could answer the following questions. If she cannot do so immediately, perhaps I could have a written reply in due course. The Minister has announced that she will commission an engineering feasibility study into how a new crossing could be built. Who are the consultants to be, when will she receive the results of the study, what is the earliest date when we can expect a Government decision, and exactly how will the new crossing be provided? Is it possible to bring the date forward? What measures are her Department taking to warn motorists of delays next summer so that they can divert from Dartford if necessary? Where are motorists supposed to go instead of Dartford? Will they have to go into the London borough of Bexley? Will EEC funding be available for the new crossing?
122
It is wrong to argue that a third crossing at Dartford will remove the need for the east London river crossing, which is long overdue and essential for dockland. The routes serve entirely different functions. When it is built, the Bexleyheath constituency will have protection on all sides from strategic traffic crossing it.
Current predictions are that, with the increasing flow of traffic, existing debts for the Dartford tunnels will be repaid before the end of the century. I hope that my hon. Friend will not argue tonight that the imposition of tolls is appropriate because the tunnels provide a local service to road users with the need to travel between Essex and Kent. Believe it or not, that has been the Department's line until recently.
We are discussing a national asset. It is located on the country's motorway network and provides direct access between the M1, M11 and the Dover ports. Tolls are not paid where the M25 crosses the Thames to the west of London.
Bexley council fears that if the tolls continue, traffic travelling from or to the Dover ports and the other eastern and southern locations, once on the A2, will continue through to Falconwood and use the east London river crossing to travel northwards.
My constituents who face ever-increasing costs to travel through the tunnels, would like tolls to be abolished before too long. Bexley council has said:
"no bridges within London are tolled; the Rotherhithe and Blackwall tunnels are not tolled; the Woolwich Ferry is the "Woolwich free ferry" and it has been made clear that it is not proposed to charge tolls on the proposed East London River Crossing. It is unlikely that any of these crossings of the Thames have the national significance of the Dartford Tunnels. Kt is apparent, therefore, that the imposition of toll charges only at the Dartford Tunnel is inconsistent."
If we are to have such tolls, far more sophisticated thinking must go into their collection. I have in mind a range of possible reductions and easy ways to pay for special users and the latest electronic aids to cut out delays.
Some of my hon. Friends may believe that all that can be done at this stage is damage limitation, after too little has been done too late for too long. But problems have their possibilities. If the Government can summon courage and imagination, bring into play the skills and enthusiasm of free enterprise and, above all, act decisively, the problem could be solved in a manner that will be of lasting benefit to the people living in the locality and to the country's transport needs.
10.49 pm
Sir Nicholas Bonsor: I intervene for only 30 seconds to express my whole-hearted support for what my hon. Friend the Member for Bexleyheath (Mr. Townsend) has said. I hope that my hon. Friend the Minister will take note of the extreme concern felt by my constituents and by all those who use the M25 or live within the vicinity of the Dartford tunnel about the clear inadequacy of the present administrative system. I hope that the Department will do something to enable a toll-free crossing to be established and to ensure that the enormous increase in M25 traffic which will occur when the system is completed is properly accommodated. My hon. Friend the Minister knows well the concern of my constituents and myself. I am extremely grateful to my hon. Friend the Member for Bexleyheath for raising the matter tonight.
10.50 pm
The Minister of State, Department of Transport (Mrs. Lynda Chalker): I welcome the debate initiated by my hon. Friend the Member for Bexleyheath (Mr. Townsend), which gives us the opportunity to emphasise the Government's commitment to ensuring that the Dartford tunnel plays its full part as a vital link in the M25 and as an essential component in the local economies of Kent, Essex and further afield.
Before I deal with my hon. Friend's remarks and those of my hon. Friend the Member for Upminster (Sir N. Bonsor), I wish to take issue with the remarks of my hon. Friend the Member for Bexleyheath about the M25. I ask him to put the matter in context and to face the facts of the M25. There has been a problem with one contract out of very many. We now have well over 80 out of the 120 miles of orbital motorway open. There have been problems and delay with one contract, but much of the remainder has been completed ahead of time, to high specification and without problem. It has been a real feat of engineering. We hope to overcome the problems following the building of the motorway, and it does not behove anyone to pour cold water on the achievements of the British civil engineering industry, which has done so well in building over some very difficult territory.
I wish now to deal with the main part of my hon. Friend's remarks. We must get the reasons for the delays clear in our minds. I do not disagree with him about the delays—I am well aware of the strength of feeling. I suffer from the delays myself—perhaps my hon. Friend does not realise that—and so do many of my staff.
It is important that we emphasise what has caused the delays, which were due to the limited capacity of the toll booths. Once all the new toll booths are open, delays will be due to the limited capacity of the tunnel. Motorists may regard that distinction as academic; they are interested only in the reasons why and in getting through the tunnel. But it is important to understand the position.
The theoretical capacity of the toll booths is 65,000 vehicles per day, but 80,000 have actually gone through them. The theoretical capacity of the tunnel is 80,000 vehicles per day, but 100,000 will go through. Therefore, it is not true to say, as my hon. Friend has said tonight and previously, that the capacity of the tunnel is limited to 60,000 vehicles per day.
Of course, the Government have always recognised that the M25 would bring increasing traffic to the tunnel. That was why we agreed to pay the 100 per cent. grants to Kent and Essex to double the number of toll booths to 12 in each direction. That work will cost £7 million, and when completed will ensure that the capacity of the toll booths matches that of the tunnel. As my hon. Friend said, the first new booths were opened in July. The final work on the booths will be completed next spring, and then there will be 12 in each direction. At present 20 booths are in action, 12 for southbound traffic and eight for northbound traffic.
The effect of the new booths is bound to be complicated by other work that needs to be done. As I am sure my hon. Friend will readily agree, the approach roads to the Dartford tunnel are not adequate, which is why we have embarked on 100 per cent. grant, costing £14 million, to improve them. Work on the northern approaches is complete, while work on the southern approaches will be finished early in 1987. Meanwhile, I fear that the work
124
will have some effect on traffic using the tunnel. We regret that, but the tunnel manager has told us quite clearly that serious delays tend to be due to accidents, emergencies or the approaches which are not complete. None of those things could be planned for. We cannot plan for the bumps and troubles that occur. We can seek to avoid them in future where it is reasonable to do so, and that. I assure my hon. Friend, we shall do.
As for the the traffic study to which my hon. Friend referred, the tunnel manager's report for 1984–85 said that the traffic rose from 12·5 million vehicles in 1982–83 to 20·2 million in 1984–85, an increase of 60 per cent. That occurred in the period during which the north-east quadrant of the M25 was opened and which is now taking a significant proportion of the increased traffic that will use that quadrant of the motorway. That helped the tunnel revenue, increasing it by £5 million in the last financial year, enabling the tunnel debt to be reduced by £4·5 million.
The study has also prompted a debate on tunnel capacity. I dismiss suggestions that traffic will continue to increase by 60 per cent. every two years. Apart from the fact that the rest of the M25 is gradually being opened and that some of the traffic that goes to the north-west will inevitably go along the southern corridor of the M25 and up the west side in due course, we cannot expect the traffic to go on growing in that quadrant, using the tunnel as fast as it has in the crucial period about which my hon. Friend was talking.
The present volumes on the north-east quadrant which join the tunnel to the A1(M) are largely complete, though there may be some further growth, perhaps of 10 to 20 per cent. The current increase is running at the rate of 7·16 per cent., even after the summer peak. I agree with my hon. Friend, therefore—and I have never doubted this since I first came to the Department—that, on traffic grounds, there is need for additional capacity, and that has already been amply demonstrated.
That is why we announced in June the results of the traffic study commissioned from Colquhoun's and Mott Hay and Anderson. The consultants found that traffic would exceed road capacity at the tunnel in a few years. That came as no surprise to my hon. Friend, to me or to anybody else. They found that by the end of the decade the excess demand would cause delays at peak times during average months, and that at peak summer periods delays could be of an hour or more. They also found that with the east London river crossing in the early 1990s, the delays would still increase. That tells me that we are right to get on with the work that we are now doing, about which my hon. Friend asked some questions.
The press notice issued by the Movement for London in the summer, which said that the traffic study had shown that delays of 50 to 109 minutes would occur in August 1989, was misleading. The figure of 109 minutes was the maximum delay that the consultants projected for any August Friday when traffic reached that level, namely, of 109,000 vehicles. The level was not likely to be reached until the average annual weekday traffic was 80,000 vehicles, 40 per cent. above the 1984 level, and above the consultants' high forecast for 1989. Even in those extreme circumstances, the delays predicted on other days in August would be less than half that figure, and at other times of the year would be much less still. I agree with my hon. Friend that no time should be lost in increasing the

125
capacity at Dartford, but I ask him not continue to repeat figures which are unduly alarmist, because to do that does not do anything to solve the problem.
The consultants found that the tunnel would be at the very limits of capacity by the mid-1990s. That is why we recommended an engineering study of additional capacity. In the June statement, I accepted its conclusions and recommendations. In July, the Secretary of State told the Transport Select Committee that it was not a question whether we should build the third crossing at Dartford, but what was the best way of doing so. Nevertheless, any commitment to the construction of additional capacity will depend on a sound economic case based on sustained traffic growth.
I deal now with the appointment of consultants and private finance, which my hon. Friend mentioned. As the next step, we are considering the possibility of private finance for additional capacity. The Secretary of State floated the suggestion as a possibility in July, and we need to make progress quickly in the light of the traffic study which I announced in June. My hon. Friend will be well aware that private finance raises new issues and that we must resolve them correctly. The Dartford scheme could be a precedent for other schemes. It is important to start off as we mean to go on.
The tunnel manager's annual report urged an early decision on the increase in tunnel capacity. It stressed also the need for proper engineering and financial evaluations of alternatives. I do not want to see any repeat of past engineering and financial problems encountered with other estuarial crossings. I am sure that my hon. Friend would not wish that either.
I hope shortly to tell the contractors, civil engineers, banks and all those interested in the tunnel scheme the basis on which we may proceed. This has a bearing on the engineering study announced in June. We need to develop guidance, and that has affected the commissioning of the study. I owe it to the prospective promoters to give a reasonable firm idea of what will be expected, and the likely rewards. I hope that that general comment will suffice for the moment. I give my hon. Friend an undertaking that I shall write to him with any detail as it becomes available. I would not want to be drawn on the detail now.
If the idea of privately financed tolled crossing proceeds, legislation will be needed in due course. That is because the Secretary of State has no general powers to toll, and any new crossing provided by the private sector would have to be tolled to give the promoters some sort of return.
I think that my hon. Friends the Members for Bexleyheath and for Upminster will understand that the issues are not straightforward. We must proceed carefully. I can give them both a firm assurance that I have no
126
intention that the Department will drag its heels. I aim to see that traffic needs are met and that the public get, the best value for money that we can give.
It is obvious that tolls constitute a burning issue for many hon. Members, not least myself. During the debate on Second Reading of the Dartford Tunnel Bill I said that tolls at Dartford could not be abolished without paying outstanding debts. The debt has now been reduced from £65 million to £61·7 million, but it is still true that. as the law stands, abolition would mean that outstanding debts would fall on the ratepayers of Kent and Essex, which would be unfair to them.
Successive Governments have taken the view that it is reasonable to expect users to pay for estuarial crossings. I note what my hon. Friend the Member for Bexleyheath said about crossings on the west side of London, but I think he understands that there is no free crossing. Every crossing has to be paid for by somebody. If we enter into debts, we have to repay the moneys. It is as simple and painful as that. We are examining new ways of paying for tolls. We are examining also new technology. These examinations will form part of future studies. I cannot give my hon. Friends the Members for Bexleyheath and for Upminster the assurances that they seek on toll-free systems. As I have said, borrowed money has to be paid for, and the sooner it is paid the better.
I well understand the feelings of hon. Members and toll payers generally. Those who are delayed at Dartford should always remember—I remind myself of this as I sit in the queue—that motorists on other routes who do not have estuarial crossings can similarly be subject to long delays and are looking also for relief. We cannot guarantee that any route, be it tunnel, bridge or ordinary road, will be free from congestion at all times, especially at peak times. We all want to reach our destination as quickly and safely as possible, but it would not be cost effective or provide a real return for the taxpayer or ratepayer if we were to build roads to a standard which meant that they were empty for much of the time and coped easily with every sort of peak that we could imagine.
The Government are fully committed to ensuring that the Dartford tunnel can fulfil its role as a vital link in the M25, not just in 1985 or 1990, but throughout the 1990s to the year 2000 and well beyond. That is why we look forward to accelerating the rate of progress on the provision of additional capacity at Dartford. I hope that my hon. Friend the Member for Bexleyheath will bear with us while we go through a complicated but interesting and highly necessary process and face one of the problems that we regard as having the highest priority in the Department.
Question put and agreed to.
Adjourned accordingly at five minutes past Eleven o'clock.

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

Strategic Defence Initiative: NATO Discussions
Lord Molloy: 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, in view of the report of the strategic defence initiative submitted to members of the US Congress and its effect on US-Soviet arms talks, they will initiate talks thereon in NATO generally.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, the SDI, comparable Soviet activities and the implications for arms control are regularly discussed in NATO.
Lord Molloy: My Lords, I am grateful to the noble Baroness for that reply. Is she aware of the report in The Times and in the International Herald Tribune to the effect that a report of Congress has caused considerable consternation in the United States and that one senior general of the United States Army has resigned on the grounds that, in its present form, SDI could make nuclear war much more likely? In view of the fact that there is no serious discussion in the United States, would it be possible for our Government to initiate some discussion within NATO?
Baroness Young: My Lords, the most recent discussions in NATO were by the United States Secretary of State, Mr. Shultz, when he briefed all his colleagues on the North Atlantic Council on 15th October about the current negotiations in Geneva and the forthcoming meeting between President Reagan and Mr. Gorbachev.
Lord Cledwyn of Penrhos: My Lords, can the noble Baroness say whether the SDI has any implications for the ABM Treaty? Secondly, is she able to tell the House whether the Soviet Union are developing their own form of SDI? Is there any clear evidence of that?
Baroness Young: My Lords, on the first point mentioned by the noble Lord, Lord Cledwyn, as President Reagan has repeatedly confirmed the SDI research is consistent with present obligations, including the ABM Treaty, and this was confirmed again by Mr. Shultz when he spoke at the North Atlantic Assembly. On the second point, the Soviet research programme has continued since the 1960s. The ABM defences around Moscow are the only type in existence in the world, and they are being upgraded. There is an extensive programme based on ballistic missile defence-related technologies.
Lord Kennet: My Lords, from the discussions in NATO, do the Government get the impression that the Americans are going to be willing to discuss the prevention of an arms race in space with the Russians at Geneva?
Baroness Young: My Lords, so far as the negotiations are concerned, we are glad that the Geneva talks are focusing on preventing an arms race in space. We recognise that both SDI and the parallel Soviet research are permitted under the existing agreements.
Lord Molloy: My Lord, is the noble Baroness aware that the gravamen of my submission is simply that the issue could determine the future of all mankind? Some eminent scientists said in Britain on Sunday that thermo-nuclear war is inevitable and is going to happen unless there is very serious examination by all the nations involved. I accept from the noble Baroness that the talks between the Soviet Union and the United States of America are very important, but I would ask the Government whether they consider that Great Britain should take a lead among all the other NATO countries in being involved in these discussions so that we might know precisely what the dangers to mankind are.
Baroness Young: My Lords, I think we would all agree that we want to see progress made at Geneva, but we must face the fact that the talks are not going to produce quick or easy results. However, we are all working with the objective in mind of achieving some constructive results.

Aid and Trade Provision: Administration
2.41 p.m.
Lord Beaumont of Whitley: 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 it would not be to the advantage both of efficient help to exporting industries and of the proper provision of worthwhile aid to developing countries if the administration of the aid and trade provision were transferred from the Overseas Development Administration to the Department of Trade and Industry.
Baroness Young: My Lords, our view is that it is in the best interests of the United Kingdom and of the developing countries that we assist, for the ATP to be administered by the Overseas Development Administration as part of our aid programme.
Lord Beaumont of Whitley: My Lords, is it not true that there have been major delays over the past year or so in companies receiving answers to their requests for aid to accompany their bids, and that this has sometimes led to the loss of contracts? Is not really the only reason for keeping this provision with the aid budget a matter of concealing the pitiful smallness of our real aid budget?
Baroness Young: My Lords, I do not intend to comment other than on a specific point. However, I can confirm to the noble Lord, Lord Beaumont, that we use a greater proportion of our aid than our competitors for ATP-type financial packages, and that over the three years 1982 to 1984 we won over £ 1,000 million worth of contracts with the help of the ATP. Those include major contracts in India, Brazil, Indonesia, Egypt, Zimbabwe, Kenya and Peru.
Lord Beaumont of Whitley: My Lords, the noble Baroness has not answered the major question, which is: is it not true that sometimes it has taken months for companies to get answers to their requests for help, and should not a better way of dealing with these matters be found?
Baroness Young: My Lords, if the noble Lord has a specific case in mind, I shall be happy to look at it. But my understanding is that in the past three years the DTI has proposed almost 100 ATP cases. Only six cases out of those did not meet the appraisal criteria of the ODA. We believe that financing sound investments is not only a good use of aid but is also in our own commercial interests,
Lord Bottomley: My Lords, is the noble Baroness aware that over recent years overseas aid from Britain has decreased, whereas in the case of the western countries as a whole it has increased? In particular, cuts made in Africa, where aid is urgently needed, have been the greatest of all. Would it not be better, instead of transferring work from one overworked Government department to another, for the Government to consider recreating the Ministry of Overseas Development?
Baroness Young: My Lords, the Overseas Development Administration is there. It is of course now part of the Foreign and Commonwealth Office, but it is within that a separate entity.
Lord Oram: My Lords, is there not a serious anomaly in having the aid and trade provision within the ODA! Has not the ODA declared that its policy is to help the poorest nations, whereas the list of countries which the noble Baroness read out in answer to the first supplementary question is a list of countries of the middle income bracket? While I can accept that there is a lot to be said for having an aid and trade provision, particularly because our competitors exercise that kind of procedure, should we not make it clear that the provision is there for the promotion of our exports and not primarily for the development needs of the developing countries? Would this not be made clear if the suggestion of the noble Lord, Lord Beaumont, was carried out and the administration was transferred to the Department of Trade and Industry?
Baroness Young: My Lords, as the noble Lord, Lord Oram, has quite properly said, the ATP was established to help counter the often aggressive way in which some countries use aid funds to support their national firms in competition for large contracts in developing countries. The ATP is used to help British companies compete on an equal basis where other
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countries are using their aid money to support their particular projects, and where it can be shown that the contract will contribute to the development of the recipient country. In fact, a higher proportion of our aid goes to mixed credits in semi-concessional aid loans in our bilateral programme than in many other countries because we recognise among other things the importance of helping British companies in this way.
Lord Hatch of Lusby: My Lords, will the noble Baroness answer the question which was put by my noble friend Lord Bottomley? Would it not be better if the Ministry of Overseas Development were recreated and given an overall supervision not only of aid but of overseas trade, so that it can work, as my noble friend has pointed out, both in the interests of the poorest of the world and also in the interests of developing trade with the under-developed countries and opening up their markets to firms in this country?
Baroness Young: No, my Lords. For the reasons that I have given, we do not believe that that would be the best line to pursue.
Lord Hatch of Lusby: My Lords, but what reasons have the Government given? The noble Baroness did not give any reasons in answer to my noble friend Lord Bottomley.
Baroness Young: My Lords, we believe that it is in the best interests both of ourselves as a country and of the countries that we assist that the ATP should continue to be administered by the ODA. That is the subject of the Question. That is the answer to it.

Armageddon: US Leaders' Statements
Lord Jenkins of Putney: 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 action they are taking having regard to the fact that the American President and Defence Secretan have been reported in the Observer as both believing that Armageddon is real, specific and imminent.
The Minister of State for Defence Support (Lord Trefgarne): My Lords, both President Reagan and his Defence Secretary, Mr. Weinberger, have made it clear on many occasions that a nuclear war cannot be won and must never be fought. They and we believe that a strong deterrent posture is the best guarantee of peace. The approach of Armageddon remains therefore a matter for scholarly speculation rather than reality.
Lord Jenkins of Putney: Yes, my Lords, but is it not somewhat disturbing that the man with his finger on the button seems to confuse the two issues and to mix up—as he has done five times during his presidency—the question of biblical possibilities with the actuality of the nuclear weapon on which his finger rests? Is that not somewhat alarming from our point of view?
Lord Trefgarne: My Lords, I think that the best thing might be if I were to quote the relevant passage from the Book of Revelation:
"Behold, I come as a thief. Blessed is he that watcheth, and keepeth his garments, lest he walk naked, and they see his shame.
"And he gathered them together into a place called in the Hebrew tongue Armageddon."
I believe that says it all.
Lord Beloff: My Lords, does the noble Lord the Minister agree that he might well suggest to the noble Lord, Lord Jenkins, that he could allay his anxieties by the simple process of moving his dwelling to a nuclear-free zone, in which case he would be perfectly safe even if Armageddon came?
Lord Trefgarne: My Lords, that is a suggestion which I dare say the noble Lord, Lord Jenkins, will wish to consider, probably at the same time avoiding taking his holiday at a point 15 miles south-east of Haifa.
Lord Molloy: My Lords, I wonder whether the Minister, his party and this Government realise that the majority of ordinary British folk take Armageddon and thermo-nuclear war very seriously indeed. Is not the noble Lord the Minister to be congratulated in so far as he can find the whole matter of nuclear war a big joke—
Noble Lords: No!
Lord Molloy: My Lords, that is how it seems to me, and Hansard will record it.
Is the Minister not aware that United States generals have decided that they cannot go along with the present attitude and have therefore resigned their positions? I do not find that a laughing matter: it is serious. Ought not the Government to take this matter seriously, and not do what the noble Lord the Minister is very able at doing, which is to provide a difficulty in the way of every possible examination?
Lord Trefgarne: My Lords, I do not think I need any lessons in the need —
Lord Molloy: My Lords, neither do we.
Lord Trefgarne: —to maintain the peace of the world. That is why we have the policies that we do; that is why we devote the resources that we do to our defence programme; and that is why we have been successful for more than 40 years.
Lord Kennet: My Lords, is the Minister of State aware that if he goes to the ruins of Armageddon in the modern State of Israel he will find that there are both hawks and doves nesting there?
Lord Trefgarne: My Lords, I am grateful for that advice.
Lord Morris: My Lords, is my noble friend aware that the noble Lord opposite can draw certain comfort from the support of generations of old men who tramped the streets of the capital bearing the yoke of a sandwich board?
Lord Trefgarne: My Lords, I am not quite sure as to which noble Lord my noble friend is referring, but I, too, have seen the boards to which he refers.
Lord Soper: My Lords, is the noble Lord the Minister aware that the Book of Revelation is a very dangerous document for quotation because you can make up your mind what you intend to believe and then find the appropriate text? Is the noble Lord further aware that there is a radical difference between the concept of apocalypse and that of Armageddon, but that they have one thing in common? Does he agree that they both involve an element of inevitability, which I believe is the very worst aspect of the problem that faces us in the world today? Would it not be far better to recognise that we have the option now of resisting a process of inevitability in the interests of what we still have a capability to do if we are prepared to disarm and to look at the world with hopeful eyes?
Lord Trefgarne: My Lords, I am afraid I take the view that the one way to make nuclear war inevitable, or in any event more likely, would be for us to disarm unilaterally, and that is why we reject that policy.
Lord Graham of Edmonton: My Lords, surely we are entitled to assume that every effort will be made to make the November summit as successful as possible. What comment do Her Majesty's Government have on, not the staggering statements but the swaggering statements that have been made recently by the President, by Robert McFarlane and by Richard Perle? Surely Her Majesty's Government should try to instil in them and in the United States Administration our desire to enhance and not to hinder the prospects of reaching a settlement in November.
Lord Trefgarne: My Lords, the Government are of course wholly supportive of the efforts of the United States, not only at the talks that are to take place in November but in the other fora which are already in process to reach balanced and verifiable methods of arms control. That support will continue.
Lord Jenkins of Putney: My Lords, does the noble Lord not agree that some of the statements made by President Reagan which are quoted in this book on President Reagan would indeed be amusing but for the awesome power which rests in the President's hands? In these circumstances, does the noble Lord not consider that he has a responsibility to take the matter seriously and to do his best to ensure that American representation in Geneva takes the matter more seriously than the President sometimes seems to take it himself?
Lord Trefgarne: My Lords, I can assure the noble Lord that both the United States and the other members of the Western Alliance take this matter most seriously. I would advise the noble Lord not to believe everything he reads as ascribed to the President.
Lord Beswick: My Lords, I wonder whether the noble Lord is not underestimating the genuine apprehension that is growing in this country about

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recent activities. Is he not aware that it is not simply the statements of President Reagan that cause this apprehension but his activities; for example, the ordering of planeloads of armed troops on the airfield of a friendly nation?
Lord Trefgarne: My Lords, I am not quite sure what the noble Lord is referring to but the one thing that has been achieved under the Administration of the President of the United States is the making of the strength of the Western Alliance such that nobody will now attack us.
Lord Beswick: My Lords, do I gather from that answer that the noble Lord, a Minister of the Government, is not aware of what happened on an Italian airfield recently?
Lord Trefgarne: My Lords, the noble Lord did not describe in any detail the event to which he was referring. I can now understand the matter he had in mind.
Lord Annan: My Lords, would the noble Lord agree that the putting down of Questions with a high metaphorical content is bound to induce from the Government a comparable response? One might expect the Government to have said to a Question of that kind that the only thing to do was to wait for Providence to intervene, which is always, of course, a disastrous thing. Is it not a fact that the best thing for the Government to do is what they are doing at the moment, which is to advance step by step in trying to reduce nuclear armaments, as they have done in NATO, which has reduced the number of short-range nuclear weapons and replaced them by medium-range ones, thereby reducing just slightly the risk of a mistake being made in the front line?
Lord Trefgarne: My Lords, I am grateful to the noble Lord for his appreciation of the efforts that have been made in the areas to which he refers.

GLC: Transfer of Functions
2.56 p.m.
Lord Boyd-Carpenter: 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 the Greater London Council and the trade unions mainly concerned are now co-operating with Her Majesty's Government and with the successor authorities in transitional arrangements in connection with the abolition of the Greater London Council.
The Minister of State, Department of the Environment (Lord Elton): My Lords, I believe that there is an increasingly realistic attitude within the GLC to preparing for the transfer of functions. My right honourable friend and I have been in discussion with the Local Government Committee of the TUC since 11th July about staffing aspects of abolition, and I hope to conclude negotiations with them soon.
Lord Boyd-Carpenter: My Lords, while I thank my noble friend for that moderately encouraging reply, may I ask him whether he is aware that, now that Parliament has decided this matter, public opinion generally expects all concerned to do what they can to secure that the transition takes place effectively, efficiently and at a minimum cost to the citizens of London?
Lord Elton: My Lords, I think that is the general perception, and with it goes a perception of the fact that it is in the interests of the staff themselves that matters should be so conducted.
Lord Graham of Edmonton: My Lords, if in fact one needs the collaboration of the GLC and the trade unions in these matters, ought we not also to have the collaboration of the Government? Is the Minister aware of the circular issued last week by the Staff Commission, which said that at present,
"GLC and MCC employees are being required to make important decisions about their future against a background of uncertainty and confusion. The commission are looking to the Government to publish draft transfer orders as soon as possible and have also pressed the Government to settle quickly the details of the compensation terms so that their employees know where they stand".
Those are the words of the Staff Commission., Is it not ironic that a body set up by the Government to expedite these matters is having to complain that those dragging their feet are not the trade unions or the GLC but the Government themselves?
Lord Elton: My Lords, I think the noble Lord has perhaps read the circular with a partial eye. I am well aware of it. I am grateful to the Staff Commission for the help which they are giving in making expedition possible. I have taken their views, and I am negotiating with all speed with the interested parties.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Glenarthur will, with the leave of the House, repeat a Statement which is to be made in another place on inner city disorders. This will be followed by my noble friend Lady Trumpington, who, again with the leave of the House, will repeat a Statement on supplementary benefit board and lodging payments.
Associated British Ports (Port of Ayr) Order Confirmation Bill [H.L.]
Considered on Report.
Church of Scotland Trust (Amendment) Order Confirmation Bill [H.L.]
Considered on Report.

European Union: ECC Report
3 p.m.
Lord Kearton Lord Kearton rose to move, That this House takes note of the Report of the European Communities Committee on European Union (14th Report, 1984–85, H.L. 226).
The noble Lord said: My Lords, in moving, That this House takes note of the Report of the European Communities Committee on European Union, I ask the permission of the House to give a little of the background. It is now 28 years since the Treaty of Rome established the European Economic Community with six original participants. The attractiveness of greater European integration, both economic and political, had been widely discussed and canvassed in the preceding postwar years.
The treaty itself had a long gestation. Although it concentrated on establishing closer economic ties, its existence helped to satisfy political needs—notably the rapprochement between France and Germany. The preamble to the treaty described it as a step towards closer union among the peoples of Europe. What was meant and covered by the word "union" was never closely defined. It was an aspiration and there was no detailed programme to reach an agreed goal.
The treaty, as the various transitional arrangements fell away and the details of policy were settled, was a great success. Its provisions undoubtedly played a major part in the great surge forward of European economic growth and prosperity of the 1960s and early 1970s. In 1963, Britain indicated its wish to join the Community. This approach was rebuffed, and it was further rebuffed in the following years. It was not until 1972 that Britain, after lengthy negotiations, finally signed the treaty and in 1973 became a full member of the Community. Ireland and Denmark became members at the same time.
It is worth recording that at a summit meeting in Paris in the autumn of 1972, the original Six and the three acceding members affirmed their commitment to full European union by the end of the decade, but without defining what they meant by union. Such a timetable was always unrealistic and there were no serious negotiations. But various initiatives in the 1970s kept the concept of union alive and there were, notably, the Genscher-Colombo proposals in 1981.
Meanwhile, a significant stage in the development of the Community was reached with the establishment in 1979 of the first directly elected European Parliament, replacing a parliament of nominees. The 1980s saw the enlarged Community—now numbering 10 members—facing many problems not envisaged by the founding fathers. The world and Europe had moved on and had greatly changed both economically and politically. Moreover, it was only too apparent that the institutions of the Community itself were no longer working in the way that the founders had intended.
As to Community problems, the common agricultural policy had more than achieved its original aims and had gone on to become over-dominant in the Community's budgetary disbursements—wastefully so. The internal market, although tariff-free, was beset by numerous other barriers and in many respects
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remained nationally fragmented. The harmonisation in the provision of services and in other matters was not carried forward. The arrangements called for in the treaty did not take place. It was a major worry that in technology Europe was not keeping up with America and Japan. It was a cause for grave concern that unemployment in the Community was so high and rising.
As to the working of Community institutions, the balance of powers and duties set out in the treaty was in disarray. Decision making had become slow and laboured, with items held over for years and years. A major new factor had been the emergence of a European Council made up of heads of government which had become the de facto ultimate authority in Community affairs. The council, nonetheless, had no formal legal basis.
In the situation the European Parliament, which under the Treaty of Rome has a largely consultative and advisory role, became increasingly unhappy. It was alarmed by the lack of impetus and the disunity in Community affairs. It was also frustrated by its own comparative impotence, and so it set up a committee on institutional affairs which reported at the end of 1983.
That committee recommended that the existing Treaty of Rome be subsumed in a new and considerably more far-reaching treaty establishing a European union. A comprehensive and detailed draft of the proposed new treaty was worked out. In the preamble attention was drawn to the declarations in favour of European union by the heads of government at their 1972 meeting and to the reafirmation at the Stuttgart summit meeting in 1983 by the heads of government of the need for, as they put it,
"broad action to ensure the re-launch of the European Community".
The European Parliament approved the preliminary draft treaty in February 1984. It is generally known as the Spinelli Treaty because Signor Spinelli took a major part in inspiring its formulation and was indeed the co-ordinating rapporteur. The European Parliament asked that the treaty be submitted to the parliaments and governments of member states with a view to ultimate approval after taking account of opinions and comments.
The draft Spinelli Treaty, backed by the European Parliament's endorsement, helped to put reconsideration of the nature of the institutions, and the aims and workings of the Community, very much at the top of the European political agenda. Support for the treaty in all its detail rapidly came from Italy. Warm support for its thrust was expressed by Chancellor Kohl of Germany and President Mitterrand of France. The European Council at its Dublin meeting that year responded by setting up its own committee for institutional affairs. It was composed of personal representatives of the heads of government under the chairmanship of Senator Dooge of Ireland, and reported at the end of last year.
Its conclusions were not unanimous, but the general feeling was that a new approach to Community affairs was indeed urgently necessary. The Dooge Committee as a whole considered that a qualitative leap forward should be taken with particular regard being paid to

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the long-term objective of establishing a genuine political entity; that is, a European union. After discussing the scope of the matters to be covered—very much wider than in the Treaty of Rome—the Dooge Committee recommended that a new draft European union treaty should be negotiated, and that it should be based on the acquis communataire and on the new needs as the committee saw them. Significantly, the committee said that the negotiations should be guided also by the spirit and measure of the Spinelli Treaty.
The Milan summit conference of June this year broadly accepted the Dooge recommendations. It was decided—although Britain in particular had reservations—to set up an inter-governmental conference to arrive at some preliminary consensus on the future shape and direction of the enlarged Community of 12. Those discussions are currently taking place.
It was in the spring of this year, in the light of those events, that your Lordships' own Select Committee set up an ad hoc sub-committee with the following terms of reference:
"To consider the implications for the institutional structure of the European Community and for the United Kingdom of proposals for European union, taking particular account of the draft treaty establishing the European Union adopted by the European Parliament on 14th February 1984".
The first meeting of the ad hoc committee was held on 26th March and the report was published on 31st July. The committee held 11 witness sessions in this country and also had the opportunity of visiting the Commission in Brussels and the European Court of Justice in Luxembourg. It received written evidence from several sources. The committee was most grateful to all those who gave evidence and who provided information. The committee is particularly indebted to Professor David Edward of the University of Edinburgh who acted as expert adviser throughout the inquiry. The committee specially wishes to record its appreciation for the services of Mr. Brendan Keith, the clerk of the committee, and Mr. Karl Newman its legal adviser. My personal thanks go to the members of the committee themselves who had to meet on an irregular schedule and who worked so hard on the committee's remit.
In writing the report the committee had to bear in mind the political dimension of its investigation and the subjective nature of much of the evidence it received—evidence which was sometimes contradictory and inconsistent. The conclusions of the report are the result of the committee's own analysis of the issues using the evidence, both oral and written, as background.
It is common to all consideration of the Community and its future that the present system is working badly and it is common ground that a rapid realisation of a true internal market is a vital necessity. There is less agreement that the right way forward is to formulate the new treaty which, while a long way from creating a federal Europe, would amount to a step in that direction. While nothing in the nature of the Anglo-Scottish Act of Union is under discussion, the advocates of a new treaty certainly contemplate member states ceding more powers to the European Parliament and to the new central authority; and they advocate that the present informal political co-
830
operation between member states should be formalised and become part of the new arrangements.
But why is the present system working badly? Essentially it is because member states have taken back to themselves powers they had ceded to Community institutions. The Treaty of Rome provided for a Council of Ministers drawn from member states to be the decision-making authority. In certain areas set out in various articles decisions had to be unanimous. Other decisions—in areas again set out in appropriate articles—could be taken by majority vote. The votes were weighted as to members and on substantive matters a majority vote is 45 out of a maximum of 63.
The Council appointed a Commission and a president of this Commission. This body was entrusted with the executive action required by the Council decisions and it also had, most importantly, the power of initiative with regard to proposals for action. The European Parliament did not have a legislative role but had advisory and consultative functions as regards the Commissions' proposed actions and the Commissions' dealings with the Council of Ministers. Parliament also had certain budgetary powers in relation to the spending of the budget agreed by the Council.
A Court of Justice ruled on questions of the competence of the Commission and ensured that treaty law was interpreted and observed, and thus gave practical effect to the obligations undertaken by member states.
Under the Rome Treaty the Commission had the key role both of initiation and in the execution of decisions. It was a very positive role. It was never intended that the Commission should be merely a bureaucracy. It was not envisaged that the Council of Ministers would spawn 20 or so subject councils with attendant national experts to discuss and consider Community activities in the greatest detail. It was not foreseen that the power of ultimate decision would pass to a European Council formed by heads of government and meeting briefly only three times a year.
The sea-change however, which in time undermined the working of the Community, was the introduction of the co-called Luxembourg Compromise in 1956. This meant that any state could hold up a Council decision if it felt that a very important national interest was at stake. This interest did not have to be spelled out or justified in any detail. In effect, majority voting in those areas provided for in the Treaty of Rome was virtually eliminated. Decisions were simply not taken. Numerous Commission recommendations were left in limbo. Even in discussions at official level within Council advisory bodies the implied threat of veto action was used to block compromise proposals. By degrees, progress in Community matters slowed to a crawl.
The directly elected parliament also had its grievances. It felt that its role in consultation and advice was not working satisfactorily and that its treaty obligations were not being properly fulfilled. The sense of the treaty, it considered, was that parliament should be taken into the confidence of the Commission and of the various Councils of Ministers on a much more intimate basis than was actually happening; and the

831
blocking of agreed recommendations by the Council of Ministers caused great dissatisfaction.
It seemed to Signor Spinelli and his colleagues that a re-launch of the Community was the way to overcome all the various difficulties and the way to recapture the impetus towards a closer European union, political as well as economic. The text of the Spinelli draft treaty is given in our report, as is the text of the Dooge submission. In brief, Spinelli proposed giving clear institutional status to the European Council which would be the senior body of the union. He stipulated that the Council of Ministers, once subordinate to the European Council, would be the decision-making body in the carrying on of Community affairs and would generally decide matters by a majority vote. He proposed a new system for appointing the commissioners who would be the executive arm of the union—a system in which the Parliament would have a major voice. He gave to the European Parliament a central role in the union's legislative process.
The draft treaty makes a distinction between two methods of action by the union: common action and co-operation. Within the field of common action the union would have law-making powers. This field would cover competences already existing under the Treaty of Rome and could be extended by union legislation. The European Council would be responsible for the initiation of action to extend that competence. It is provided that union legislation would restrict itself to determining the fundamental principles covering common action and entrust that the responsible authority of the union or member states was setting out in detail the procedures for implementation. Provision is made in the treaty for differential application of laws where union application would create special difficulties for individual member states. This position could conceivably lead to a two-tier system of states within the union, with some more integrated with the union than others.
The second method of action—co-operation—would cover all commitments which member states undertake within the European Council. For instance, it would be expected to lead to a steady convergence on matters of foreign policy.
Our report attempts to set out the various arguments and considerations relating to a proposed new treaty of union. I will not rehearse them in this introduction to your Lordships' debate but will confine myself to the committee's conclusions. In arriving at these conclusions the committee was more and more convinced that making a reality of the Common Market was a matter of the greatest priority and urgency. It very much welcomed the commission's recent initiative in this regard, set out in a comprehensive White Paper. It noted that even with priority and urgency the completion of all the measures needed was estimated to require some seven years.
The key conclusion of your Lordships' committee was that the Treaty of Rome could and should be restored to its original intentions. Some amendments would be required: in particular, to recognise the role of the European Council and to give the Commission authority to deal with new problems which had
832
emerged. However, the committee did not support a major rewriting of the Treaty of Rome or a new treaty of union. When the institutions of the Community are again working properly and the internal market in goods and services is truly established, that might be the time to take further political steps towards European union. It would then be a case of building on success and on the knowledge that member states would indeed cede powers to a European authority.
To restore the vitality of the Community within the Treaty of Rome, the committee's view is that there should be strict limits on the use of a national veto. It accepts that sovereign states are unlikely to renounce completely the use of the veto but it considers that such use should be a last resort. It should only be used in the case of a vital national interest—not just important but vital—which the head of government concerned will have to explain and justify to his colleagues in the European Council. Making the veto a rare event will greatly speed decision-making. Decisions should in general be decided by weighted majority vote, if a vote is necessary.
The Council of Ministers, in its various manifestations, should primarily concern itself with taking decisions of principle and laying down policy guidelines. There must be more self-discipline on the part of member states, with fewer subject-matter councils, themselves with fewer subordinate committees and working parties with their accompanying national experts.
The Commission, which your committee found to be hardworking but understaffed, should be restored to the role which was envisaged for it in the Treaty of Rome and it should have the necessary staff resources to perform this role. However, in the committee's view the number of actual commissioners is already too large at 14. With the accession of Spain and Portugal the proposed increase to 17 would make it still more cumbersome. For rational working and an effective distribution of duties and responsibilities, the committee considers the right number of commissioners to be nine, but it is recognised that immediate political considerations might limit this reform to the appointment of 12, one for each member state.
Your committee considered that the time for an extension of the powers of the European Parliament had not yet arrived, particularly in the legislative field, but it was felt that a return to the relative powers and duties of the Commission and the Council of Ministers, as set out in the Treaty of Rome, would give the elected parliament more effective powers of advice, consultation, and—importantly—of scrutiny. The committee share Parliament's view that commissioners who are appointed and not elected should pay great attention to the views of Europe's elected representatives and work closely with them.
Your committee has been impressed by the devotion of Her Majesty's Government to Community ideals and by its desire to make the Community more effective. In implementing Community law and decisions, in many respects Britain has been more communautaire than some of her more vocal partners, yet there seems to be some residual doubt by these partners as to how deeply the United Kingdom is committed to the Community.
One signal of deep commitment, which was recommended in an earlier report of the Select Committee, would be Britain's full participation in the European Monetary System.
Finally, your committee considered whether there was a real risk of a two-tier Europe developing, with some member states, notably France, Italy and Germany, moving towards a closely integrated group of which Britain was not a full member. Such a development is not seen as being very likely but if it happened it would not be in the interests of the United Kingdom. The committee therefore welcomed the Government's close involvement in the post-Milan inter-governmental discussions which are currently taking place.
My Lords, the subject that we are debating is complex, and I apologise for this rather long introduction. The future development of the Community is of vital importance to our country, of absolutely vital importance, and we offer our report as a contribution to the discussion on this future.
Moved, That this House takes note of the Report of the European Communities Committee on European Union (14th Report, 1984–85, H.L. 226)—(Lord Kearton.)
3.24 p.m.
Baroness Young: My Lords, "European Union" is an elusive and emotive term upon which many different constructions may be put. I should like to begin by congratulating the Select Committee on the thoroughness with which it has tackled this important subject.
Their report is a cogent and perceptive analysis of the ideas which lie behind the concept, and how it relates, or should relate, to the activity of the European Community. It will be a valuable reference work for some time to come.
May I also congratulate the Select Committee on the timeliness of its work, a point to which the noble Lord, Lord Kearton, himself referred. The report was published just before the start of the Intergovernmental Conference on the development of the Community which is now taking place, and has proved a valuable contribution to the debate on the direction which the European Community should now take.
On this difficult subject it is as well to remind ourselves that our basic text is the preamble to the Treaty of Rome, which commits us fully to the shared goal of creating,
"an ever closer union among the peoples of Europe".
This closer co-operation among member states, leading to practical benefits for our peoples, is what membership of the European Community is all about. It is an aim to which successive British Governments have long subscribed. The Select Committee's report rightly emphasises that union is not about a Utopian plan for a European federation. It is how best to realise the aims of the Community so that its future and success are assured.
I think that the best definition of European Union is provided in the Solemn Declaration of European Union, based on the efforts of Hans Dietrich Genscher
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and of Emilio Colombo and signed by heads of government at Stuttgart in 1983. This said:
"European Union is being achieved by deepening and broadening the scope of European activities, so that they inherently cover a growing proportion of member states' mutual relations and of their external relations".
It should be obvious from all this that we are not afraid of European Union. As my right honourable and learned friend the Foreign and Commonwealth Secretary has said, the authors of the Treaty of Rome saw European Union as a continuing process; as a Community growing politically and economically interdependent. Being in constant development, it had no finite shape. They saw it as a journey travelled together in an agreed direction. In that sense—the sum total of the ever closer relationship between us—such a union exists today; I have no doubt that it will be stronger tomorrow. It is a reality as well as an aspiration. It exists in the definite political and economic sense solemnly affirmed at Stuttgart; and the political imperative is growing all the time. The question is how this organic process of "ever closer union" is to be taken forward, allowing Europe to enjoy the real power and influence that its unity alone can bring.
The Select Committee recognise that the Common Market itself is far from complete. Obstacles to the free movement of goods and services continue to hamper trade and make a mockery of the term "common market". It is for this reason that the Government wholeheartedly agree with the committee's diagnosis of the Community's current condition and their conclusion that the completion of the internal market must be a major priority. Progress in this field is the single most important contribution that can be made to making the European Community more effective, more real to its citizens, and the motor for greater prosperity and jobs that its citizens rightly expect it to be.
To the outside world we present a single tariff barrier within which there exists in theory a single domestic market—the internal market. But the Select Committee have recognised in their report that there is still a large element of theory to this—too large for our taste. For example, I would commend to the attention of your Lordships the list of documents required for the transit of a vehicle from Germany to Italy, which appears as an appendix to the Select Committee's Report on page 301.
The Government are glad to note that the committee do not believe that a new treaty is necessary to achieve this and other desirable improvements. Nevertheless, the committee have rightly recognised that there is some impatience with the pace of progress in Europe and a recognition that in a Community of Twelve it will be even more difficult to take decisions than it is now. That is what is now being discussed in the Inter-governmental Conference.
The Select Committee concluded that we should consider amending the treaty, if this was necessary to achieve the practical improvements in decision-taking which we want to achieve. That is our approach. For us, the crucial test of any proposals at the conference is whether they are necessary, whether they will help achieve the goals we have set ourselves, and whether they are susceptible to being agreed by all. We must

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aim for realistic and practical proposals capable of implementation in all member states. Meanwhile, as the committee recommends, we are active participants in the Inter-governmental Conference. Your Lordships may rest assured that Britain will continue to play a central role in European Community affairs.
I shall now turn to some of the detailed issues raised in the report. The Select Committee report mentioned abuse of the Luxembourg Compromise as the greatest obstacle to the completion of the internal market (in paragraph 101). The Government have no doubt about the importance of the Luxembourg Compromise. The Luxembourg Compromise reflects the political reality that all member states must in the last resort be able to defend themselves against being outvoted on any issue affecting their very important national interests. On matters which fall under majority voting rules, in our view a member state must be able to insist that discussion continues until unanimous agreement is reached if it considers that a very important national interest is involved. But we agree with the committee that we must prevent the Luxembourg Compromise from casting its shadow over decision-taking. We have suggested ways of limiting potential abuse.
The Select Committee's report has some wise words on the role of the European Parliament. We are first and foremost a union of democratic countries. We are unique as a Community in having a directly elected parliament. The Parliament tends to hit the headlines when it rejects the Community budget. But its positive suggestions for the improvement of Commission proposals appear, if at all, at the bottom of the page. Although the parliament is consulted on many issues, it cannot ensure that account is taken of its opinions in the Council's decisions. Hence the frustration felt by many MEPs and the disillusion of some voters.
The Council-Parliament relationship never will be easy. Ministers meeting in the Council are all conscious that they are well and truly accountable to their own parliaments and electorates. That is not going to change. But we can do more to give the European Parliament a proper role in the European partnership without putting that accountability at risk. This means earlier consultation and an earlier opportunity for the European Parliament to give its views on issues under discussion. The Government endorse this aspect of the recommendations of the committee's report.
The Select Committee has made four recommendations about the Council of Ministers. They are a counsel of perfection. The Council's role should of course be one of taking decisions of principle and of laying down the policy within which the Commission should work. This was the intention of Article 155 of the Treaty of Rome which says that the Commission shall,
"exercise the powers conferred on it by the Council for the implementation of rules laid down by the latter".
But it is often difficult to do this in practice. Some of the most technical and detailed matters of Community business, which ought on the face of it to be dealt with by the Commission under managerial powers, are the most contentious—weights and dimensions of commercial vehicles and the chemical content of
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water for human consumption (such as lead) are examples. We cannot see any alternative to the Council examining on a case-by-case basis detailed matters of this sort in order that Ministers may themselves take decisions for which they can be called to account by their own parliaments. However, we are in favour of greater delegation of authority to the Commission wherever possible.
This leads me to the role of the Commission on which the Select Committee had made four recommendations. The Government wholeheartedly endorse these recommendations. I would in particular draw your Lordships' attention to what has been said about the staff of the Commission who, far from being the overstaffed bureaucracy of popular mythology, are hard-pressed and can be expected to carry an even greater burden when the Community is enlarged in January.
Although the thrust of the Select Committee's report is very much in accordance with the Government's thinking, I must explain to your Lordships why in some cases the Government draw different conclusions from the committee. The committee made a recommendation in favour of a reduction in the number of commissioners to nine. We believe a reduction is necessary. But it would be inequitable for some member states not to be represented at all. We continue to think, and have said so in the Inter-governmental Conference, that one commissioner per member state will suffice after enlargement.
On the proliferation of specialist councils we think that, provided the Foreign Affairs Council retains its overall responsibility for the direction of Community business, specialist councils with the expertise they can bring to bear have a major contribution to make. In practice, the Council of Ministers has to be the major negotiating forum in the Community. It is, after all, dealing with decisions which have to be implemented in each member state and which are often significant legally, politically and economically. We are against everything being referred up to the highest level. But there are limits to the extent to which delegation is possible.
The Government's position on United Kingdom membership of the exchange rate mechanism of the EMS is well known. We have always said that we will join when the circumstances are right, but sterling's status as a major trading currency and the market's perception of sterling as a petro-currency pose particular problems for the mechanism. We also need to consider carefully the implications for the operation of domestic policy. We do not accept the argument that sterling's absence from the ERM is an impediment to liberalisation of the market in financial services.
The Select Committee's report draws attention to the proposals the Government have put forward for a treaty formalising co-operation in foreign policy and security. Such a treaty would play an important role in cementing the valuable practice of consultation and concertation among the ten member states. We need to move from consultation to common action wherever possible. The Inter-governmental Conference is discussing how the strengthening of political co-operation can be achieved by embodiment

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in a new treaty reflecting the fact that foreign policy is a matter for collaboration between sovereign member states and not something that lends itself to definition under the Treaty of Rome, with the problems of competence and jurisdiction that that would entail.
This debate takes place against the backdrop of the Inter-governmental Conference. European Community affairs inspire varying emotions, but confusion as to what is going on is probably the commonest reaction. This is especially true about the progress of the Inter-governmental Conference. The issues before it are complex, but they are important to the future shape of the Community.
The first session of the Conference was held on 9th September. There have been regular meetings of senior officials in a preparatory group to discuss possible amendments to the treaty, covering in particular those measures necessary to complete the common market, the role of the European Parliament, and whether to update the treaty to include specific reference to issues such as technological co-operation, which are already dealt with in the Community but to which the European Community Treaty makes no direct reference. In a separate preparatory group, political directors of member states' foreign offices are working on the text of the possible new treaty on political co-operation which I mentioned earlier.
A large number of proposals have been put forward. It is too early to judge the shape of any package that the Luxembourg presidency may try to pull together next month for presentation to the European Council in Luxembourg in December. The Treaty of Rome is not immutable. There may be cases where majority voting does not apply, and should apply. But we are not going to find it easy to improve on its authors' work. If we do, it has got to be for a purpose and not to change the rules in the hope that that alone will be enough fully to establish the common market with the enhanced opportunities for wealth creation that this will offer or create a technologically viable Europe able to compete with the United States and Japan. We have to will, and to decide on, the ends as well as the means. We will, therefore, take a view on any overall package at the end of the process on the basis of whether or not it will contribute to the practical improvements in the way the European Community works that we all seek and to the realisation of treaty objectives.
In the time we have available it is difficult to do justice to every detail of this extremely comprehensive and useful report. I hope that it will suffice at this stage to repeat my thanks to the noble Lord, Lord Kearton, and to the Select Committee for the important contribution they have made to a better understanding of the working of the European Community and for the light they have cast on the most advantageous ways in which the Community should develop. My colleagues will find it a helpful guide in the difficult discussions on the future of the European Community currently taking place at the Inter-governmental Conference.
3.40 p.m.
Lord Kennet: My Lords, may I endorse everything the Minister of State has said about what an able and useful report this is? It covers exactly what one wishes
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it to cover and was produced with admirable dispatch. The House owes the noble Lord, Lord Kearton, and his colleagues more than the usual debt of gratitude for this document.
We must also be grateful to the Government for not having dismissed it before the House had an opportunity to debate it. In these days, these little forbearances should not go without due recognition!
I regret in a way that the Labour Party has not chosen to speak in its usual place at the start of the debate, because it would have given the House up-to-date news as to whether or not the Labour Party intends to stay in the Common Market. That is something we must resign ourselves to not knowing until the end of the debate.
A noble Lord: My Lords, may I ask the noble Lord, Lord Kennet, to speak up?
Lord Kennet: My Lords, we do suffer under a permanent disability on the SDP Front Bench. It is much better in front, and it is also much better behind.
A noble Lord: I did not wish to miss anything.
Lord Kennet: My Lords, much of the report, it goes without saying, we on these Benches endorse. We endorse the reduction in the number of subject councils as clearly good, and it stands to reason that the reduction of the Commission at least to 12. if not to nine, is clearly a good thing; we endorse that strongly. We also endorse the restoration of the Commission to its proper functions under the treaty, and an adequate staff ratio. In all this I was glad to learn that the Government are in agreement with the report. That is good, and no more need be said.
I endorse strongly the requirement of the report, its request, its suggestion, urging that we join the EMS. I am sorry to hear that the Government still think the conditions are not right. What are the conditions which are not right? It cannot be anything to do with the position of sterling vis-à-vis other currencies because since the Government first said that conditions were not right sterling has been all over the place, and if none of the positions it occupied in the last three or four years was right, I should like to know what position would be.
Completing the Common Market, the by now famous and I hope soon to become more famous, list of 46 documents that a German lorry must carry to get into Italy makes the point without further argument. Nothing became the career of our late colleague the noble Lord, Lord Cockfield, in this House so well as his first reaction to being exposed to the Common Market in all its absurdities: he came forward with 300 proposals which would be required in order to complete it.
He made a good splash with that and adopted a positive stance. I regret that no more has been heard of the 300 Cockfield proposals. Assuming he is right, we have a long way to go, and I am not surprised to hear that seven years is the estimate of the Commission for how long it will take. But the point is that to get those 300 proposals it will take majority voting. The reason why this has not been completed already is that there

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has not been majority voting, or not enough. There has to be more, and the speed with which the Common Market can be completed depends on how much more majority voting there is.
My Lords, looking at the general development of this great, amazing, baffling, new institution of ours, the European Community, I find I am not among those who believe that to stand still is to go backwards. This is a widespread view on the continent. I think a period of no institutional advance is not to be regarded as a tragedy or a dead loss. There must be organic development. To force it will only produce distortion. If there is a kind of winter during which no organic development takes place, that is a pity, but let us not despair. On the other hand, winters of organic development do stimulate vision and it is to the latest winter that we owe the remarkable vision of the Spinelli Treaty.
I want to say a word of personal praise for this particular member of the European Parliament, who year after year has turned out visionary draft after visionary draft, always keeping the right distance ahead of common humanity, who pant after him achieving what they can and seldom going astray from the route he has marked out, though, of course, at nothing like his vertiginous speed. The world needs its Spinellis.
We have nothing against a new treaty. We do not demand it and think it is the only way forward, but I fear that the Government and, indeed, the Committee may have been a little insular in saying, "No new treaty whatsoever". This is a question of national traditions. It is our custom not to have a new document but to amend the old one or, if we cannot amend it, to carry on patching things up, doing things without writing them down. This is not the custom on the continent. There they proceed with carefully thought-out documents succeeding each other over decades and centuries. If they want a new treaty, I do not see why we should object unless it contains something bad. But there is no logic which says there is no need for a new treaty. We might just as well yield to their vision which says, "Since we are agreed we are going to do it, we might as well have it in a new treaty".
This arises most sharply for the British Government at present in the matter of the political co-operation machinery. If the Government are ready to have that as a new treaty and then presumably to face the swallowing-up of that treaty into a later amalgamation—as they faced the swallowing-up of the Coal and Steel Community and Euratom into the European Community, a later amalgamation or separate treaty—then why not take it on board now as an amalgamation in the form of a new treaty as soon as it is born? A lot of undue weight is being given to formalities here. It is always good to give way on formalities, especially when there are points of substance that you cannot give way on.
I strongly support the demand for deformalisation of the European Council, the meeting of Prime Ministers. It has got too grand, too formal. I commend to the House the evidence to our Select Committee of my right honourable friend Dr. Owen. He gave a sardonic account of the accretion of officials who now
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go to the European Community, which used to be a private meeting of people talking without papers, without decisions to take, to become of like mind on general questions. We should go back to Chancellor Schmidt's original vision of it. There is no reason why the supreme decision-making body should not remain the Council of Ministers, as it is under the treaty. If the Council of Ministers fail to take decisions they are in clear dereliction of their duty under the treaty, and they are in clear contradiction of political and structural common sense in insisting on passing it up to the higher level, to the European Council. But maybe there is room for a system whereby every tier in this pyramid—COREPER to subject councils, subject councils to the Council of Ministers, Council of Ministers to the European Council—should have to obtain the permission of the tier above to pass up a decision. It would be quite salutary, for instance, if the Prime Ministers refused permission to the Foreign Ministers not to decide, and if the Foreign Ministers refused the Ministers of Transport permission not to decide, and to pass it up.
Such a thing would have to be explored. Of course, you could turn the European Council into a two-tier system of its own. I do not mean in any fundamental political way, but procedurally. It could have a few meetings, not more than half a day a year, in which they took decisions, and longer, more frequent meetings in which they consulted generally in private, without officials and without papers before them.
I turn now to majority voting. Part of these reforms—this did not come clearly from the report—must be the written statement of overriding national interest. It is one thing to say that the words, "very important national interest", should give way to something a little stronger, not necessarily "supreme" but probably "vital national interest". That would be an improvement on "very important".
However, if all that we face is a change between a Minister saying that it is "very important" and a Minister saying that it is "vital", that will not take us very far. What is needed is for that Minister, that Government, to be bound to produce a written piece of paper, in advance of the occasion, stating the reasons for which they will refuse to have majority voting on a given decision. They will have to fill up one side, or two sides, of a sheet of paper—I would not be against putting a minimum length on it, as they do on exam papers, which state, "Write on at least two sides"—to be passed to colleagues saying, "This is a vital decision to my country for the following reasons" and listing them as 1, 2, 3 and 4, and publishing it. That would be the end of the story for the Government. They would have their point, and there would not be majority voting on that matter, and the other Ministers would have to lump it. But it would not be the end of the story for the development of the institutions because our national parliaments can read it, the European Parliament can read it and our peoples can read it, and form a proper, true and informed judgment on the policy of each country in this vital regard of how much democracy they are willing to accept in the council.
Turning to the Commission, I have said that we agree with our own Committee's report on this. But there is one point that goes beyond the Committee and

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which should be examined in future. It would, I believe, be a good idea. The Committee discusses whether or not the European Parliament should have a veto on the election of individual commissioners. It already has the power to dismiss individual commissioners. It comes to the conclusion that it should not—or, at any rate, should not the first time round, although it might perhaps the second time round. One sees the point of that because the first time a person is appointed the European Parliament will not know him and will not have any reason to exercise judgment. The second time around they will know him as he will have been a commissioner for four years. They will have seen him, probably once a month, during those four years, and will have an opinion on whether he deserves to continue.
I propose that we might go one stage further and say that the commissioners should be found from among the members of the European Parliament. This is not a new proposal; it has been going around. It looks a bit bold, but it would have two good effects. First, it would, in itself, strengthen the European Parliament. I am among those who believe that the Community is in desperate need of the scouring action of a bit of democracy on all the dross and incrustations that infest it. It would improve the power of the democratically elected Parliament and, at the same time, make the Commission, in a certain sense, more directly the servant of the European peoples. The trouble about the Commission is that, under the treaty, it is not anyone's servant. It is just a disembodied set of intelligences that is charged with having ideas and then seeing whether they will wash in the Council of Ministers for an outright "yes" or "no" or in the parliament for a "yes" or "no" type of advice.
Who are they, the Commission? That is a constitutional loose end. If the commissioners were elected by the European Parliament from among its own members, the analogy is clear with a national democratic civil service in a national democracy. I submit that we are unlikely to construct a European democracy that does not bear considerable resemblances to our national democracies.
This brings me to my last point. The Government say that the time for greater powers for the European Parliament has not arrived. In general, I do not think that this is true. The time for greater powers for elected people is something that those elected people must decide. It is paternalistic for others who are not members of that directly-elected parliament to judge when it is fit to be considered grown up and to be allowed to settle its own hash. I believe that it should have greater powers.
Even before that, there is something the importance of which is greatly underestimated throughout the Community—the question of the seat of the parliament. Those who have been members of it—there are plenty in the House today, I see, looking around—know what an immense burden it is on the development of European democracy that it should be stuck down there in Strasbourg. Let us think of it in national terms, the national analogy. How would British democracy have grown if the law said that the Sovereign and the Civil Service shall be in London, that the Parliament shall be in Edinburgh and shall not be allowed to meet anywhere except in Edinburgh, and
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that the Clerks of both Houses of Parliament shall have their being and their houses in Glossop? Every time that Parliament met, its own Clerks, the Committee Clerks, the Clerk of the Parliaments, Hansard writers, the transport office and everyone else would have to proceed from Glossop to Edinburgh, and the permanent secretaries from London to Edinburgh. From time to time, held on a rather short lease, the Committees of the Parliament, collecting their Clerks in Glossop on the way, would be allowed to meet for a short time in London.
We all know that the very essence of democracy is immediate communication between the legislature, the executive and the judicature. If you do not have that, you do not get democracy. You get bureaucracy, confusion and doubt. Those are precisely the factors that now disfigure the European Community. Lastly, I believe that the new treaty, or a new treaty, or an amendment of the old treaty, should not only say that there will be a uniform electoral system but that that uniform electoral system will be adopted by 1989. Democracy (surprise, surprise!) is the answer in this great bureaucracy, as in others.
3.57 p.m.
Baroness Elles: My Lords, first, I owe an apology to the House. I will not be able to stay to the end of the debate. For one of the reasons that the noble Lord, Lord Kennet, adumbrated, I have to take the plane to Strasbourg tonight—there are not many of them—for a meeting tomorrow morning at 9 o'clock during the parliamentary session. I apologise therefore to noble Lords, especially those who are taking part in the debate. I should like to join previous speakers in congratulating the European Communities Select Committee of your Lordships' House on producing what is a most valuable and far-reaching report. The noble Baroness, Lady Llewelyn-Davies, as chairman of the Committee and the noble Lord, Lord Kearton, chairman of the sub-committee, will know how enormously the reports from that Committee are appreciated not only by your Lordships but throughout all the institutions of the European Community including, if I may say so, the somewhat maligned members of the European Parliament as well as the nine other Governments of the member states and of the two other member states as from 1st January 1986. The report has been welcomed and has been read with the greatest of interest. I welcome very much this opportunity to say a few words on the subject.
I should like, first, to comment on the meaning attributed to European union. The introduction to the report states that European union is about
"how best to realise the aims of the Community so that its future and its continuing success are ensured".
This is, with respect, a somewhat minimalist approach. It is one that is certainly not shared by the vast majority of other member states throughout the Community. Of course, in today's debate, we are absolutely right to take the United Kingdom's position and the Government's position, which is well understood and which has been very clearly put forward by my noble friend Lady Young. Let us be aware, however, that there are nine other member states discussing the same problem with us. We have to be careful not to take too nationalistic an approach to

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this term. Following the speech made by my right honourable friend the Foreign Secretary in Bonn the other day—and may I say in parenthesis how I wish that it had also been made in Birmingham, Bristol and other cities of the United Kingdom—I welcome the fact that my noble friend the Minister has actually made pretty well the same statement in this regard in this House in this country. This is, I think, the first time that the Government have said in this country what they believe by European union. My right honourable friend the Foreign Secretary went a little further following the Genscher/Colombo definition. But I believe that the term implies, as my noble friend has said, both a progress towards closer union—as spelt out in the preamble to the treaty—but also an objective. To my mind, therefore, the best definition (because it was one which looked to the future and is one with which I think few would argue) was perhaps that contained in the Tindemans Report of 1975, then rhetorical and now reality.
Summarily, the objectives were and now are: a united front to the outside world in foreign policy, security, economic relations and development aid. Here, tribute should be paid to the Government for the draft treaty on European political co-operation which I know has been put forward to the inter-governmental conference. Secondly, common policies in economic and monetary matters, in industrial and agricultural sectors and in energy research and regional and social policies as well. Ten years ago those were new, but look where we are today. Ten years later we are now looking to recognise the urgent need for common co-operation in technology, environment and health matters as well. Third, in the Tindemans Report it was stated that there was the need to have institutions with the necessary powers to determine a common, coherent and all-inclusive political view, the efficiency needed for action, and the legitimacy needed for democratic control.
These sum up what 10 years ago was seen to be the vision of Europe and which, bit by bit, has been achieved in these last 10 years. It is indeed not necessary to be a federalist to support this view. While debate on terminology shows a wide gap between rhetoric and reality, the issue itself cannot and must not be ignored, recognising that Britain has a direct interest in the outcome. The Spinelli draft treaty, to which all of your Lordships have already referred, adopted by the European Parliament last year, contains this principle, but goes further. The contribution made by Mr. Spinelli and the European Parliament has provided the major basis for ongoing discussion together with the findings of the Dooge Committee, which spelt out in more discreet terms many of the ideas contained in Spinelli. Both documents express the need for action and highlight by their proposals existing difficulties and blocks in the decision-making process, implicitly recognising that failure to adopt new policies will contribute to a decline of economic and social prosperity of the European Community.
I know that there are some views as to how Governments implement treaties, and these must be taken into account if one is considering a new draft treaty. The United Kingdom has always honourably
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inplemented every treaty that it has ratified. If it is not a tactless remark to make in your Lordships' House, the same is not true of all other governments; and we have to bear this in mind.
The Commission's carefully spelt out proposals for the completion of the internal market by 1992, as your Lordships will know, drafted by my noble friend Lord Cockfield and broadly supported by the Government, would bring a saving to industry on Commission calculations of something like £8 billion a year lost by formalities at inter-Community frontiers, plus another one or two billion pounds for delays. Since 45 per cent, of British exports go to other European Community countries, our own industries are also losing millions of pounds a year. It is therefore of direct interest to the United Kingdom to support these proposals totally.
The technological Europe—which was also referred to in the Dooge Report—is essential if the gap between Japan, the United States and ourselves (and by "ourselves" I mean Europe) is not closed, and we are already 10 years behind.
Esprit, a common Community programme, has allocated over 100 projects to the United Kingdom this year within a totality of over 400 projects. Here again is direct proof that we are talking not only about ideals and future prospects: we are talking about the realities of today for the citizens both of Britain and other member states of the Community. Surely this is an area which must be more closely co-ordinated. But these policies cannot be achieved if the institutions, whose task it is to make the relevant decisions, are incompetent, inefficient or undemocratic and do not represent the interests of the people affected.
I checked today—indeed, the services of the Commission kindly counted them up for me—and as at 1st June, 1985, there are 763 draft proposals before the Council. Some may not be important; but some are. Only recently the directive on architects was adopted after 17 years, the one on pharmacists after 16 years; and yet these draft decisions directly affect businesses and individuals throughout the Community. I can give one example. We all know about the draft directive known as the Vredeling directive. Businesses are still asking: what is happening? Are we going to be affected? Is it going to be adopted? Is it going to be amended? If your Lordships, and indeed another place, ran the business of legislation in this way, I think all governments would be turned out immediately—and rightly. Consequently, vast numbers of people throughout the Community are kept in suspense because of inefficiency or unwillingness to come to an agreement. Therefore, if for no other reason—and there were many other reasons adumbrated in the report before your Lordships' House—the decision-making process needs serious reform.
First, I believe that draft proposals should not remain undecided longer than an agreed time; possibly two years after the European Parliament's opinion has been received. A time limit would impose either a negative or a positive decision. Updating of the treaty to make certain provisions, notably Articles 57(2), 99, and 100 of the Treaty of Rome, subject to majority rather than unanimous vote might cosmetically improve the situation. But many of the proposals for the formation of an internal market, and which are

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waiting for decision, could be decided now by majority vote if the threat of veto did not undermine the decision-making process. All governments appear to be agreed that the veto should, first, be retained for vital national interests. I think here that my noble friend referred to "very important" national interests but I hope eventually that the Government might be prepared to amend this to the word "vital". Secondly, they agree that they must be modified so that the threat of its use does not impede progress. It may be that a simple alteration of the Council's internal rules of procedure could deal with that matter, imposing written and public justification where a member state wishes to apply the veto. A gentleman's agreement, though pleasant sounding and in accordance with the traditions of this Government, would not, I believe, be in the interests of any government, all of which, after all, are subject to their own national parliamentary control, when a Minister, on return to his own national parliament, could only refer to an agreement as the reason why he did not apply the veto on a matter on which there may have been sustained propaganda by narrow sectoral interests. I therefore think that however nice a gentleman's agreement sounds, it would not be effective in removing the threat of a veto hanging over what could normally be a majority decision.
Those who are aware that I am a member of the European Parliament will not be surprised that I have a few comments to make about the somewhat Luddite and anti-democratic attitude as to the future and increased powers of the European Parliament in the legislative process. This is clearly one matter on which the European Parliament feels most strongly, rightly and understandably. Having for years watched the delays and procrastinations of the Council for good or bad reason, but having direct adverse effect on our constituents, it is no longer tolerable for European Parliament members to spend hours, days, or months, amending draft legislation but to have no further right to intervene in the legislative process and to have their amendments overwritten, rejected or ignored by the Council of Ministers.
There are proposals before the inter-governmental conference, I believe, from the French Government and from the Commission, as well as from other sources. Her Majesty' Government are asked to recognise the unacceptability to the European Parliament and the possible consequences if some positive consideration is not given to the legitimate demands of the European Parliament. I do not ask for the final decision but I think that the position is intolerable to a democratically elected parliament. We are responsible to our constituents in exactly the same way as those in another place are responsible to the same constituents; we are elected by the same people and we have to answer to them. I am not issuing a threat—far be it from me to do so—but I think that Her Majesty's Government should be aware of the very strong feeling which will turn against this Government in particular if it is shown that we are the country which has denied the European Parliament at least some advance in the legislative process.
I should like to deal with the budget issue. If the European Parliament had not rejected the budget in 1979, the common agricultural policy may well have
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taken 81.5 per cent. of the budget, as it did in 1978. The fact is that the budget was rejected at that time and pressure was put on the Council. This is of course the Parliament's view; I accept that it may not be the Council's view. Something like 65 per cent. is spent on agriculture and there is increased social fund spending of 35 per cent., which again is of direct benefit to the United Kingdom.
Who can respect an organisation, an institution, such as the Council, which last year dared to present a budget for 10 months when I think we all know that, after all, the year consists of 12 months? That was the 1985 draft budget. The 1986 draft budget contains proposals for 10 member states and totally ignores the fact that, as from 1st January 1986, there will be 12 member states. It is clearly quite impossible for a parliament—which at least expects to be taken seriously by the Council of Ministers if by no one else—to be presented with a draft budget of this magnitude and these characteristics.
The European Parliament is not irresponsible if it is taken seriously. I would say the same for the seal of the parliament. The noble Lord, Lord Kennet, has more than fully explained the difficulties under which members of the European Parliament work. Under the treaty, governments are meant to decide where the seat of the parliament should be. However, the present situation with at least three working places is a recipe for inefficiency, expense, exhaustion and divisiveness between both the parliament and the other institutions with which it is expected to work efficiently. Therefore, at the end of the day I think that the parliament will probably take its own decision as to where its working place should be. As we well know, it is only the temporary that lasts, and we temporarily find our working seat in one place and hope to stay there until member states have finally recognised that we have actually come.
The European Parliament has of course also been the recipient of tens if not hundreds of petitions from individuals and groups claiming to have had their rights, which are established under Community law, violated by member states' governments, their agencies or European Community agencies. I mention this because I do not think it was dwelt on in the report on European union, but it is a matter which I believe is of vital importance for the role of the European Parliament in protecting the citizens whom we represent against violations of their rights under community law. We should certainly like governments to recognise the right of the European Parliament to investigate those matters which concern Community law. It may be that these issues could be resolved by an inter-institutional agreement and not at this stage by a new treaty. But I thought it right to inform your Lordships of the views and opinions of a large majority of the European Parliament.
The success of the inter-governmental conference is of deepest concern to us all. We do not want to see a two-speed Europe encouraged and enhanced. After all, the United Kingdom already has derogations on lorry weights and on clawbacks for the sale of lamb, and I believe—and it is a belief that is shared by many in this House, and by leading businesses and industrial organisations—that it is shameful and harmful for our businesses and for commerce in this country that we

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are not members of the exchange rate mechanism. It cannot make sense that, when eight out of 10 of our largest export markets are member states of the Community, we are the only country which has a floating exchange rate. I do not pretend to be a major economist; but there are enough economists in your Lordships' House who I am sure would tell me that to have one country with a floating exchange rate against all the others which have exchange rates which remain stable in relation to each other simply cannot be for the benefit of our businesses or our industry.
I would very much hope that—I was about to say at the end of the day but I hope it will be at the end of this year—the Government will see their way, regardless of the fact that it is a petrocurrency, regardless of the fact that they have never found the time right, to be able to be part of the exchange rate mechanism of the EMS.
In conclusion, there are many issues before Her Majesty's Government at the inter-governmental conference. We wish to assure Her Majesty's Government of our firm and loyal support for a successful and positive outcome of these meetings, knowing that if substantive measures are taken to make progress along the road of European union, it will be for the prosperity and security of United Kingdom citizens, who will be the main beneficiaries of the decisions which we hope Her Majesty's Government will take.

Civil Disorders
4.15 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on the recent serious disorders. In the past six weeks there have been three serious riots; in the Lozells Road area of Birmingham, in Brixton, and at the Broadwater Farm Estate in Tottenham. Four people have died, one a police constable who was savagely killed. There have also been disorders in Liverpool, Leicester and Peckham in South London. Many police officers and others were injured. There were appalling attacks on the police with petrol bombs and other missiles, and particularly in Birmingham and Brixton there was extensive looting and attacks on shops and cars.
"My Speaker, all responsible members of our society will condemn the disgraceful criminal behaviour which has occurred. All responsible members of our society will applaud the courage and dedication of the police in doing their job of maintaining and restoring order in the streets and on the housing estates of our major cities. Public order is essential for the maintenance of a civilised way of Ufe and for the safety of individual citizens. On that there can be no compromise. So far 700 people have been charged with offences arising from these disorders.
"The riot in Brixton was triggered by the tragic shooting of Mrs. Groce, and the riot in Tottenham
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followed the death of Mrs. Jarrett after a search had been made at her home. These police operations are being investigated by senior officers from other police forces under the supervision of the independent Police Complaints Authority. These arrangements will ensure that they are fully investigated and that any necessary action is taken as a result. In the case of the Lozells Road riot, the Chief Constable of the West Midlands is preparing a report which will be published. Her Majesty's Inspector of Constabulary is being associated closely with the preparation of this report.
"So far as police operations are concerned, though the other disorders were serious enough, the riot at Tottenham stands out for the problems it presented to the police. In that riot a police officer was killed, firearms were used and the police had to face a ferocious barrage of petrol bombs and other missiles. The design of housing estates like that at Tottenham poses particular difficulties in such circumstances. The Metropolitan Police Commissioner is urgently reviewing the tactics of the force on such occasions. There must be no "no go" areas in any of our cities.
"The riot at Tottenham was the first occasion in Great Britain when the chief officer of police gave authority for plastic baton rounds to be used if necessary, though in fact they were not used. Plastic baton rounds and CS gas were made available to the police in Great Britain for public order use following the riots in 1981. They may be used only in the last resort, where conventional methods of policing have been tried and failed, or must from the nature of the circumstances be unlikely to succeed if tried, and where the chief officer judges such action necessary because of the risk of loss of life, or serious injury, or widespread destruction of property. That threshold was reached at Tottenham. The commissioner had my full support in making it clear that such weapons would be deployed if similar circumstances arose in the future.
"Other matters need to be looked at in the light of police experience in these disorders. The defensive equipment introduced in recent years—helmets, shields and protective overalls—proved its worth. Without it there would have been more serious casualties. The Metropolitan Police are acquiring more shields and other defensive equipment. It is also right to consider whether any further equipment is required, and this is being done. Similarly, there may be lessons to be learned in relation to police training and deployment. The commissioner is pursuing these matters and I am in close touch with him. I shall ensure that any lessons learned are disseminated nationally.
"This Government have done more to meet the needs of the police than any in recent history. Since 1979 the Metropolitan Police has increased in strength by nearly 4,500 officers; other forces in England and Wales are stronger by a similar number. Including civilians, strength has increased by some 12,000. These figures speak for themselves. Even after a recent welcome intake of recruits the Metropolitan Police still has scope to increase strength by about 300 within its present establishment of 27,165. I support the

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commissioner in his efforts to make good this shortfall as quickly as possible.
"The force's reorganisation should, in addition, release 200 officers for operational duties; and I have authorised an increase of nearly 50 in the civil staff ceiling next year for further civilianisation. Following my predecessor's announcement in July on drugs, I have told the commissioner that I am prepared in principle to agree to an increase of 50 officers in the establishment next year, specifically to strengthen his efforts against drug trafficking.
"Taken together, these steps mean that there will be a substantial strengthening of theMetropolitan Police in the months ahead. Beyond that I have set urgent work in hand to assess where there are specific needs for further increases in the Metropolitan Police establishment. I shall consider applications from provincial police authorities on the same basis; namely, that the police should have what they need in the fight against crime.
"In recent years a great deal of effort has been put into establishing good liaison and consultation between the police and the community in inner city areas, particularly, for example, in Brixton and Handsworth. These disorders must be deeply depressing for those community leaders and police officers who have put so much effort into establishing a better understanding. But it would be wrong to assume that these efforts were misplaced. On the contrary, they must be continued and redoubled if the police are to protect and serve the community efficiently.
"More broadly, the Government will continue their strong commitment to urban regeneration. The Urban Programme has more than tripled, from £93 million in 1978–79 to £338 million in 1985–86, and there has been substantial expenditure in all the riot areas. The Department of Employment and the Manpower Services Commission are spending more than £ 100 million in the Partnership areas, and my department plans to spend some £90 million in 1985–86 through Section 11 grants. We must ensure that the very substantial sums that now go, and will continue to go, to inner city areas are spent to the best advantage and directed to the real needs of the people who live there. The city action teams have been set up to improve the co-ordination and targeting of Government programmes in the Partnership areas. We shall do everything possible to ensure that our objectives in the inner city areas are achieved.
"These disorders are shocking events. It is of paramount interest to us all, young and old, people of all ethnic backgrounds, that public order should be maintained. I acknowledge the social problems which exist in these areas, but it is no solution to loot and burn shops which serve the area, or to attack the police. Mob violence must be dealt with firmly and effectively and criminal acts punished according to the criminal law. The police should have the support of all of us in striving to maintain order and uphold the law. It is their first priority. It is the Government's also".
My Lords, that concludes the Statement.
4.24 p.m.
Lord Mishcon: My Lords, the House will be grateful to the Minister for repeating a very serious Statement on very serious matters which was made by his right honourable friend the Home Secretary in another place. There are three matters which I want at once to emphasise are matters in common between these two Front Benches and I imagine are shared in common in all quarters of your Lordships' House. The first is to express sympathy for the victims of these disorders, whether they be police or whether they be civilians. The second is to condemn, as I do in a forthright, unequivocal manner from this Front Bench, murder, violence, arson, riot, and looting. The third thing is general support for the police and other services in their unenviable task in facing an unwelcome new chapter in the history of our inner city areas
Having said that, there must be equal condemnation, or at least equal concern, if there be any attempt to turn our great police force into a quasi-military force. I noted in the Statement a reference to certain matters. I shall only say, briefly, let us go a little carefully before assenting to plastic baton rounds and CS gas, and other measures, even when they are stated to be weapons of last resort.
When talking of the police force I must say that I am a little confused. I read—as possibly some Members of your Lordships' House heard—the statement made by the Prime Minister to great applause at the Conservative Party conference. She offered a blank cheque to the Metropolitan Police Force in manpower and equipment. The new Secretary of State hastily got hold of that cheque and filled in the figures before he himself saw the Metropolitan Commissioner. He asked for greater manpower immediately. The Home Secretary did not issue that blank cheque; as I said, he had already filled in some figures, and those are the figures which occur in the Statement but with which the commissioner, as I understand it, is certainly not himself content.
There is great concern, and I believe there is no point in any of us trying to hide the fact, at what would appear to be—I underline the word "appear" on purpose—tragic and expensive blunders of the police immediately prior to the disastrous events which occurred at Brixton and Tottenham. I mention this matter only because the Statement again refers to the internal inquiry which is being made by various chief constables of different areas and under the aegis of the complaints authority.
I say deliberately from these Benches that if anything ever called out for a judicial inquiry it is the events chronicled in the Statement made to your Lordships this afternoon. Those who are very much interested in race relations want it, require it, and are entitled to it. I believe that all of us are interested in seeing that if mistakes are made by us nationally they are seen to be frankly faced so that we can avoid them in the future. From this Front Bench I call for that judicial inquiry to be made.
Lastly, may I briefly talk about causes—not causes which justify (I repeat that) riots, violence, murder, arson, looting, but causes which have to be looked at if one is taking into account some of the black youths and white youths who were engaged in these riots,

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some of us may think, misguidedly. The Home Secretary first saw fit to blame the whole of these matters on what he described as criminality. Then, and I pay him due credit for this, he thought again. In a speech last Friday in speaking about these disaffected young blacks he referred to them as the "tinder which caught fire in the recent incidents". One cannot leave tinder lying about in inflammable areas. It is the duty of Government to see to that. There are issues of unemployment, housing, racial discrimination and decayed inner city areas. We all know about them.
In conclusion, I merely ask a question that is based upon an article that I read in today's Times headed
"Hurd devising new strategy for inner city action"
In the course of that article an interesting comment is made by the political correspondent of The Times:
"A meeting of ministers last week concluded that the present system of co-ordination, a Cabinet sub-committee chaired by Lord Young, needed to be revamped to give particular emphasis to the difficulties faced by disaffected young blacks".
The article continued later:
"Mr. Hurd is to draft a minute for Mrs. Margaret Thatcher in which he will suggest that the Home Office, the Department of Education, the Department of Health and Social Security need stronger representation".
I ask the question: is that true?
4.32 p.m.
Baroness Seear: My Lords, we from these Benches wish also to thank the Minister for repeating this lamentable Statement. Of course, we agree with the noble Lord, Lord Mishcon, in extending our sympathy to those who have been injured, whoever they may be, and in deploring totally and absolutely violence, arson and rioting, as has been said already. But, like the noble Lord, Lord Mishcon, one must also make it absolutely clear where we stand in relation to violence. I ask the noble Lord the Minister to make clear that the inquiry which is being made into what has happened from the point of view of the police will be an inquiry which will be thorough and that there will be no conceivable cover up, and that it will be made absolutely clear to the country as a whole that there is no cover up.
We have to face the fact that in these communities the relations between the police and the local community has deteriorated to a lamentable point. Whoever is to blame for this, whatever the reason, that fact is a fact of cardinal importance. The noble and learned Lord, Lord Scarman, pointed out the importance of these relationships when he made his inquiry into the Brixton riots in 1981. We can only say on the evidence that, despite the genuine efforts that have been made by the police—and we applaud them—they have not been successful. Therefore, it is essential to fall over backwards to reassure local communities that are already disaffected, and those who may easily sympathise with them although at present they do not go along with them, that the actions of the police are open to investigation as is the action of any other person in this country.
I should like to say a little more about causes. Of course, it is right that in this Statement the emphasis has been put on the damage, the violence and the position of the police and the need for support for the
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police. But it is also surely clear that these issues are symptoms of problems which we have not solved. This rioting was not only by young blacks; there was rioting by young whites as well. That points to a wider and even more difficult problem than the problem of the young blacks. It is a problem of the failure of the youngsters to respond to the school system. This is a huge question in itself. They have contracted out of what the education system is able to offer. Why? We do not know the answer. Of course, it is a problem of unemployment. Surely this emphasises again and again that now is the time to put money into the inner cities in a way which creates jobs for these youngsters. The unemployment rate among the under-25s all over the country is appalling, and it is particularly appalling in inner city areas. This must be a matter of the very highest priority.
While the unemployment of the young whites is deplorable, the unemployment among the young blacks is a total disaster. Again we have not conquered that problem and, despite determined efforts on the part of a great many people, including those on the Government Benches, we have not even begun to tackle it.
There are one or two particular points. We know that in the youth training scheme, not as a result of intention on anybody's part, the extent of participation among young blacks is less than it should be. As a matter of urgency can we not try to understand why this is so and, if we cannot, try to raise greatly the participation of young blacks in that scheme for youngsters from 16 to 18? After all, that is the crucial age group in the troubles in these centres.
Similarly it has been said that the Government are considering contract compliance. If this is true, in my view it is a positive step that might help greatly with the unemployment problem as it affects young blacks. But these recent events must underline the fact that our present policies are not working and that in the inner city centres something far more determined, far more drastic, is needed if these riots are not to be repeated.
4.38 p.m.
Lord Glenarthur: My Lords, I am grateful both to the noble Lord, Lord Mishcon, and to the noble Baroness, Lady Seear, for their expressions of sympathy both to the police and to the victims in these terrible circumstances. I am also grateful for their round condemnation of the kind of action which has been taken by those who employ violence such as we have seen.
Perhaps I can deal first with some points raised by the noble Lord, Lord Mishcon, who was concerned that we were marching towards a quasi-military force in the police. There is no question of his fears being realised. There is no question of the police becoming a permanently armed force. There are considerable objections to arming the police as a matter of course. The main objection is the belief that if it were known that the police always carried firearms and were prepared to use them, the ordinary criminal would be more likely to arm himself. The result might be the shooting of more policemen and perhaps other innocent people and a general escalation in armed

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crime and violence. That is something we certainly do not want to see.
The Government believe that the advantage lies in seeking to preserve law and order as far as possible by traditional methods of policing. This is a view which the noble Lord will know is shared by all chief officers of police. The noble Lord urges caution in the use, for example, of plastic baton rounds. Yes, of course, but then they have the reassurance which my right honourable friend has given that they will have the protection they need to carry out their difficult tasks. That is something which cannot be denied them.
The noble Lord expressed concern because he felt that there was disparity between what my right honourable friend the Prime Minister had said and what had been said by my right honourable friend the Home Secretary. I think that when I repeated the Statement, I made clear that the application for provincial authorities in the same way as the metropolitan authority would be considered on the same basis; namely that,
"the police should have what they need in their fight against crime".
It is true that the commissioner expressed a view that an establishment increase of the order of 3,500 is needed in the median term and my right honourable friend has stated that we shall be examining the case for an increase in the coming months while the force is recruiting up to its present authorised establishment. Of course it is important that the issue is fully examined and that is what is now being done.
On the question of a judicial inquiry, I do not share the noble Lord's view, although I understand the force of his arguments. A judicial inquiry would cut across the investigations which are already in train. It could prejudice any criminal or disciplinary proceedings which might flow from the investigations being conducted under the supervision of the Police Complaints Authority. The wider aspects of police community relations have already been well explored and it is difficult to see how an inquiry would really carry matters further forward. Police equipment and tactics are matters which need to be looked at by those with operational experience and expertise rather than by a judicial inquiry. That is why we do not see that any useful purpose would be served by an inquiry in the form that the noble Lord suggests.
On the question of the inquiries that are being conducted, perhaps I may say to the noble Lord that the investigations are indeed being carried out by police investigators. In the cases of Mrs. Groce and Mrs. Jarrett, they are being carried out by assistant chief constables from provincial forces but under the supervision of members of the Police Complaints Authority. Authority members are of course wholly independent of the police: by law, no person who has even been a police officer may be a member of the authority. They have the power to approve or disapprove the appointment of the investigating officer and to give directions during the course of the inquiry.
In regard to both Mrs. Groce and Mrs. Jarrett, a member of the authority has been closely involved within a few hours of the events occurring and has been in close contact with the investigating officer ever since. They are there to ensure that there can be the
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public confidence for which the noble Lord is asking in the ways that these important cases are investigated but they will not, by their presence, inhibit subsequent proceedings if they should be appropriate. The Birmingham report will be published, and the Police Complaints Authority will be publishing a report in due course.
On the question of the article in today's Times, to which the noble Lord referred, of course the causes of disturbances such as these are complex. It is essential that we ensure that we get full value and benefit from the money which we are spending in the inner cities—and we spend a great deal of it—and that we see that it is properly aimed at the real, underlying problems which concern both the noble Baroness, Lady Seear, and the noble Lord opposite. It may be that the existing arrangements for doing this are capable of further improvement. This is being actively considered, although I do not think it would be proper for me to go into the exact mechanism in the speculative way in which the newspapers have suggested it.
The noble Baroness, Lady Seear, did not want to see any cover up in the inquiries. Of course there will be no cover up. That is why the publishing of both the report of the Police Complaints Authority and the other report to which I referred will take place. The noble Baroness expressed the view that of course whites as well as black people were involved in the riots, particularly in Handsworth and Brixton. She is quite right in saying that. Twenty nine per cent.—in fact, nearly 30 per cent.—of those charged in connection with Handsworth were white, and nearly 35 per cent. at Brixton, which I think adds weight to the remarks that the noble Baroness made.
While again understanding the complexity of the social issues, education, employment and so on. which the noble Baroness put forward, I simply cannot believe, and neither do I think would any of my noble friends, that they provide any excuse for the terrible violence which has besieged various parts of this country in the course of the past few weeks. No amount of social difficulty can provide an excuse for that kind of occurrence.
The noble Baroness asked about the YTS. She suggested that more money ought to be put into the inner cities to create jobs and that in connection with the YTS the participation of younger blacks is lower than it should be. Perhaps I may simply tell her that the Government are extending the YTS to two years and are doubling the number of places offered under the communities programme. I know that my noble friend Lord Young is conscious of the need to ensure that these programmes are well targeted in the inner cities and that that problem of low take-up among certain groups is redressed and overcome. Thus the matter is certainly being looked at.
On the question of contract compliance, perhaps I may simply emphasise two points. First, the Government are firmly committed to equality of opportunity in employment and totally opposed to racial discrimination. Secondly, we believe that individuals should be employed or promoted on their merits and not because of their racial or ethnic origins.

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I think that I have covered most of the points raised by those on the Benches opposite. I shall study their remarks with care and reply to any others that I have not answered.
4.45 p.m.
Baroness Fisher of Rednal: My Lords, for a period of six years I served as a representative of the Handsworth area on the Birmingham City Council. I know the area particularly well. During the period that I have been away from that area, which is now about 15 years, one has seen the whole area sliding down a very slippery slope. One is amazed because the Birmingham City Council has been putting a great deal of money into the Handsworth area. It has also set up its own inquiry as a city council under the eminent barrister Julius Silverman, an ex-Member of the other place.
The difficulties are confounded in as much as that in the area, there is the metropolitan council as well as the Birmingham city council. While the metropolitan authority is dealing with the police inquiry, the city itself feels that it ought to have its own inquiry, which is now taking place and which of course will be published.
However, this afternoon we have heard about the difficult role of the police. That role will continue to be difficult unless we do something to prevent further riots of this nature. I think one must face up to this. If noble Lords in this House were to visit the Lozells area, they would say immediately, without any discussion at all, that something must be done there; some more money must be put into that area.
The Government say that they are doing this and that for urban redevelopment, inner city partnerships. I become a little worried that while they are doing that, they are also rate capping the City of Birmingham. What they are giving with one hand, they are taking away with the other. They are taking away more in the rate capping than they are giving in urban redevelopment. How does one solve problems if the Government are trying to tackle problems in that way? We understand from the Government that it is all a case of presentation. However, presentation will not prevent riots and it will not prevent the bad feelings that arise. If noble Lords were to see the areas, they would see what I am talking about.
One out of every two males living in the particular area in Birmingham where this happened is unemployed. In view of the very large number of young people in that area with nothing to do, it is very difficult for a lot of these young people even to get on the YTS courses. The most advantage they get is in relation to the community programmes. There is a particular difficulty in that area because Handsworth has its own probation service which is run exclusively there. Practically all the community service jobs, more often than not, are taken up by the young people who are placed on probation. They are in a difficult area, and all I would say to the Government is this: make quite sure that when you are making all the inquiries you look at the amount of money you are putting into the inner cities.
There is another small point I should like to mention in conclusion. Many of the traders who lost
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their businesses in the Lozells area were small traders. They are in a very difficult situation regarding compensation. Here again they are asking that the Government come forward quickly with the necessary money, because the small businesses that were running there are really the mainstay of the local community. So may I urge the Minister to look at that particular point about paying compensation very quickly?
Lord Glenarthur: My Lords, the noble Baroness points to what she believes to be the difficulties caused by constraints on local authority spending preventing action to tackle the sort of problems she is concerned about. However, I am sure the noble Baroness will be aware that the Government give Birmingham substantial support under the Urban Programme. They allocate £25 million per annum to the Partnership and high priority is given to Handsworth, where some £20 million has been spent in the last five years.
The noble Baroness referred to the question of rate capping, but the basic block grant distribution arrangements produce a substantial redistribution of resources in favour of areas where needs are high, such as the inner cities—Handsworth being part of that—and where rateable capacity is low. I think that is a fact which is all too easily lost sight of in the perennial arguments about just how relative needs should be assessed, which affect the position only at the margin. It is the inner city authorities themselves who are opting to throw away some of this benefit by spending at levels which they know will reduce their grant entitlement and impose extra burdens on local people and businesses. Of course, the noble Baroness expresses concern, and she knows the area well, but unless the national economy thrives the inner cities certainly will never thrive. That is why it is necessary to secure a sustained national economic recovery, and that is what is being secured at the moment.
So far as the speeding up of payments under the Riot (Damages) Act is concerned, it is certainly right that those responsible for the compensation arrangements should not allow public money to be paid out without rigorous scrutiny of the claims. I am sure the noble Baroness would agree with that, but I know that those who are involved and who are dealing with the claims recognise the need to get the money to genuine claimants as quickly as possible. The receiver, who is the compensation authority in the Metropolitan Police District—that may not be part of Birmingham but certainly it is part of areas where other troubles have taken place—is making payments to applicants on their claims.
The point about the YTS which the noble Baroness raised was, I think, dealt with in the answer which I gave to the noble Baroness, Lady Seear. However, I will examine what the noble Baroness has said and if I can follow it up in writing I will do so.
Viscount Tonypandy: My Lords, before we leave this subject, may I ask the Minister whether he is aware how deeply public opinion is on his side and that of the noble Lord, Lord Mishcon, and the noble Baroness, Lady Seear, in regarding this as a national issue in which the police are our barrier for our parliamentary democracy? If the police were not there the bully boys would indeed take over. But there appear to be people

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stirring up black people, because they have a vested interest in trying to get power there. This is one new feature of our life in these islands where we rejoice in one of the most tolerant societies in the world. It is a comfort, I believe, for the British people that from both sides of the House today we have had a recognition that the police are public servants who deserve our support and our deepest gratitude.
Noble Lords: Hear, hear!
Lord Glenarthur: My Lords, I am very grateful indeed to the noble Viscount, Lord Tonypandy, for his remarks in support of the police. Of course, they deserve every word of what he said. The noble Viscount referred to those among certain parts of society who foment trouble. Extremists will seek to make political capital out of disorders of this kind. Their presence does not help, but there is no evidence that the disorders were organised in advance by external agitators. All the indications are that the disorders were local, that they were criminal and hooligan, rather than political and externally organised. With that, I can simply share entirely the noble Viscount's sentiments and agree with every word he said in support of the police.
Lord Maude of Stratford-upon-Avon: My Lords, is my noble friend aware that experience has shown that pouring very large sums of Government money into inner city areas is a very costly way of creating not very many jobs and that one of the reasons why there are not enough jobs in some of these areas is that left-wing local authorities, by the size of their industrial rate bills, have driven out of their areas the firms which used to provide employment and have deterred any fresh ones from coming in? And if the level of industrial rates is not enough to deter new firms from coming in, rioting and looting certainly is.
Lord Glenarthur: My Lords, I think my noble friend is quite right. Certainly pouring money into areas such as this is by no means the only solution. That is why the problem has to be tackled on a much wider front, in much the same way as I suggested in answer to the noble Lord, Lord Mishcon, that it was being tackled. So far as local authorities' rates bills are concerned, it is true that they do lead, or can help to lead, towards the sort of difficulties that we face. I think that my noble friend is quite right to put his finger on it.
The Lord Bishop of Manchester: My Lords, the noble Lord the Minister has made the point of the Government's commitment to equality of opportunity regardless of race in matters of employment; but some of us would value an assurance that the kind of surveys we have been seeing recently about discrimination over jobs are being taken seriously by Government, together with the enormous problems which are being faced by young blacks, in particular in inner urban areas, in obtaining employment.
There has been a general unanimity in what has been said in the debate today about the enormous pressures on the police, about the value of the police and the need to support them. But we would like also to be assured that there is a recognition of the very
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great pressures facing young people, in particular in these areas. While in no sense can the kind of behaviour which we have seen be in any way condoned, and it must be condemned from the point of view of the Christian Churches—these are sins as well as crimes—it would be very foolish for any of those who hold responsibility not to recognise that what has been happening in British cities is a sign of these very great pressures on young people in particular. I, for one, would like to be assured that there is an awareness on the part of Government that these problems must be set in their wider context and that they are prepared to review policies in general over a whole range of issues, of which unemployment is one and housing policy another.
Lord Glenarthur: My Lords, the right reverend Prelate puts his finger on one area which came out in the report on the earlier riots on which the noble and learned Lord, Lord Scarman, reported. May I say to him in relation to employment here that training and special programmes have been reviewed in the light of that report. Many relevant initiatives have been taken. Small businesses have been encouraged, there are local enterprise agencies, enterprise allowances and an expansion of the small firms service. Training has been reviewed; I referred to the new two-year YTS. There has been a vast expansion of the community programme, with £2 billion spent annually on special measures, and special consideration is given to the schemes and projects which he no doubt desires to see in inner cities. Recreation and leisure schemes are also supported under the urban programme. I think that that action indicates that we have concern in the way that he desires.
Lord Donaldson of Kingsbridge: My Lords, may I ask the noble Lord one last question? Am I right in thinking that there is a strong connection in each of the inner city areas with drug traffic, and that for unemployed people wanting to earn easy money it is a great temptation to take some money for distributing drugs? This means that the very big and powerful drug barons who are in no sense black, but are of all colours and all nations, are to some extent behind this? If the police are to make a special effort, as they are now doing, will this make the relationship with the people in the area even more difficult? Is this the true picture or an exaggerated one?
Lord Glenarthur: My Lords, it is certainly the case that the sort of things we have witnessed may be, to some extent, involved with drugs; but I think that a lot of it has to await the further inquiries which are taking place. Certainly I from this Dispatch Box, and many of my noble friends in the past and others in another place, have condemned in every way the drug barons to whom the noble Lord referred. He further knows that, all being well, it will be possible before long to introduce legislation to remove the proceeds from those who benefit from drugs. But I do not think there is any conspiracy of drug traffickers to encourage rioting as such. Riots may simply be symptoms of something else which is occurring in those areas.
Lord Mishcon: My Lords, only for the purpose of the record, I am sure the noble Lord will readily

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acknowledge that the policy in regard to drug traffickers is a universal policy of both Houses of Parliament and is not just the prerogative of one party.
Lord Glenarthur: Absolutely, my Lords. I hope that I had not indicated to the contrary.
Lord Marley: My Lords, may I ask the Minister whether any consideration has ever been given to consulting the French police, who appear to me to be very efficient at handling these matters?
Lord Glenarthur: My Lords, I must confess that I do not know whether or not any particular liaison has been made with the French, but I shall certainly ask and will let my noble friend know.

Board and Lodging Payments
5.3 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, with the leave of the House I shall now repeat a Statement which is being made in another place on supplementary benefit board and lodging payments.
"In April the Government took action to control rapidly increasing expenditure and to help curb abuse. Between December 1982 and December 1984 spending rose from £166 million a year to £380 million a year. At the same time, the number of boarders under 26 had more than trebled from 23,000 to around 85,000.
"Regulations were introduced which provided for the maximum weekly amounts for board and lodging to be determined by Ministers, rather than by local offices. In addition, the regulations limited the period during which certain unemployed people under 26 could be paid as boarders. There was a wide range of exemptions to protect the most vulnerable who needed to be boarders, such as families with children. The regulations were scrutinised by the Joint Committee on Statutory Instruments and debated and passed by both Houses of Parliament.
"On 31st July, after Parliament had risen, the High Court decided an application for judicial review on the regulations. Mr. Justice Mann rejected the argument that we had failed properly to consult the Social Security Advisory Committee and he also rejected the argument that the time limit of four weeks applied in this case was unreasonable. The judge did, however, find that the powers in the 1976 Supplementary Benefits Act were insufficient to make regulations enabling Ministers to determine board and lodging areas and limits.
"In other words, the judge's view was that the regulations would have been in order if they had themselves contained the board and lodging areas and limits. Mr. Justice Mann declined to make a formal order on our undertaking not to apply the time limits pending the making of new regulations or the outcome of any appeal. Immediate action was taken to put this undertaking into effect and I should
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like to pay tribute to the efforts of local office staff in carrying out this work.
"We have lodged an appeal against the judgment and arrangements have been made for an early hearing in the Court of Appeal. This will take place at the end of November. However, as Mr. Justice Mann specifically recognised, there is a need for a sensible interim operation. It is in the general interest that there should be stability during which the outcome of the appeal can be given proper consideration and the review, which we are committed to carrying out, completed.
"I have accordingly laid draft regulations today. They include temporary provisions—which will expire at the end of April 1986—to meet the judge's points. There are two important differences from the regulations passed by the House in April. First, time limits will not apply to existing boarders on benefit. They will apply only to new claimants. The second important difference is that I am also taking powers, in addition to the exemptions in the previous regulations, to exempt claimants from the time limits who would otherwise suffer exceptional hardship.
"The House will appreciate, in view of what I have said, the need to clarify the position. The regulations achieve this without in any way prejudicing the outcome of the appeal. The House will have the opportunity to discuss them when they are debated next week. We hope in this way to restrain spending, tackle abuse, but at the same time protect the interests of genuine claimants."
My Lords, that concludes the Statement.
Baroness Jeger: My Lords, I thank the Minister for repeating that Statement. I am sure your Lordships will be relieved to know that, in view of the fact that there is to be a debate next week, I do not intend to reiterate the sincere belief held by my noble friends and myself that this problem is caused by lack of employment for young people and lack of housing at affordable costs and that it is these factors that are at the heart of the problem. I shall confine myself to just a few questions.
First, I should like to ask the noble Baroness whether the review to which she referred will deal only with the time limits, or will it deal also with the amount of payments to be made and the limitation of payments? Next I have to ask whether she can make clear at what date people are to be designated as new claimants. Do they become new claimants in April, 1986, or are they new claimants as from now, in which case it would appear to contradict the fact that the judgment quashed all time limits; or is there some other explanation? If the time limits are to apply to new claimants as of now, pending the appeal, then there would seem to be some contradiction of the court's decision.
On the point of people who suffer exceptional hardship, can the noble Baroness tell us a little more about who is to decide exceptional hardship? What advice will be given to local officers? Will this include special consideration for the refugees, about which we have had some correspondence, and for people newly discharged from mental hospitals and psychiatric units

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who need support for longer than the time limits at present in force allow? Can she also say whether there will be in the review any variation of time limits as there is now in different areas? Will there be this geographical difference whereby someone can stay for two weeks in one place and for four weeks in another place? This causes a good deal of confusion and there is a lack of clarity here. Those are the main points which arise from the Statement, for which again I thank the noble Baroness the Minister.
Lord Beaumont of Whitley: My Lords, I should like to thank the noble Baroness for repeating the Statement. I am appalled by the attitude and by the tone of the two Statements that we have heard this afternoon. In both cases the Government appear to be treating with very severe arm's length disdain the fact that they themselves have caused the troubles which the community is now reaping. This was so when we were talking about the rioting; it is so when we are talking about the very real misery which is being imposed by some of these regulations on board and lodging payments which have indeed resulted in the past in suicide and a very great deal of distress.
The Statement says that the number of boarders under 26 has more than doubled from 23,000 to around 85,000, as if that were an act of God. It is not an act of God, my Lords; it is an act of this Government. The next paragraph of the Statement says that:
"The regulations were scrutinised by the Joint Committee on Statutory Instruments and debated and passed by both Houses of Parliament".
The noble Baroness will remember the debate in which your Lordships' House passed those regulations. It was one in which the noble Baroness had her baptism of fire on the Front Bench. It was most unfortunate that she had to put them forward because they were wholeheartedly condemned by every Member of your Lordships' House from every side of the Chamber.
We give the interim measures which the Government are proposing to take now a modified welcome, though I certainly wait with interest to hear the answers to the questions which the noble Baroness asked. I should like to ask a question about the review which the Statement says,
"we are committed to carrying out"
Is the review awaiting the outcome of the appeal in any sense, or is it in fact going on at the moment? Is there going to be an appeal anyway; or if the Court of Appeal reverses the judgment will there then not be a review because the Government see that there is very little to do? There is a very great deal to do.
I too will not add more to what I am saying today because there is going to be a debate on the subject which I suspect will result in a real condemnation of the insensitive and harsh measures by which this Government seek to cure the economic problems of this country by taking it out on the lives of the poorest and weakest members of the community.
5.15 p.m.
Baroness Trumpington: My Lords, I am grateful to the noble Baroness, Lady Jeger, for the brevity of her
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speech. The noble Baroness would not wish me to comment on her opening remarks. She asked about the time limits. The time limits are currently suspended. Under the new regulations the time limits will remain suspended for existing boarders. The difference is that the new boarders who become boarders after the regulation comes into force on 4th November will be subject to time limits, unless of course exempt. With regard to financial limits, they have never been suspended and continue to apply. On the Notting Hill case, which is the other case which was involved, we have not suspended the financial limits, in line with normal practice not to implement tribunal decisions pending the outcome of an appeal.
When I was answering a question from the noble Baroness, Lady Jeger, last week, I should really have said that in regard to the findings in the case the only position on which the judge did not agree with the DHSS was over the fact that it lay in the Minister's power under the regulations as they were originally put through both Houses—on neither of the other issues raised did he disagree. So there is no contradiction of the court's decision into what is happening now.
The noble Baroness asked me about refugees. Our view has always been that refugees should be among those protected by the categories originally drawn up for exemption from the time limits which apply to benefit at the boarder rate for certain unemployed young people. But I acknowledge that difficulties were being encountered initially in some cases. Instructions have just been issued to our local offices about the further changes in the arrangements concerning boarders; in particular, headquarters should be approached by telephone in any case where it appears that a refugee may not qualify for exemption. I trust that this additional safeguard will remove any remaining cause for concern on the question of time limits as they affect refugees. The noble Baroness also asked me about discretionary powers for exceptional hardship. These will be exercised by experienced people in headquarters.
The noble Lord, Lord Beaumont, painted a picture which is simply not the case. The reason why the new arrangements were brought in was that originally the maximum amounts payable for board and lodging were determined locally for each local security office. This local limits system simply reflected local patterns of charges determined by landlords without any checks on unreasonable increases. It facilitated cartel type activities by groups of proprietors and charges were being pushed up far in excess of the rate of inflation. Young people could receive large amounts of money as boarders—in some cases more than £100 a week—and this far exceeded what many of them could earn and is a considerable work disincentive. It is also much more than they would receive as householders or non-householders.
The Government recognised that the benefit system gave excessive encouragement to some people to leave home. As a consequence they became trapped in accommodation they could not afford if working. This was of no service to the taxpayer and of no service to claimants themselves. There were indications of a growing market specifically for DHSS claimants, sometimes at higher charges for people on benefits, as shown by the rapid growth in new establishments.

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Some proprietors were making very high returns on letting at the local limits.
With regard to the changes being kept under review, we have said that we will keep them under review. We realised that the measures were not the last word on the subject and so the Government are continuing closely to monitor the operation of the new rules and are undertaking further research, including a study by a firm of management consultants into the operation of the market for private and voluntary care. The result of those exercises will be considered carefully when they are completed in about six months' time, before the full review of all the limits is made next year.
With regard to suicides, the Government very much regret the recent tragic occurrences. In introducing a new board and lodging regulation, steps were taken to protect those vulnerable young people who need to be in board and lodging accommodation for more than a short time. A number of the cases brought to the Government's attention would appear to have been covered by the exemption categories had the full facts been made known to the local DHSS office. The Government introduced regulations to allow the exemption categories to be extended quickly should the need be shown. Also, the new discretionary provision should and will help. As the noble Baroness said, we shall be having a full debate on this subject next week, and so I hope that I have answered sufficient questions for the time being.
Baroness Jeger: My Lords, I apologise for speaking again but there is one point about which I am still not clear. It is one that affects very many people. The judgment was made during the Recess that the time limits should be quashed. I understand that there is to be an appeal heard at the end of November. The noble Baroness stated that after 4th November new claimants will be subjected to time limits. I understood that to be what the noble Baroness said.
Therefore, between 4th November and the date of the appeal at the end of November, surely the Government will be disobeying the order of the court? I am interested to see that the noble Baroness is shaking her head because I want to have it on the record what the case is. This point has caused much confusion.
Baroness Trumpington: My Lords, Mr. Justice Mann clearly envisaged the possibility of amending regulations and framed his judgment accordingly. It is in no one's interest that there should be uncertainty over the next month. Regulations will expire after six months—the period during which the Court of Appeal and the parties concerned will decide upon any further action any of them may wish to take. I repeat that the regulations will not affect those living in board and lodging accommodation at the time when the regulations come into force.

European Union: ECC Report
5.23 p.m.
Debate resumed.
Viscount Rochdale: My Lords, I take it that we may now return to the subject of European union. I had the
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privilege of being a member of the ad hoc committee under the skilful and very perceptive chairmanship of the noble Lord, Lord Kearton, which examined this very difficult and complex subject of European union. We greatly admired the way in which the noble Lord conducted our deliberations. I should also like to thank him for the way in which he has introduced the debate this afternoon.
One of the earliest problems we came up against in the report, and which the noble Lord himself mentioned today, was the exact definition of what was meant by European union. Every noble Lord who has spoken this afternoon mentioned that point. I shall not dilate upon it except to say that I agree with those who believe that the best definition is to be found in the words of the Treaty of Rome:
"an even closer union among the European peoples,"
With due respect to my colleagues, I believe that we dodged the issue: we did not pursue that point further. What we did was to emphasise that whatever the title and whatever its scope and competence, a major ingredient in achieving ever closer union and a really effective Community, with its potential worldwide impact, was completion of the internal market, so that it really did operate as a common market.
I agree with the importance of achieving a common market. My own limited experience, based on having been a member of a number of inquiries set up by the Select Committee covering several different issues, and of proposals which have emerged from Brussels, has led me and others to reach the rather depressing conclusion that so often, however good the various proposals were in a commercial or practical sense, they were—if I may use a colloquialism—bogged down by the lack of union and crusading fire which in the early days brought the Community—with its intended but never achieved common market—into being.
The problem of a common market, with all the various components which contribute towards it, really epitomises the lack of union; the lack of willingness of member states to give as well as to take. I conclude from this that important as the completion of the market is (and I certainly will not say that it is other than extremely important), the failure to achieve it is a symptom of a far deeper problem and not the main problem itself.
Perhaps your Lordships will allow me to cite one or two examples. I have particularly in mind an inquiry that we held earlier this Session and debated this spring; that on airline policy, where it was clear that industrial and commercial progress was all too obviously being frustrated by national political fears and interests. So much for union. Again, the inquiry of 1984 into the distribution and servicing of motor cars pointed in exactly the same direction. Indeed, the Select Committee's own report on internal markets in 1982 also pointed to the fact that it was lack of union and not necessarily the proposals themselves which posed the difficulty. Those inquiries all had the same lessons to teach.
The whole situation, as has been mentioned by the noble Lord, Lord Kearton, has changed enormously since the Community was first launched. Membership has doubled. The United Kingdom has joined with its

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very special problems. World trade patterns have changed significantly. There has been a prolonged economic crisis and recession. All of this has surely tended to make union more difficult and to encourage member states when in difficulty to draw back into their national shells.
So while the institutional framework of the Community may have been adequate in the earlier days, stimulated no doubt by the inspiration and enthusiasm of many, stemming from great expectations and the problems of history, today it can hardly be surprising that the framework is perhaps no longer adequate for the case.
Some important institutional changes and adjustments are clearly needed. It is encouraging to feel that such a need is becoming more widely recognised throughout the Community. I was very glad to hear my noble friend on the Front Bench making precisely the same point; that some adjustments were definitely needed. Had that not been so, and had that fact not been recognised, surely the draft treaty of February 1984 or the Dooge Committee could never have emerged at all. It was the recognition of need that brought them both into being.
I should now like to make three points. Firstly, I believe it would be quite wrong—and indeed ungracious to the efforts of many devoted individuals in the Commission and elsewhere—to overlook the very real successes that the Community has in fact achieved in many directions—and often, as the report points out, with very limited resources at their disposal. I hesitate to mention the subject which is to be debated later this evening but the common agricul-trual policy has been, in effect, a real success even though at the moment it has run into difficulties. But there have been other successes which need to be acknowledged; so we build on a lot of good but need change.
My second point is that I do not believe that the importance of the United Kingdom being seen today to be totally committed to the Community can be over-emphasised. However difficult some of our rather special problems in relation to the Community may sometimes appear to be, in this context—as I think has been mentioned—the Select Committee totally rejected the idea of a two-tier or two-speed Community. If that suggestion were to be pursued it would, I believe, put the United Kingdom in an impossible position and at the same time be extremely damaging to the Community as a whole.
My third point concerns the question of the treaty. I was very interested to hear what the noble Lord, Lord Kennet, had to say on that. The question we considered was whether an entirely new treaty should be considered or should the line taken be for amendments to be made to the existing treaty. I entirely agree with my colleagues on the committee that the latter course—amendments to what there is already—should be adopted, however that may best be arrived at.
I remember very clearly on one occasion when we met that a witness said to us that he had been present years ago when the original treaty was being discussed. He had first-hand experience of the problems of arriving at a treaty. The way in which he put it
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convinced me that any attempt to embark now on a totally new treaty might be expected to be long, drawn, frustrating and possibly a disruptive exercise that could well be counter-productive to the main objective of closer union. He certainly recommended otherwise. I was very impressed by that point, as I believe we all were.
I have not in my brief remarks—and I intend to be very brief—pursued some of the particular points that loomed so large in our inquiries: the use of the veto, majority voting, the Luxembourg Compromise, greater expedition in the decision-making and execution of business and the proper distribution of responsibility as between the different institutions of the Community. These are of course all immensely important matters and must be put right if the day-to-day working and the monitoring of projects, once they are in motion, are to go ahead smoothly and effectively. These are issues which I think are all covered in the recommendations in our report and with which I fully agree.
However, there is just one conclusion on which I want to say a few words: that is, paragraph 103 dealing with the European Council. As the report points out, and to use its words:
"The European Council has 'emerged'. It now has the vital role in the Community system. But it has no Treaty status."
If it really is to be,
"ultimately responsible for coordinating and directing policy".
surely, as a matter of priority, it must be brought within the treaty institution. Without it, surely the Community will be like a ship without a rudder. Might it not be that this weak link underlies so many of the problems we are here to discuss this afternoon?
5.35 p.m.
Lord Gladwyn: My Lords, I well remember during the war writing papers in the Foreign Office on the possibility of forming some kind of Western European association after it. When the war was over I even found myself soon negotiating, under the direction of Mr. Bevin, the famous Treaty of Brussels which set up what was called the Western Union, on the council of which I then represented Her Majesty's Government. After that, I actually drafted a great deal of the charter of the Council of Europe. When I arrived in Paris as ambassador I witnessed, at close range, the sad collapse of the European Defence Community which, on reflection, was no doubt too idealistic in conception. I witnessed also, with expressed dismay, our own failure to associate ourselves with the negotiations for what eventually led to the European Community.
After retirement from the Foreign Service I sat for some years on the parliamentary delegation to the Western European Union and the Council of Europe, ending, after we joined the Community, as representative of my party on the European Parliament when I became the rapporteur, at the end of 1975, of a report of European security or defence. I am still, of course, associated with the European movement. So I suppose I could say that over some 40 years I have been in the forefront of the many efforts to achieve some form of European Union. It is in the light of that experience that I venture to make a few reflections regarding the

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report now before us and on the production of which—with the possible exceptions of the paragraphs relating to the powers of Parliament—I congratulate the authors most sincerely.
Well, over all these years, although I may have changed my mind in certain minor respects, I have consistently held to one principle: that it is no use—indeed, it is positively counter-productive—to propose the constitution in this part of the world of a federation in the usual sense of that term; namely, a union with a directly-elected president, a sovereign parliament, federal armed forces, a federal police and a federal foreign service under a federal Minister of foreign affairs.
Federations of this type have been formed elsewhere, of course, notably in the United States of America, and have functioned satisfactorily. However, the 13 original American colonies had a common language, religion, law, history and social practices. In Western Europe these conditions, or anything like them, do not exist. So a federal union in this part of Europe of the type described is almost inconceivable. It might possibly be considered by some of the democracies concerned—notably the Italian—but if it or anything like it actually came before the various parliaments for ratification it would, I feel sure, certainly be rejected by the majority of them.
Wherein, then, does the unifying principle lie, the adoption of which will result in that closer European union which in the opinion of, I think, most Members of this House is essential if we are not, individually, to sink into the position of impoverished client states of one or other of the super powers? It lies, as we all know, in the acceptance by all concerned of certain supra-national obligations involving the taking by a Council of Ministers, usually by a qualified majority vote, of decisions on the recommendations of an independent commission—the brilliant notion which Jean Monnet succeeded in grafting into the Treaties of Rome—all with the advice and, increasingly, the consent of a directly-elected European Parliament.
There is no reason why this genial conception should not have worked reasonably well and have resulted by now in a Community which, though necessarily less effective than a full-blown federation, would have been an economic entity capable as such of playing a role in the world not much less significant than those of the super powers. The reason why as yet it has not so resulted is very simple, in my humble opinion. It lies in the adoption in 1966, at the instance of General de Gaulle, of the so-called Luxembourg Compromise, which, I think cannot be denied, permitted and indeed encouraged the indiscriminate use or threat of the famous "veto" and which has thus seriously delayed the general progress of the European idea. At last, after 20 years, no doubt with the prospective arrival of Spain and Portugal, this truth is largely accepted and a drastic revision of the so-called Luxembourg Compromise is thus perhaps the principal recommendation of the sub-committee which we are now considering.
It is also in effect the chief recommendation of the admirable, as I think, Dooge Report, the full text of
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which has happily been produced by the committee, though of course both the Dooge Committee report and our report which we are now considering to some extent have been overtaken by events, owing to the progress of the negotiations now going on for a European Union. Though the committee does not say so, it would seem that, with a couple of exceptions that I shall refer to later, it approves of the Dooge Committee as a whole. I speak subject to correction, but that seems to emerge from the report. Certainly Dooge's proposals, in my own view, offer far better grounds for advance than those contained in the draft treaty, approved by a considerable majority of the European Parliament at the instance of its originator, Mr. Spinelli, which even if approved by all the parliaments, I feel could hardly function without the application of further frankly federal measures.
However, the Spinelli report contains some interesting ideas; for instance, the distinction between "common action" and "co-operation", and I am a little surprised that such short shrift was given to it in the report that we are now considering. But even Spinelli contemplates, for a provisional period of 10 years, some sort of national veto. So let us get back to what is that essential point.
It looks as if (Spinelli excepted) we were confronted by three different proposals for reform. First, there is the Select Committee's conclusion that,
"a Member State should be entitled to invoke only a vital national interest"—
and "vital" is underlined, which must only be used in the most exceptional circumstances; and that,
"the Head of State or Government must explain to his colleagues on the European Council why such an interest is at stake".
Next, there is the opinion of the majority of the members of the Dooge Committee; namely, that,
"decision (in the Council) must be taken by a qualified or a simple majority. Unanimity will still be required in certain exceptional cases … the list of such cases being restrictive"—
I am not quite sure what is meant by that.
"The Presidency must call a vote if the Commission or their Member States so request. The vote must be taken within thirty days".
Finally, in the Dooge Committee a minority, consisting of the representatives of the United Kingdom, Denmark and Greece, think that,
"more use will need to be made … of the majority voting provisions of the treaty",
and that, after a reasonable time,
"the President should call for a vote",
but that—and this is the crucial point—
"when a Member State considers that its very important"—
that is my emphasis—
"interests are at stake, discussion should continue until unanimous agreement is reached".
If I heard aright the noble Baroness, Lady Young, I think that is a formula which is accepted now by Her Majesty's Government.
It will be seen that the most radical proposal is probably that of the majority of the Dooge Committee, the next most radical proposal is that of the Select Committee, and the least radical, which really does not depart very much from the Luxembourg Compromise, is that supported by Mr. Rifkind with the not unexpected support of Denmark

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and Greece, neither of which states has shown any enthusiasm for the idea of any meaningful European Union at all.
I do not know how many of your Lordships will be prepared to accept the formula proposed by the majority of the Dooge Committee which I have read out. I need hardly say that I myself have accepted it, along with many committed Europeans in this country I believe, but if it should not be acceptable to the Government, then at least I hope that on consideration and in accordance with what I hope will also be the majority in this House they will prefer the proposals of the Select Committee to that which they presumably instructed Mr. Rifkind in the recent negotiations to plump for. Cannot they possibly have a change of heart?
I have one further general observation to make which concerns European defence—or security, which perhaps is a word more palatable to some people. The whole of Section C in Part II of the Dooge Com-mittee's report—which, incidentally, except as regards the veto, unless I am wrong appears to have been approved by Mr. Rifkind—is devoted to political co-operation, in which defence necessarily plays an important, and indeed an essential part. However, unless I am wrong, it is not referred to at all again in the Select Committee's report, apparently on the grounds that defence, or security, is not covered by the treaties. Of course it is not, but it is or should be part and parcel of the machinery of political co-operation which has now been functioning for many years. In practice it cannot be totally differentiated from the machinery set up under the Treaty of Rome. Consequently, I shall only ask whether Section C of the Dooge Report, which happily embodies various proposals made as long ago as 1975 in a resolution which, with great difficulty, I myself managed to get through the European Parliament, is now broadly acceptable to Her Majesty's Government? I suppose it is, but I should like it confirmed.
A second question follows. Even if such proposals are not accepted by certain other members of the Community—and how could they possibly be accepted by Ireland, which is officially neutral?—would we be prepared to see them accepted and applied by such members of the Community as are prepared to do so? So far as political co-operation is concerned, it is evident that this would result in a sort of two-tier Europe; but why not? The arguments against a two-tier Europe advanced by the committee in respect of the machinery of the EC itself are no doubt valid, and I would not dispute them, but there is no apparent reason why decisions taken in the vital realm of defence outside the treaty should necessarily apply to members who, for one reason or another, cannot accept them. After all, they only need to abstain. Surely, if the veto of a small country such as Denmark is to apply in this highly important and vital sphere, the whole future progress of the projected Union on the political side will be vitiated?
There is, of course, still a general danger. I suppose it is possible that what might be called the "core" of the EC—namely, Germany, France, Italy and the Low Countries—may decide to go ahead on the basis, not so much of Dooge as of some more federal plan, which is perhaps not very different from the essential points
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made by Spinelli. If this were to happen, then I repeat that I agree with the sub-committee. Since I do not think our Parliament would approve of any federal plan, a two-tier EC, as I have already said, would be unlikely or even impossible to work in that respect. Perhaps if the Government see fit to accept the Dooge proposal on majority voting, the danger, which is a real one, might be averted. Therefore, I finally ask the Government whether they think that there is any foundation for such apprehensions as these?
I said at the beginning of my remarks that there were two points on which apparently Mr. Rifkind differed from his colleagues. The first was on decision-making, which I have already dealt with. The second was on the power of the parliament. I very much hope that the Government will eventually rally to the proposals of the majority of the Dooge Committee in this respect also. The difference between what Mr. Rifkind was suggesting at the instance of the Government and what the Dooge Committee report suggested, if read with attention, did not seem to me to be totally irreconcilable. I have no doubt that if the Government went as far as that it might again help to avert the danger of a split in the EC, which would clearly be a disaster for all concerned. I wonder whether the noble Baroness when she winds up the debate will be able to deal with this point also.
5.50 p.m.
Lord Rodney: My Lords, I start by congratulating the noble Lord, Lord Kearton, on his excellent speech, which gave an admirable resumé of our report. I should also like to compliment him on the expert way in which he directed our inquiries in the subcommittee.
The European Community is a ready target for the media. It is all too easy to point to its shortcomings, but, regrettably, the advances that have been made and the advantages that derive from membership are seldom newsworthy. It has to be admitted that in recent years progress along the road to implementing the Treaty of Rome has been painfully slow. But is it not remarkable that politically we now have a situation in Western Europe where conflict among the countries of that area is unthinkable, whereas only some 40 years ago we were emerging from the most horrendous world war that mankind had ever known and in which the majority of the protagonists were those very same countries?
Then again on the economic front all customs duties for the six founder members were abolished in 1968, and the same process is applied to all new members within three or four years of their joining the Community. In conjunction with that a common external tariff for imports has been established for all members, thus forming the basis for the largest single market in the world. We can add to that the magnificent strides which were made up to 1973, with an increase in internal trade of some 600 per cent, whereas world trade for the same period grew by only 250 per cent.
It cannot be denied that initially significant progress was made, but that is where the good news ends. Since then the internal market has, if anything, declined. There has been a logjam of proposals submitted by the Commission to the Council of Ministers, and

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indecision and disenchantment have replaced the original enthusiasm. There is no doubt that the world recession has played a large part in the stagnation which set in, but it went beyond that. The idealism faded away and narrow national interests took its place.
The aims of the Treaty of Rome can for convenience's sake be classified under two headings: first, the political dimension; and secondly, the internal market. I would not want to say that one is more worth while than the other or that they are unrelated and can each be put into their own pigeon-hole, but I believe that steps to achieving the internal market are clearly definable. In fact, the recent White Paper did just that. Therefore, given resolve and good will, that is an attainable goal. The political dimension is much more difficult to define and consequently that much more difficult of attainment. I agree that the major effort should go into achieving a genuine internal market with all the advantages that will accrue in improved employment possibilities, a higher standard of living for Europeans as a result of greater wealth creation and a more prestigious standing for the Community in the world.
There is a spin-off from that which I consider most important. At the present time the attitude to Community membership is lukewarm, public interest is minimal and proposals emanating from Brussels are for the most part unwelcome. But might not the whole climate of public opinion change if a thriving internal market could be achieved, creating the largest single market in the world, larger than either the United States or Japan; and might not the approach to closer political integration be greatly facilitated with the creation of a spirit of Europeanism rather than of nationalism?
If one reads the brave words uttered at successive summit meetings and compares them with the little progress made, is it surprising that cynicism and disbelief have crept in? Many of your Lordships will remember the report on the internal market debated in your Lordships' House on 13th December 1982. In it were listed the main obstacles to a common market, among which were border delays, administrative barriers, documentation requirements, statistical collections, transport quotas, VAT procedures, and so forth. Incredible as it may seem, three years later the list is almost identical. Is it a wonder that the business community views all ministerial pronouncements with scepticism? They have heard it all before.
But I believe that there is a glimmer of hope for the future; and here I must say how impressed I was by the atmosphere of optimism among the people we met at the Commission in Brussels. Some of them have been there for very many years but they have managed to retain their enthusiams and dedication in spite of the evident frustrations to which they must have been subjected.
Apart from that, I suggest that hope stems from an economic climate which is much more conducive to progress; and the unemployment situation is, I believe, a powerful political incentive to action rather than words. The Heads of State and Government pledged themselves (granted, once more) in Brussels in March of this year to the completion of the internal market by
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1992. In June in Milan the Commission's White Paper was welcomed (granted, with some reservations) and instructions were given for the establishment of a precise programme. That has been followed very rapidly by a draft directive issued by the Commission in July.
I think that here it is appropriate to commend the achievements of the noble Lord, Lord Cockfield, in Brussels. He has certainly proved a happy choice as our senior Commissioner. If he can maintain the momentum that he has achieved in his first 10 months, I think the grounds for optimism will not have been misplaced.
But most important of all, there is just the possibility that the political will to achieve a true internal market is being rekindled; and I submit that in the final analysis that will be the factor which will decide whether or not the 1992 target date is achieved.
5.58 p.m.
Lord Broxbourne: My Lords, the concept of European union belongs to that considerable category of concepts which as generalisations win universal assent and acclaim, only to encounter difference and disagreement when practical effect is sought to be given to them. I think that today we must concentrate on the practicalities of this matter, and that to some extent means a dichotomic debate—on the one hand, Spinelli; on the other, other and perhaps more practical approaches.
To reject many of the proposals of Spinelli, as I feel constrained to do, does not imply any disrespect. It may seem perhaps a poor return for the Herculean labours involved, but so far as the authors of the report and the treaty are concerned, I recognise the high purpose which animated their endeavours and respect the conscientious industry which they devoted to their task. Nevertheless, I do not believe that the product of these protracted labours, three years of work and four years since the committee was set up, is something which can give practical effect to the generalised concept of European union.
I am reminded of the phrase sometimes applied by my headmaster to my efforts to translate Thucydides, "ingenious, but incorrect"—not altogether surprising, I think, considering the provenance of the report and the draft treaty. As your Lordships know, it is the product of the Committee on Institutional Affairs of the European Parliament. This committee did not exist before 1979. In those days in what I suppose we must now call the unreformed parliament, although it had the advantage of being in closer touch with the national parliaments and the member states—I am glad that my noble friend with all his great experience agrees with that—these matters were dealt with ad hoc by the political committee and the legal committee of that Parliament. Of course, to set up a specialist committee with grandiose terms of reference is an invitation to produce a grandiose and imprecise report. That is one of the political laws of nature, and has happened in this case. The difficulties and weaknesses of committee drafting are well known, but in this case they are aggravated by special difficulties.
My Lords, we get an indication of the climate and content of the committee discussion from the

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memorandum on Page 307 of the Report of the Select Committee by my respected friend Derek Prag, MEP for Hertfordshire where he says that the main struggle was between advocates of an ideal federal constitution versus pragmatists. The inevitable result is a draft lacking in precision and practicality. In reading some of its provisions I am reminded of the dictum about a document emanating from Lloyd George's Cabinet: "Only God and the Cabinet knew what this was intended to mean, and now only God". I find much cogency in the objections spelt out in the Foreign Office memorandum. In my view, these proposals are unsatisfactory in three fundamental respects; first, the relationship of the suggested union with the existing Community; secondly, the provision regarding legislative procedures and decision-making in Article 38, and, thirdly, the provision for the taking effect of the proposed treaty in Article 82.
On the first of these matters, Article 7 of Spinelli provides that the union shall take over Community patrimony. That is not phraseology easily comprehensible to British lawyers at any rate, nor do I think the phrase from which it is translated, acquis communautaire, is much more explicit. The article goes on to preserve the basic provisions of the EC treaty where they are not explicitly or implicitly amended by the new treaty. Implicit amendment by so complex a document may well give rise to considerable doubt and dispute.
Finally, Article 7 preserves the other provisions of the existing treaty in so far as they are not incompatible with the proposed new treaty—if anything even more open to doubt and difficulty in its interpretation than the provisions regarding implicit amendment in Article 7.
The second weakness is in regard to the provision for legislative procedures and decision-making, and the importance of this is clear from Article 42, whereby the law of the union once established would become directly applicable in member states and take precedence over national law. Unfortunately, the evolution and enactment of such laws is less clearly stated than their effect when enacted. The voting procedures and resolution of disagreement dealt with in Article 38 are complex, lengthy and difficult, and hardly constitute a reassuring basis for laws so far-reaching in their application and so absolute in their effect. On the provisions for taking into effect, the objections are succinctly stated in Paragraph 11 of the Foreign Office memorandum, and I need not seek to gild the lily.
The necessary rejection of some of the grandiose proposals in Spinelli does not imply, and should not dictate, a negative approach. On the contrary. In my view, it reinforces the need for a positive approach giving effect as fast and fully as possible to existing treaty requirements in what is, after all, an economic community. That involves practical steps for establishing the internal market, as was said by several noble Lords in this debate, steps specified and recommended in the report of the Dooge Committee and the Cockfield White Paper: free circulation of goods, free movement of capital, common transport policy and the like—all excellent objectives.
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I refer specifically to only two matters. First, for what my view is worth, I accept the conclusion of the Select Committee. I should like to join in with my tribute to the members of the sub-committee, and to the noble Lord, Lord Kearton, for his admirable chairmanship thereof. I accept for what my view is worth its conclusion that the United Kingdom should participate in the exchange rate mechanism of the European Monetary System. I say "for what my view is worth" because I am bound to tell your Lordships that in matters of high finance and taxation my first instinct is to call for an accountant or an aspirin, or sometimes both simultaneously. But it does appear to me, as very much a layman in that sphere, that this mechanism seems a natural and necessary ingredient of an economic community, and participation would seem to be both helpful and appropriate.
There is one other matter in the economic sphere of which little or no mention has been made, certainly not in this debate: what has happened to the projected European company and the related subject of the two-tier board and workers' participation? These were matters keenly canvassed in the European Parliament and its Legal Committee in the early days of British entry. We had high hopes of them, particularly in the context of workers' participation with representation on the supervisory board and through the workers' council. This would have advantages nearer home than the European scene. Worker participation, influencing and advising management but not obstructing or usurping its functions, could help to replace the concept of two opposing sides in industry by a constructive approach to what should be the common objectives of all. I believe it could be an emollient influence in a troubled world and could inject new strength and spirit into our industrial and commercial endeavours. So I ask the question, to which I hope my noble friend will have a reply: are these possibilities now lost sight of, or is there some hopeful progress that she can report?
May I briefly say a final word on political cooperation and institutional matters? Of course, political co-operation between like-minded European nations is desirable in a difficult and dangerous world, but it is not constitutionally appropriate that it should be sought through the mechanics of an economic structure like the EEC. I am doubtful if it requires any treaty provision at all, since it is a matter for political agreement and goodwill. If further machinery is required beyond the existing NATO procedures and in a less formalised context, it should be formed outwith the Treaty of Rome, whose objectives do not extend to this.
On institutional matters, as your Lordships know, the Treaty of Rome divided decision-making into three categories: the simple majority, the qualified majority and unanimity for certain important articles like Articles 100 and 235. Then, the Luxembourg compromise qualifies majority decision by postponing decisions where very important interests are involved until unanimous agreement is reached. Of ourse, this does not constitute an ideal instrument in the eyes of lawyers. But, on the whole, it works, not so much perhaps in its actual operation as in its background and influence. Spinelli would, by Article 23, phase out the veto after 10 years during which the postponement

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of vote would depend on matters of vital national interest. The Select Committee, at Paragraph 48 of its report, while retaining the veto in principle, suggest the replacement of "very important" interests by "vital" interests and also that the head of state or government must explain to colleagues on the European Council why such an interest is at stake.
I have two reservations about these well-intentioned proposals. The change from "very important " interests to "vital" interests might well turn out to be a matter of semantics. A nation that wishes to veto on the grounds of very important issues will have no difficulty in envisaging those same interests as vital. Secondly, is it not rather naïve to suppose that the obligation to explain will embarrass or deter national statesmen in making their case? Can one really envisage the majestic presence of President de Gaulle or indeed, in contemporary terms, the elegant presence of our own Prime Minister abashed and crestfallen conceding their case and abandoning their veto under such a requirement? There may be those among your Lordships who think that such a consummation is devoutly to be wished. I must ask you to believe that in terms of reality the prospect is remote.
Therefore, I conclude by saying this: the better course is the practical one. Retain the principle of the veto as a necessary fact of political and national life but continue to explore ways and means of extending and improving majority voting. This, on the institutional side, combined with measures to improve the internal market within the ample scope and provisions of the Treaty of Rome, will be work enough for statesmen without involving themselves in visionary aspirations and unrealistic endeavours outwith the structure and beyond the contemplation of the Community of which we are part.
6.13 p.m.
Lord Ezra: My Lords, there is no doubt about the timeliness of this debate. At the present time, the intergovernmental conference, set up as a result of the meeting of the European Council in Milan, is deliberating and preparing its report to be submitted to the next meeting of the council in December. According to informed or normally informed newspaper reports, such as that in the Financial Times of 14th October, all the proposals from governments have not yet been received or considered by this inter-governmental conference. We are therefore in a position, with the presence here of the noble Baroness, Lady Young, to make suggestions as to what the United Kingdom Government's proposals might be, if they have not already been submitted.
I believe that a degree of consensus is already emerging in our debate this afternoon, with some differences of emphasis. We have been helped in developing that degree of consensus by the admirable report presented by the noble Lord, Lord Kearton, and his colleagues. What we all feel, I believe, is that a priority objective is the completion of the internal market and that, in addition, we should seek to consolidate and build on the progress made in political co-operation among member countries.
The question arises, however, as to how we are most effectively to achieve these objectives as a further step
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towards union among the countries of Western Europe as defined in the treaty. I believe that in order to achieve these desirable objectives, based upon the proposals put in the report and in the other documents emerging from the Community, three orders of action need to be taken. The first is that there has to be a clarification of the institutional framework of the Community. For a start, there is defacto a new institution; namely, the European Council. That needs to be brought within the scope of the treaty, and its rights, duties and obligations need to be clearly defined.
The Council of Ministers has been referred to a number of times in the debate. There is little doubt that it has gone beyond, in its practical operation in recent years, what was originally intended in the Treaty of Rome. It meets in no less than 17 different formations. It is tending to do more and more the work that most of us who have been concerned with the European Community thought should have been reserved for the Commission. So the Council of Ministers needs to be brought back to what it was originally intended to do and concern itself with major issues of policy in the different spheres of action rather than in their detailed implementation.
The Commission correspondingly needs to be given back its original powers. The Commission was there to make proposals to the Council of Ministers, which would deliberate on a collegiate basis and then, according to the methods of voting laid down in the Treaty of Rome, decide what needed to be done. This, in practice, has not worked particularly well. So we need to give the Commission back its original powers and authority.
So far as the European Court is concerned, I believe that the report of the sub-committee has made some very useful suggestions. I feel that these would be well worth following up. Finally, so far as the parliament is concerned, this is the one area where I feel that the Select Committee report has been perhaps inadequate. I was very impressed with the remarks made by the noble Baroness, Lady Elles. We had the good fortune of having her speak in this debate as someone who is a member of that parliamentary institution. I believe that her view that that institution, now that it is directly elected, should be given progressively enhanced powers was a very cogent one, and that we should be looking carefully at that issue. For a start, I believe that the whole process of consultation needs to be firmed up and taken much more seriously.
Secondly, we ought to consider whether some form of legislative role of a limited nature might not be entrusted to the parliament. If that cannot be done, then at least its consent should have to be sought on certain specific occasions. The parliament has indeed been given powers—very extreme powers. It can get rid of the whole Commission; and it could hold up the budget. But in my opinion these powers are much too extreme to be the only powers that it possesses. We need some intermediate powers to make it a more effective body.
If we could have that degree of clarification of the institutional framework, then we come to the second major issue which has to be dealt with and which has been referred to throughout this debate; namely, the problem of the Luxembourg Compromise and the

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veto. Here I should simply like to say that I believe that the recommendation made in the report of the Select Committee is a very reasonable one. If we can get the European Council to become part and parcel of the institutional framework of the Community, then it seems to me to be right and proper that where vital interests are involved and a government wish to impose a veto then they should have to do that in writing to the top level within the Community, which would be the European Council. Those are two of the issues which I feel need to be addressed in order to achieve our objectives; namely, clarification of the institutions and dealing with the question of the veto.
Thirdly, I think that we need to incorporate within the treaty the whole question of political co-operation which has developed very effectively alongside the main treaty activities and has served the Community very well to an increasing degree. However, here again we need to bring that matter within the ambit of the treaty.
There is another development which I feel has to be introduced within the ambit of the treaty and that is the European monetary system. That, again, has developed on the side but needs to be integrated within the treaty. Here I must say that I fully join with my noble friend Lord Kennet, the noble Baroness, Lady Elles, and the noble Lord, Lord Broxbourne, in proposing to the Government that the time is indeed now ripe for us to join the exchange rate mechanism. It is particularly ripe because if we are committed to the objective of introducing a complete internal market within the Community—and I am very impressed with what my noble friend Lord Broxbourne said a few moments ago—it is inconceivable that that could work effectively unless we also try to make sure that there is some greater stability of exchange rates, which the other members have achieved but on which so far we have been reluctant to take the final step.
Whether all this could be done as a series of amendments, or whether the matter needs to be looked at as a new treaty, I feel should be left an open question at this stage. We do not yet know what the other countries would like to propose. We do not yet know the extent to which the European Council will agree that there should be amendments of greater or lesser importance. Therefore, I feel that we should leave the matter open. I am in favour of doing it whichever way is likely to be the more effective. It sounds as if amendment rather than a new treaty negotiation would be more effective. On the other hand, if there are amendments of such importance and of such an extent, it might be simpler to introduce a new instrument altogether. So I hope that that question can be left reasonably open.
To sum up, in order to achieve the things which we want to achieve as a next step in the development of the European Community we need to ensure that the procedures are brought up to date. We need to.ensure that there is clarification about the rules and regulations affecting the institutions. Above all, I should like to associate myself particularly with what the noble Lord, Lord Rodney, had to say: underlying all these changes there must be a common political will to make progress.
6.25 p.m.
Lord Reay: My Lords, I should like to start by joining with other Peers in congratulating the Sub-Committee on European Union under the chairmanship of the noble Lord, Lord Kearton, for having introduced an admirably sensible and succinct report. They received outstanding evidence. I was not a member of that sub-committee, but I had the good fortune to be present on one occasion to hear a brilliant contribution from Mr. Christopher Tugendhat, who had recently retired as commissioner and was therefore able to combine experience with, for the first time, independence.
I should next like to say how pleased I am by the constructive approach which has been taken recently by Her Majesty's Government towards the intergovernmental conference. Speaking in another place on 24th July the Foreign Secretary said:
"Our objective throughout is to achieve effective changes in the decision-making procedures of the Community because we believe that it is an essential British interest for the Community to be able to function more effectively and for the United Kingdom to be in the mainstream of developments to that end".—[Official Report, Commons, 24/7/85; col. 1061.]
Speaking in Bonn earlier this month the foreign Secretary, in a speech to which my noble friend Lady Elles has already referred, deliberately contrasted a failure on Britain's part to appreciate the significance of the Community in its early days with our attitude now. He said:
"There is no such failure to understand the importance of the changes that are taking place in Europe today. In Britain we are in no doubt about the significance of today's European agenda".
In other words, the Foreign Secretary has been at great pains to explain that we are not to be regarded as Europe's odd-man-out.
I have one central point which I wish to make, which is this. I think that Her Majesty's Government should make it their strategic priority throughout the conference until it finishes towards the end of the year, a determination not be isolated from France, Germany and Italy, as they were at Milan. I think that the Government made a mistake in voting against holding the intergovernmental conference, even though I know that the Government had good arguments and that the vote was sprung on a council which was largely taken unawares. Nevertheless, the consequence of this impulsive vote, with its isolating result, has been, and must continue to be, a long and dedicated deplomatic repair job to ensure that our partners do not spend their time preparing a special side road for us to follow, off the beaten track, together with perhaps the Greeks who, in the words of a recent Financial Times editorial, seem to treat the Community as nothing more than a source of development finance, and the Danes, while the remainder forge Europe's future.
When France proposed last week that member states should be excluded from new EC policies if they cannot approve them, one cannot but suspect that she had Britain in mind. We must not forget that our refusal to join the exchange rate mechanism of the EMS marks us out as a reluctant Community member, however good the reasons may be for us to have remained out orignially, and however difficult it is to judge the right moment to step into the system. I

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should like to add here in parenthesis that I think the right moment to do so is probably not today, owing to a considerable underlying difference in the rate of inflation between us and our Community trading partners as a result of rising unit labour costs in this country. But if this country is not to be pushed out of the mainstream of Community life during the course of the conference, what might we have to be prepared to put up with?
For one thing there is the question of treaty amendment. Her Majesty's Government do not believe that treaty amendment is necessary to achieve improvements in Community decision-taking. Accordingly, they have not laid any proposals before the conference which they had not already Iaid before the summit in Milan. But this is probably a minority view; otherwise, there would not have been a favourable vote for calling the conference, the purpose of which, after all, is the consideration of treaty amendments. Therefore, the Government are wise not to rule out treaty amendment absolutely; but they may find that they have to go further and eventually accept it, whatever their own preference.
Then there is the question of rhetoric. In the past the Government and government officials have shown an almost passionate contempt for the concept and the phrase of "European union". On 2nd July in another place, at col. 199, the Prime Minister said:
"I wish that we could drop the phrase 'European union' ".
However, now an attempt seems to be being made by the Government to swallow the phrase after all. The Foreign Secretary, in the excellent speech which he made in Bonn on 3rd October, went out of his way to give the impression that the Government will try to live with the phrase. He quoted Churchill on a united Europe; and he quoted the Treaty of Rome, to which the Treaty of Accession commits us, on an ever-closer union. He quoted past summit communiqués signed by British Prime Ministers, including the Solemn Declaration of European Union signed at Stuttgart in 1983 by the Heads of Government. He then concluded:
"It should be obvious from all this that Britain is not afraid of European union".
Those words were repeated this afternoon by my noble friend the Minister. The Foreign Secretary went on to say:
"Such a union exists now today and I have no doubt it will be stronger tomorrow".
In view of all this, if there were to be an amending treaty I think it would be inconsistent—and it certainly would be seen as being inconsistent—for the Government to refuse to accept in its title the words "European Union".
Then there is the question of powers for the European Parliament. The Germans, Italians and French last week all submitted proposals concerning an extended role for the European Parliament. The Italians appear most enthusiastic for increasing its powers. On the face of it, however, an expansion of the role of the Parliament—certainly anything like the joint decision-making with the council which was proposed by the Dooge Committee—seems hardly compatible with the goal of speeding up the Community's own decision-taking procedures.
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However, this point cannot be lost on the French and Germans. Like Her Majesty's Government, I am sure that they will want the last word to remain with the council. In fact, the German proposals for extending consultation procedures between the council and Parliament seem in principle not too far removed from that which the United Kingdom has supported in the past. They involve an extension of the present consultation procedure.
In any case, something will have to be done to increase the role of the European Parliament. To do nothing, I submit, would be to break faith with the decision to proceed to direct elections. I suggest that it would also be seen as an inappropriate response to the European Parliament's own role, by means of the Spinelli Treaty, in having sparked off the whole process of institutional stocktaking which has led to the intergovernmental conference, as was described by the noble Lord, Lord Kearton, and by my noble friend Lord Broxbourne. On this question I think that Her Majesty's Government should try to stay in the middle of the pack and, as my noble friend Lady Elles said, not be the one to block progress.
Although views about the means and the degrees differ, all parties agree that there needs to be more voting by qualified majority in areas defined in some way, either by subject, as they are in certain specific articles of the treaty, or perhaps more hopefully by policy area where the mainline of action has been taken by a unanimous decision. It is generally accepted that curbs must be imposed on the persistent abuse of the Luxembourg compromise, although its retention, perhaps in some other form—at present it does not even have legal status—will I am sure be upheld. I accept the point that, whereas the unanimity requirement has resulted in failure by the council to take decisions on hundreds of Commission proposals, as has been pointed out this afternoon, nevertheless by the same token it has meant that many of the proposals have not been voted out but still lie on the table for possible adoption in the future.
On the question of the number of commissioners, if I understood my noble friend the Minister correctly, I think that the Government should think again as to whether they really want one commissioner for each country. As Mr. Tugendhat pointed out in his evidence to the sub-committee, this would give a built-in bias in favour of the small country; that is to say, in favour of the big-spending country. I wonder whether the Government really want that. I think that they should reconsider the possibility that there could be 17 commissioners for a Community of 12. I wonder whether, in fact, that would necessarily be excessive for a Community stretching, as it will, from Elsinore to Cape St. Vincent. There could perhaps be senior and junior commissioners. I would prefer the Government to re-open their mind on this subject.
There is a great need for the Community to make progress again. Unless it moves forward it will break apart, particularly with the accession at the end of the year of Spain and Portugal, and the approach once again of a financial crisis caused by the apparently unstoppable excesses of the agricultural policy. Politically it must move forward in order to help prevent Germany falling for the dangerous illusions of reunification. Nor will the United States put its own

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population at risk to defend a Europe in the process of Balkanising itself. And what an irresistible provocation for Soviet expansion would also be provided by such a development!
Therefore, the stakes are very high. Economically, it is widely realised that the continental-size market of the EEC must be made into a single market if all European countries are not be be relegated to second-rate industrial and commercial status.
For all of this a joint effort of will is required. Yet sometimes this country behaves as if it does not appreciate what is involved in nurturing a friendly relationship with a continental neighbour. I should like to ask rhetorically: what was the point of offering New Zealand assistance at the very moment when it was France which had fallen to a nadir of embarrassment over the Greenpeace affair? My noble friend Lord Bruce-Gardyne has already, quite rightly, used his column in the Sunday Telegraph to rebuke the Government on this matter. To borrow a French phrase, it was an opportunity lost to keep quiet.
Too often we spoil things by rudeness. There is no point in always loudly insisting that we know how to do things best; in demolishing everyone else's arguments before constructing our own, which often, after a lot of ill-will has been caused, produce a remarkably similar conclusion; in particular in praising our own pragmatism—which is not pragmatism if it succeeds only in arousing animosity between us and our friends and allies—at the expense of others' so-called dreams. A truly pragmatic approach has to include a pragmatic assessment of its own diplomatic consequences.
Let me conclude by suggesting that there is no reason for failure at the intergovernmental conference. Most countries want progress, and have an interest in progress. There is no reason why the conference should not succeed, and can then be used to build a rapid development of Europe's political and economic unification. What is required is a constant eye on the main goal. Let us hope that this time the governments of the Community will not lose their way in philosophical sterilities or national or personal animosities, but collectively see the immensely important task they have set themselves right through to the end.
6.41 p.m.
The Earl of Bessborough: My Lords, we must all be grateful to the noble Lord, Lord Kearton, for having produced his admirable report, introducing it so lucidly, and inspiring what so far has been a fascinating debate. I must say that I agree with the report and conclusions—that is to say, that there is no need for a new treaty. We are not keen on precise, written constitutions in this country. I agree nonetheless that more majority voting in the Council is essential, even if an ultimate right of veto is retained in some form.
As I have explained in considerable detail on more than one occasion in your Lordships' House over the past seven years I believe, with my noble friends Lady Elles and Lord Broxbourne, and I think with my noble friend Lord Reay, and certainly with the noble Lord, Lord Ezra, we should join the exchange rate mechanism of the European Monetary System, in the not too far distant future.
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Having said this, I must admit that, speaking entirely personally, ever since Count Coudenhove Kalergi's pre-second world war thoughts about a United States of Europe, and certainly after Sir Winston Churchill's advocacy of it after that war, I have been something of a loose confederalist. ! think this is partly due—and here I suppose I should declare a kind of multiple interest—to the fact that 1 had a French mother, close ties and knowledge of the working of the Canadian confederation, to say nothing of a Greek son-in-law, an Italian nephew whom my noble friend Lord Thorneycroft knows well, and of course many close friends and relations in all the present and indeed future Community countries (that is my multiple interest) and even an American wife, in whose country citizens of every European stock seem to be reasonably happily united. All this has had some influence on my thinking.
I was sad therefore to read the somewhat depressing article by Mr. Apple of the New York Times in the Sunday Times yesterday that European unity remained a distant vision, and that typical Britons feel little sense of identity with their continental cousins. That depressed me yesterday. I realise that western Europe is different from the United States, or even the People's Republic of China, which is also a federal state, and it is to those two great countries to which I have been travelling most in recent years. It is there in the United States as well as in China where I have found, and still find, so many people asking me why we have not in western Europe achieved a greater degree of integration and union; not only an economic and a genuine internal common market which begins to exist, but also a greater degree of political union as well as a European industrial and energy policy as effective as—or perhaps I should say more effective than—the kind of wasteful, common agricultural policy which for good or ill exists and which is to be debated later tonight. That is why I have been sympathetic to the idea of creating a loose confederation, perhaps somewhat on the lines of Canada, with each member state nonetheless retaining its own sovereign or presidential head.
I recognise however that this is not practical at present, and also that there seems little support in this country even for the relatively modest terms of the proposed Spinelli Treaty and the Dooge Report, to which I think every other noble Lord has referred. Therefore in recent years I have tried to be severely practical—like my noble friend Lord Broxbourne—in this sense and have urged, as indeed I am glad to see that Her Majesty's Government are doing, a breaking down of existing technical barriers to travel and trade; and of course I strongly support the views of my right honourable and learned friend Sir Geoffrey Howe in his recent speeches, as well as the admirable proposals of my noble friend Lord Cockfield, vice-president of the European Commission. All these are good steps in the right direction.
As your Lordships know, I have always—certainly for some 25 years—been advocating greater scientific and technological co-operation in Europe. This has to some extent been achieved not only through the European Torus at Culham which we discussed last week, but also through ESPRIT, the European Strategic Programme for Research in Information

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Technology, which was referred to by my noble friend Lady Elles. Indeed, I would support EUREKA too, even if I believe that we should also join the United States in their strategic defence initiative.
I am glad to say that western European co-operation in space seems to be effectively achieved through the European Space Agency. But I have for many years thought that we should achieve greater unity in defence, which has more or less been achieved through NATO. Like the noble Lord, Lord Gladwyn, I greatly regret the collapse of the European Defence Community in the 1950s.
Here I might add that when as an MEP I used to have meetings with NATO in Brussels, I would find considerable support for the proposition that the Community should have its own defence policy, even if this is not recognised in the Rome Treaty. I then also at that time also found positive support in NATO for debating defence in the European Parliament, and we debated this on more than one occasion during my period in that Parliament. But it has always seemed to me that we should not only have greater unity defencewise but also industrially, expecially when European firms are trying to increase their trade with such a vast country as the People's Republic of China. I regret that the EEC-China Trade Treaty, which was signed in the late 1970s, has not been implemented to the extent that I hoped it would be.
I greatly regret that the kind of sectoral industrial working parties contemplated in that trade agreement have not been set up, and that in our trade negotiations with China we have not—certainly individual firms have not—been able to present a united front in assisting the People's Republic to develop its own high technology in a way in which I know they wish to do.
As my noble friend Lady Young knows, I had the good fortune to lead a science and technology mission to China almost exactly a year ago in the company of the noble Lord, Lord Kearton, who opened this debate so effectively. The main object of that visit was to show the Chinese that it was not only the Japanese and the Americans who were capable of assisting China to develop its new technologies, but that we in Britain and the European Community could also help them. I hope that the Government will give some thought—it will not be easy for them—to the possibility of setting up such joint Sino-European industrial working parties.
Finally, in so far as political union is concerned, political co-operation, as has already been said this afternoon, is working reasonably well; but I hope very much that the European Parliament might develop more on the lines of your Lordships' House as a forum for the scrutiny and revision of European legislation. Having been a member of that Parliament for six and a half years I believe that the European Parliament could play a greater revising role in this respect. I am glad to learn, as I understand it and as I understood it more or less from my noble friend Lady Young at the beginning of this debate (I hope she can confirm this) that Her Majesty's Government are prepared to see the European Parliament more fully involved in discussions and deliberations with measures considered by the Council, as well as the introduction of procedures which would enable the Parliament to
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express its views before the Council comes to a conclusion. In this respect I used to play my part in the conciliation procedure between the Council and the Parliament over the budget.
I should like to see this kind of procedure extended to other fields and other departments. I think the report of the noble Lord, Lord Kearton, is along the right lines for the present, but that perhaps we must think rather more deeply about what out ultimate long-term aims in Western Europe should be, bearing particularly in mind that both the United States and the People's Republic of China would like to see us more effectively united, not only politically and defence wise, but also industrially.
The Times leader of 1st August on the day after the publication of the report of the noble Lord, Lord Kearton, referred to the possible extension of the competence of the Community to cover high technology and some other areas in which it is increasingly important for Europe to pursue a common policy to enable it to compete effectively with Japan and the United States. I thank the noble Lord, Lord Kearton and the members of the Committee for their remarkably comprehensive and indeed fascinating report.
6.54 p.m.
Lord Beloff: My Lords, my excuse for rising so late is to add my congratulations to the noble Lord, Lord Kearton, and his sub-committee for a report which, considering the timetable imposed, impresses one with the thoroughness with which these issues were examined. However, it leaves open questions upon which, had I been a member of that sub-committee, I would have liked to press the witnesses further—especially the degree of support which exists in our partner countries in the Community for the changes now being advocated and whether the difference that appears to exist between the citizens of this country and those of our partners is not to some extent an illusion based on different modes of political discourse.
I rise also because, like the noble Lord, Lord Gladwyn, I have long been concerned with these issues—though I hasten to add that I have never, like the noble Lord, been in the forefront of them. In 1957 I was the author of a report commissioned by the Council of Europe, on the basis of the work of a study group, to examine the general range of questions from politics and economics to science and culture which were involved in the development of European institutions. That committee met between "Messina" and "Rome". The shape of the future was beginning to reveal itself. Since the report was translated into German, Italian, Spanish and Portuguese, though not I hasten to add into French (they never are), it provided at that time some material for discussion.
It is interesting now, and revealing of some of our problems, to look back at what we then thought. The most striking point is that my economics colleagues, who were considerable professional economists, were unanimous in believing that agriculture would be the last major economic activity to be integrated—it was so difficult to think of integrating European agriculture—and that transport, industry and energy

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would long precede it. That shows that one can be wrong.
On the other hand, the difficulties that have accumulated and which are the cause of our discussion today and of this report were foreseen. That is to say, although the European countries had had the shock of a war and had jumped the first hurdle, in the Coal and Steel Community, of successfully bringing together the previous warring powers—that, as other noble Lords have said, was Jean Monnet's principle intention—it was already evident that the Common Market, the European Economic Community, would be less centrally directed than the Coal and Steel Community, that the Commission would have less power than the High Authority and that individual governments would have more. In that sense we were responding to an observation that in Europe the necessary degree of public popular consent for allowing important issues affecting people's employment and income to be transferred to an international or supranational body would be lacking. It would be lacking for a very good reason; namely, that many of the countries concerned had taken centuries to attain even their existing measure of national unity and the idea of a European Union based on some kind of pan-European feeling would, if it were to happen at all, take centuries more.
Indeed, this has been illustrated in the course of our discussions this afternoon. Why is Denmark the odd man out on the Dooge Committee? Because Denmark is the only Scandinavian country in the Community and naturally is unwilling to be tied more closely into an institution from which its closest friends are excluded. Greece, as has been pointed out, is a part of what before the days of Lord Byron we used to call the Near East; it is not a part of Europe in the sense in which Belgium, Holland or even Spain are parts. So one could go on.
Therefore, one is left with what can be done to make these European countries function better to their own advantage. Much has been said, and rightly, to the effect that the original impulse towards setting up a single common market for things other than agricultural products, which achieved the first goal of a single tariff area, has now been baulked. It has been illustrated by the number of permits which a German lorry requires to go to Italy, and we have had a vivid illustration in the report, and referred to by the noble Baroness, to prove that point. This starts me thinking again whether we are right to say that it is possible to do this kind of thing without a much greater departure from sovereignty than even the committee, which admits some derogation of sovereignty is required, is prepared to accept.
Perhaps I may remind your Lordships that the common market of the United States, which is, after all, the model that we have, the model with which we wish to compete, is based not on a commission and a treaty and a series of institutions but on 15 words in a constitution: the Congress shall have power to,
"regulate commerce with foreign nations and among the several States and with the Indian tribes".
That is all. The entire wealth, prosperity and unity of the American system is based upon 15 words in a written constitution interpreted by a court. If we are to consider the kind of institutions that we need, ought
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we not perhaps to think of whether a strengthened central point and, above all, a strengthened court might not be the root?
Instead of that, the people who are willing to have new treaties, new assemblies, new organisations, cannot bring themselves to tackle the fact that their existing Court is undermanned and overworked and badly requires internal reform, just as they apparently cannot tackle the problems which the Commission faces. One has the feeling, with matters like the Spinelli initiative, that what one does when one finds an obstacle is not to think of ways of tackling it but to think of ways of getting round it and pretending it is not there.
This may be impossible. If it is impossible, then ought we not to reconcile ourselves to the fact that what we have in Europe is not in fact a supranational organisation except in very limited respects? What we have, and what we appear to deplore, is increasing consultation between sovereign governments. There were, in the first six months of this year, no fewer than 36 ministerial meetings. It may be said, and it has been said, that this all shows that we are becoming hopelessly bogged down with their specialists, their experts and their officials. However, may we not look on this as a hopeful sign? If, say, before 1939 or before 1914 there had been regular and constant meetings of Ministers concerned with industry, agriculture, technology and education, would we not have thought that Europe was making rather considerable progress towards managing its affairs?
Similarly, ought we not to look at the reasons, not only why the parliament is disgruntled (I can imagine that intelligent and public spirited persons in an assembly which appears to have restricted powers should be disgruntled) but also why their powers are, and are likely to be, restricted? The reason seems to me to be this. All our countries, though their constitutions are different in many ways, have in common today a strong aspect of democracy in its strictest sense. That is to say that people look to their legislatures, look to their elected representatives, or heads of state if they happen to be directly elected persons, and make demands upon them in their capacities as consumers, as producers, as members of particular parts of the community with specific interests. Until they feel that they can equally well go to my noble friend Lady Elles (who I am sorry could not stay for the rest of this debate) equally with the members of the other place who are elected from that area, then the European Parliament cannot expect to receive major powers. If it did, it would fly in the face of the expectations of ordinary people.
I am not sure that, on the whole, direct elections were a very good idea, for the reason which has been alluded to; namely, that it made a bigger gap between members of that assembly and the members of the national parliaments. If there is to be a greater role for the European Parliament, then certainly greater consideration must be given to the interlocking of its activities with those of the national parliaments which the peoples themselves still regard as their major voice.
Therefore, it seems to me to be quite reasonable for the committee to have put forward the conclusions that it has, provided it does not believe that they will make a very major difference. Whatever is said about

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the veto, so long as a Minister for whatever it may be—agriculture, energy or whatever—is more susceptible to the pressures, electoral or otherwise, from an interest in his own country, the veto will be there. Ought we not therefore always to be looking at ways in which we can strengthen the existing mechanism?
This is virtually my last point because I have spoken for too long. It is interesting to note that much of the discussion about the number of commissioners—whether there should be one for every country or whether they should be grouped and reduced in number—has all along assumed that the commissioner is in some sense linked to and an exponent of his own country. Otherwise, if they are to be chosen entirely as European citizens of major competence, why should not all the commissioners be German, French, Italian or whatever? In other words, there are, even in the Commission, which we have not yet tackled, inbuilt national differences.
Finally, speaking as a member of the Law Sub-Committee of your Lordships' European Communities Committee, it very much strikes me, as one sees the people who come from the Commission and from the Court, that there are still major gaps in the understanding of each other's legal systems, habits of thought and ways of looking at constitutional commitments, and a long dialogue will be necessary before that situation changes in the way in which all of us in the end would like to see.
7.10 p.m.
Lord Thomas of Swynnerton: My Lords, when I first read this powerful report I recalled the advice of a Cambridge don to one of his undergraduates some years ago, suggesting that he should read The History of the English People by Mr. J. R. Green. He said:
"This book is short, it is interesting and it is usually true."
I must say that one of the great benefits of this report—and it must have taken a very great deal to ensure it—is its brevity. That is a great achievement, on which the noble Lord, Lord Kearton, and his colleagues should be congratulated, particularly since there is almost no aspect of European affairs which it does not illumine by its terse and sharp prose.
Naturally, like other noble Lords, I have found much with which to agree in the recommendations. I agree it is useful to be reminded that, contrary to the views even of some Englishmen, Britain is a good deal more communautaire—a difficult word for us, I agree—than some of our colleagues suppose. I agree that we and the European cause in general suffer from an exaggerated idea of the size of the Commission. I think it is obvious that the Parliament must sit in the same place and not travel around in the way that one of my noble friends so graphically described. I certainly agree that the number of commissioners should not go up as far as it might otherwise do, although I would agree with the noble Baroness, Lady Young, in suggesting that the final figure might be something like 12.
I support with more qualifications two of the recommendations. First, like other noble Lords, I now
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believe that we should join the European Monetary System as soon as reasonably possible, but I do not think it should be done in order to make a concession or a gesture to our partners. I think it should be done as a quid pro quo of the realisation of a full internal market in financial services.
I also think that the role of the European Council must obviously, if it is going to go on being important, be defined, although how exactly that is to be done is a different matter. I must confess that any institution which consciously takes a name which is so close to the name of another institution in the same undertaking—and, after all, there is a Council of Ministers—causes one to wonder whether it deserves to survive. Certainly, whoever christened it the "European Council" showed plainly that he did not care at all if confusion was created in the public's mind. And, as a matter of fact, while I am on the question of words, there is no doubt whatever that the public at large in all countries is always confused by the fact that every institution in the European Community seems to have the same name. If this is going to be a vital enterprise, as I hope it will be, something should be done about that by some committee, somewhere, soon.
I have two or three doubts about the report, and the fact that I mention them obviously does not mean in any respect that I did not enjoy and profit from reading the rest of it. First, the implication is left—I am sure it was not intended—by paragraph 1 of the report that the Select Committee thought that Europe equalled the European Community. That is a dangerous implication to leave behind since after all the grandiose words "European Union" are words which affect countries like Switzerland and Austria, which are not part of the Community but are part of the West, and also countries east of the Iron Curtain, which are never mentioned at all in this report. Of course they should be, at least by implication, since we all hope that in the end Europe can once again really comprise those European peoples.
My second doubt concerns the point which others have made about the distinction between "vital" and "very important". In an age of euphemism, I cannot believe that that distinction is the right one to insist upon.
Thirdly, I question whether the report, in paragraph 22, is right to say that one of the original aims of the European Communities was to try to ensure that Western Europe faced the super powers on the same footing. I cannot believe that was one of the original aims, even though there may have been many people who worked towards that through other ways.
Finally, and much more important, is the doubt that I have about the Select Committee's understandable reluctance to become involved in a discussion of what these two words "European Union" actually mean. It seems to me that they refused the fence, so to speak, of defining those words or of becoming involved in a serious and profound argument such as is needed as to what those words imply. It is understandable that the Select Committee, being composed of rational Members of this House, had a natural reluctance to become too involved in bland, high-sounding words which might turn out not to mean very much, and so they concentrated on the practical details. But in this

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respect, and in this respect alone, I confess that I found the report a little disappointing because to cut through the "guff' and expose the real choices which face us in respect of Europe and the European Community as a whole is not only essential but is now very appropriate, considering that the process of integration which brings Spain and Portugal at long last into the Community is now done.
The words "European union" remind me rather of the phrase which was used earlier this afternoon during QuestionTime by the noble Lord, Lord Soper, in relation to the Book of Revelation, in which he said that the Book of Revelation could be interpreted to mean anything or nothing. Her Majesty's Government, obviously, from the words of the noble Minister, favour the concept of European union although my noble friend Lady Young rightly pointed out that the two words related to a rather elusive concept. My noble friend Lady Elles also favoured the concept of European union and my noble friend Lord Reay even likes the phrase itself. But although my noble friends Lady Elles and Lord Reay sit on the same side of the House as the noble Minister Lady Young, my noblefriend Lord Broxbourne and myself, there is, I submit, a difference between us as big as there is on normal occasions between this side of the House and the other side.
The fact is that, if European union is going soon to be what my noble friend Lady Elles said it should be—she quoted the present Foreign Minister of Belgium, Mr. Tindemans, saying that the aim was to achieve a united front to face the outside world as well as to achieve economic and monetary unity within the Community—and if that is what she believes and the whole enterprise is to remain democratic, then of course the European Parliament should have the powers which my noble friend says are necessary. My noble friend Lady Elles—and I regret that she is not here to comment at the moment—said she is not a federalist, but if in fact she is looking forward soon to a united front to the outside world and if she is not a federalist surely she must support the idea of a unitary European state. These are some of the sorts of questions which should be discussed, and I believe it is a pity they were not raised in the report.
I do not think we should "despair"—this is a word used in paragraph 18—if at the moment we can say that all we have achieved is a sophisticated customs union. That is a very remarkable achievement. It is realised in the report itself, because in paragraph 29 it is stated that this is a "unique and experimental" way of achieving co-operation without major concessions of sovereignty. This idea of economic unity without political unity is one that could well attract, and that has indeed already attracted, nations in other continents who are desirous of economic collaboration without substantial concessions of sovereignty.
My noble friend Lord Rochdale said in a powerful speech that perhaps the failure to achieve a full internal market was due not so much to failure of negotiations as to political failure. If he is right, then the European Community will, oddly enough, then cease to be that unique and experimental undertaking which the report claims it to be and will simply become—if I may suggest it in a rather exaggerated way—what the German Zollverein became in the end
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in 1870, rather than remaining a successful Zollverein, such as did not, after all, occur in Germany in the last century. I think it is much more interesting to support the Government's plan of trying to achieve a full internal market by 1992, without the complete collapse of all national sovereign distinctions.
So, again, I regret that the report did not explore this foggy marshland which was explored in their excellent and powerful speeches by my noble friends Lord Broxbourne and Lord Beloff—a marshland across which, inevitably, some kind of line is drawn and must be, for the foreseeable future. If we manage to achieve by 1992 an internal market of the sort envisaged that would be the time to see what further stages would be needed or desired. Perhaps we should then consider Tindemans, Spinelli and, to put it in rough terms, Elles, Bessborough or, indeed, Rochdale.
I have two further points to make and the first is about political co-operation. The report touches on this only twice and on the major occasion in two paragraphs, Nos. 82 and 83. Those paragraphs are interesting not for what they say, but for what they do not say. Is this modest attention due to some kind of scepticism about its benefit? If so, I, like my noble friend Lord Broxbourne, share that scepticism. Political co-operation should surely stick, as was originally intended, to considering the political issues arising from European economic problems and should not consider questions arising from political anxieties throughout the world, from Nicaragua to South Africa. There are certain occasions when these meetings of foreign ministers seem to be under the aegis of political co-operation, and in danger of confusing statesmanship with journalism. After all, statesmanship of that sort is concerned with power and not with fashionable crises.
The second point that I have to make is that we should have liked in this report a few more words about culture. It is true that the report reminds us in paragraph 85 that education is specifically excluded from the competence of the European treaties, save when it is dealing with the movement of persons. Even so, in a report with such a grand title it would have been pleasant to have known for sure that the committee members realised that what makes us Europeans is not basically a common policy towards sheepmeat, but a common recollection of Shakespeare and other masters of European art. This is specially important at the present time, when British educationists are, interestingly enough, trying to see how they can integrate Asian cultures into what they call British culture. That is important, because we should realise that British culture has always been a part of European culture.
7.25 p.m.
Baroness Robson of Kiddington: My Lords, I must first pay tribute to the way in which the noble Lord, Lord Kearton, introduced this report this afternoon, but, above all, to the way in which he conducted the committee. He was faced at the beginning by a number of people on that committee who had widely divergent views about what European union meant, and he managed by skill and by leadership to make us agree to the report that your Lordships have in front of you. There are many of us who advocated Britain's

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entry into Europe long before we ever achieved it. To many, this report will probably not sound particularly revolutionary. That commitment to Europe is the commitment that Spinelli has—an ever-closer union among the peoples of Europe, as in the preamble to the Treaty of Rome. Those words obviously have a much wider implication than a purely economic union, which is what we have concentrated on over the years.
The noble Lord, Lord Thomas of Swynnerton, suggested that the committee should have spent more time trying to define their ideas for European union. I think that those ideas would be very diverse among the members of the committee, but I believe that we could have come together on a definition of what we mean by "European union".
The noble Lord, Lord Rodney, referred to the miracle that has happened in Europe since the end of the last world war; the fact that we cannot envisage another war breaking out among the member states of the European Community. The noble Lord, Lord Beloff, referred to the fact that it has not managed its affairs too badly since the end of the war. But we must also look back and think how much greater the influence of the European nations could have been on peace and on détente between the super-powers if union in Europe had existed in foreign affairs and defence. My noble friend Lord Gladwyn talked about the need for a unified defence in Europe, and the noble Lord, Lord Reay, talked about the same thing. As long as Europe is not united we shall be played off against each other. We had an example not so long ago, when Mr. Gorbachev visited France. He tried to play off President Mitterrand against our Foreign Secretary, and he succeeded up to a point. Their answers were not united.
Attempts have been made in the past by different nations in Europe to influence the super-powers, and because there has not been unity within the nations we have failed. Chancellor Brandt's attempt to create the Ostpolitik failed because there was not enough support from all the rest of the countries in Europe. Also, there is no doubt about the fact that Britain would have been a member of the Community a lot earlier if it had not been for the claim that we have a special relationship with the United States and for the Polaris agreement, which took place at the same time as President de Gaulle said "No."
I am using these examples only to show that there is a lot more to European unity than just the Economic Community. On the other hand, having been a member of this committee I visited these institutions and listened to all the expert evidence that was presented to us. I came to the conclusion that without an improvement in the European Community and without a true free market and free movement of people, goods and services within Europe, we could not achieve any of these other aims. I believe that if that was achieved we would really be in a position to move forward to the much greater issues that challenge us.
The majority of Members of the House who have spoken have approved of the report and its recommendations. There was absolutely no dissension from the recommendation that this country should join the European monetary system now. There were some
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doubts about the recommendation to change the expression "important national interest" to "vital national interest". I agree: on the surface there does not seem very much difference between the two words. But the main recommendation is that this "vital national interest" should be presented by a Minister to his peers. What we did discover in our visits to Brussels was that it is not the use of the veto that is barring advance: it is the threat of the use of the veto by people much lower down the scale. The committee felt, and I felt in particular, that a Minister having to present his case to his fellow Ministers would not use it on an issue which was not of vital importance. He would hope that his fellow Ministers would consider that if he raised it at that level it really was vital. I do not believe, for instance, that a British Minister would raise a minor issue and pretend that it was vital—but neither would any of the others. I believe that this would improve the speed with which agreement might be achieved.
I turn now to another recommendation which I wholly support. I would prefer to see an amendment or amendments to the present treaty rather than a new treaty. There is a tremendous risk that getting involved in talking about a completely new treaty could be completely divisive among the nations and could detract from the need to concentrate on completing the free market in Europe, which would drop even further back. I am not a lawyer but I should have thought that the recommendations we have made could certainly be included as amendments in the Treaty of Rome.
We have made important recommendations about the European Court. They may appear minor in the report, but the only basic safeguard of nations, organisations and individuals under Community law is an appeal to the European Court. It seems to me a tragedy that the court should be saddled with having to adjudicate on staff questions at the Commission. It is not making the right use of the people working there, who are being overworked. Secondly, it is creating a backlog of cases which take too long to come before the European Court. I should like to see private individuals have greater access to the European Court if they feel aggrieved in any way.
Those are the main points I wanted to mention. In accepting this report—I hope that the Government are going to accept its recommendations—if the recommendations are implemented and we move forward at a slightly faster speed in creating the European market we must never forget that this is only a step, though an important one, towards European union. We must keep the aim of much closer co-operation in Europe always in front of us.
7.37 p.m.
Lord Oram: My Lords, this report is not a dramatic report: still less the revolutionary report to which the noble Baroness pointed in her opening sentences. Indeed, it would not be so good or so useful a report if the sub-committee had tried to make it dramatic and had tried to catch the headlines by putting forward radical proposals. I very much agree with its somewhat cautious but nevertheless very constructive approach. Like other noble Lords, I congratulate the noble Lord, Lord Kearton, both on the achievement of the report

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and on the lucid way in which he presented it to us at the beginning of the debate.
In particular, I welcome the fact that it rejects the Spinelli draft Treaty. It seems to me that that proposal was altogether too formal, too legalistic, too intricate and certainly untimely for it to get any general acceptance. I agree, perhaps not surprisingly, with the evidence given to the committee by the two witnesses from the Labour party, my honourable friends Mr. Foulkes and Mr. Robertson. In discussing the Spinelli report they went so far as to suggest that the proposals, though they may have been a useful stimulus to debate about the future of the European Community, may nevertheless have done more harm than good. The proposals have diverted people's attention away from the real problems of Europe, notably massive unemployment, and have engaged too many people chasing what I would call the will-o'-the-wisp of constitutional perfection. I welcome the fact that in this debate this evening most if not all of those who have contributed have not sought a perfect constitutional solution.
Let us remember that it is only 30 years since the Common Market started. Surely, in the span of human history, that is all too short a time for any set of institutions to be properly tested or to be subject to fundamental amendment. Having regard to Europe's complex history and geography, 30 years is surely much too short a time in which to have expected to reach complete satisfaction in constitutional terms. But as the noble Lord, Lord Rodney, pointed out, a great deal has been achieved in international relations and in internal organisation within the existing institutions.
If we make comparisons and consider, for instance, the timetable of the evolution of constitutions—our own included—and if we think of the constitutions of the United States of America, the United Nations and the Commonwealth, no one can reasonably suggest that root and branch constitutional changes should have been brought into effect in those cases after such a short period of testing. It is surely too soon for anything like the Spinelli proposals to be adopted.
It is in my view not a question of devising new constitutions. It is a question of making the existing institutions work more effectively. This, as the report before the House suggests, can be done pragmatically and mainly within the limits of the existing treaties. The report recognises, as I am sure we all do, that changes in the treaties will be necessary from time to time because of changes in the European scene—economic or political. But the report is wise to suggest that we should in meeting those changes build on and improve the existing treaties rather than attempt root and branch reformation, as Spinelli proposed.
Relationships between member states are bound to change over time and modifications of the treaties are needed to meet those changes. The noble Viscount, Lord Rochdale, listed many of the changes which have taken place since the formation of the Community. I would add just two others. First, there is the increase in the number of states, which obviously raises questions about representation on the Commission or
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voting rights within the Commission. That is one change that neeeds to be met—but it does not take a new treaty to meet the kind of situation.
To take another example, on the economic front there has been a considerable change in this country's degree of self-sufficiency in relation to food production. I believe that we are now something like 75 per cent. self-sufficient. Certainly at the time when the Common Market was formed we were in a very different situation compared with our continental neighbours in that particular respect. This is something that must have an effect on the constitutional arrangements.
It is developments such as those which must be constantly assessed and reassessed. That is the reason why I have always said that the issue of British membership of the Common Market has never been, as some would have it, a question of high principle—of black and white. It has always been a grey situation and a developing situation. Opinions and attitudes can change according to those changing situations. Indeed, we can say that we have now reached the point where those who 10 or 15 years ago were enthusiastic advocates of European unity are now perhaps less enthusiastic; and where those who were vigorous opponents of European union are now less inclined to oppose it.
It is for all those reasons that I believe it would be wrong to force the pace of constitutional change as Spinelli proposes. Let us rather be cautious; prepare to change but not make too much change too soon. Let us remember also that institutional changes—especially those of a radical nature—must stand the test of public opinion and of the democratic process in all member states.
I noticed from the minutes of the committee's proceedings that the MEPs who gave evidence, and who attended in their capacity as members of the European Parliamentary Institutional Affairs Committee, were of the opinion that there was an upsurge of feeling in Europe in favour of closer European union. I believe they were deluding themselves. As I have explained, there are questions of change—but I do not believe that they are prompted by any upsurge of opinion in favour of union, as some suggested. It was perhaps wish fulfilment on their part. I am glad that this was pointed out to them by my noble friends Lord Gallacher and Lord Ardwick, who stressed the difficulty that would face us if we adopted the Spinelli proposals.
With all this in mind I would point to three of the committee's conclusions in Part 6 of their report which are in my view particularly wise. I have already dealt with the first of them; the committee's rejection of the Spinelli proposals. Secondly, and as other speakers have said, I agree wholeheartedly with paragraph 99 concerning the Community's failure to establish an effective internal market. Several speakers have pointed to that aspect as being a most crucial issue and I thoroughly agree.
I refer now to an earlier report by the European Select Committee of this House which dealt specifically with the problem of the internal market. I was privileged to serve on that particular subcommittee, and under the chairmanship of the noble

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Lord, Lord Greenhill, in drawing up that report. I recall the very impressive evidence we received about the folly of barriers preventing the flow of goods freely from one country to another within the Community. The noble Baroness, Lady Young, made mention of the horrific list of documents listed on page 301 of the report which have to be dealt with before a lorry can move. The noble Lord, Lord Rodney, also referred to this point.
I remember that in the sub-committee of three years ago to which I have referred we received an estimate that the cost of delays to lorries which were being kept standing still at frontiers while complicated documentation was being processed was anything up to 10 per cent. of the value of the goods. It is perhaps worth quoting the main conclusion of the sub-committee which dealt with the internal market. We said:
"It is only by a general understanding by governments and peoples of the advantages to be gained from an integrated Community market that the 'political will' needed to achieve it will be created. At the present time the Committee"—
that is, the committee of three years ago—
"regretfully conclude that this will is absent".
Reading through the evidence which the subcommittee of the noble Lord, Lord Kearton, has received, time and again it seems the finger was pointed at the lack of political will. As I have said before, it is not so much a question of whether the constitution would allow an internal market to be created; it is more the need to get on with the job within the confines of the present constitution.
The third issue to which I refer—and again is one which has been well debated today—is the question of decision-making. The Committee has dealt very fully and helpfully with the questions of the veto, majority voting, the Luxembourg Compromise and the excessive use of that Compromise. I believe, as the noble Baroness, Lady Robson, pointed out, that the recommendation contained in, I think, paragraph 102 of the report, about what should be done with the veto deserves the closest attention. Indeed, I think that the noble Lord, Lord Kearton, and his colleagues are to be congratulated on the formulation of a feasible solution to this vexed series of problems connected with the veto.
They propose that if the use of the veto is to be confined it could be done by the head of state who wants to exercise the veto having to explain at the European Council why it is a vital issue for his or her country. I believe that that is a very sound recommendation but I take up the point that I believe three or four speakers have taken up—first, by the noble Baroness, Lady Elles. We all noticed that the Minister in her opening speech used the phrase "very important" rather than the word "vital". Was that deliberate, my Lords? If so, I hope that she will explain why the Government stick to that formulation rather than adopt the suggestion of the Committee headed by the noble, Lord, Lord Kearton, that the word should be "vital". In the report the word "vital" is printed in italics which shows that the committee was concerned about that. I am concerned that the Government may not have taken this recommendation properly on board.
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For instance, take the last occasion when the veto was used. Germany was protesting about a proposed increase in food prices—or perhaps it was the other way round; I am not sure. Can we imagine that Chancellor Kohl would have stood up in the European Council and said that this 1 per cent. difference in food prices was vital to Germany's wellbeing? I think he would have seen the absurdity of the position. I believe that that is the right method in order to confine the use of the veto to the issues for which it should be used.
It is the series of similar commonsense proposals which commend this report very much to me. I believe it to be a very valuable report. I hope it will have a lasting effect. I noticed a reference in one of the early paragraphs of the report to the Spinelli proposals being one of a long series of initiatives applauded at the time but soon forgotten. I hope that this report will not have that fate. We can certainly applaud it, as we have been applauding it, but I hope it will not be soon forgotten.
7.54 p.m.
Baroness Young: My Lords, we have had a most useful and, I believe, constructive debate and I am grateful to your Lordships for providing the opportunity to consider this important report. The Government will take careful note of what has been said today. I am sure that the report will attract much attention in Europe.
The European Community Treaty rightly talks about ever closer union among the peoples of Europe. In other words, the process has to be real and of measurable value to ordinary men and women. That is why the Community, and the Government in particular, have focussed on the steps needed to break down barriers. Many more people now have first-hand knowledge of Europe through greater opportunities for travel. Barriers to trade are being pulled down. Europe speaks with an increasingly powerful voice to the rest of the world as a result of the continuous growth of political co-operation—the regular consultation process between governments on foreign policy issues which is one of the most remarkable developments in Europe. This debate has, I think, helped to emphasise the fact that, although much has yet to be done to achieve a real common market, the picture is not the one of stagnation which some would have us believe.
New opportunities have opened up for collaboration and for joint endeavours for European businesses and firms, contributing to growth and jobs. I should like to assure my noble friends—in particular my noble friend Lord Beloff, my noble friend Lord Rodney and my noble friend Lord Broxbourne—that we shall continue to press on with our determination to liberalise the internal market: a view which I think is shared by all of your Lordships who have spoken today and one also shared by the noble Lord, Lord Oram. There is a common awareness that the frontiers of technology are better tackled on a European, as opposed to a national, scale if the challenges of the 1980s and 1990s are to be faced and the risk of domination by the United States and Japan is to be avoided.
We are not just talking about the goals of the Community but of real achievements—a point made by my noble friend Lord Rochdale. In the past two years we have created the Esprit programme; agreed

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on the general research programme for the next five years; revised the regional and social funds; made a big advance on standards; agreed on the single administrative document of custom clearance; negotiated the accession of Spain and Portugal; started to tackle the problem of CAP surpluses; agreed on a common fisheries policy; agreed on a mechanism for budget discipline; and dealt with the problem of budget imbalances. I do not think that that is too bad a record.
I am glad that a number of your Lordships have referred to what my right honourable and learned friend said in Bonn about European Union, which I repeated today. Indeed, I am grateful to my noble friend Lord Thomas for adding to our understanding of European Union by correctly expanding on authoritative descriptions of it by others, including Mr. Tindemans in his report on European Union in 1976. The European Council, commenting on that report, declared that:
"European Union will be built progressively by consolidating and developing what has been achieved within the Community".
That seems to me to be a further admirable description.
At this hour there is not time to answer all the important points that have been raised in the course of the debate. Therefore, I shall focus on two or three areas which have been the subject of much discussion and try to answer one or two other important matters. The first area is what has come to be known as the Luxembourg Compromise. The noble Lord, Lord Kennet, my noble friend Lady Elles and the noble Lord, Lord Oram, asked that the term "very important", which I used in my opening remarks, should be changed to the "vital" interests referred to in the committee's report and that the justification of a veto should be published—a point raised by the noble Lord, Lord Ezra.
We recognise the need to prevent the abuse of the Luxembourg Compromise but the wording is not simply a question of semantics. We are not sure that change of usage from the words "very important"—which dates from the birth of the Compromise in 1966—to "vital" would achieve any of the results that we all wish to see. However, I can confirm to the noble Lord, Lord Ezra, and others, that we have proposed that there should be a special procedure of the Council under which a member state should explain its use of the veto fully and formally.
The noble Lord, Lord Gladwyn, said that the United Kingdom delegate on the Dooge Committee should have joined the majority view as regards voting; that is to say, that the general rule should be majority voting and the unanimity should be required only in exceptional cases. The present treaties have many articles—over 40—which provide for majority voting, yet relatively few of these are used in practice. The Community has always been able to take decisions where the political will exists whatever the voting rules may say. We continue to believe, as we argued in the Dooge Committe, that more use should be made of the many majority voting provisions already in the treaty, but we see no point in tinkering with voting procedures in the hope that this alone will bring about a real common market or a technologically strong Europe. The starting point has to be for
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member states to demonstrate that they really are committed to the early achievement of these objectives.
My noble friend Lord Broxbourne asked whether the obligation to explain the veto would stop its abuse. Like the noble Lord, we recognise the political reality that member states may sometimes have to invoke a very important interest to request postponement of a vote, but we do not consider that there is any validity in the distinction between a vital or a very important national interest. The principle is the same. We have made two linked proposals, that the Presidency call a vote once a full discussion has been held, and then that the veto be explained. These measures together could introduce more clarity into an area over which the possibility of a veto may be unjustifiably casting a shadow.
Many of your Lordships referred to the legislative role of the European Parliament, in particular my noble friend Lady Elles, to whom I think we all listened with great interest. The Government have made proposals at the Milan European Council to increase the European Parliament's involvement in the legislative process. We particularly want the Council systematically to take account of European Parliament resolutions and to consult the European Parliament at an early stage on Commission proposals for legislation, and indeed, as my noble friend Lord Bessborough pointed out, we should like to see the European Parliament more involved in legislation. But the European Parliament must use its powers responsibly and make sure that its resolutions are targeted for action.
Both the noble Lord, Lord Kennet, and my noble friend Lady Elles commented on the seat of the European Parliament and here the Government believe that the solution lies in the European Parliament's own hands. We should be glad for the Parliament itself to make clear what specific seat it would desire, as the noble Baroness, Lady Elles, has recognised.
Nearly every noble Lord who spoke in the debate has commented on the question of the ERM. Could I say that the United Kingdom keeps the question of membership of the ERM constantly under review. We have always said that we would join the mechanism when the circumstances were right and it is no easy matter to judge when those circumstances are right. Sterling and the Deutschemark are both major trading currencies. At present the ERM only holds one major trading currency. The addition of a second could put the system under strain, especially when the dollar is volatile. The market's perception of sterling as a petrocurrency is also an important factor. Developments in the oil markets tend to cause sterling to move one way and other countries' currencies the other way, for reasons beyond the control of any ERM participant. Expectations of future oil prices are also likely to have an important effect on the exchange rate. Against this background we need to give consideration to the implications of ERM membership for the operation of domestic policy. We have always believed that one of the most significant steps towards strengthening the EMS would be the abolition of exchange controls. Most of our partners retain such controls, and they are

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a serious impediment to the creation of the internal market for which we have been pressing.
A number of your Lordships commented on the whole question of political co-operation, and I should like to make clear the Government's position on a new political co-operation treaty. We are taking an active part in negotiations. The text of a new treaty on political co-operation has been proposed, but we are convinced that it should be free-standing alongside the Treaty of Rome. Foreign policy is a matter for co-operation between member states. It is not to be confined within the sort of legal regulation which incorporation into the Treaty of Rome would entail.
The noble Lord, Lord Ezra, and my noble friend Lord Rochdale commented on the European Council. It may be helpful if I say that the idea behind the European Council was to offer strategic guidance to the Community, not as a sort of court of appeal on the day-to-day business of the Community, which is for Foreign Ministers; we favour a return of the European Council to that strategic role. If it were to be incorporated into the treaty structure, the temptation would be strong to delay decisions even more than happens at present, so that Heads of Government could be consulted. That would not improve the decisionmaking process, which is something that we all want to see improved.
A number of your Lordships commented on the role of the commissioners and particularly on the Committee's proposal that there should be only nine commissioners. My noble friend Lord Reay asked about the Government's position on this matter where we have proposed that there should be 12 commissioners. Our proposal is based on the principle that commissioners are not representatives of their countries but impartial servants of the Community; and in any case we are not convinced that there would be substantial portfolios for all 17 commissioners. Thirdly, the Commission's decision-taking would be very cumbersome if there were 17 commissioners. We are therefore persuaded that we should press for a smaller Commission, but, for the reasons which I gave, we feel that each country should have a commissioner.
There were a number of quite specific issues which were raised, of which perhaps the most important was the one raised by my noble friend Lord Bessborough and also by the noble Lord, Lord Gladwyn, on defence. I am glad indeed that this was raised in the context of European Union. By our membership of the NATO Alliance we are committed to the defence of Europe and by our membership of the European Community we are committed to its prosperity. But it would be wrong to think that the institutions of the one could be superimposed on the institutions of the other. They were built for different purposes. There is, however, scope for the co-ordination of positions in matters of security, for example, and we shall continue to be on the look-out for other matters on which the Ten can pool their resources.
My noble friend Lord Broxbourne asked about the progress on the European company. Progress has been made on the discussions on a European economic interest grouping, but there has been no recent substantive discussion in the Council on the Vredeling proposal on worker participation. We believe that
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matters of this kind are better left to individual member states.
My noble friend Lady Elles referred to the 763 proposals that have piled up before the Council, and we agree with my noble friend that some proposals spend some considerable time in the Council before being decided. However, over the long term the picture is not quite so sombre. According to the Council Secretariat the Commission has submitted 3,481 proposals to the Council over the past six years and the Council has adopted 3,235 of them. If we ask why some proposals have to wait, this may often be because of the Community's habitual search for consensus despite the provisions of majority voting.
I began by speaking of the importance which the Government attach to the full implementation of the internal market and I should like to conclude by saying something on the very important question of technology that has been raised particularly by my noble friend Lord Bessborough but also by other speakers. There are proposals before the Intergovernmental Conference for new Treaty articles which recognise the degree to which technological co-operation has already become part of Community activity. Technology was high on the agenda of both the European Councils held earlier this year. The Community is the world's largest industrial grouping, yet we supply only 10 per cent. of the world market in information technology. In 1983 eight out of every 10 personal computers sold within the Community were manufactured in the United States.
The heart of that challenge is commercial competitiveness. Europe is not lagging behind America and Japan in pure science, and our development of new technologies has been fully equal to theirs. Where we have failed, and where the United States and Japan have conspicuously succeeded is in the development and marketing of products based on those new technologies. For the Community the essential task must be to create the conditions in which our high technology companies can collaborate together and exploit their expertise. That requires us to drop the philosophy of European national champions and move towards open competition throughout the Community. It requires us to promote collaborative ventures between European enterprises aimed at the development of products designed to secure a substantial share of the world market. That is where the completion of the common market becomes so vital.
I should like to end with a quotation from Sir Winston Churchill—something already referred to by my noble friend Lord Reay. Sir Winston Churchill summed up the vision of a Europe united and powerful in a famous speech in Zurich in 1946, at a time when Europe was still devastated by the aftermath of the war. He described the task as being:
"to recreate the European family and provide it with a structure in which it can dwell in peace, in safety and in freedom.'
Our membership of the European Community has brought us closer to that goal. The committee's report is a timely pointer to the right way forward towards the ever closer union described in the Treaty of Rome—a perceptive analysis of what that term ought to mean and of the consequences for action in the Council of the European Community now. The Government are most grateful to the noble Lord, Lord Kearton, and to

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his committee for the contribution they have made to their thinking and for the observations made by your Lordships today.
8.12 p.m.
Lord Kearton: My Lords, I can be brief. I should like first to thank once again the members of the subcommittee, who must be very pleased that the report has given rise to such an interesting, wide-ranging and comprehensive debate. I should like to thank all noble Lords and Baronesses who have taken part in the debate. Speeches have been powerful and eloquent. Finally, let me say how much I appreciated the concluding speech of the noble Baroness, Lady Young. I think that she covered an immense amount of ground and was most positive and constructive. What she said, together with the speeches of Sir Geoffrey Howe over the past 12 months, have convinced me that the Government are moving forward towards a closer European union—I say this to the noble Lord, Lord Thomas of Swynnerton—however one defines that phrase. I think that we are getting there, and I can only say that I hope we get there quickly.
On Question, Motion agreed to.

CAP Reform: ECC Report
8.13 p.m.
Lord Plowden Lord Plowden rose to move, That this House takes note of the Report of the European Communities Committee on the Reform of the Common Agricultural Policy (17th Report, 1984–85, H.L. 237).
The noble Lord said: My Lords, the common agricultural policy has been outstandingly successful in increasing agricultural productivity and with it agricultural production. Many farm products, including wheat, barley, sugar, milk, butter, beef, wine and olive oil, are greatly in surplus, in great contrast to the shortages of the 1940s and to the famine which exists in parts of Africa at the present time. But the price for those achievements has been high. A heavy cost has been borne by the Community as a whole and by consumers who have often had to pay more for their food than they would had the CAP not existed.
The CAP currently accounts for about 65 to 70 per cent. of the Community budget. Even with the increase in the VAT ceiling on the Community's own resources to 1.4 per cent., funds will be under pressure. The Commission's preliminary draft budget for 1986 contains the statement that the VAT rate it entails would be 1.35 per cent. even under the strict assumptions on which the draft budget is based. The Select Committee report states:
"Left unreformed the CAP could break down. If this were to happen, the committee fear that the existence of the EEC itself would be put in jeopardy. They therefore consider reform to be imperative".
The committee welcomed the initiative taken by the Commission in instigating a Community-wide debate on the future operation of the CAP. Although the Commission's debate centres on six topics for reform, the committee, partly because of the constraints of time, decided to concentrate on those aspects bearing most directly on the problems of surpluses and cost.
In several earlier reports the committee has argued that the CAP must move towards a greater reliance on the price mechanism. This is the chief message of the present report. But there are three new factors influencing the committee's recommendation. The first is the decision of the European Council at Fontainebleau to place specific constraints on the growth of CAP expenditure on agricultural price support. The second is the Commission's recently published Green Paper which is strongly in favour of greater reliance on the price mechanism. The third is that the committee, like the Commission, acknowledges that continued price restraint will adversely affect some farmers, chiefly those who farm in less favoured areas and on a small scale.
Because of widespread Community industrial unemployment the prospect of other employment for displaced agricultural workers in many areas is bleak indeed. The committee considers that provision of direct income aids, at least in the short term, is an essential complement to the successful use of the price mechanism. It recommends that arrangements for direct income aids should be at the discretion of member states and in accordance with detailed schemes made or administered by those individual states or delegated by them to appropriate regional authorities. But—and this is important—it should be within a policy framework drawn and approved on a Community footing and subject to Commission approval.
The committee is convinced that the CAP must change now. It must move towards restrictive pricing and realistic thresholds for all products which are in heavy surplus. In the view of the committee, consistently applied price restraints will reduce the overall level of output in the Community, and raise standards of efficiency, but it will take time to have an effect.
Price restraint broadly will have five main advantages. It will benefit consumers. To a limited extent it could stimulate demand for farm produce in the food industry and in the increasingly important industrial sector. It will reduce the cost of CAP and its economic distortions. It will facilitate agricultural trade and minimise any cause of legitimate criticism of its effect on international markets. Finally, restrictive pricing would lead to direct savings in support expenditure and so would release funds which might in part be used to finance structural measures.
The structural, or guidance, section of the Community's Agricultural Guarantee Fund was originally intended to receive 25 per cent of CAP funds. But so high has been the growth of agricultural support spending that the guidance section is currently only about 5 per cent of CAP spending. The committee repeatedly questioned witnesses whether they would prefer the CAP to be reformed by means of price restraint or by quantitive restraints such as quotas or quantums. With one possible exception, the witnesses, including the National Farmers' Union, representatives of food manufacturers and traders and the consumers in the European Community Group, said that they would prefer the use of price restraint. The committee consequently reject the extension of the quota system.
Quotas would not bring agricultural prices nearer to world levels, and they would tend to ossify agricultural structures. Furthermore, quotas are difficult to administer both consistently and uniformly, and undoubtedly would require the creation of a large bureaucracy. But I recognise that there are people of great experience who believe the objectives of the committee could be achieved by the use of quotas and quantums. Nonetheless, the committee, after the most careful consideration, were not of this view.
The committee strongly recommend that the CAP should be reformed on the basis of the prices policy. Such a policy can be both a measure of reform in itself and a precursor of further reform. It is essential that such a policy should operate with two main considerations in mind: that the farming community should be encouraged to cut production of commodities in massive surplus; and, second, that they should be protected from sudden sharp changes in policy. Farmers throughout the Community must be able to plan their businesses secure in the knowledge that politicians will not suddenly lose courage and change direction.
In evidence to the committee, the National Farmers' Union called on the Council of Agriculture Ministers to make long-term price projections, and to stick to their decisions. The Agriculture Mortgage Corporation told the committee that if regular price reductions are to be imposed, and a phased approach is adopted, it will be essential for a clear indication to be given at the start of the phasing period of the final target price figure. Therefore, the committee call on the Council of Agriculture Ministers to declare its commitment to a policy of restrictive pricing as the central element of the CAP for the future. Without such a declaration, the committee believe that the present initiative of the Commission, like all earlier attempts to reform the CAP, will fail.
The chief message of the report is the need for a consistently applied restrictive pricing policy tempered by direct income aids for those genuinely in need. The report makes a number of other recommendations. It recognises that the trend away from farming will continue. This trend is already marked. The number of people employed in agriculture fell from over 19 million in 1960 to 12 million in 1970 and 8.2 million in 1982. The trend is partly due to increased efficiency and technological advances, but the trend is also partly due to demographic change. The average age of farmers in the Community has increased in recent years. Fewer young people are entering farming and some young people, born in farming families, are opting for alternative employment.
The committee believe there is justification for speeding up the pace of such change. Large numbers of small, inefficient family farms cannot be supported in the long run by Community mechanisms. Therefore, the committee support the suggestion of the Commission that farmers be encouraged to leave production by means of a pre-pension scheme paid to older farmers who agree to abandon their agricultural activity. The pre-pension could be granted until the beneficiaries reach the age at which they would normally start to receive pensions under the national pension schemes.
The report also acknowledges that in the long-term environmental considerations will play a greater part in the formation of agricultural policy. Selective mechanisms should be used to regulate agricultural and environmental priorities. Agriculture, like other sectors of economic activity, should be subject to controls to protect the environment from pollution. In the majority of cases the Community's polluter pays principle should apply.
The report also approves the proposals of the Commission for policies designed to promote farming practices which conserve the rural environment. Management measures and a limited number of environmentally sensitive structural programmes, in which farmers would agree not to farm certain areas of land and might turn instead to forestry, tourism or craft industries, might be particularly suited to less favoured areas or marginal zones; but I think this should be considered in other regions as well as the Community.
On the subject of world food markets, the report calls for a new round of GATT talks to defuse the present atmosphere of mutual distrust which is growing between the Community and the United States of America on agricultural trade. The report states that the Community can best increase its share in world food markets by relying on an increased use of the price mechanism.
Finally, there is the question of food aid to developing countries. The Commission's Green Paper states that the,
"problem of food aid goes far beyond the confines of agricultural policy; it is the task of society as a whole to reflect on the matter and to find adequate solutions".
The committee believe that the ultimate goal must be to assist developing countries to achieve greater self-sufficiency on food as has happened in India over the last 20 years. Care must be taken to prevent gifts of food from hindering the development of indigenous agriculture.
These are the main conclusions of our report. Everything that I have said about the reform of the CAP, and indeed much of what was said in the debate on European Union earlier this afternoon, depend on one factor—political will. The penultimate sentence of the committee's report says:
"The reform of the CAP must not be allowed to fail through lack of courage and political will".
I hope that the House will support and encourage Her Majesty's Government, the European Parliament, the Commission and the Council of Agriculture Ministers to carry out the vitally needed reform of the CAP. I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on the Reform of the Common Agricultural Policy (17th Report, 1984–85, H.L. 237).—(Lord Plowden.)
8.31 p.m.
Lord John-Mackie: My Lords, I want, first, not only to congratulate the noble Lord, Lord Plowden, for putting this report before us but also to thank him for all the work that he did towards it. I do not think we realise how much he contributed behind the scenes. We had rather a short time to prepare the report. It

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had to go before the Select Committee on a particular day, seven days after our last meeting. I have the minutes before me, two long paragraphs showing what we asked the noble Lord to do at the last moment. It is to his great credit that he carried that out, working late into the night. I went along in the middle of the week, thinking that I would find the clerk there, to make a certain amendment. But there was the noble Lord beavering away in order to get the report to the Select Committee in time. We must thank him for all the work that he did behind the scenes as well as for his speech today.
Before examining the report, it is necessary to look at the introduction to the Commission's Green Paper. There are several points in that introduction that are worth mentioning. The first relates to the family farm. The Commission emphasises that it does not want vast spaces of land and few farmers. This is neither possible nor desirable in European conditions in which the basic concept remains the family farm. Most of us, I believe, would agree with that, although in our country and in Europe family farms are disappearing. In this country alone in the last 20 years the size of the farm has doubled. Admittedly in this country the average is not big. It is 170-odd acres. Nevertheless, this shows the trend. One hopes that we shall not so much try to reverse the trend but at least to keep it where it is.
The next point relates to price policy in the market. The Commission concluded that,
"there can be no alternative to pursuing a price policy more adapted to the realities of the internal and external markets but taking account"—
I emphasise this—
"of the Community's obligations to the agricultural population".
The noble Lord, Lord Plowden, mentioned this point.
Next, there is the question of the perspective for farmers in the long term. As your Lordships know, farming is a long-term job. There is no doubt that the Commission realises this. It recognises that farmers must have a long-term perspective to enable them to carry on. The paragraph at the bottom of page 43 states:
"There is no miracle solution".
They can say that again! There is no miracle solution to this problem, as the noble Lord, Lord Plowden, has so adequately explained.
There is also the question of the farmers' role. I am intrigued by the point made that farmers must accept a role not only as technicians but as managers and entrepreneurs. I have always considered myself a manager and an entrepreneur. It is a little hard on farmers to suggest that they do not manage. The noble Lord mentioned retirement, which is recommended. I always feel a little guilty having progressed about eleven years beyond the time for farming. However, I see the point that early retirement helps the situation in many cases.
Emphasis is placed on cereals. This was the point that we took up in our report. The issue of farmers' incomes is put very clearly together with the impact of restrictive price policy on agricultural incomes. This must be examined carefully. Added to this is the depopulation of the countryside. There is emphasis on part-time farming, which of course applies much more
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to other parts of Europe than to this country. This has an important role in many parts of Italy and Germany and for that matter all over the continent, and will apply even more when the two new countries join next year.
There is emphasis on the question of the environment. This is, of course, very important. Finally, on the last page of the introduction, there is reference to the reduction of prices and the effect of reducing production. The two points with which I should like to deal are those of cereals and the reduction of prices and what effect this will have. Before dealing with those matters, I should like to refer to the environmental point that we make in paragraph 74.
If the environmentalists think that reducing agriculture to anywhere near its state in the late 1920s and the early 1930s is a help to the environment, they could not be more wrong. If farming is not profitable no amount of grants to plant trees and dig ponds will be taken up. The way to get farmers to do better is to consider the point made, I think, by the farmers' union on page 27 of the report, where it emphasises this point:
"It must be recognised, however, that farmers may be more inclined to farm in an environmentally sensitive manner during times of agricultural prosperity rather than when profits are slack".
That is only too true. The way to get farmers to do better is through co-operation. Some remarks that I read recently about the malign influence of agriculture on the environment make me mad.
I should like now to consider the major recommendations in the report. To be brief, cut prices and you will cut the surpluses, with, of course, all the attendant savings in storage costs and restitution costs. Taking cereals as the Commission's first worry, I am nevertheless surprised by its attitude towards milk. It may be thought that the problem has been solved a little through quotas. However, when one considers that we have a million tonnes of butter stored at a cost of £6 a week per tonne—£6 million a week—one feels that something should be done. But it is the issue of cereals that the Commission has taken up. At present there is a stock of over 30 million tonnes. Unless something is done, that could rise to nearly 90 million tonnes by the end of the decade. Economists tell us that the price factor will control production; but very few, if any of them, will tell you how long that will take and what percentage of change will have to be made in the price to have an effect. This is what I fear. It took a long time in the 'twenties—and I am old enough to remember those times—before there was a serious reduction in agricultural production, although one has to admit that costs also came down at the same time.
That is not the case today. If anything, our costs are rising and our prices are coming down. But I cannot see a straight price reduction having a quick enough effect. In the last two years we have had a fairly savage cut in cereal prices—I think at least £20 a tonne, if not a little more—and there is little sign of any reduction in acreage so far. This last harvest may have some effect. There is no doubt that some farmers are looking for alternative crops, but the scope is very narrow indeed—protein peas for stock feed, linseed, lupins—and will be filled up very quickly indeed. I do not think one can stress alternative crops too hard.

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A drastic cut could force out poorer land from cereal production, but what is the alternative—more sheep and trees? These two products are deficient in the EC. The two are not supposed to be compatible—when I was in the Forestry Commission I had a long battle with many farmers on the subject of planting trees on hill lands—but that is a theory with which I do not agree. There are many examples, and, generally speaking, well integrated forestry with farming can more often increase the farming production. But even if on all the poorer land—and this is an important point—cereal growing was stopped, this is not where the surplus comes from. The immediate reaction by the large cereal-growing areas to a cut in price would be to grow more per acre, and our plant breeders and agronomists tell us that we are nowhere near the maximum yet; so we should get an increase in production initially, however savage the cut might be. All this adds to what I said earlier, and not even a dramatic price reduction will have a quick enough effect to get the Commission out of the mess we have got into because of tardy action in the past to prevent it.
There is the question of other uses for surplus products. The noble Lord, Lord Plowden, mentioned this fact. Biotechnology is advancing in the use of cereals and sugar for industrial purposes, but it will be a long time before any appreciable help can be achieved.
We suggest that we could share in the world food market. With the world surplus of grain, as I understand, at about 250 million tonnes, this will not be easy and certainly not short-term. It could bring us into conflict with the United States. But I shall not stress that point. I believe that the noble Lord, Lord Middleton, has ideas on this subject.
We have rejected quotas. However, in the Recess I spoke to many people interested in the subject, and they have been advocating quotas and prepared to accept them. There has been considerable discussion in the agricultural press on the subject. I am philosophically against them. As I think the noble Lord said, it would be very frustrating to good farmers to be tied down to quotas. He said that it would "ossify" some sectors of agriculture, and I should be against that. A national quota handled by our national Government could probably be made to work in this country, but the administrative difficulties which were pointed out for the rest of Europe, with the enormous numbers of farms and the size of them, would I think be insurmountable.
Quotas also conflict with my next point, which is the much wider question of the fact that it is estimated that 800 million people have a standard of nutrition barely sufficient for good health and that probably half of them are on virtually a starvation diet. This has been borne out by the situation in Africa and some other parts of the world today. The Commission states (and I should like to quote this; I know the noble Lord also quoted it):
"The problem of food aid goes far beyond the confines of agricultural policy; it is the task of society as a whole to reflect on the matter and to find adequate solutions".
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I agree with the last part, but I do not think that they can defend the first part, that,
"The problem of food aid goes far beyond the confines of agricultural policy".
I would say agricultural policy is to feed people wherever they are, and I am afraid that I do not altogether agree with that point.
The Commission made the point that food aid should not distort local agricultural production. But on the same page the Commission suggest in the next paragraph the point that they make in the Green Paper, that,
"within the framework of national food strategies of the developing countries an intermediary facility should be set up to assist the purchase of foodstuffs commercially on concessionary terms without this being allowed to interfere with development policy priorities".
I would agree with that. I should say that help with this should surely be pursued with all the vigour that we can muster, to help in getting food that way. In my opinion, and in that of most people, the production of foods in developing countries to the standard of nutrition that the rest of the world has is a very long-term job. Look how long it took us to become self-sufficient—and they are much further behind where we started. The world's population is estimated to reach 600 million in the next 20-odd years. Therefore, the food situation will not be solved overnight.
I can see the "price mechanism" ultimately reducing production, but I cannot see it getting rid of the surpluses and of those that will be built up during the time that this reduction takes place; because we have a graph showing what will happen if production is not slowed down very quickly. We could have 90 million tonnes of cereals by the end of the decade.
There is considerable criticism—and rightly so—that in the present world food situation surpluses should be lying in stores and in many cases deteriorating, if not actually rotting. A combination of price reduction and an orderly distribution of surpluses, either through the aid organisations or by commercial means, or both, with price concessions, as suggested by the Green Paper, is morally and commercially the correct way to solve this problem.
8.47 p.m.
Lord Mackie of Benshie: My Lords, my noble kinsman has said much that I was going to say and for that I thank him. I could not believe when I accepted a late invitation to dinner and said, "I shall come at 9.30" that I should not be able to see the end of the debate. With the time of night being what it is, I apologise to the House but I assure noble Lords that I shall read tomorrow what they say, and with much greater interest than listening to them today while waiting for my dinner.
Having dealt with the question of hunger, let me go on to the report and to the noble Lord, Lord Plowden. I have greatly enjoyed sitting under him (if that is the correct expression) in the committee because he is a man of much experience in committees. His recommendations vary somewhat. In the case of top people, he puts them up; in the case of the farmers, he cuts them down. But nevertheless his reasons for so doing are sound, I dare say, in both cases.

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This is a very interesting committee. I think that the noble Lord, Lord Plowden, has found it interesting because we have 14 members—we had a very distinguished member who had served a long time and who retired last year, the noble Baroness Lady Elliot. Of these, eight—with the Lady Elliot, nine—were farmers directly interested in farming, and six were others. By "others" I do not mean anything derogatory.
However, it is interesting that the recommendations of this report have been against the short-term interests of farmers. When the usual anti-farming lobby produces its venom against the farming community, it might take a look at this small question of the membership of this committee, which has consistently advocated that the CAP behave in a sensible manner, that prices be cut according to the laws of supply and demand, and that forecasts be made of what the prices will be in order that farmers can plan. That appears to be common sense. If I may say so, that common sense has emanated from a majority of these short-term farmers about whom people speak badly.
On the whole question of agricultural production, other reports from this House have received a great deal of publicity. They have said that we shall be in queer street as soon as oil exports start to decline and that therefore a great deal needs to be done in other fields or we shall be extremely poor. It is worth pointing out that under the CAP in this country in relation to agriculture we have saved imports in the region of £2,000 million, which would have to be found from a manufacturing industry which, according to other distinguished committees of this House, does not appear to be doing too well. I dare say it might be said that that of course has nothing to do with the Government.
However, the whole problem of the surpluses stems from the fact that we have large numbers of primary producers who have no marketing organisation. When you manufacture on a large scale you organise your market and you organise your production to meet your market. The returns which even extraordinarily competent people farming good land are achieving are not extraordinary in relation to the capital employed. They are nothing compared to the returns achieved by other businesses; they are nothing compared to the reward achieved from selling newspapers, even when they are bought out against their will. However, these are the returns achieved by farming, an achievement which has done a great deal of good for this country.
Throughout the globe farmers are not doing very well. The competent people on the prairies of America are going bust by the score. Inside the EC we have a protective system. It is a protection which this country normally dislikes, but it is the system which has produced these enormous surpluses, and surpluses must be better than shortages. Therefore, we must deal with that.
However, in the EC we are not logical. My noble kinsman spoke about the third world. Under the CAP the community imports from the third world manioc;—or tapioca, call it what you will—which helps the balance of payments of third world countries.
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Manioc is a substitute for barley, which is in surplus, and it costs us a great deal of money to import it. We also import maize gluten from the mighty United States, with whom we are certainly at war if you bear in mind the subsidies which at present they are throwing about regarding the importation of wheat into Algeria. We import it without imposing the normal levies which we impose on other cereals. Therefore, the CAP is not enitrely logical or protective, and under GATT and in relation to the third world, it is doing its best to try to work a system of world trade.
There is no question in my mind about the alternatives posed by the Commission. They were, first, price cuts; secondly, season-to-season adjustment of prices, which is exactly the same and refers to the threshold; thirdly, intervention restrictions, which of course mean falsifying the standards of grain relating to intervention by raising the standard so much that it is forced on to the free market, thus lowering the price—a dishonest way of carrying on; fourthly, a co-responsibility levy; fifthly, quotas; and lastly, a set-aside policy, which certainly would not work in this country. The committee is absolutely right that price must be the right way to do it. Quotas are too complicated, too ossifying (to use that lovely phrase), and the argument for them will no doubt be put later by my noble friend Lord Walston. However, the committee as a whole thinks that they would be bad for agriculture.
Therefore, we are left with price restriction, and as we have said we do not want price restriction to be so savage that socially we destroy whole areas of the countryside which mainly depend on agriculture. If I may say so to my noble kinsman, that is the argument which I and others have heard put forward in third world countries: that if large quantities of food are imported, you not only destory agriculture, but you destroy the social system in the countryside and you drive the displaced Africans, or whichever peoples in the third world are involved, into the towns where they have nothing to do but take to crime and be unemployed. The same is true to a very large extent in the Community. If we agree that we cannot allow people to produce for evermore increasing surpluses and we have to cut the price to do it, we must look at variations of the system in order to make it effective.
As my noble kinsman said, it is perfectly true that we cannot do it quickly by moderate price cuts. We must look at co-responsibility payments. If, for example, one takes a premium per acre for growing cereals, it would concentrate the cereals on land that should be growing cereals; in other words, the land which is capable of growing 3 tonnes, 5 tonnes or even 6 tonnes of wheat an acre. I suppose that that would be the correct thing to do. However, we must do something with the land that is going out of production in the poorer areas. I think that we must look at this in a far more positive way than we have so far. We must say that, for example, in forestry not only will it be profitable for rich men to recoup tax and to plant trees and for their heirs to reap the profit in 50 years' time—in fact, at present people are advertising for land for just that purpose—but we should be spending that money, or the same sort of money, on making it profitable for the small farmer to plant the

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trees. I know that at present the grants are quite good, but they do not bring a positive cash flow.
That would be a very reasonable way in which to proceed because the shortage of wood is absolute. There is no question that, to take our continued use of paper and wood, for years and generations to come there will be a shortage of cellulose of one sort or another. We must also look at positive conservation measures. It is all very well saying that we will pay subsidies to build stone walls but not to dig ditches; that we will give subsidies for hedging but not for something else. That does not produce a positive cash flow. Therefore, if we are to encourage people to stay in the countryside, money must flow in positively—capital-wise for tourism and income-wise for forestry.
Other new techniques are being spoken of, including the biological techniques of production from sugar, and so on. Surely it is possible to go a lot further than has been achieved at the moment. We cut down thousands of acres of forest every day to provide the newspapers that we read. Surely in this country we could be growing crops and techniques could be produced to make paper—of which we use plenty here—out of straw. Certainly during the war we were using it. A lot of money might go into that sort of thing to provide alternative crops.
I come lastly to a simple point. The reason why the farmers, the agriculturists, on this committee have recommended what would appear to be cuts against their interests is simply that they are thinking in the long term. The primary producer is always at the mercy of the five per cent. surplus producing the 50 per cent. drop in price, and it mostly appears to go in that way and not in the other way, and therefore he deserves some protection against that sort of action of the market.
What has been wrong up until now is that for extraordinarily selfish and stupid reasons the agricultural ministers on the council have not recognised this fact so that we have reached a stage now where, as my noble kinsman said, at any moment we shall have not 30 million tonnes of surplus, but we could have 90 million tonnes of surplus in great bins all over the place and running out of every store in the country, and no money to pay for it. So in our long-term self-interest it is right that we should bring the spending under control, that we should produce alternatives and try to preserve the fabric of the countryside by other means. This report goes a long way towards pointing some of the ways in which this can be done, and our chairman is to be congratulated on his chairmanship of the committee and on his introduction of the report.
9.2 p.m.
Lord Stanley of Alderley: My Lords, I look on this report wearing two hats. The first is as a member of the Select Committee whose task it was, as I saw it on behalf of the taxpayer, to limit the cost of the CAP in order, among other things, to prevent it from going bankrupt and so causing ad hoc cuts—which the noble Lord, Lord Mackie of Benshie, referred to as totally unfair—and the real possibility of a complete collapse of the Community as a whole. Wearing that hat, I support the report, particularly the method of price restraint.
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I have no time for quotas or quantums for commmodities such as grain, if only for the simple reason that they are impractical in so large and diverse a body as the EC. Indeed, the noble Lord, Lord John-Mackie, made this point. Those on whom they will work will not understand them because they are not as literate, as numerate, or perhaps indeed as articulate as some of your Lordships, in particular the noble Lord, Lord Walston, who I know likes quantums.
However, wearing my other hat as a farmer, and I think indeed as a citizen, I have to point out that such price restraint, unless carefully and gradually put into operation, will carry quite a lot of price tags. We never get anything in this world for nothing. Indeed, some of these points were forcefully brought out by the noble brothers—if I may call them so—Mackie.
The first tag that I see us picking up for price restraint is that if it is to work properly it will bankrupt—or, as perhaps the Minister would put it more kindly, put out of business—perhaps up to 20 per cent. of the farm workforce. Here I am afraid that I have to disagree slightly with my chairman; it will not just be in the West, it will also be in the South, and it may be the so-called efficient large farmers who may well suffer.
After many years of price restraint, farmers have little financial fat. Indeed the noble Lord, the Lord Mackie of Benshie, pointed this out. The price cuts that we have experienced—in this year in cereals in particular—have been substantial. I am supported in this view by looking at the rapid exodus of the financial institutions from the agricultural scene, over which I cry not one tear.
Secondly, the United Kingdom might want agricultural production again when North Sea oil runs out in, I believe, the 1990s. We might then be short of currency, and the report from your Lordships' House, which caused quite a storm, suggested this. The United Kingdom is not self-sufficient in temperate foods, even those commodities which are in structural surplus in the Community as a whole.
Thirdly, price restraint will increase the rate of drift from the land. The report, as my chairman, the noble Lord, Lord Plowden, pointed out, says this, and it says it in paragraph 69. I fear that this drift will go southwards into our cities, so perhaps aggravating the law and order problem, and that it will increase the social problems in the areas deserted by this labour force. There will be a further decline in services such as schools, post offices, village shops, and of course there will be no ladies for the Tory tea parties, if of course those ladies who remain are still of that political persuasion.
Fourthly, price restraint of any kind whatsoever will harm the environmental work. I have said this before, but the farmer's first duty is to his family and not to the birds and the bees, and there will certainly be more derelict farm buildings, larger fields, more smoke, and plenty of corner cutting, particularly in such things as safety.
I have mentioned only a few of the price tags which will have to be picked up by price restraint. It certainly is not, thank God, for me to decide whether the game is worth the candle. It is for the Council of Ministers to decide; but I hope that they, and my noble friend Lord

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Belstead, will consider these points before a final decision is made. Talking to our Continental partners, who in the past have suffered more unrest than we have in Great Britain, I suspect that they value the social stability of a rural population more than we do in this country.
So I ask my noble friend Lord Belstead to accept the principle of price restraint as the best way of controlling CAP expenditure and to recognise that it is essential that any price reduction is known well in advance by the farmers. This was put very forcefully by the noble Lord, Lord Plowden. Secondly, any price restraint must be introduced slowly to allow the industry to adjust, and, like the noble Lord, Lord Mackie of Benshie, I believe that this adjustment should have been started many years ago. Thirdly, I ask my noble friend to remember the social price tags.
If your Lordships asked me to stop sitting on my hedge (if I have not grubbed it out already) I would come down on the side of price restraint, or maybe price freeze, for those commodities in structural surplus. If this does not balance the budget I would suggest that the VAT contribution is made higher, despite the fact that it has already gone up 0·4 per cent. this year, to make sure that the CAP does not run into debt.
9.10 p.m.
Viscount Sidmouth: My Lords, when the shape of the CAP first became known in this country about 20 years ago many people, of whom I was one, viewed with some scepticism its apparent reliance almost exclusively on price mechanism to regulate both supplies of food for the Community and the well-being of the farming industry. There was provision for a common external tariff, which has limited the sources from which the food supplies of the Community could be expected to come, but even so the market to be regulated was large and, in many respects, complex. The accession since then of what will shortly be a further six states into the Community has greatly increased that complexity and also the political pressures.
In defending the policies which have resulted in the present financial problems, the Commission has taken the line that all would have been well if only the price recommendations made in recent years had been followed. It is true that over that period both the European Parliament and the Council of Ministers have consistently raised the price levels above those proposed by the Commission. But within the criteria laid down by the Treaty of Rome political decisions on these matters are inevitable. The objectives for the CAP set out in Article 39 of the Treaty are expressed in general terms, and in some cases can be seen as mutually conflicting. Furthermore, they are specifically set above the provisions of Article 43, which deals with the general rules of competition in the market.
It is clear, therefore, that in the CAP we do not have a free market, with the free flow of supply and demand making the market price. On the other hand, it is not a fully managed market, either. In the end, the only really finite control is the amount of finance which can be made available, and this appears to be running out.
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Sooner or later it must become necessary to introduce a further parameter. I believe this should lie along the lines of determining levels of food from Community resources which are required from time to time to meet the needs of the internal market and any external markets that may present themselves. Recognition of such targets must surely be essential for shaping policy from year to year, whatever methods are finally adopted for working towards them.
It so happens that research and development can help in adding precision to such calculations. Much has been made of the increases in productivity brought about by agricultural research and development. They have even been used as a stick with which to beat the fanning community or the research council itself. But the measures can also be seen as helping to reduce the fluctuations in food supplies brought about by variations in weather and natural conditions from year to year. Indeed, much research has been directed specifically to this objective. For example, I believe this could justify a reduction in the expensive storage of reserves to cover a possible shortfall in any crop year, and that would also bring more conviction to forward projections of our future production requirements.
In making its recommendation that,
"the principal tool for reform must be an increased use of the price mechanism,"
the committee was influenced by the immediate financial crisis in the European Community budget, and its possible consequence of a complete breakdown. Direct financial action under the price mechanism is no doubt the logical way to meet a short-term financial crisis because it would obviously reduce the cost to the Community of any particular crop year. However, I believe it is too blunt an instrument to resolve on its own all the long-term problems which have been thrown up. Indeed, like its forensic counterpart, it could, if wielded too violently, lead to grave injury and even murder. Foremost among the vicitims would be a myriad of small farmers and growers, and before I conclude, like previous speakers, I should like to draw attention to their plight.
It happens that the crop to which particular attention is paid in this report is cereals, where there is a minimal problem regarding small growers, mainly because there are very few of them—anyway in this country. However, other products which have been examined recently by the committee—for example, grapes for wine-making, olives for oil, or dairying in the animals sector—illustrate all too clearly the problems arising where there is a multiplicity of small producers and a product which is in surplus.
It is not that they are inefficient, necessarily. Very recently I visited an area in the centre part of Mallorca where the combination of a Mediterranean climate and ample supplies of subterranean water have created a prosperous community of small producers, mainly of fruit and vegetables. Very nice it looked, too, with immaculate buildings and miles of impeccable dry stone walls. No doubt this area will continue to thrive within the Community when it comes in. However, elsewhere there are millions of small producers, typically on marginal land, who are very vulnerable to any reduction in support prices.

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In the days of the Community of Six, Commissioner Mansholt, I believe, brought in a plan to shake something like eight million of these people out of agriculture. That plan was not implemented as such, but we have heard earlier this evening from the noble Lord, Lord Plowden, of the vast efflux of people from agriculture that has taken place within the Community since that time. We have also heard this evening cogent reasons why we should not go down that road any further—reasons both social and environmental.
On this score, I believe that particular importance attaches to Nos. (ii) and (iii) of the topics selected for the great debate on agricultural policy proposed by Commissioner Andriessen. Some of the evidence submitted to the committee, for example by the AFRC, indicated the work being done on alternative crops. But, important though this is, there was little to suggest that it would have a significant effect in the short term.
As for new uses for agricultural products, previous inquiries have revealed possibilities; for example, ethanol from cereals and alcohol from wine. The problem in most cases appears to be more economic than technical, in that the price of these products as food makes them too expensive as feedstocks for the new uses, as compared with sources already available elsewhere.
Thus the outlook for the small grower remains bleak. Recognising this, the committee considers that direct income aids must be a corollary to the more rigorous application of restrictive prices. These views are set out in paragraphs 57 to 64 of the report. I believe that the problem of the small grower is at the root of the present difficulties within the CAP, and that it can be solved only by vigorously pursuing both the long-term and the short-term remedies which have been proposed.
9.24 p.m.
Baroness Elliot of Harwood: My Lords, perhaps I may add my thanks to the noble Lord, Lord Plowden, for the admirable way in which he conducted this report and this committee. It was fascinating to listen to and fascinating to read afterwards when it was printed. I think the evidence which was taken was extremely interesting and will be of value for a long time to come. Certainly it was a very well worthwhile exercise. We are much indebted to the noble Lord for the enormous amount of trouble he took and the great area of agricultural activities which is covered in this report. The enormous number of organisations we saw and the great numbers of people whom we interviewed were all of great importance.
Tonight I do not want to take long. I should like to pick out merely one or two vital matters arising from the report.
I think that one of the things the Commission perhaps does not realise strongly enough is that farmers want a clear indication of the policy of the CAP for at least three or five years. Decisions which are taken instantly cannot be implemented instantly. If you are a farmer who is engaged in production, you cannot change your policy instantly: it is quite impossible. I think it takes at least three years to
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change a policy, whether it is for stock rearing or for cereal growing. Too often the Commission has given pratically no notice of any change in policies, so I hope that whatever else happens in the future we may at least have sufficient notice to be able to reorganise our agricultural production.
Tonight everyone has spoken, quite rightly, of the problem of surpluses. I believe that is the key to much of the reform that we ought to engage in. How do we tackle these surpluses? I do not think we concentrate nearly enough on the all-important business of selling what we are producing. We do not give enough thought to it; producers do not give enough thought to it; the Commission does not give enough thought to it. No one on the production side gives enough thought to how we are going to sell the produce that we make.
I went to the opening of the Royal Agricultural Show this year, which was performed by the noble Lord, Lord Sieff. He made an excellent speech, I thought, and one of the things he stressed very strongly was the story of how—and after all he is involved in a great selling operation—the producers must produce what the consumers want to buy. I was very interested in his speech. He talked about one or two particular examples, and I remember that one of them concerned the Arctic lettuce, which Marks and Spencer have managed to get the producers to grow and which are selling in their thousands, whereas before that the kinds of lettuce being produced were not really those that the consumer wanted to buy.
I think more could be done if there had been closer liaison between the producer and the consumer. We have marvellous selling agencies here—businesses like that of the noble Lord, Lord Sainsbury, or of the noble Lord, Lord Sieff. There are many others such as Tesco and so on which are all wonderful selling agencies. I think that we are as good at selling as any country in the world but we do not have a close liaison between the consumers and the people who are providing the consumers with what they really want to buy. I should like to see much closer co-operation between those of us who are producing and those who are selling, because I believe that in that way we might avoid the surpluses we have today.
I know that the cost of the CAP is the biggest item of expenditure in the Community's budget and people are asking whether the Community gets good value for this expenditure. My answer is, "Yes". We have provided all the food, and more, that the people in the 10 nations of the Community want. Farming life is still of the greatest importance both to the Community and to the people who live in our countryside. Rural life must be supported. More people crowding into towns would certainly be quite intolerable: it is quite bad enough as it is now. I agree with all that the noble Lord, Lord Mackie of Benshie, said on this subject just now. We must see that the rural communities are preserved, but we must change those rural communities and rural life while recognising that agriculture is an essential part of the national life in all EC countries.
That is where it is so very important for people to study the question of over-production. I know that we have recommended in our report the idea of price control, and that is probably a very good way of doing what is needed. But more could be done in other ways

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if we studied this matter more closely. I also agree—and this is in our report—that if we are to have cutbacks in the rural areas the consequences to the community must be measured and looked after. That is where the question of direct grant aid comes in.
We have suggested in the report that other activities could be introduced into rural areas. Examples are tourism, craft industries and forestry, although, in my opinion, forestry does not increase employment. I am surrounded by forests in the area in which I farm and the number of people employed is far fewer than in agriculture until the moment when the forests are cut down. That is when a lot of people are employed, and then there has to be replanting, but it takes a great number of years to reach that point.
We shall have to go for direct aid for those areas which will be severely hit if and when there is a great reduction in production. At the end of the day, we must all agree that it is better to have more food than too little. We must all consider very carefully the problems by which we have been obsessed in the last few months in Ethiopia and in Africa generally. I shall not discuss them now, because they do not come into our report, but where you see a shortage of food there you see disaster. In a way, we are fortunate because we are dealing not with shortages but with surpluses.
I have one other suggestion, and I wonder whether the Commission would consider it. Many years ago, the United Nations started an organisation, which is now famous, called the Food and Agriculture Organisation—FAO. When it was first started, it was run by a very remarkable man named Lord Boyd-Orr, who was the chairman. As your Lordships know, he has been dead many years, but he then made a suggestion which nobody took up. It was that there should be a world food board to help with distribution and with the way in which production and distribution could be united. It was rather like the World Bank which we have today. I do not know whether that is at all a possibility; certainly it is something which has been discussed and rejected.
It would be a pity if ideas such as that could not be looked at again because we are now in a position that is quite different from our position immediately after the war, when agriculture was only beginning to be the enormous industry it is today. If there could be some liaison between areas of over-production and areas of starvation, we should be doing something of enormous value not only to the agricultural world but to the whole community. I do not know whether the Agriculture Commission would ever consider that suggestion because it goes outside Europe and would mean that Europe would simply be part of a much bigger world organisation. But it might be worth thinking of; indeed, there are many ideas which we must consider as well as those that we have recommended.
However, as a farmer, I support the EC. I do not think it impossible to find a way out of these problems and I hope that the Commission will take advice from us as well as from other people. I believe that this matter could be solved and I do not think that it is insoluble.
Lord John-Mackie: My Lords, before the noble Baroness sits down I think I should correct her on the question of labour for forestry and for agriculture. Statistics show that, on comparable land, forestry employs three times as many men as hill farming.
Baroness Elliot of Harwood: My Lords, I am very interested to hear that, because the noble Lord, Lord John-Mackie, was the chairman of the Forestry Commission. I can only tell him that in the area in which I live that does not happen, but it may happen in time.
9.30 p.m.
Lord Lever of Manchester: My Lords, it is with some diffidence that a mere townsman with little or no knowledge of the details of farmers' problems rises to speak briefly, not under the delusion, which could be readily brought about by reading the report of the noble Lord, Lord Plowden, and his colleagues, that I had acquired that expertise simply by studying the masterly report which they have presented to the House.
I want to make some general comments as briefly as I can. First, self-sufficiency in food as an aim can be defended on social and environmental grounds even by those who see that that modest aim is economically not necessarily the best path and certainly not to be pursued rigidly in food or in any other area of our activity. What we have achieved here is not self-sufficiency, but we have achieved a structure quite different that produces these surpluses. Within a self-sufficiency programme you can structure productivity gains so that these will be manageable in the Community, will bring down prices and will bring benefits and a reduction in the burden of the subsidy required. But when you go on to the field of surplus you are moving into a totally different and more dangerous and destructive area.
When you are subsidising self-sufficiency you are at least subsidising useful work. The moment you move into producing surpluses in goods which are already in surplus in the rest of the world, you are subsidising waste, and in circumstances which affront the common sense of most of your citizens. So we really have to worry that our political leadership in Europe has been so slack that it has allowed the situation to get into the grave and complicated condition which the noble Lord, Lord Plowden, outlined briefly today and which is fully outlined in the report. What is worse is that, with the best will in the world—that is to say, even if we handed over the problem of running Europe to the Select Committee—it would take many years and much heartache before it is put to rights.
The problem continually increases with productivity gains. This has another political aspect to which I draw your Lordships' attention. It means that our people who are bearing the burden of the cost of this system see that they are bearing the burden of tax and prices in order to supply foodstuffs to the world outside at prices massively lower than they themselves have to pay; or, alternatively, they are forced even more unattractively to witness the sacrifices they are making in subsidising food production thrown away as the food is allowed to rot or deteriorate. When we act in this way we force ourselves to try to get rid of some

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of the surpluses in ways which inevitably disrupt world markets and patterns of trade. In doing so we are openly challenging and undermining the basis for the liberalisation of world trade. This adds to the frictions between nations and gives an impetus to protectionist trends already at a dangerously high level.
In political terms, the majority of our citizens who have to finance the production of these surpluses will readily come to feel that they are financing a process which undermines their own legitimate and healthy trading opportunities. This is not a static situation but one that grows worse all the time. We make productivity gains in agriculture and, because the system is upside down, those gains are not of benefit to us but are a further menace. They do not lighten the burden on the Community but increase it and present the Community and its citizens with the almost insoluble problems which are now upon us.
We must be careful not be become a 20th century version of the Luddites. The original Luddites tried to strangle production at birth. The 20th century versions of them could be said to be allowing production to come into being using the most modern techniques available for producing food but they then destroy it, waste it, use it or otherwise attempt to get rid of it in ways which redound to our harm.
If I may now say a few words about the LDCs, I agree with the committee in the principle of one having to be very careful not to act, however generously, in giving away food when that action undermines the food production of other countries. I also wholeheartedly agree with my noble friend Lord John-Mackie when he says that there is quite a distance to travel in many parts of the world before people will be able to feed themselves. It is a real problem and the committee were right to draw attention to it.
What is to be done? I do not know whether it heartens the bucolic membership of the committee to know that a mere townsman utterly endorses their majority view in favour of a market solution. Almost every knowledgable and objective person who has examined this problem is driven to the conclusion that, basically, the market solution must play a part. There are undoubtedly occasions in the modern world when the brilliant insights of Adam Smith on the workings of the invisible hand on markets must be
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intelligently and humanely related by government action to 20th century conditions. However, such interventions by governments have a fundamental justification; they are interventions to correct market anomalies and not to create them. The interventions we have organised in Europe are calculated to create anomalies on a growing scale.
I support also the committee's recommendations concerning generous selective action to help farmers where difficulties will be created. I fully support the committee's judgment in favour of timing changes in a realistic and compassionate manner. However, the difficulties of some can no longer serve to justify subsidies on this scale to the rest. We have reached a point—as the noble Lord, Lord Plowden has made clear in his report and again today—where such arrangements do not merely threaten the solvency of the Community but will increasingly embitter relations between its members and threaten the existence, and certainly the fundamental purposes, of the EC. We have already seen that this system of agricultural support—uncorrected even after it became fairly obvious that correction was required—has already done great injury to the major European purposes, which have had my full support or many years and continue to do so. That system not only eats up a great part of the budget but has too often reduced the contribution of Ministers to tedious and destructive nationalistic budgetary squabbles. This is a lamentable dissent from the great European purpose.
I conclude by fully recognising that we must act with circumspection and compassion. I fully recognise also the complexity of the problem, as outlined in the report. However, complexity is not an excuse for taking no action. I very much favour market action because it is the neglect of that action which is in part responsible for the present situation. It has been said that the alternatives to the market are the state and prayer. Neither of those has a compellingly successful record so far in this area, so I have no difficulty in supporting the noble Lord in recommending the market solution. The future will belong to those nations which can respond most swiftly, intelligently and compassionately to change. It will very heavily penalise those who obstinately resist it. The mischiefs involved in the present system of agricultural support have gone on too long. They must be corrected.
Lord Sainsbury: My Lords, first, may I join with others in praise and appreciation of the wise and firm chairmanship of the noble Lord, Lord Plowden, during his three-year term as chairman of Sub-Committee D. He will be greatly missed.
The shortcomings of CAP have been its failure to adapt its policies to changing circumstances. At the end of the war memories of hunger were vivid in the minds of millions. In fact, shortages of food continued into the 1950s. So naturally all the emphasis was on expanding production and on higher productivity. In this, undoubtedly CAP policy was very successful. But in due course this ever-expanding production became both excessive and increasingly embarrassing.
In the United Kingdom, in the 10 years from 1973 to 1983 there was, in the case of wheat, an increase of 45 per cent. in yield per hectare. In the case of barley the figure was 17 per cent., and for milk it was 25 per cent. per cow. These increases in yield were, of course, not confined to the United Kingdom. As long ago as the 1960s far-sighted Sico Mansholt, the agriculture commissioner at that time, proposed in his well known memorandum a substantial long-term cut back on CAP price supports. But that and other of his proposals were rejected, showing then, as so often since, that the Commission and the Council were incapable of taking decisive action. Now, nearly 20 years later, growing surpluses and unacceptable costs have reached crisis proportions.
The Commission, in its Green Paper or discussion document on the future of the common agricultural policy, states that agriculture, like the rest of the economy, is subject to the law of supply and demand. It goes on to say:
"Unless the Community succeeds in giving to market prices a greater role in guiding supply and demand within the agricultural policy, it will be drawn more and more into a labyrinth of administrative measures for the quantitative regulation of production."
I could not agree more.
In my opinion the importance of a restrictive price policy operated consistently over a period of time cannot be exaggerated. To date the Council of Agricultural Ministers has unanimously agreed that something needs to be done but disagreed as to what it should be. In the light of experience I am not surprised at this disagreement and its reluctance to accept a realistic restrictive price policy. So often in the past prices have been fixed as a result of political compromises acceptable to all member states, and generally well in excess of the prices ruling in international transactions or the domestic markets of countries with which the Community is in competition.
Of all the commodities in surplus it is probably cereals which present the greatest long-term problem; but that is not to say of course that there are no others. As has already been said, there are over 1 million tonnes of butter in store, in spite of the milk quotas, which are costing the EC taxpayer approximately £6 million per week. There are also over 800,000 tonnes of beef.
The Home Grown Cereals Authority has projected that end of season EC stocks of cereals may grow to the
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staggering total of 89 million tonnes by the year 1990–91. If the Home Grown Cereals Authority's projection is anywhere near right, then the number of intervention stores that will be needed is beyond belief. The Commission itself suggests that the very large harvest of 1984, which amounted to 155 million tonnes, could be a normal level of production in 1990 compared with the level of 125 million tonnes which was the average in the period 1980–83. It also goes on to say that even optimistic assumptions do not suggest that export markets can be relied on to absorb the future increases in Community production.
The Commission, as well as many others, has advocated for several years that European cereal prices should come more in line with those of our competitors in world markets. In 1982 the Council introduced a system of guaranteed thresholds which should result in the price being reduced if the threshold is exceeded. But the recent experience of the 1985–86 price negotiations shows how difficult it is for the Council to put such a policy into practice if it is not complemented by other measures concerning farm incomes.
Farmers particularly hard hit by a restrictive price policy should be helped; but the big questions are how and by whom? The committee considers provision for direct income aids to be an essential complement to the successful use of the price mechanism. But agriculture and rural conditons vary so greatly in different parts of the Community that the committee feels that it would be impossible to devise and administer centrally measures which can meet every case, where some form of direct income support is thought desirable on political or social grounds.
Detailed arrangements for income support, in the committee's view, must therefore be framed and administered nationally and in some member states regionally. Unfortunately both EC farm Ministers and farmers' organisations across Europe have shown practically no interest in the Commission's proposal for direct income aid to farmers. Mr Graham Avery, Agricultural Adviser to the European Farm Commissioner, said recently at a seminar in London that there was some enthusiasm for schemes designed to ease early retirement for farmers which, I should have thought, however valuable in themselves, are hardly an alternative to direct income aids.
I should now like to refer to something rather different. Agriculture is not just food production. The demands of consumers, their nutritional needs, their concern for quality and the requirements of the food industry have in the past, in my opinion, not been given the attention that they warrant. It is not always recognised that 80 per cent. of the food that we consume is processed or is manufactured. It is a very important industry. Its competitiveness has not always been helped by the common agricultural policy. I should therefore welcome a more integrated approach being taken and more attention paid to food policy.
I understand that the Commission anticipates six months of consultation and negotiations on its various proposals in the Green Paper. The great question at the end of the day is: will the Ministers of the member states have the political will and courage to take the

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necessary drastic steps, or will they jeopardise, by compromise and inadequate measures, the whole future of the European Community?
9.54 p.m.
Earl Ferrers: My Lords, I should like to declare an interest as one who has been involved in agriculture and farming throughout my life and also as chairman of the British Agricultural Export Council, whose purpose is to try to encourage exports from firms ancillary to agriculture which supply input to agriculture. I should also like to add my thanks to the noble Lord, Lord Plowden, and his committee for their remarkable report. It is clearly a result of a great deal of work and a thorough review of the whole problem.
It is interesting to note that out of 17 Members of your Lordships' House taking part in the debate I think that only the noble Lord the Minister and four others are not members of the committee. Therefore, there is a certain healthy whiff of unanimity of view expressed this evening. The committee have addressed their minds to the frantically difficult problem which has exercised Governments, the European Community, farmers, financiers and ordinary bemused individuals. I sympathise with anyone who tries to find the route out of the problem of the common agricultural policy.
Some of your Lordships may remember about two years ago a little word was coined called "TINA", which was supposed to mean "There Is No Alternative". Sometimes I think the word TINA can be applied to the common agricultural policy with a different translation, which is "There Is No Answer". It is difficult to find a solution, and even more difficult, having found it, then to get the other nine colleagues in the Community to agree. In the world of politics this is unlikely and, therefore, the most that could be expected is that we would get a watered-down version of the best and therefore the problem will continue.
The noble Lord, Lord Sainsbury, gave us some alarming figures of what the stocks might be in 1990 and later if rates of production continue at present levels. I do not dispute for a moment that those figures are correct. The only consoling thing is that when something seems perfectly obvious in this life it is the one thing that usually does not happen.
It is fashionable to lambast the CAP, which has in fact been a success. It set out to do two things: first to produce food for members of the Community at a reasonable price, and, secondly, to raise the standard of living of those in rural parts of the Community. This it has done; and it suffers from its success. I liked the definition of the noble Lord, Lord Lever of Manchester, when he said that it is justifiable to subsidise for self-sufficiency but not to subsidise for surpluses. That is correct. The difficulty is that one cannot actually bring the guillotine down at the moment one arrives at the point of success.
The committee's main plank was that there should be a reduction of price. They say that a continuation of existing policy will cause difficulty to paying members, and might end the European Economic
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Community if the CAP cannot be brought under control. I agree. I think there would not be many who would not agree. The suggestions of the committee are logical, intellectual and reasoned; indeed, so logical, so intellectual and so reasoned that it is very difficult to disagree with them. But I would venture to make one humble, modest criticism, if I might. It is almost an impertinence to do so, but my criticism is that possibly they have looked at the tactics of the solution as opposed to the strategy.
Agriculture, not only in the EEC but particularly in the United Kingdom, is undergoing very severe pressures, and has been for the past two years. Cereal prices—and this is the example taken by the report—in fact have dropped by £20 a tonne over two years which means that returns have dropped by about £60 an acre. Costs have increased at the same time, from the point of view of both inflation and technological improvements. This year has been a bad harvest, with a drop of about half a tonne per acre. I do not lay emphasis on this because in farming one has good years and bad years, but nevertheless it is a fact. As my noble friend Lord Stanley of Alderley said, there is not much fat left. Of course, there are some farmers who always do well and who are on good land. There are others who are not so fortunately placed. In general, the only point I wish to make is that agriculture is undergoing some pretty severe strains.
I therefore enter one word of caution, if I might. What happens if prices go on being lowered? It is not as if you say that 5 per cent. off one year will rectify the position. It will not. It is, as the noble Lord, Lord Plowden, I think, said, a policy of continuing price reductions. Two things will happen if prices are lowered. One is that by lowering profitability it will stimulate farmers, by every conceivable means, to increase their productivity in order to gain by extra production that which they have lost by price reductions. The result will be to add to the very problems we are trying to resolve. It is another example of what I once described to your Lordships, I hope with a degree of humility, as "Ferrers' law", which says that everything has the reverse effect of that intended.
The second thing is that if reducing prices works the way that it is intended, then farmers will be put out of business. That may be desirable. The noble Lord, Lord Mackie of Benshie, said that farmers in the vast prairies of North America were going bust by the score. I do not believe that this is a policy that we want to see pursued here. What happens if bankruptcies take place and businesses come to an end to any reasonable extent? One thing is that land prices will drop. That, in turn, will put in jeopardy other farms and other agricultural businesses for which security largely rests on the price of the agricultural land. That being so, that will put them in jeopardy, and land prices will drop still further. That is the effect of market forces. This may be perfectly justifiable, but I doubt whether it is something that we wish consciously to see happen.
The committee says that there will be a trend away from farming. That is perfectly true in numbers, but not necessarily in acreages. What do you do with land that is made uneconomic in that way? What happens

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to it? I do not think the committee addressed their minds to that. If the land that has become uneconomic is bought by a neighbouring farmer who is more economical, he can then farm that land more efficiently and so continue to produce that which the person who has gone out of production used to produce. And so the problem continues. What is the alternative? It cannot be put down to grass. Because there are beef mountains, butter mountains and milk lakes, it cannot be put down to rape. Although the committee suggest rural industries and tourism, I do not believe that this is a satisfactory alternative. It is a method of providing employment; it is a method of providing an additional income: it is not an alternative land use. The uplands will be particularly badly hit.
The committee say, as I think the noble Lord, Lord Sainsbury, said, that those people should be helped by some form of rural subsidy. That helps economically those who live there, but it is slightly akin to a rural dole. I do not believe that it is a satisfactory land use. It might be an aid in difficult circumstances, but it is not really a satisfactory strategy.
There are those who say—the committee did not say this—that land which came into a state of non-viability would be a wonderful opportunity for conservation. Conservation is good and should be encouraged; it is worthy. But as a policy, conservation is complementary to agriculture; it is not an alternative. To see large areas of land become derelict because of the financial inadequacies of agriculture and to consider that it provides environmental conditions for birds and insects to flourish is not an acceptable strategy. It would be tantamount to seeing a return to the depressed era of the 1930s. I do not say that this is what the committee wishes but I hoist one word of warning: if that particular policy of continued price decreases were to take place that would be the possibility.
Then one asks: what is agriculture? It is not just farmers and farm workers. It is all those whose work and livelihood brings them into contact with agriculture. It is the farm workers, the villages, the agricultural merchants, the corn merchants, the agricultural engineers, the machinery manufacturers from the small blacksmith up to the Fords and Massey Fergusons of this life. It is the agricultural chemical companies such as Shell and ICI and their purveyors. It is a whole range of country, industrial, chemical, manufacturing, and processing activity, all of whom depend upon agriculture in its widest sense. All those people, companies and industries will be affected if we have a decline in rural agriculture.
It is significant to remember that agriculture is the biggest industry in the United Kingdom other than oil exploration. I do not suggest that that is a reason for continuing to subsidise at uneconomic rates the production of food that at present has no particular home, but, if we followed the line of the committee of the noble Lord too far, it would have quite deleterious results. Paragraph 95 of the report says that the cereal problem could mount in almost geometric proportions. I agree entirely. However, decline can happen quickly and, if an avalanche begins, it is not easy to stop. What we have to try to do is to make adjustments without causing the avalanche.
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We are not alone in this. Other members of the European Community and the United States of America face the same problem. We are all suffering, curiously enough, from a technological success. I think that it was the noble Lord, Lord Wilson, who said when he was Prime Minister that if industry had the output that agriculture produced we should have no problems in this country. But, as in industry, in order to succeed one has to modernise. Modernising invariably creates the very unemployment that we all seek to alleviate. One sometimes thinks that life would be very much simpler if mankind had not thought of these innovations and technological advances. Everyone would be employed and the countryside and our cities would look nicer. But one cannot deal in fantasy. One has to deal in the realities of life. We are in a world with disadvantages as well as advantages.
I should like to draw this thought to your Lordships' attention. It was mentioned, I think, by the noble Lord, Lord Sainsbury, and certainly by the noble Lord, Lord John-Mackie. In 1960 there were 3,000 million people in the world. In the year 2000 there are likely to be 6,000 million; and we are only 15 years off that. All those people have to be fed, housed and clothed. What to us at the moment is a carbuncle of anxiety induced by over-production in the West is in the totality of the world no surplus at all. We ought to find a way to get what is a surplus in the West over to those who are not so fortunate. That does not mean that the provision of food to other countries is in itself necessarily a good thing. Somebody has to pay. Frequently the food does not get where it is needed; and there is a possibility that it may lull people into security as they wait for the next load of food as opposed to trying to find their own methods of production. But it is something which we ought to consider; and in some way to try to find an answer to. Without doubt there are those in this world who ought to be able conveniently and easily to deal with what at present is a surplus. One should remember that, despite their gross inconvenience, surpluses are very much better than deficits.
If the Government find the right answer to this and if the answer be that advocated by the noble Lord's committee, I wish them well. I asked them to be cautious for the reasons which I have given and I hope that they will not find the problem too intransigent because I rather doubt whether in the end they will be able to get their other colleagues in the Community to agree. That sounds a little depressing, but things do not always work out in quite the way we expect, and I have no doubt that in the end some solution will be found. However, I do not think that it will be an easy one and I do not think that it will be quite the one which the committee of the noble Lord, Lord Plowden, suggests.
10.11 p.m.
Lord Northbourne: My Lords, I, too, should very much like to thank and congratulate the noble Lord, Lord Plowden, on his sensitive and charming chairing of the committee. I should like to touch on one or two aspects of the report. The first is debt. I am very worried about the question of debt, which the noble Earl, Lord Ferrers, touched on a little. If the price restraint policy which we are advocating is indeed applied, there will be a very serious problem of debt for

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those farmers who in the last few years entered into financial commitments when land prices were high and everything looked good.
A few years ago the future of the CAP seemed buoyant. The question is: were people who entered into debts at that time misled by the CAP or did they just make a bad business judgment? How do we draw the line? The problem of debt will not get any easier as land prices fall away, as they undoubtedly will under the influence of lower prices.
In paragraph 71 the report stresses the wide variation in the levels of debt within countries of the EEC. For example, debt in the Netherlands and Denmark represents respectively 81 per cent. and 89 per cent. of operating capital. The level in this country is of course very much lower. I trust that the Government will look carefully at any element of concealed subsidy which is contained in these debt differentials, and make sure that Community funds are not spent relieving debts on loans which have been unfairly subsidising competition with British producers.
A particularly important point on the subject of debt in this country is made at page 87 of the evidence given by the Agricultural Mortgage Corporation. I quote Mr. De Salis, who said:
"In many instances people are over-borrowed because… they are farming more land than they now wish to … They find it difficult to sell off part of their land because of the incidence of capital gains tax. It is impossible to roll over capital gains into the paying off of an overdraft as it is into investment in other assets. It is rather extraordinary, in the current economic climate, that it is not possible to roll over capital gains tax into reducing the size of one's business … If that could be changed, I think that it would make it easier for farmers to solve their borrowing problems".
What will happen to farmers who are put out of business by price restraint? Last Tuesday John Cherrington in an article in the Financial Times said:
"The political question of the day is, 'Whose land is to be sterilised, and how will farmers be compensated?' ".
We cannot just shrug our shoulders and say, "Let them grow brioche!" We have to do something about it. I think that it is necessary very clearly to differentiate between help which is given to maintain existing farm structures and help which is given to compensate the farmer and his family against personal suffering. For the former category, the Council for the Preservation of Rural England has recommended annual management grants tied to agreed farming practices and urged hectarage payments rather than headage payments to avoid over-grazing and preserving the countryside.
I think that part-time farming can also help to maintain existing structures in areas of the countryside where small farms are important to the landscape or indeed to the structure of the rural community. More alternative part-time occupations are needed in these areas, and there is also the possibility of new part-time farmers. I remember a conversation with a Frenchman who asked me about my job. I said, perhaps a little sententiously, "I am a peasant". He said, "Me too", in a flash, "but not a practising one". I think there probably is some room for part-time peasants.
Finally, I should like to turn to the question on which many noble Lords have touched—European
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food surpluses in the context of world hunger. I agree with the report—and it is generally accepted—that, apart from emergencies, gifts of food to developing countries are counter-productive. Cheap food distorts markets, lowers food prices, and discourages local production. The aim of development aid must be to stimulate self-sufficiency, but this does not detract from the need for emergency food supplies.
Many developing countries do not have the regularity of rainfall which we enjoy, and, except under irrigation, production fluctuates widely from year to year and so do prices. The only solution to this problem which provides regular food supplies to the consumer and a more regular return to the farmer is strategic storage. Adequate storage is an essential ingredient of any policy against hunger. Strategic stores should ideally be replenished from domestic production in the good years. This holds up prices and encourages local producers. However, there are many countries today where bad year has followed bad year: no replenishment of strategic stocks has been possible. In cases of this kind, and in cases where strategic storage has not yet been established, there is a very real justification for donating some of Europe's surplus grain to refill the stores.
A brilliant Jewish politician flew over to Rome in 1974. Henry Kissinger in his keynote speech at the World Food Conference in that year suggested a policy of world food storage. The initiative unfortunately failed through lack of political will. I suggest that the recent response to the Live Aid appeal might indicate that there may now be more political mileage in support for the third world's starving people. It is disappointing, in this context, to note that the United Kingdom Finance Minister was among those who, in September of this year, supported the withdrawal of the 500,000 tonnes emergency food aid proposed by the European Commission for 1986. I would ask the Minister whether he can give an assurance that this question will be reopened. In Mali, Chad, and Ethiopia today the stores are empty.
I should like to read to your Lordships a sentence or two about another brilliant Jewish politician 3,200 years ago:
"Joseph said to Pharaoh, 'Let them take up the fifth part of all the food of those seven good years and lay up corn under the hand of Pharaoh, and that food shall be for store to the land against the seven years of famine which shall be in the land of Egypt, that the land perish not through the famine".
That was 3,200 years ago. Surely it is time we learned the lesson!
10.20 p.m.
Lord Middleton: My Lords, I had the privilege of sitting on the committee of the noble Lord, Lord Plowden, having myself a direct interest in farming. It is getting late so I should like to make my brief contribution to this debate by concentrating on the cereals section of the report, where the problem is summed up in three short sentences, on which I should like to base my remarks:
"[grain] surpluses are heavy and still increasing. Productivity continues to rise. Disposal on the world market is costly and a cause of international friction".
Noble Lords have referred tonight to an estimated build-up of surpluses by 1990–91 of 90 million tonnes.

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The growth of EC grain surpluses is illustrated by Table IX in the report, and the production figure for this year's crop was a guess because our report was published at the end of July.
The Home Grown Cereals Authority has this month told me that its estimate for 1985–86 (that is the year's grain crop) for the EC should be revised upwards from the estimated figure in Table IX which is 133 million tonnes to 140 million tonnes. If this is right, it would generate a much larger surplus over the next seven years and it would generate significantly greater costs of disposal. The authority's new figures, which include a revised estimated annual increase, envisage a total liability in 1990–91 of 14·3 billion ecus in respect of cereals alone. That is not much less than last year's total appropriation for the whole of the EC's agricultural market support of 16 billion ecus.
This latest piece of information surely underlines and magnifies the problems of marketing grain surpluses which are described in the report, and as the report says they call into question the viability of an intervention system that is already very near to taking the Commission's expenditure well beyond the budgeting ceiling.
Even allowing for the vagaries of the weather, therefore, productivity continues to rise, so what is to be done about it? The Commission is quite clear what is to be done and that is to check the continuing rise in cereal support prices. For this 1985–86 season they proposed a 1·8 per cent. cut in intervention prices for grain, but the Council of Ministers failed to agree on this particular issue. Since the report was published, the Commission has said that in the absence of a Council decision it will implement its own recommendation.
The reasons Lord Plowden's sub-committee supports a policy of cutting back institutional prices have been given by the chairman and are set out in the report. The logic is inescapable. The noble Lord, Lord Plowden, has referred to the other options, the other possible control mechanisms, and the reason for preferring the use of the price mechanism. I was very interested to hear the views of the noble Lord, Lord Lever, on that.
The crucial question is: will such an apparently modest institutional price reduction have any effect upon the build-up of surplus grain stocks? The answer has been given by my noble friend Lord Ferrers. The answer has to be that it will not in itself reduce output by so much as a bushel. What it will do is to reduce to some extent the financial burden on the Community's funds, and that is the overriding necessity.
What kind of price reduction is needed to affect grain output? Any farmer will say—and it has been mentioned tonight—that the price he is actually receiving for his corn is dropping steeply. The National Farmers' Union has given me up-to-date figures, the figures are confirmed by what my noble friend Lord Ferrers has said and my experience confirms their accuracy. These figures illustrate quite clearly what is actually happening. The market price for feed wheat in September 1983 was £120 a tonne; in September 1984 it was £ 100 a tonne, and this September it was between £95 and £100 a tonne. That is a fall of up to 20 per cent. in two years. But this is not the end of the story
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because last year the Commission imposed a 120-day delay in the payment to farmers for grain sold into intervention and that in itself is equivalent to a £4 a tonne reduction. Finally, during the same two-year period input costs have risen by at least 10 per cent.
This sharp downward trend in grain prices should be considered in the light of paragraph 57 of the report, which quotes the evidence given to us by the Agricultural Mortgage Corporation. I think this has already been referred to tonight. The corporation estimated that a 15 per cent. reduction achieved by cutting prices would have eliminated the net farming income for 1984. Whether or not this is a reliable estimate, there can be little doubt, as is said in paragraph 58 of the report, that a significant reduction in support prices will cause genuine hardships to many individuals.
My noble friend Lord Stanley has referred to this fear within the agricultural industry and it is why the report recommends measures to mitigate the personal and social impact of lower prices. I was very interested to hear what my noble friend Lord Ferrers had to say on that. However, even with the present order of price reduction that has actually happened, and notwithstanding what the Commission may be putting on to the institutional prices, volume of output is unlikely to be affected. Here, I am in complete agreement with the noble Lord, Lord John-Mackie.
The normal reaction of a producer in this situation is to cut costs by increasing efficiency if possible and to produce more in order to compensate for lower prices. That would be my reaction and probably that of my fellow arable farmers. I cannot speak for European farmers, but I guess that their reaction would be similar. However, farmers on the continent would suffer much more quickly and more severely by reason of their relatively smaller average size of farm. The differential is very well illustrated on pages 119 and 120 of the report. There is a very interesting Home Grown Cereals Authority document which was published after our report and confirms this view that a much smaller support price reduction for cereals than is sometimes mooted would have a significant impact on a large number of European farmers
Those who are less keen on the operation of market forces than I am may argue that this reinforces the case for other measures such as quotas or quantums or co-responsibility levies. I would not agree with them; nor do I believe would the majority of the committee of the noble Lord, Lord Plowden. If it is true that, as my noble friend Lord Ferrers suggests, in a competitive world efficient producers will always step in where others cannot cope in a harsh economic climate, then there will remain the problem of surplus grain. I wish we could do more for the hungry people in the world. Emergency aid can do a little to alleviate desperate situations; but I find myself in complete agreement with the noble Lord, Lord Plowden, in saying that the hard truth is that the only practical way to prevent recurrence of famine is to ensure that people have the means to grow sufficient food or the means to purchase it. Can we expand home consumption of cereals? Table IX illustrates that home demand has changed very little. Increased total home consumption is likely only if domestic EC cereal prices move downwards.

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With regard to the development both of new crops in place of those in surplus and to the development of new uses for agricultural products, the evidence that we heard was that little progress has been made. But here again high domestic prices discourage farmers from seeking alternative products and they discourage the search for new uses; so it remains to consider the disposal of grain on the world market.
The figures relating to world production and consumption of cereals are interesting. When we last had a general debate on agriculture two years ago on a Motion of the noble Lord, Lord Mackie of Benshie, I quoted some figures showing that the world level of production of grains over consumption was slim. Over a period of 20 years up to 1981 it averaged out each year at about one week's world supply. I found also that whereas world cereal production had doubled in those 20 years, world consumption had kept pace. And looking at more recent figures it is plain that such a trend continues. Furthermore, in eight of the last 13 years consumption has exceeded production; so the advice of which the noble Lord, Lord Northbourne, has reminded us just now—the advice of Joseph to the Egyptians—remains sound to this day.
Shortages, at any rate in the more developed countries, are overcome by means of the build-up of surpluses in the fat years, chiefly in the United States. And it is those stocks which are moved in response to the demands of world trade. The uncertain factors which make any guesses about the future volume of world trade difficult are the capacity of the Soviet Union to grow food more efficiently, the great fluctuations of output caused by the weather, which also causes huge swings in Russian grain output and which can cause (as it did recently) a 55 per cent. reduction of Australian output in one year of drought. Lastly, the great uncertainty is the question of how fast China can become self-sufficient in wheat, which her people are consuming in ever-increasing quantities, having relied so much in the past upon rice.
The largest exporter of wheat is the United States, with the EC catching up fast, having already overhauled all other exporting countries. The United States also exports over 60 per cent. of the world's trade in coarse grains. Therefore it is not surprising that she looks on the prospect of the growth of subsidised EC surpluses with unease. One's natural instinct is to say that the EC should endeavour by every means to capture a greater share of the world grain market and that the United Kingdom in its turn should fight to increase its share of the total EC exports. The report rightly spells out the difficulties in the way of such a course and, as the noble Lord, Lord Plowden, has told us, the report calls for a new round of GATT talks in order to thresh out some kind of understanding with the United States.
I myself believe that this will be an uphill task. How, for instance, do you interpret the condition laid down in Article 16 of GATT, which permits export subsidies providing they do not allow a country more than an equitable share of world trade? You can argue about what is an equitable share of world trade until the cows come home. Nevertheless, I believe firmly that the trading route is the most promising one that
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we should follow. There are immense difficulties along that road, not the least being the uncertainty about the future strength or weakness of the dollar; but I support fully and wholeheartedly the Committee's firmly stated view in paragraph 87 of the report that the Community can increase its share in world markets and that increased use of the price mechanism will help to achieve that object.
10.35 p.m.
Lord Walston: My Lords, this is for me a sad occasion. It is sad because it is the last time that I shall address your Lordships as a member of Sub-Committee D, having been a member of it, with a two-year break while I was in the European Parliament, since its inception 11 years ago, and having served as chairman for three years. But it is also sad for a far more serious reason, and that is because this is the first time that I find myself in very fundamental disagreement with the findings of the committee, and with the report.
The committee has always had a reputation for sound, thoughtful, constructive and helpful reports. I wish that I could say that I felt this report lived up to that reputation, but I am afraid that I cannot do so. That does not in any way lessen my respect and affection for my colleagues on the committee, and in particular for the noble Lord, Lord Plowden—and I share in the admiration which has been expressed by many other speakers. But in my view this report is inadequate, illogical, unimaginative and complacent. It does little more than endorse the Commission's green discussion paper, itself completely lacking in imagination and reality and emulating the ostrich in its desire to hide its head from unpalatable facts.
In essence, the report places reliance solely on the price mechanism, and we have heard a great deal from other speakers today about the price mechanism. It is, I agree, a very useful weapon, but it is only a subsidiary weapon in the fight to contain the cost of the CAP and to slow down the increase in these butter and grain mountains and in the mountains and lakes of the other commodities that we know so much about. I repeat that its role can be a supporting one only, and not the main weapon.
There are several reasons for this. First—and my noble friend Lord Sainsbury made this perfectly clear—experience has shown that Ministers simply do not have the guts to cut prices sufficiently to reduce production. Year after year, even when the Commission has gathered all its courage in its hands—and it does not have very much courage, or perhaps it has too much realism—the Council of Ministers has whittled away even those very modest suggestions about price reductions. Therefore, to produce a policy which is based solely on solving this problem by price reductions is simply unrealistic. Many noble Lords who have spoken today have said that it has not worked in the past, and our trouble is that because it has not worked in the past we have no reason for believing that it will work in the future. Will there be a stubborn change in the attitude of the Council of Ministers? I do not believe there will.
But, in a way, I must confess that I feel it is fortunate that Ministers have not had the guts to do what is

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necessary because if they relied solely on drastic cuts in prices we would, after five or 10 years, but not before then, have seen widespread bankruptcies—and bankruptcies not only of farmers, as the noble Earl, Lord Ferrers, pointed out, because before the farmers' bankruptcies there would have been bankruptcies of machinery makers, of dealers and of suppliers of fertilisers and all the other things which go into farming. This would have had a devastating effect upon our rural environment. If any noble Lord doubts that, let him look at the Middle West of the United States, where just this is happening. Obviously, the conditions there are very different, but they are nonetheless severe.
We would also have seen what those of us who are old enough saw in the late 'twenties and in the 'thirties. We would have seen derelict farm buildings; we would have seen overgrown hedges, waterlogged fields, no new planting of trees and a general run-down of the environment; and increasingly the urban public is concerned with these matters. They do not want to see that sort of thing and they must realise—those who understand it do realise full well; one noble Lord has already mentioned this in his speech although I do not remember who it was—that the best protection for the environment as we know it and like it is a prosperous agriculture.
But today it would be far worse than in the 'thirties because conditions are so different. In those days most farmers were tenants. They had as a buffer against economic pressure their landlords—bad luck on the landlord perhaps. But farmers would go along to him and say, "I'm very sorry sir, but I can't pay my rent", and he, rather than have the farm put back into his own hands in time of depression, would forgo the rent or would reduce it. Now there are relatively few tenant farmers. Most farmers are now owner occupiers; most of them have pretty heavy mortgage payments to meet; and, with the best will in the world, the mortgage companies and the banks cannot behave in the way the landlords did in those days.
There is another difference. There was very little farm capital, tenant capital, in those days—very little was needed because there was not the same intensive use of inputs. Today all farmers have substantial overdrafts with banks and that makes them yet more vulnerable to these pressures. It took years, and then only because of war, to recover from the 'thirties. By then we had lost our position as the leading agricultural country of western Europe. Today we still have not recovered it. Virtually all our farm machinery is imported; our leading dairy cows come from Dutch and Canadian stock; our leading beef cows come from France—we who had once been the stock farm of the whole world. These are some of the things that happened then; and to a far greater extent they would happen now if the price mechanism alone were pushed far enough to achieve the desired cut in production; and Unless it is applied so drastically that widespread bankruptcies would occur, it simply will not work.
Farmers' reaction, as we have heard, is to grow more. This is what has been done. We have been experiencing cuts in prices for several years now. The Home Grown Cereal Authority's prices show that over the past three years there has been a drop in the price
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of wheat of more than 20 per cent. That bears out some figures which the noble Lord, Lord Middleton, has given us. Professor Harvey of Reading University has written in a most helpful and interesting paper that,
"farming income is now more than 30 per cent. lower than it was in 1971–72. The industry is paying out more for bought-in labour, and especially capital, than it was and as a result has less left over for itself.
Those who pin their faith on the price mechanism would surely say, "If this has happened, if farming income has been dropping even since 1971, if the price of grain has dropped by 20 per cent. in the past three years, surely less must be produced". But has the butter mountain declined? Has the cereal mountain become any smaller? It is still rising and it is rising fast. Surely that must be sufficient to convince even the most committed supporters of the price mechanism pure and simple that it is not enough to solve this problem.
I am not saying that it should not be used. It should be used—but it should be used as a back-up to other policies, and they should be based on quantitative restrictions. That is to say, not on the amount that farmers may produce (I am not advocating an individual quota for each farmer in any way) but on the amount for which they will receive a guaranteed price. This is very much in line with the suggestion made by the noble Lord, Lord Lever. He said that we should by all means pay subsidised prices for what we want but not for what we do not want. That is precisely what I am saying also.
There are various ways of doing that. I will make only two suggestions, and those as briefly as I can. But I must begin by making it clear that the ultimate target should be announced now but reached only after 5 years, thus putting farmers on notice as to what the future holds for them and giving them plenty of time to adjust. One cannot bring about rapid changes when one is dealing with farming.
One method would be adopting in a modified form a scheme that has enjoyed some success in the United States. I speak of the guaranteed loan scheme. Under that scheme, farmers are free to grow as much as they wish and sell at the best price they can get—but the Government undertake to lend them money interest-free on the security of a specified quantity of their crop. If the farmer has not sold that quantity by the end of the harvest year, the Government take the security—they take the wheat—and the loan is discharged.
There is one obvious drawback. It can be overcome but it is a serious drawback; the need for a fixed amount of this loan to be allocated to each farm. However, I believe that with some modifications this scheme would be workable in the Community, and it deserves a great deal of thought.
There is a second and, to my mind, preferable method. That is, for the Commission to agree on the amount (let us stick to wheat) that the Community consumes annually. That would constitute the Community quantum. This amount would receive a guaranteed price, gradually reducing—and here the price mechanism comes into play—until it comes closer to the world price. It is for the politicians and the Ministers to decide how close that should be.

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This Community quantum would be divided among member states according to their average production over the past five years; a purely statistical and not political exercise. Each member state would then receive from the Community funds which would represent the difference between the world price and the guaranteed price for its national quantum. Each national government would be free to divide this amount among its own farmers in any way they wished.
A government could give every farmer exactly the same amount per acre. If they wished to favour those in the hard-hit areas or small farmers, then a government could give a larger proportion to them, and a smaller proportion to the bigger farmers. A government could also supplement these deficiency payments by national payments—I stress national payments—from a social fund in order to alleviate hardship in special cases. However, this would be done only in a way that does not encourage greater production.
Many people have said that quota systems or quantum systems—whatever you like to call them—cannot work. The noble Lord, Lord Stanley of Alderley, particularly said so. But I remind your Lordships that we have lived with them in one case for a long time and in another case for a short time. Sugar beet—the sugar régime—is based on a Community quantum allocated to each country. It was much too big and has been badly administered, but it has been done. It can be done—it works.' We also have the famous milk quota, which is in fact individual quotas, which I do not like, but which is working. So if people dismiss this argument of quantum on the ground that it cannot work, let them look at the facts and see what has in fact happened.
There are many advantages in such a scheme. In the first place, it puts a ceiling on the cost of the CAP, and that is one of the most important things that it is desired to do. Then, it lowers the price of cereals to the consumer, which includes livestock producers and thus, indirectly, the consumer of livestock products; it abolishes intervention buying, reducing bureaucracy, and allows farmers to grow as much as they wish and to take their chance on the open market; it does away with accusations of unfair competition from the United States of America; it gives freedom to member states to support their farmers on social grounds from their own resources; it entails the minimum of bureaucracy; and it cushions farmers from violent changes in world prices but renders them more liable to economic forces.
I believe that it is along such fines that we should be directing our thoughts and urging the Ministry, our own Government and, through them, the Council of Ministers and the Commission to tum their minds, and not of this blind adherence to the price mechanism which, as I have said, has been proved not to work. In my opinion this is a great opportunity which the committee has missed.
10.51p.m.
Lord Campbell of Croy: My Lords, I will be brief at this stage of the debate. I was not a member of the
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committee but I state categorically that I am convinced that reform of the CAP is essential and that nothing should be allowed to delay carrying it out.
The original agricultural policy of the Six which started nearly 30 years ago has achieved most, if not all, of its early aims. It is in more recent years that it has produced these massive surpluses demanding more and more granaries and stores. The system must be changed. The EC cannot afford paying the agriculture industry to produce quantities of food that cannot be consumed in Europe or apparently disposed of elsewhere. Farmers should not be encouraged to produce for public intervention: that is, for markets which do not exist.
The committee's main recommendation is that there should be more use of the price mechanism. I do not have time to pursue the points which the noble Lord, Lord Walston, so eloquently put, but I believe that that is one of the remedies that should be used, not necessarily entirely on its own. However, I draw your Lordships' attention to the part of that policy which has not been spelt out in either of the documents—either in the Commission's Green Paper or in the committee's report: namely, the direct income aid which would be a counterpart to the reduction of prices and aid to those who would be hard hit and indeed might have to go out of business. Money will have to be spent on schemes which it will be difficult to agree upon. Nonetheless, this must be done if the policy of price restraint is to be followed.
The noble Lord, Lord Northbourae, spoke on this part of the policy and I should like to say more on it. The debate so far has concentrated on the effects there would be in this country on the environment, on hill farming, and so on. I should like to refer also to other member countries. That is where more of the difficulty will be met.
To devise solutions which will accompany the reform of the CAP, we should have closely in mind two factors which have contributed to the situation in which we now find ourselves. First, there has always been an extra element in the CAP as it was originally introduced among the original six members of the EC which was not contained in British agricultural support policies at that time. That factor means that there has been a regional development subsidy within the CAP, which was always intended. It was intended to provide a form of assistance to Less Favoured Rural Areas, especially in France and in Germany. In Britain, on the other hand, regional aid programmes have been needed by and designed mainly for industrial areas in decline, and they have been quite separate from agricultural support measures.
There have been two different approaches, therefore, I believe that the recent German refusal to allow cereal support prices to be reduced should be regarded in the light of that fact. I have no doubt that the Germans had in mind rural communities where a large percentage of the population is still employed either full-time or part-time in agriculture.
The second factor to which I refer is that there are problems arising from the fact that most forms of agricultural support policy apply virtually across the board, so that large efficient farms on good land benefit more than most small units. This was always the

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problem in this country under the old deficiency payments system and others. Some of the smaller units will undoubtedly need special consideration as a price restraint policy is applied.
As the noble Lord, Lord Walston, has said, in Europe Ministers have not been prepared in recent years to reduce prices. I believe they will only do so in the future when they know that there are measures prepared for those who will be hard hit, for the environment and for disadvantaged areas. The crucial and difficult part in drawing up an effective price mechanism policy will therefore be the creation of schemes over the whole of the EC for areas, communities and individuals, in order to temper the harsh impact. of the policy upon them. The British Government must be ready to include elements of regional aid, special aid and aid for the environment. The agricultural policy of the EC is making it economically unbalanced and top heavy. Unless reform is embarked upon soon, the serious distortions which the CAP is causing will upset other parts of the EC's economic and financial policies. We must make sure that we do not reach that stage.
10.58 p.m.
The Earl of Radnor: My Lords, at this late hour I shall be as quick as I possibly can be. In point of fact, after the very good debate that we have had there is little left to be said; and I, myself, view the whole question in fairly simple terms. Before I say anything more I should like to compliment the noble Lord, Lord Plowden, and indeed the whole of his committee, on this report.
I agreed with their conclusions for the most part, though there were perhaps some unimportant details on which I might or might not touch. What I disagreed with was the degree of emphasis which I read into the whole report. I felt that it described the situation in a very calm manner and reached very sensible conclusions, but to me it did not transmit any of the urgency which the noble Lord, Lord Campbell of Croy, has brought out, and which I am sure is inherent in the situation as it now exists.
I cannot agree with the noble Earl, Lord Ferrers, with the noble Baroness, Lady Elliot, and with others that the CAP has done a particularly good job. Certainly it has a purpose, but it has got out of control. The noble Earl said that one cannot bring the guillotine down at just the right moment. As far as I am concerned, that guillotine needed lubricating a long time ago and has been stuck at the top for far too long. We are in Europe in the embarrassing predicament which has been described so well by so many noble Lords. We are spending a lot of money to produce products which we ourselves do not want, and then more money to store them. In spite of what your Lordships say, it is hard to see quite what the end of it all will be.
Having said that, let me now say that I agree entirely with the committee that the price mechanism must be the right mechanism to use. I am sorry in many ways that the quota cannot be used. I think the reasons have been covered perfectly well. However, I am sorry that it cannot be used. The small farmer has a very
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important part to play, certainly in English society, and I should imagine even more so on the continent, and I think the price mechanism bears heavily on him. It is not that the small farmer is suffering from lack of scale—there are extremely good and efficient small farmers—but his marketing is at a severe disadvantage. When this business eventually sorts itself out I hope that he will survive in our society, and I expect and hope that that will be through some form of co-operative movement which might emerge when he sees the danger which is portrayed in the report.
I cannot produce solutions any more than has any other noble Lord. At least two and probably more noble Lords suggested that in the world there was not a surplus and that, what is more, there could be a shortage coming. That is all very well, and it may be true; but, as I said at the beginning, the situation is more immediate. A future shortage could probably be met from land which had run derelict (I hope that that does not happen) in precisely the same way as the need was suddenly catered for in 1939 after the 1920s and 1930s, about which the noble Lord, Lord John-Mackie, spoke.
Where the emphasis of the report is completely wrong is in producing three solutions (as far as I read it) for this country and presumably for farmers in general. One is diversification into different crops, which is just not realistic. The table in the report that I read shows that in the case of those commodities in which we in Europe were not self-sufficient we nearly were, and so any swing into those products, as many noble Lords have said, would immediately produce the problem again in a different commodity. If the members of the committee were thinking of the stranger crops about which one reads, I do not think that that is practicable. We all know of people who grow anything from borage to evening primroses, for whatever purpose I cannot think. They may do it well and make some money, but it is not the answer to this question.
The next alternative is diversifying into the service, craft or tourist industries; in other words, farmers must do something different. I think that that is an equally impracticable suggestion. Farmers are farmers. Who is going to finance this sudden change into a new business? Who is going to teach them to be good with tourists? Who is going to teach them their new craft? Where are the craftsmen going to come from who are not going to drive a tractor but will do some fancy ironwork, pottery, or something of that sort? Again, this is where the emphasis is wrong. It is written in a paragraph as though it is a solution, but in my opinion it should be disregarded entirely.
That brings one back to the third matter, which is a solution, but a difficult one, and that is direct grant aid. There will be considerable hardship if the price mechanism is used with such force that it will have an effect on surpluses more quickly than the noble Lord, Lord John-Mackie, thinks it might. If there is hardship, money will be required in quite a large measure to alleviate that hardship and deal with the situation. How much money that is, I do not know. Presumably it will not equate with money that is used to support the present system. I hope not. This is where the emphasis must lie and where there must be a full

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realisation that the price mechanism will cause hardship if it is used in such a way that it is going to deal with this situation of surpluses past, present and future.
I would suggest—and these are peripheral matters—that research should be directed at alternative crops such as the ones which have to do with fuel in some way or other. Research should move away from those crops which are in surplus. Obviously thought should be given to alternative occupations, particularly the financing of people who might wish to do something altogether different from farming and yet stay on their farms.
My last point is the most important of all, because the report says that this will all need political will. Indeed this is so. It is not just will in this House; it is will in Brussels, with the commissioners, the heads of state and so on—particularly the heads of state. Looking round, I see that not many of your Lordships who are here now were present during the previous debate, but I sat through practically the whole of it. The previous debate was to do with European Union; it was very learned and interesting to listen to. I missed about two or three speeches. The common agricultural policy was mentioned with some emphasis once by the noble Lord, Lord Reay, and once by my noble friend Lady Young. If it was hardly mentioned in the previous debate, what sort of notice is going to be taken, and what sort of action is going to take place, in Brussels? I think it will be a very awkward situation that will dribble on.
The rules of the game here are the Treaty of Rome. This was spoken about frequently earlier in the day—the veto, the Luxembourg Compromise, where the veto can be brought up under spurious and unreal situations. I do not think anything very helpful will happen regarding these food mountains until a situation is created in Brussels whereby a majority, a two-thirds majority or something of that sort, deals with the possibility of one member nation stopping action for its own parochial reasons. That is where my noble friend must talk to his other friends and Ministers and try to persuade them to use every power in the world to influence the commissioners and the heads of state to behave in a sensible way. I feel it is they who have let us down and who have led us into the position we are now in.
11.10 p.m.
Lord Gallacher: My Lords, it is worth putting on record at the outset that support for agriculture, at least in Britain, pre-dates our entry into the Common Market. The milk marketing boards of the 1930s, the major agricultural Act of 1947 and subsequent legislation all show clearly that before Britain became a member of the EC, we accepted in principle the concept of support for farming. Consumers are sometimes inclined to overlook that fact, and I think that it needs to be stressed.
Furthermore, even the system that we had—a system of deficiency payments—was not without blemish. One can recall, for example, in the matter of world meat prices, and so on, that major additional sums of money were required by way of supplementary votes by Parliament causing great
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upheavals in the country even though we had the shelter of what was thought to be a better system; namely, deficiency payments. Nevertheless, the common agricultural policy is basic to the Treaty of Rome. I belong among those people who believe that without the CAP there would never have been a Treaty of Rome. Certainly, there would not have been the free movement of manufactured goods throughout the Community which gave the EC its initial buoyancy and proved it to be a success resulting in Britain's decision to join.
The reform of the common agricultural policy is designed to benefit consumers. But, no less, it is designed to assist EC manufacturers to compete in world markets. Here, there is a fundamental distinction between the policy that applied when world trade was buoyant and manufacturers within the Community could afford to sustain the CAP at its then cost, and the present position whereby manufacturers are having to compete in a world recession and are finding that more often than not their prices are out of line with those of their main trade competitors.
It is fair to say that the price mechanism vis-à-vis the CAP has not yet been seriously tried. I know that the farmers' union and other bodies can show that there has been a reduction in price. But, certainly, the Council of Agricultural Ministers has so far not summoned up enough courage to make really radical reductions in prices. That is what the proposals in the Green Paper are all about. I believe that your Lordships' sub-committee would have been foolish, given an apparent willingness on the part of the Commission to make fundamental proposals as regards the price structure, to have followed the advice of the noble Lord, Lord Walston, and said, "We will set that on one side and opt instead for a system of quotas" when that was furthest from the mind of the Commission at the time the present proposals were made.
Furthermore, on his own admission, the noble Lord, Lord Walston, has been frank with the House, saying that, on the matter of sugar, it has not been a wild success. The price of sugar in the Community—sugar is supposed to be on a self-financing quota basis—is not appreciably less than the world price. In fact, it is considerably higher. So far as the quota itself is concerned, there is intense dissatisfaction in the United Kingdom with current proposals which show clearly that France, for example, is in a far more preferential position as regards its sugar quota than we, here in the United Kingdom, are. Although quotas may be a recipe for solving the problem, I foresee greater arguments in Brussels about national quotas than we get about prices under the present regime.
So far as milk is concerned, it is mildly ironic that without milk marketing boards in the United Kingdom, which are not much in favour with the Commission because of their statutory character, it would not have been possible, in my opinion, to have ensured such a smooth introduction of milk quotas as we have. Although they are related, as the noble Lord, Lord Walston, said, to the individual farmer, it is a fact that we are currently, as a nation, under quota, and to that extent it is not of itself an immediate answer to this problem.

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The problem of consumption within the Community is not easily solved. Fashions are of course changing all the time. Socialist propagandists in the 1930s used to make our flesh creep—such flesh as we had in those days—by pointing out that children in lower income groups who were fed skimmed milk were pre-disposed to rickets. It now transpires in the light of current medical opinion that necessity was the mother of nutrition. Today, for example, the diet which used to suffice for manual workers—cheap, high energy food, fats, sugar, starch, which are not bad in themselves—is now bad because manual workers are not quite so heavily manual workers as they were in the days when those foods were part of the basic diet. We cannot divorce what is happening in the community from what people want to eat and are eating; a fact that my noble friend Lord Sainsbury quite rightly stressed and which the noble Baroness, Lady Elliot, also mentioned.
In this connection one would wish to congratulate the Government on having apparently found a permanent funding basis for the Food From Britain organisation. All I would say is that they should take considerable note of the advice which the noble Lord, Lord Sainsbury, gave and using the Food From Britain organisation try to bring together farmers and food manufacturers to make sure that what is being produced by farmers is what is asked for by food manufacturers and therefore what can be sold.
There is also a great deal of money being spent on generic advertising by organisations which preceded and predate the Food From Britain organisation. I would refer to milk products, meat, eggs, fruit, and bread. All of these product organisations—some statutory, some not—are spending substantial sums of money, often financed by the trade, and it seems to me that having found a breathing space for the organisation by reason of solving its funding problems, there should now be an attempt to extend Food From Britain's umbrella so that it is the comprehensive organisation which those who advocated it in the first instance wished to see.
The effect of reform, unless backed by supports as described in the Select Committee's Report, will undoubtedly have a serious effect on farm communities and the environment. Reform may not be a cheaper option, certainly in the short run. Indeed, I have fears myself—bearing in mind Lord Ferrer's law—that we could find ourselves paying more in order not to grow food than we are currently paying for growing it. Nevertheless, I think that the size of the problem has now reached such proportions that in fact we have very little alternative but to try.
Of course, if we are going to restrict prices and consequently change the pattern of farming, we need to ask ourselves: what kind of farming? Is it to be low input or low output? If that is thought to be the solution, then one would wish to see that farming conducted on a current cost-accounting basis because one has the feeling that many of the claims being made for it as a solution are based on artificial costings and would not be capable of implementation by those people who are entering farming for the first time.
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If we are to reduce acreage, where are we to reduce it? As the sub-committee was told by the Agricultural Food and Research Council, anything can be grown in the eastern half of the country. On the other hand, the further west one goes, the less successful certain products are. Here I think that there is a dilemma for British agriculture; namely, do we farm less intensively in the east and move west in order to reduce production? Or do we in fact continue to farm productively in the east and allow farming to languish in the west of the country?
I think that land use comes into this in a very significant fashion. Planning, too, comes into it in a very significant fashion. I was very glad that the noble Earl, Lord Ferrers, touched on this. It seems to me that the east of England—and particularly the south-east of England—is inevitably that part of Britain which stands in closest proximity to the European Market. Indeed, when we were being urged to go into the Market, the triangles and quadrangles showed quite clearly that within a 150 or 200-mile radius of London there were in fact millions of consumers. I believe that we still have that problem with us today. Undoubtedly, if there are serious attempts being made to alter land use patterns then the Ministry of Agriculture and the Department of the Environment will have seriously to tackle the problem of where in effect changes in land use are to take place.
We are living through a second industrial revlution. Fortunately, in my opinion, it will not scar England as the first industrial revolution did. It is a fact already reflected in land prices that this is the area of greatest potential, if we regard membership of the EC as an opportunity to trade in a very large and enhanced market; and that was what joining was all about. But it would be foolish not to tackle this problem of where and when development is to be allowed to take place. Whichever Government grasps this nettle can expect to be thoroughly unpopular for the exercise because, apart from the joys of the weather, undoubtedly the people who are most articulate and who are best able to resist such alternative uses will oppose this strongly. Nevertheless, I think that the dilemma is there.
A rolling programme has been mentioned and I think that it is indispensable. It was rather disappointing for the sub-committee to find that the Minister of Agriculture appears to be frightened of planning ahead in agriculture. The Minister—not on this occasion but on a previous occasion when he met the committee—seemed to indicate that attempts to plan ahead had not been successful in the past. That may or may not be so. Nevertheless, I think that, given the nature of the problem and the importance of letting farmers know what the future holds for them, it is an inescapable fact that there must be rolling programmes of at least five years' duration. I think that these are possible within the context of what the Commission is seeking to do, and I sincerely hope that the Government, particularly the Minister of Agriculture, will modify their attitude to the whole concept of a rolling programme.
I began by saying that I think that the CAP was responsible for the success of the Common Market in the first instance. I believe that unless it is reformed, it is capable oí destroying the Common Market, and for that reason the sub-committee's report—an excellent

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one in my view—is worthy of every consideration. I hope that the Commission will take note of it and that we shall make a major attempt to grasp the nettle and to reform what has undoubtedly become a major embarrassment to the members of the European Economic Community.
11.21 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, this debate and the Report of the Select Committee on the European Communities come at a most opportune moment. I should like to congratulate the noble Lord, Lord Plowden, not only on a speech which I very much admired, but also on chairing the committee, which has undoubtedly made a most valuable contribution in its report to the search for a solution to the problems facing the common agricultural policy.
The particular relevance of the report is that it has been made when the European Community is engaged in a wide-ranging debate stimulated by the Commission's green paper, Perspectives for the CAP. The committee has been able to take this into account in the work which it wisely set in hand before the publication of the green paper.
There is a great deal in the noble Lord's committee's report with which the Government can find common cause. It is the Government's view that the committee is right to emphasise the fundamental role of a more market-orientated price policy in seeking reform of the CAP; right that action through the price mechanism is to be preferred to quotas; right that unlimited price guarantees are not an effective instrument for tackling the social issues raised by changes in our countryside.
All your Lordships' speeches this evening have identified the basic problems facing European agriculture—its rising budgetary costs and the problem of finding outlets for mounting surpluses. I must say that I was very glad that the noble Lord, Lord Plowden, spoke of the achievements of the common agricultural policy in the past. But we must face the fact that the problems stem directly from the failure of CAP market support to respond adequately over a long period to rises in agricultural productivity, so that the provision for all market support in the Community for agriculture in 1985 will apparently be equivalent to £11¾ billion, or 70 per cent. of the whole Community budget.
I was also very glad that the noble Lord, Lord Gallacher, in what I thought was a most interesting speech, reminded us, and said that we should remind others, that agricultural support certainly predates the European Community.
The appalling weather in some parts of the British Isles this summer, which in some areas has persisted right through the autumn, is a salutary reminder that there is still a need for an agricultural support system. However, I think that we should also do well to remember that in the last 10 years support prices in the Community have risen overall more slowly than rates of general inflation in the member states: consequently—and many of your Lordships have made this point this evening—many producers have suffered a decline in income in real terms. So the difficulty we face is not in identifying the problems, for
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there are plenty of those, but, as my noble friend Lord Ferrers said, in finding effective solutions that can be agreed by 12 member states and sustained over a sufficiently long period of time.
One point on which the committee were adamant, and I think your Lordships are all agreed, is that we need to get away from crisis management and to make longer-term decisions based on a realistic and objective analysis of the likely conditions in which European agriculture will have to operate in the future. The recent history of the milk sector provides a striking example of what can happen when decisions are put off and put off until drastic action is finally necessary and quotas are imposed—but quotas still with an inbuilt surplus and with the costs of disposal continuing to increase.
Therefore, I am sure that it is right that both the committee (with a distinguished dissentient voice, but nonetheless the committee) and the European Commission have stressed the need for a policy of sustained price restraint as the best means of tackling the basic problems of the CAP. Support prices more in line with market realities will not only contain directly the costs of the European budget by immediately reducing the costs of disposal of surplus produce, but in the longer term will bring a better market balance of supply and demand by reducing the incentive to overproduce and by encouraging greater consumption.
May I come closer to the difficult point? It is argued—and we have heard it in the debate this evening from some of your Lordships—that the response to reducing prices is going to be higher production. With respect, I think this is to ignore the recommendation of the committee, and indeed the policy of the Government, for action through the price mechanism sustained over a period of years, which will give a clear signal to producers and can, I argue, restrain production. This approach would avoid the practical difficulties that quantitative controls such as quotas can entail. Nor would it artificially freeze the structure of agriculture, as quotas may do—a consideration which I think accounts for the support for the price option, after a good deal of hesitation, from my noble friend Lord Stanley.
From all these viewpoints a more market-orientated price policy surely addresses many of the CAP's pressing problems. But, of course, as your Lordships well know, a sufficiently tough price policy has proved difficult to agree. We hear various alternatives suggested—co-responsibility levies, quotas, support based upon a quantum, and set-aside policies are the main mechanisms. Co-responsibility levies would be a false solution in the Government's view. They are attractive to those who advocate them because they represent an escape route from the budgetary controls which have been agreed for the CAP. Moreover, co-responsibility levies are likely to result in higher support prices to compensate producers, with the result that consumers end up bearing the burden which would otherwise fall on the Community budget.
Although the committee were clear that a policy based on quotas does not meet the needs of the present situation, the committee also referred to the concept of a price differentiation system based on a quantum—a matter to which the noble Lord, Lord Walston,

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devoted part of his speech. Under such a system production up to the level of the quantum would receive full price support, and the excess would have to be disposed of at much lower prices. What worries the Government is that in order to operate such a system surely it would be necessary to identify how much production was within the quantum, and to do this would seem to require quotas to be set, and indeed to be enforced, at some level in the production or supply chain, probably at farm level—and, of course, for cereals this would be far more complicated than it is even for milk and for sugar beet. The idea could, the committee suggests, also involve deficiency payments: not a concept, as I understand it, that the noble Lord, Lord Walston, was advocating. Unless the guaranteed prices were set at levels rather lower than those at the moment, deficiency payments would be likely to be extremely costly. Without dismissing these ideas out of hand, they are, I suggest, the realities which we should have to recognise if we were to consider this option.
Finally, thinking of the options, set aside was disposed of by the noble Lord, Lord Mackie of Benshie, as being, in his view, impracticable for this country. It would certainly be very expensive if we wanted to offer the financial inducements necessary to attract a significant amount of land out of surplus crops.
Cereals have quite rightly been selected for special attention by the committee in the report and by the Commission in its green paper, for the sector is pivotal to the agricultural economy. As my noble friend Lord Middleton said in his speech, the trend in cereal production is ever upward. The committee endorses the policy which the Government have long pressed the Community to adopt; a restrictive price policy. Particularly for cereals, a policy based on keeping market prices in check will be to the competitive advantage of the United Kingdom, because we have a highly efficient industry which is better placed to adapt to the challenges of the market than that in many other countries.
The Government are prepared to look carefully at additional measures to improve the way in which the existing system is managed, such as changes in quality standards. But most of the suggestions to be found in the Commission's green paper for new approaches outside the framework of the existing system cannot be said to represent solutions to the real problems of the cereals sector. In principle, cereals quotas could provide a solution, but I strongly agreed with the noble Lord, Lord John-Mackie, when he said that there would be massive problems of negotiation and administration; they would choke off demand by being inflationary and would introduce rigidities. Other noble Lords said very much the same thing. New uses for cereals, while being interesting in themselves, as mentioned by some of your Lordships, do not represent any real prospect for the use of large new quantities of grain at a reasonable cost and would, furthermore, only have a chance of viability if grain prices were very much lower.
The Commission has not, of course, restricted itself to analysing the cereals sector. It has suggested more broadly in the green paper that price policy could be accompanied by other measures: first, that the farmer might be offered some alternative and, secondly, that
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particular groups of producers could be offered some form of direct income support. Lord Plowden's committee expressed views on both those approaches and I shall say a brief word about them.
On behalf of the Government, I certainly agree that there is a place for alternative crops, but we must surely analyse the costs carefully. It is no use replacing cereals with an acre of a substantially more costly product. We can also expect, almost as surely as night follows day, that there will be demands from some in the Community for measures to offset the cost of supporting alternative crops, for example, by increasing the level of protection against imported substitutes, and thus we would expect renewed demands for a tax on vegetable fats and oils, to which we remain adamantly opposed.
One of the alternatives available to farmers is the possibility of expanding farm woodlands. The Government recognise that woodlands on farms have the potential to make a valuable contribution to farm income as well as having wider environmental benefits. In the presence of experts on this subject this evening, I think I must cut short my remarks on this particular subject, but I should just say that, as I think your Lordships know, we are considering what measures might usefully be taken to encourage farmers to bring existing farm woodlands under proper management and to plant woodlands. To assist in this process, the views of interested organisations are currently being sought on the basis of a report which the Ministry of Agriculture published a little while ago called Woodland as a Farm Crop, which we hope will be a contribution to this important subject.
In seeking alternatives, one other theme pursued by the committee and in the green paper is the role of agriculture in the economic structure of rural areas. Here I should simply say that I think we are trying to take some positive steps to try to deal with, and address ourselves to, the economic decline which occurs because of people being attracted away to urban areas. As your Lordships know, we have from the beginning of this month instituted a new grant scheme which incorporates grants for tourism and craft projects on farms in the less favoured areas. If I may say so, I am more optimistic than my noble friend Lord Radnor about this, because through ADAS farmers are put in touch with bodies such as the tourist boards, the Development Commission and the Council for Small Industries in Rural Areas, which are particularly well qualified to help.
Not all family farms in remote rural areas can, of course, turn to tourism or to craft works. We should remember, however, that expenditure on hill livestock compensatory allowances in the United Kingdom this year is likely to amount to about £100 million including payments for the first time to farmers in the new less favoured areas following the extension of the LFA agreed in the council last year. When I heard the noble Viscount, Lord Sidmouth, speaking of small farmers, I could not help but reflect that over half the farmers who claim HLCAs have holdings of less than 25 cows or 167 sheep.
We have also taken measures to mitigate, so far as is possible, the effects that the introduction of milk quotas has had on small producers. Using quota bought up under the outgoers' scheme we have been

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able to restore the small producers to their 1983 production levels. We also aim by the next financial year to remove the whole of the cutback on development awards to those with less than 200,000 litres of quota. Small milk producers are also benefiting from an abatement to the co-responsibility levies in the LFAs; and, in the beef sector, the suckler cow subsidy, which was raised last year to a ceiling of £24·75 per cow, will also have been of assistance to the smaller producer.
Whether additional measures might be considered by the Community in the area of additional support for particular groups of producers is, I realise, a central issue in the debate currently taking place on the Commission's Green Paper. The provision of direct income support has been recommended by the noble Lord, Lord Plowden, and the committee, and I give your Lordships the assurance that we approach the Community discussions on this with an open mind. But we have to recognise that there could be some very difficult problems associated with this. Of course, provided they act within the Treaty member states can and do operate income aids already in the context of their social policies. But if a Community measure were to extend much beyond general guidelines for national policies there would be numerous difficulties. How could this support be paid for, given the constraints on Community expenditure? What may be considered rural poverty in one member state does not necessarily mean the same thing in another. Agreement would have to be reached on who was eligible, and on what they should be paid and for how long.
If I may, I shall remain silent on overseas aid this evening and, if the noble Lord, Lord Northbourne, will allow me, I shall write to him on the direct question which he addressed to me.
Perhaps I may say a final word on one other area addressed by the committee; namely, agriculture and the environment. On this, I simply wanted to say that in many respects I think we can claim to be ahead of some of our Community partners in this whole area. Our recent extension of the less favoured areas and the changes in our farm capital grants—which, incidentally, address the problem of pollution more directly than it has been addressed before are, I think, examples of this. We were also, as your Lordships know, instrumental in securing new provisions in Community legislation: the Structures Regulation 797/85, which will enable us to introduce entirely new measures to help protect areas where the countryside is particularly sensitive to major agricultural changes.
We readily accept the need to encourage the farming industry to adopt high standards in such matters as animal welfare and the protection of wildlife and the countryside. But equally we must recognise, as the noble Lord, Lord John-Mackie, certainly did in his speech, that there is a need to maintain an efficient and competitive industry which is able to fulfil this role. In these circumstances it seems to us to make practical sense to attract the sympathy and the co-operation of those who derive their livelihood from the countryside.
Having said that, I would just make the point that we feel very strongly that individual member states are best placed to decide exactly what they should do
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within general Community policy so far as conservation and environmental protection is concerned. I hope that is the way in which the Community can continue to go forward.
May I finally answer just one question that my noble friend Lady Elliot asked me. My noble friend suggested that we should concentrate far more on selling agricultural produce. That was in tune with a great deal of what the noble Lord, Lord Sainsbury, said in the second part of his speech. In reply, I would just say that the agriculture and food industries in this country have, as your Lordships know, faced a significant change over the years since the second world war, and particularly since joining the Community. Our self-sufficiency, as your Lordships know, has gone up by leaps and bounds, particularly in recent years. This changes also our attitude to marketing and exports. The volume of agricultural exports has risen by 52 per cent. since 1973. May I also say that member companies of the British Agricultural Export Council, of which my noble friend Lord Ferrers is such an energetic chairman, have most certainly contributed. Incidentally, in connection with agricultural exports, I was most interested to hear that my noble friend Lord Middleton had reached the conclusion that, providing one was talking about realistic prices, there will continue to be opportunities for Community grain exports, of which we have claimed an increasing share in recent years.
Having said that, there is of course greater interest today in food quality and marketing. The development of food quality marks and the success of Food from Britain are further evidence of this; and I was grateful to the noble Lord, Lord Gallacher, who recorded the point that he was glad that the Government had now made a statement and would put Food from Britain on firm funding for the future, as we would hope.
Perhaps I may finish with just a word on the Commission's whole perspective exercise in more general terms. I would say to your Lordships that discussions in the Community are still in their early stages on that particular document, and that in their Green Paper the Commission have attempted to cover issues affecting the whole of agriculture. But they are suggesting at the moment options for debate—only options and not proposals. These do not pretend to form a complete policy. Necessarily these options reflect not just the needs of different sectors of agriculture but also the needs of different interests in different member states. What I am trying to say to your Lordships is that I think the position of the Commission's Green Paper represents complex issues with important implications, particularly for an enlarged Community. As in the annual Community price fixing, it is going to be a substantial task to pull together the various measures which will be needed to respond to the problems the Community faces.
Nevertheless, the prospect of finding improvements in the operation of the CAP which will benefit producers, taxpayers and consumers is one which the Government welcome, and we intend to work for effective measures which will enable agriculture to develop on a secure but rational basis in the years ahead.
11.45 p.m.
Lord Plowden: My Lords, I thank the noble Lord the Minister for his comprehensive reply to the debate and all those who have taken part in it. One thing on which everyone agrees is that the common agricultural policy is in a state of crisis and that something must be done in order to deal with it. Otherwise, as the committee said, it will run away and may jeopardise the whole working of the Common Market itself.
At this late hour it would be invidious to deal with points that were raised by many speakers, and I will only touch on what the noble Lord, Lord Walston, said. With his usual lucidity, he put forward the idea of quantums and quotas, with which the Minister dealt in his reply. The noble Lord, Lord Walston, mentioned sugar and milk quotas. Those happen to be two commodities that have to go through small sugar refineries or dairies, and therefore there is a much easier way of controlling them. Other speakers who are farmers will know much better than I the difficulties of dealing with quotas in the cereal field, and it is something we considered very carefully.
This is a debate that will take place right throughout the Community and the Green Paper, as the noble Lord, Lord Belstead, said, offers a series of suggestions. But inherent in all the suggestions is better use of the price mechanism, which was the majority view both of the witnesses who appeared before us and of the members of the committee. I feel that, however this problem is solved, it will require a great deal of willpower on the part of Ministers who do this, because it is bound to affect a great many farmers throughout the Community. But they will be far more affected if the common agricultural policy collapses because governments are unwilling to continue to vote increasing sums of money to produce commodities for which there is no use.
On Question, Motion agreed to.
House adjourned at thirteen minutes before midnight.

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