Sitting of 10 October 1994

Preamble
Reassembling after the Summer Recess, the House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

Lord Shackleton: Tributes
The Lord Privy Seal (Viscount Cranborne): My Lords, before we once again address ourselves to business after a long summer break, I am sure that, with your Lordships' permission, the whole House would wish to pause for a moment to pay tribute to the late Lord Shackleton. Any account of Lord Shackleton's life would describe a distinguished and unusual statesman. It is therefore only right that we should remember his outstanding official contributions to our national life as a Member of Parliament, when, according to my noble friend Lord Wyatt, his slogan was, "With Shackleton to the polls"; as one of the first Life Peers; as an RAF Minister and as Leader of this House.
In the latter post he carried the additional burden of Minister for the Civil Service—a heavy double responsibility when one considers that, as Leader of your Lordships' House, he led a Labour administration faced, perhaps unlike today, with a large Conservative Opposition, and that, as Civil Service Minister, he was responsible for implementing the Fulton reforms. As your Lordships will know, he led the Opposition in this House from 1970 to 1974 with the greatest of distinction before leaving active politics to devote much of his time to business.
Lord Shackleton displayed qualities of determination, prescience, high principle and, if I may say so, guile in everything he undertook. No doubt some of those qualities he inherited from his famous father. He certainly displayed all of them during his period as a defence Minister, which proved to be a particularly happy time both for him and his colleagues in that department. His prescience in particular was nowhere more obvious, in retrospect, than in his 1977 report on the Falkland Islands.
However, it is perhaps as a servant of your Lordships' House that Lord Shackleton will be best remembered. It would be fair to say that he suffered only one substantial reverse. In 1968 and 1969, together with the noble Lords, Lords Carrington and Jellicoe, and the late Richard Crossman, he attempted to reform your Lordships' House. That episode, together with his successes in this House, constitute a formidable record. He was one of the fathers of the Select Committee on Science and Technology and tried constantly to improve our procedures.
Above all it was as Leader that Lord Shackleton shone. When I first came to this place he was described by someone who should know as one of our greatest Leaders. When I asked why, essentially I was told that he knew and loved this place; that he regarded himself
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as its servant and that he gave of himself to one and all. I was told too that he adhered strictly to our essential principles of self-regulation, self-restraint and respect for minorities and that he had an exceptional gift for recognising and articulating the sense of this House.
The other two qualities that I have heard attributed to him as Leader I myself was fortunate enough to experience during my own time as a defence Minister. His relations with his political opponents were close and friendly; but he fought his corner with the very greatest of skill. His battles, in my experience, to save HMS "Endurance" and the hydrographic squadron will not be forgotten by those on both sides of the argument.
I was fortunate enough to come to know Lord Shackleton a little. I could therefore begin to understand the personal characteristics that made him such art outstanding Leader of your Lordships' House. I first met him when I was a young man and, characteristically perhaps, he offered me a lift home back from a party in an ancient Peugeot motor car. When I came here he gave me the warmest of welcomes together with a great: deal of thoroughly unpompous advice. Indeed, he asked me to dinner in your Lordships' Dining Room, á trois together with a delightful and highly intelligent actress. I still cannot make up my mind as to which of those two ideal dinner companions had more charm.
His warmth and zest were infectious. His conviction that politics was an honourable calling I found profoundly reassuring. I know that even on such a relatively slight acquaintance I, for one, shall miss him. This House will miss him, and the qualities that he brought to it, acutely. Today I am sure that I speak for the whole House when I say that our sympathy goes to his family from a House to whose name he added a lustre particularly his own.
Lord Richard: My Lords, we on this side of the House are grateful for what the Leader of the House has had to say about Lord Shackleton. We are grateful to him for his kind words and for his sentiments. He is quite right. Lord Shackleton's death is a sad loss which we all share. We pay tribute to him today not only for his massive contribution over the years to the public life of this country but also for his personal qualities as a man.
His history is well known. He was the son of a famous father whose exploits in the Antarctic were indeed legendary. He nonetheless became a traveller and an explorer very much in his own right. Born in 1911, the youngest child of his parents, he was only 10 when his father died on board ship off South Georgia in January 1922. He was educated at Radley and Magdalen College, Oxford, and when he was 22 he arranged the university expedition to Sarawak. As he himself recalled later with characteristic clarity, he was asked why he chose Sarawak. He answered thus. "It was quite simple", he said. "My heart was directed to the Antarctic but my head told me that if I immediately became involved in the Polar regions my contemporaries would suppose I was playing on my father's reputation, so I decided to go to the tropical forests and be my own person"—a characteristically Shackletonian comment.

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His war record was distinguished. He was twice mentioned in dispatches while serving as a wing commander in the Royal Air Force. He became the Labour Member of Parliament for Preston in 1946, defeating, I think, the noble Lord, Lord Harmar-Nicholls, in a famous by-election. Subsequently he went on to represent the Preston, South division from 1950 to 1955. I am told that in 1951 his majority was precisely 16, which must be a tribute to something—the perception and perspicacity of the Preston, South voters and also the way in which he had looked after his constituency in the period up to then. He was one of the first Life Peers and on the return of a Labour Government became Minister of Defence for the Royal Air Force. As the Leader of the House has said, he went on to become Deputy Leader of the House and then Leader of it and Lord Privy Seal. In Opposition he continued as the Leader of the Opposition until the election in 1974 and subsequently, as the Leader of the House has told us, he became one of the elders of this House, one of the wise men, if I may put it that way, who not only guided Labour Peers but also, I think, guided the House as a whole, particularly in its relationship with the House of Commons.
Undoubtedly Lord Shackleton's name will be permanently associated with the Falkland Islands. He undertook a survey of the islands in 1976 and produced an economic study for their future in 1982. The past 10 years saw from him a staunch parliamentary battle with the Ministry of Defence over the future of HMS "Endurance". The original "Endurance" was the ship that his father took to Antarctica all those years ago. It was the 1981 decision to withdraw it which was held by many to have sent the wrong message to Argentina about Britain's policy over the Falklands. In May 1992, therefore, when the Government—indeed the Leader of the House himself was then a Minister in the Ministry of Defence—announced that the Navy's Antarctic patrol ship "Polar Circle" was to be renamed "Endurance", that famous parliamentary victory gave enormous satisfaction not only to Lord Shackleton but, I think, to his many friends.
In this House he was a deeply respected Member of the Privy Counsellors' Bench. On all sides he was regarded as one who, while passionate in advocating his cause, nevertheless had an abiding affection for the House and always played the game strictly according to the rules. But above all, at least for me, he was an extremely nice man, friendly, courteous, kind and generous in his advice, which was freely given and often sought. We shall miss him greatly and we should like to extend our deepest sympathy to Lady Shackleton and their family.
Baroness Seear: My Lords, perhaps I may say, first, how much my noble friend Lord Jenkins regrets that he is in America today and is therefore unable to be here to pay a tribute to his old colleague and friend Lord Shackleton. I know he very much wishes that he could be speaking himself here today.
So much has already been said that there remains little for me to add about the career of Lord Shackleton. He was not only an outstanding politician in the best
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sense of the word, long before the name became as downplayed as it has been in recent years, but he was clearly a statesman, a statesman of the kind that we need greatly and do not so often see. He was a remarkably versatile man, almost a Renaissance figure. He was an eminent explorer, a successful politician, an outstanding Leader of your Lordships' House, a director of personnel at John Lewis, fostering the exceptionally good industrial relations for which that company is so well known, and a prominent member of the board— indeed, I think vice-chairman—of RTZ. This is a range of activity and achievement that few people manage to reach and which many of us wish more of today's statesmen could emulate. It is, alas, sad that so few people coming into politics today have the range of knowledge and experience which undoubtedly enabled Lord Shackleton to make the unique contribution that he made, calling on that experience and on the courage and determination which he developed in the various walks of life in which he was so distinguished.
Perhaps I may personally record one of his activities and achievements which has not been mentioned either by the other speakers or, I believe, in any of the tributes which have been paid. It is probably very little known. I was concerned with getting the Anti-Discrimination (No. 2) Bill through the House in 1972, and I was extremely ignorant of the precedents of the House. It was Lord Shackleton who said, taking the lead in the matter, that what was required was a special Select Committee of your Lordships' House to deal with the question of sex discrimination. I believe that it is not claiming too much to say that it was from the work of that committee—which would never have come into existence except for Lord Shackleton's initiative—that the Sex Discrimination Act flowed together with all the benefits, with their limitations, that that legislation has conferred on the larger half of the human race in this country. I believe that few women realise how much they owe to Lord Shackleton in that regard. I am very glad to have the opportunity to add that piece of information to the many tributes which have been paid to a most distinguished and much missed colleague.
Baroness Hylton-Foster: My Lords, very few Cross-Bench Peers will have known Lord Shackleton when he was Leader of the House and Leader of the Opposition since that is now about 20 years ago. But he will be remembered and admired for his persistence, as has already been mentioned, in eventually persuading the Government to change the name of the Antartic patrol ship "Polar Circle" and rename it "Endurance". The "Polar Circle" replaced the old "Endurance" after the Falklands War. The old ship played a very large part in his father's life.
Lord Shackleton was a man of very wide interests many of which have already been referred to in the tributes. We endorse all the tributes which have already been made and we express sympathy to his family. We would like to draw attention to two points in which we are particularly interested. After leaving the Commons in, I believe, 1955, he joined the John Lewis Partnership and played a major role in the management and recruitment of staff. He was known for his skill in finding the right man for the job.

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Later, in 1973, after ending his full-time party political career, he took a directorship in Rio Tinto Zinc where once again his special skills were used in sorting out problems and getting the confidence of personnel and fitting them in the right jobs.
His friends on the Cross-Benches would like to draw attention to one or two matters: his openness to new ideas; his ability to admit when he did not know, and to ask for help; his skill in getting to know people and in gaining their confidence; and his pride, as a non-scientist, in being made a fellow of the Royal Society. Therefore, it is not surprising that throughout the life of Lord Shackleton so many people and organisations thought that he was the right man for the job.
The Archbishop of Canterbury: My Lords, on behalf of all Bishops in your Lordships' House, may I also pay tribute to Lord Shackleton and his distinctive contribution to this House and to this nation. As we have already heard, to follow a famous father is never easy, but it was one of those admirable qualities which Lord Shackleton exemplified that his sense of history allowed him to be independent of his father's achievements and yet at the same time to enjoy the same love of adventure and exploration.
Three words particularly strike me when I think of his life: self-reliance, resourcefulness and initiative. Those qualities stood him in good stead during his political career as well as in his geographical adventures. His breadth of interest and his contribution to the life of this nation, spanning both scientific and political careers; and his abilities and his achievements are a tribute in themselves. It is my sincere hope and prayer that his life may well be an example to many for its richness and sense of adventure. I am sure that all people of faith will want to say with me, "May he rest in peace".
Lord Callaghan of Cardiff: My Lords, the death of Eddie Shackleton removes a colleague of nearly 50 years and a friend for all that time. I wish to pay tribute to the enthusiasm with which he pursued every cause, the tenacity with which he followed it up and the generosity which he always showed. I especially remember the way in which he put aside his personal affairs in 1976-77 in order to help me with the Falkland Islands at a particularly difficult time when there seemed the possibility of invasion. We were trying to tempt others into joining with us in what would have been a matter of mutual advantage in the economic development of the South Atlantic. I carry these and many other memories of a warm and generous colleague. He was one who never carried opposition into enmity. He also never stood any nonsense. I am so glad that a member of his family is able to listen to us today and to the elegant tributes which have been paid. We shall miss a dear friend.
Lord Carrington: My Lords, I wonder whether your Lordships will allow me very briefly to support what the Leader of the House and others have said about Lord Shackleton. I do so for two reasons: first, for a great many years he and I sat on opposite Front Benches either as Leader of the House, Leader of the Opposition or in various other capacities depending on which
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government was in power. As my noble friend the Leader of the House has said, we were both of us involved in what I suppose one would now call the "non-reformation of the House of Lords".
Secondly, he was a doughty opponent and a vigorous debater. He was scrupulously fair and honourable. In politics, as in business, he was a man of the highest principle and of the greatest integrity. In all those years he was, for me, a close personal friend. He was a great servant of his party, of this House and of the country. I remember on one occasion when he was Minister for Defence for the Royal Air Force, he announced the arrival of the Shackleton mark II maritime reconnaissance aircraft, declaring that it was a great improvement on the mark I. In my judgment there was no improvement possible on the original Shackleton. Those of us who were fortunate enough to work with him remember him with respect and affection.
The Earl of Longford: My Lords, I endorse all the fine and true things that have been said about Eddie Shackleton. As he succeeded me as Leader of the House, I suppose it is inevitable that I should say one or two words. I first got to know him when we welcomed him to this House in 1958 as one of the first Life Peers. I remember Clem Attlee saying what a fine debater we should find him—and so we found him then and in the years that followed. My relationship with him later was close and rather delicate. When I was Leader of the House, he was Deputy Leader and it was then widely understood that he would succeed me at the earliest possible moment. That was perhaps not the basis for a very close friendship. But nothing could have been more sensitive or loyal than his behaviour at that time. He was generosity itself, both when he took over from me when I resigned and later. I shall think of him in the words of a well known novel:
"He was a good man and he did good things".

Council Tax: Appeals
3 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
How many appeals against banding decisions in respect of local government taxation are still outstanding, and when it is expected that they will be settled.
The Minister of State, Department of the Environment (Viscount Ullswater): My Lords, 368,574 of the initial appeals lodged in England and 24,807 in Wales were outstanding at the end of August; 31,562 initial appeals were outstanding in Scotland at the end of June, the latest date for which figures are available. Four out of five of the initial period appeals are expected to have been settled before the end of this year. The remaining appeals—those which are more complex and difficult to resolve—will be settled as soon as possible thereafter.
Lord Boyd-Carpenter: My Lords, is my noble friend satisfied that the long delay which has elapsed in respect of a very substantial number of appeals, as he

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has told us, is unfair to the taxpayer and casts a rather adverse reflection on the efficiency of the governmental system? Is he also aware of the fact that decisions are now apparently being taken by the officials concerned without visiting the premises involved?
Viscount Ullswater: My Lords, I cannot agree with my noble friend—and nor can the National Audit Office, which I quoted on a previous occasion as stating:
"The completion of 21 million bandings to a 12 month deadline was, by any standards, a significant achievement… the banding of all properties was carried out to a level of accuracy that met acceptable professional standards".—[Official Report, 26/7/94; col. 593.]
The original banding exercise relied largely on the existing records of the valuation office agency, with some external inspections of properties. I understand that more detailed inspections are clearly needed when bandings are appealed against. I believe that that is what is taking place now.
Lord Williams of Elvel: My Lords, is the noble Viscount aware that at the end of March, according to figures announced in this House, there were 614,000 appeals outstanding; that in mid-June, according to figures announced in this House, there were 478,000 appeals still outstanding in England alone, before including Wales; and that, if my arithmetic is right, the noble Viscount is announcing that something like 392,000 appeals are still outstanding in England and Wales? I recognise that the noble Viscount is agreeing with his noble friend Lord Henley, who announced on 28th April in this House at Question Time that 80 per cent. would be cleared by the end of the year, but is it not the case that the council tax has to be paid in full and in advance before the appeal? Is not that unjust? Is not there some mechanism for making sure that the council tax is not paid by people who challenge their banding until such time as that banding is approved?
Viscount Ullswater: My Lords, I repeat again that I believe that 80 per cent. of the initial appeals in England and Wales are expected to be settled by the end of 1994. There has been no announced target for Scotland, but, to judge from the limited information available, I believe that Scotland is likely to do better still. A tax of some sort or another will be payable by the taxpayer. We are talking probably about corrections from one middle band to another middle band, meaning a difference of about £60. I think that it is right that the taxpayer should make that sort of contribution.
Viscount Mountgarret: My Lords, if any rebates are made because taxpayers have paid in excess of the banding into which their property is eventually adjudged to fall, will such a repayment have interest attached?
Viscount Ullswater: My Lords, again that is an attractive proposition, but in a typical case the interest would amount to only £3 or £4 a year—that would be for a one-band reduction in the middle of the range. Clearly, it would not be worth setting up special
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machinery for such trivial amounts. I am sure that the noble Viscount would agree that that would be a waste of public money.
The Earl of Onslow: My Lords, is it not a novel doctrine of taxation that trivial amounts do not matter, because what is trivial to one man may be another man's decent pint of beer or dinner at the Savoy?
Viscount Ullswater: My Lords, I agree that many sums which may be trivial to some are not trivial to others, but what is important is that we should not waste the taxpayers' money.
Lord Boyd-Carpenter: My Lords, will my noble friend answer my question as to why the official who determines the amount of the tax does not in many cases visit the premises concerned? Is that a sensible and fair way to assess a tax?
Viscount Ullswater: My Lords, I think that I said that initially the original bandings relied largely on external inspections, but I indicated to my noble friend that, when it comes to a question of an appeal, the inside of a house would need to be considered. If my noble friend would like to bring to my attention any specific cases where that has not happened, I should be most grateful and shall take them up.
Baroness Seear: My Lords, instead of making the taxpayer pay the higher amount which he is challenging, would it not be more reasonable to allow him to pay the amount that he thinks is reasonable but then, if the assessment goes the other way, require him to produce the extra money? As the noble Earl, Lord Onslow, pointed out, although a relatively small sum, that additional money could be a large proportion of the disposable income of the people concerned.
Viscount Ullswater: My Lords, I really feel that some £3 or £4 a year is not a particularly large sum for people to have to cope with. That is what the interest would amount to. I am sure that the noble Baroness would not want to go down that road or to find that, where other appeals have been made to increase the banding, people have to pay the charge for the higher band until the property has been seen.

War Crimes Prosecutions
3.7 p.m.
Lord Campbell of Alloway Lord Campbell of Alloway asked Her Majesty's Government:
Whether investigations under the War Crimes Act 1991 referred to on 21st July 1994 (H.L. Deb. col. 355) have now been concluded; whether the advice of Treasury Counsel and the consent of the Attorney-General has been sought by the Director of Public Prosecutions as regards the institution of any proceedings; and, if the Attorney-General's consent is to be sought, when his decision may be made known.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, the Metropolitan Police War Crimes Unit has now submitted reports in five cases and those reports are receiving careful consideration by the

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Crown Prosecution Service. Some inquiries are however outstanding and these are being concluded as quickly as possible. The detailed handling of these cases is an internal matter for the Crown Prosecution Service.
Lord Campbell of Alloway: My Lords, I thank my noble and learned friend for his Answer; but apart from the five cases that he mentioned, what changes have taken place since June when out of 569 of those interrogated, 229 had been excluded including all those living in Scotland, leaving 28 under investigation, 10 of whom—now reduced to five as I understand it—are under consideration for prosecution? Will the Director of Public Prosecutions, when she seeks the consent of the Attorney-General for the Crown Prosecution Service to proceed against any of that handful of men, have regard to the viability of there being a fair trial on cogent evidence which on this occasion is plainly admissible?
The Lord Chancellor: My Lords, the pursuit of the investigations has gone on since the last time we discussed the matter. Since then, as I say, the war crimes unit has submitted reports in five cases, which are being considered by the CPS. The other investigations are being concluded as quickly as possible. So far as concerns the considerations which would be put before the Attorney-General by the Director of Public Prosecutions, if and when she came to submit the cases for his consideration, I have no doubt that all aspects of the matter affecting the justice of whether or not a prosecution should be taken would be considered, including, in particular, consideration of the dates and times involved in the matters which were the subject of the inquiry, having regard to the need to ensure a fair trial for any person whom it might be decided to accuse.
Lord Stoddart of Swindon: My Lords, how much money has so far been expended on those investigations? What is the estimate of the total amount which will be expended before the inquiries are complete, and exactly when is it estimated that there will be no further inquiries necessary under the Act?
The Lord Chancellor: My Lords, the latest figure I have for the total is the same figure as the one I gave on the last occasion. It is £5.2 million in Scotland, England and Wales. The precise outcome of the investigations, and the amount that may be required for them, is difficult to predict at this stage. Your Lordships may take it that these inquiries are being pursued as vigorously as possible by the police war crimes unit, and the costs thereafter will depend on the decisions taken as to whether a prosecution should be mounted.
Lord Renton: My Lords, is my noble and learned friend aware that before the Act was introduced it was assumed, on information held by the Government, that there would be trials; and that since the Act was passed there has been a lapse of three years? Does my noble and learned friend accept that justice delayed is justice denied?
The Lord Chancellor: My Lords, I accept that justice unnecessarily or improperly delayed is justice denied; but I believe that I am right in saying that the Bill went forward upon the basis that investigations
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undertaken had shown that there were matters which required to be investigated. I do not believe that what the outcome would be was forecast with any degree of confidence; but before the public authorities could investigate these matters in the ordinary way, jurisdiction was required to be established. It was only once the jurisdiction had been established that the police could properly undertake investigations. As my noble friend has said, those investigations have now been concluded so far as concerns Scotland. I understand from my noble and learned friend the Lord Advocate: that he has decided that there should be no prosecutions there.
Lord Irvine of Lairg: My Lords, when were the five cases that the noble and learned Lord mentioned referred to the DPP? Since the war crimes were committed more than half a century ago, and since delay is always the enemy of justice, particularly with identification, has not the time come for the DPP to set herself a deadline for making up her mind, at least in these five cases?
The Lord Chancellor: My Lords, as I understand it, the five reports were submitted since we last discussed the matter. Your Lordships may take it that the DPP is as concerned as your Lordships to ensure that these matters are brought to a conclusion as rapidly as possible. However, the precise consideration that is required to be given to the reports—in the nature of things they are very detailed reports—is of such a character that it is not possible at this stage reasonably to forecast how long they might take. All I can do is give your Lordships an assurance from lie DPP that they will be concluded as quickly as possible.
Lord Campbell of Alloway: My Lords, finally, will the hazard of conviction as a result of mistaken identification be brought well to the forefront of the minds of all concerned, as was recently acknowledged by the appellate court in Israel?
The Lord Chancellor: My Lords, I have no doubt whatever that that consideration would, in any event, be taken into account. The history of the case in Israel to which my noble friend referred underlines that necessity in cases of this type and will reinforce the consideration which I believe would in any event be given to it.
Lord Irvine of Lairg: My Lords, since the noble Earl, Lord Ferrers, informed your Lordships' House on 27th June that 10 cases were being considered for prosecution by the DPP, and since the noble and learned Lord has just told the House that the five cases he mentioned were referred, as he understood it, to the DPP after the House last discussed the matter, are we to take it that the 10 cases to which the noble Earl referred have been dropped and that these are five new cases?
The Lord Chancellor: My Lords, my understanding is that the five cases that are presently being considered are the cases in which reports have been received from the police war crimes unit and which are being considered by the CPS. I believe that in his previous Answer my noble friend was referring to consideration being given by the Metropolitan Police War Crimes Unit

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to matters which were before it. In the light of the noble Lord's inquiry, I shall check that point; but that is my understanding.

CPS: Powers
3.17 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
Whether there are any circumstances in which the Crown Prosecution Service can instigate its own investigation where it considers that the law has been broken and no appropriate action has been taken.
The Lord Chancellor: My Lords, the functions of the Crown Prosecution Service are set out in Section 3 of the Prosecution of Offences Act 1985. It is not an investigatory body. The investigation of alleged offences is a function of the police service except where they fall within the remit of specialist agencies such as the public health authorities, the Health and Safety Executive, Inland Revenue, Customs and Excise and the Department of Trade and Industry. The Crown Prosecution Service has no power to require the police to instigate an investigation but does from time to time pass to the police material in its possession with a view to criminal investigation.
Lord Dean of Beswick: My Lords, I am grateful to the noble and learned Lord for that detailed Answer, but is he not aware that a number of us believe that there are glaring weaknesses now in the powers of the CPS? Is he aware, for instance, of the series of meetings of the Public Accounts Committee of another place which indicated the huge loss of money incurred by appointed bodies in the public sector? I submitted evidence to it from the regional health authorities. I was informed that it was the job of the local chief of police to deal with such matters. The chief of police did not say this, but it is my opinion that he did not have the resources or special knowledge to deal with such a situation. Bearing that in mind, is it not time that the responsibilities of the CPS are reviewed with a view to plugging that hole in what it is supposed to do?
The Lord Chancellor: My Lords, the precise powers that the CPS should have in relation to the police are obviously the subject of considerable difficulty, but these matters were discussed when the Prosecution of Offences Bill 1985 was before both Houses of Parliament. The powers to which I have referred are the powers which Parliament, after considering these matters, believed that the CPS should have. Precisely what should happen in a local area and how the resources of the police should be deployed there is a matter for the operational control of the chief constable, the chief of police, in that area. It might well be unwise to seek to innovate on that situation.
Lord Irvine of Lairg: My Lords, I accept that the Crown Prosecution Service is not an investigating body but a referral body. However, the Department of Trade often refers cases for investigation by the Serious Fraud Office or, occasionally, by the Crown Prosecution
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Service. Should not the Department of Trade refer this case either to the SFO or the CPS for investigation as the only means of removing the widespread anxiety that it is wrong in principle for a Tory Minister to be left with the last word on whether a Tory politician should be prosecuted for insider trading?
The Lord Chancellor: My Lords, I do not believe that the Question tabled by the noble Lord, Lord Dean of Beswick, refers to any particular case. I believe that the noble Lord referred in more general terms to the situation as between the Crown Prosecution Service and the police in relation to local health authorities and the like. If a police investigation or an investigation by police attached to the Serious Fraud Office is required, the specialist agencies such as the Department of Trade and Industry may refer matters in that way. However, that depends on the judgment taken as to whether such inquiries are likely to add anything to the sum of knowledge in the possession of the department concerned relating to the matter before it.
Lord Dean of Beswick: My Lords, I am grateful to the noble and learned Lord for his reply to that supplementary question. My Question related specifically to the government-appointed bodies. The noble and learned Lord said that the matter was previously discussed in 1985, when the conditions regarding the CPS were brought into being. Is the noble and learned Lord aware that I am making the point that it is time a review took place? Huge sums of money have been spent, in some cases unwisely, and some managerial actions leave much to be desired. Is the noble and learned Lord aware that there is deep anxiety that as regards publicly appointed bodies the present situation allows people to get away with financial murder? Local police chiefs are unable to deal with the matter and I ask that the position now be reviewed.
The Lord Chancellor: My Lords, any legislation must be kept under review by those responsible for bringing proposals before Parliament in relation to such matters. Perhaps the best thing for me to do is to note what the noble Lord, Lord Dean, has said and to pass his observations to my right honourable and learned friend the Attorney-General, who has responsibility for the Crown Prosecution Service. However, I believe that the balance between the Crown Prosecution Service and the police which was established in 1985 was important and that it would require a good deal to suggest that it should be changed.

Anglia Television: Dealing Allegations
3.24 p.m.
Lord Clinton-Davis Lord Clinton-Davis asked Her Majesty's Government:
Whether they have taken any steps to obtain the consent of persons named in the inspector's report into allegations of insider dealing concerning shares in Anglia Television to the publication of the report, and what is the current position regarding that report.
The Minister of State, Department of Trade and Industry (Earl Ferrers): My Lords, no such approach

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has been made. Reports are prepared on the basis that they will not be published in order to enable the Secretary of State to consider possible criminal proceedings. Consistent with the inspectors' conclusions and the advice of counsel, my right honourable friend has decided that no further action should be taken.
Lord Clinton-Davis: My Lords, is the Minister aware of the extraordinary inconsistency in the Government's actions in relation to this matter? Is it not right that they named the noble Lord, Lord Archer, when they should not have done; made allegations about Anglia Television having been the source of the leak, which was untrue and the Government withdrew the allegation; and then made allegations about a cover-up, which necessitated their releasing the name of the noble Lord, Lord Archer, in circumstances in which they should not have done so? Are they not now colluding in the whole question of a cover-up by making no efforts to obtain the consent of a man who says that he has been exonerated in the report when there is provision in the Financial Services Act to enable reports to be published if such consent is forthcoming?
Earl Ferrers: My Lords, there is no inconsistency of approach whatever. The name referred to was made public because it was already in the hands of the newspapers. A direct question was asked of my department and a direct answer was given. There is no collusion at all. The whole purpose of an inspector's report is that it should be confidential and there is no legal authority to publish it. Despite what was said by the noble Lord, Lord Clinton-Davis, it would be contrary to the assurance which was given by a Minister in the House that this should be made public. The report contains far more than just the information which was provided to the inspectors. The whole nature of the report is that it should be confidential and provide confidential advice to my right honourable friend.
Lord Hailsham of Saint Marylebone: My Lords, is there not an important constitutional issue at stake? Am I not right in believing that these inspectors' reports are an exception to the general rule of the right of silence of a person who is under investigation? If the result of an inquiry is that no case exists, would it not be a serious breach of the rights of the individual to publish a report which extracted from him information under threat of criminal proceedings if he did not give it?
Earl Ferrers: My Lords, my noble and learned friend is right. The whole basis of these reports is that they should be confidential so that information is provided in full. If it were known that the information provided was to be made open to the public it might be a good deal more restricted than would otherwise be the case. The Department of Trade is the appropriate prosecuting authority for these cases. My right honourable friend was satisfied on the basis of independent advice, which is confidential, that it would not be appropriate to prosecute.
Lord Richard: My Lords, will the Minister confirm that under the Financial Services Act there is power for a report to be published if the individual concerned requests it? If that is right, will the Minister further help
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the House by saying who is anxious to preserve the confidentiality of this particular report: is it the individual concerned, who says that it would exonerate him, or the Government? If it is the Government, what conceivable reason do they have for so doing?
Earl Ferrers: My Lords, the reason is that when inspectors are invited to make a report they gather a great deal of information from different people, draw conclusions and make recommendations. Those matters are specific to my right honourable friend and it is up to him to decide. That decision is taken only after he has received independent advice.
Lord Richard: My Lords, is the Minister telling the House, therefore, that even if the individual concerned—that is the noble Lord, Lord Archer—were to make a request for the report to be published the Government would refuse to do so on the grounds of preserving the inspector's confidentiality or some other confidentiality, the nature of which escapes me?
Earl Ferrers: My Lords, it is one thing for my noble friend to ask my right honourable friend for the report to be published. The fact is that my right honourable friend would have to decide whether to publish a report which contained a great deal more than facts; it would include the inspector's opinions. I refer the noble Lord the Leader of the Opposition to what was said when the Bill was being considered in this House. The Minister said that as regards Clause 147, which is now Section 177, the inspector's task would be to establish facts of a straightforward kind and not to pass judgment and that his report would not be published.
Lord Campbell of Alloway: My Lords, without wishing to become involved in a detailed argument at this time, is the noble Earl aware that many of us on this side of the House are fully satisfied with the way in which this matter has been handled by the Government and with the answers given by my noble friend the Minister in the House?
Earl Ferrers: My Lords, I am quite sure that my noble friend is right and I am grateful to him for what he has said.
Lord Clinton-Davis: My Lords, has the noble Lord, Lord Archer, made any requests for publication of the report? What is the essential difference between the publication of inspectors' reports in company investigations, in which there is a presumption in favour of publication, and this situation? Is there not an almost exact parallel? If the Government continue to insist on that absurd argument, is it not time that the law was changed?
Earl Ferrers: My Lords, perhaps I may say that the noble Lord, Lord Clinton-Davis, is wrong, Section 432 of the Companies Act 1985 expressly confers a power to publish when investigating companies' affairs; Section 177 of the Financial Services Act does not.

Business of the House
3.30 p.m.
The Lord Privy Seal (Viscount Cranborne): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order 38 (Arrangement of the Order Paper) be dispensed with on Monday 17th October to enable the Motion standing in the name of the Lord Privy Seal to be taken before any notices relating to Public Bills, Measures and delegated legislation.—(Viscount Cranborne.)
On Question, Motion agreed to.

Select Committee Appointments
The Chairman of Committees (Lord Ampthill): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Lord Privy Seal (Viscount Cranborne) be appointed a member of the Committee of Selection, the Committee for Privileges, the Select Committee on House of Lords' Offices, the Select Committee on Procedure of the House and the Liaison Committee in the place of the Lord Wakeham; that the Lord Strathclyde be appointed a member of the Committee of Selection, the Committee for Privileges, the Select Committee on House of Lords' Offices and the Select Committee on Procedure of the House in the place of the Viscount Ullswater; and that the Earl of Arran be appointed a member of the Select Committee on Broadcasting and the Select Committee on Procedure of the House and a member of the Board of Parliamentary Broadcasting Unit Limited (PARBUL) in the place of the Earl of Strathmore and Kinghorne.— (Lord Ampthill.)
On Question, Motion agreed to.

Europe Agreements: ECC Report
3.31 p.m.
Lord Middleton Lord Middleton rose to move, That this House takes note of the report of the European Communities Committee on The Implications for Agriculture of the Europe Agreements (10th Report, HL Paper 57).
The noble Lord said: My Lords, this report is made following an inquiry by Sub-Committee D into the trade agreements between the European Community and the Central and Eastern European countries. For that inquiry we were fortunate in having as our specialist adviser Professor Mario Nuti of the Centre for the Commonwealth of Independent States and Middle Europe at the London Business School. His wisdom and knowledge of the CEE countries was invaluable.
I must pay tribute also to the guidance and support of my colleagues on the committee. The chairman is in an absolutely unique position to appreciate the part played by his Clerk. Mr. Mitchell's work at the inquiry stage and in the preparation of our report was of the highest quality.
This is the second report of the European Communities Committee on the Europe Agreements. The first was by Sub-Committee A in 1991 under the chairmanship of my noble friend Lord Aldington, who inquired into the Commission's proposals for association agreements with Poland, Hungary and Czechoslovakia. That report covered the agreements in broad terms and could not give detailed attention to agriculture. The aim of this report is to fill that gap.
I should say that, since the 1991 debate, the Czech Republic and Slovakia have separated and agreements have been signed with Romania and Bulgaria in addition to the Visegrad countries. Since then, and very importantly, the European Council at Copenhagen in 1993 has declared that the Central and Eastern European countries could become members of the Community as soon as they satisfied the necessary political and economic conditions.
Therefore, our brief was to concentrate on the agricultural provisions of the agreements; to consider the development of the Community's agricultural trade policy towards the CEE states; and to consider the implications of those states' possible membership of the Community.
Why agriculture is important in this context is, first, that in all CEE countries, with the possible exception of the Czech Republic, farming plays a much larger part in their economies than is usually to be found in countries with a comparable degree of industrialisation.
Secondly, the negotiating mandate for the agreements contained a separate reference to agriculture. The agreements envisage a free trade area in two five-year periods with rapid liberalisation of trade in most industrial products. Agriculture was considered separately and trade liberalisation in this sector was more limited. That is explained in detail in Part 3 of the report.
Thirdly, although their agricultural production potential in the short term is limited, for the reasons given in Part 5, if those CEE countries solve their current problems in restructuring their agricultural and related industries, they will have significant export potential in the medium to long term. Fourthly, agricultural policy is a particularly sensitive matter for the Community.
The provisions of the agreements must therefore be judged not only against their original aim of promoting market economies in the CEE countries but also against the more ambitious objectives of accession to the Community.
We began taking oral evidence last December. Even before our discussions with the embassies of the CEE countries and with our own Foreign and Commonwealth Office, and well before our visits to Poland and Hungary, it became abundantly clear that we were not just looking at the minutiae of the Europe Agreements and the way they were operating. We had to look beyond whether Hungary's quota of tariff-free goose-liver was adequate and similar detailed considerations. Like the committee chaired by my noble friend Lord Aldington, we were looking at the social, political and economic future of those five countries, which until recently were part of the Eastern bloc. We

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were looking at countries whose most important sector in their economies—their agriculture—was in great disarray following privatisation and the collapse of their COMECON markets. Those are countries where growing disillusion with conversion to a market economy has stemmed largely from problems in that field, and where the effect of this dissatisfaction has already been reflected in political changes within the new democracies.
In the Polish election of September 1993, the Polish Peasants' Party came to power together with the Democratic Left Alliance, leading to a new government of the Left having a strong representation of farmers' interests. This summer, the elections in Hungary produced a swing towards those on the Left—or on the Right, whichever way one prefers to look at it—who may be hankering after what they perceive to be the less troublesome climate of the former command economy.
Now, those trends, taken together with the chaotic situation in Russia and the countries of the former Soviet Union, seemed to us to give considerable urgency to the need to accelerate the process of restoring the economies of the CEE states and to the need to boost the progress, already well under way, towards parliamentary systems of government. They give considerable urgency to the need to promote conditions that could allow their accession into the European Union. That will take time and will not be easy to achieve. Community agricultural policy provides one of the main, if not the main, obstacle to enlargement.
We therefore felt that we could not look at the agricultural parts of the trade agreements and what appeared to be a rather relaxed view of enlargement on the part of the Commission and the other European member states without looking at the much wider picture of the stability of Eastern Europe; and, indeed, in the long run the security of the West. If this has meant widening the scope of the inquiry, then we were encouraged as to the lightness of so doing by the strong views of our Foreign Office witnesses and those of our embassies in Poland and Hungary when we visited them that this kind of inquiry was both timely and necessary. I am further encouraged by the Government's response to our report published last month, which endorses the committee's view of the overriding political considerations.
I turn now to the report. In Part 2, we look at agriculture in the CEE countries before and after 1990. Part 3 examines the agricultural provisions of the agreement and the changing context in which they came to be made. In Part 4, we consider their operation and effects also in the light of the recent common agricultural policy changes and the GATT regime. Part 5 explores the implications of further opening of agricultural trade with CEE states and Part 6 considers the implications of their membership of the Community.
In particular, we have investigated whether the CAP, even under its current reform, might clash with further integration—issues which do not appear to have received much attention to date even by the Commission (though I am aware of an independent report advocating further CAP reform released last week by the Commission as a discussion paper).
Our conclusions are given in Part 7. I suppose that these could be summed up as follows. The agreements were made before the undertaking to open up the European Community to accession by the CEE states. So far as concerns trade in agricultural produce, they were very meagre. No concessions at all were made (and for obvious reasons) for trade in "sensitive" products; for example, those which were already in surplus in the European Union—corn, milk, beef, sugar and wine. They simply reflect the level of concessions towards import of other products that could be accepted by Agriculture Ministers of the Community at the time of negotiation. Ministers were more concerned with protecting the Community's budget and EC farmers than with adapting the agricultural sectors both in the Community and the CEE states to the requirements of an enlarged community. Since then, it is important to realise that the trade balance between the Community and Eastern Europe has been shilling in the Community's favour.
The committee makes various recommendations in regard to promoting a more liberal trade regime; to the importance of promoting investment in processing industries both from outside and inside the CEE states, and to re-focusing the existing aid and assistance programmes. The central issue, however, is the incompatibility between the common agricultural policy and the further integration of CEE agriculture with that of the European Union.
We conclude that the target of Community membership cannot be attained without further reform of the CAP, especially since the CAP's additional burden on the Community budget is not the only cost of CEE membership: the costs to the Community's structural and cohesion funds must also be considered. We say in paragraph 178 that without a clear commitment to radical CAP reform there is no prospect that the agriculture of the CEE countries can be integrated with that of the Community.
In 1991, Sub-Committee D stated in its report of that year on the reform of the common agricultural policy how it should be done. In paragraph 179, we repeat in summary those recommendations. The MacSharry proposals, to which we took exception at that time, were considerably modified towards our views when the reform package was eventually agreed by the Council in 1992. That CAP reform still had a great many undesirable features and did not go nearly far enough. Unless the European Union can be dragged albeit unwillingly into the daylight of reality, there is no scope for further enlargement and we face instability and insecurity if governments of the CEE countries slide back into the waiting hands of their "old guard".
After the Corfu Summit meeting in June, my right honourable friend the Foreign Secretary, when interviewed for television, said that one of the main objectives of British foreign policy was the,
"strengthening of the links with Eastern Europe".
When members of my committee visited Hungary in March, our ambassador, Sir John Birch, expressed that rather more vividly when he said to me (and he has given me permission to quote him):
"If, ten years ago, we thought we could obtain a situation in Eastern Europe where the Russian army had withdrawn into Russia and where the CEE countries were moving into parliamentary systems of government, we would have paid billions of pounds to achieve it. Now we have got that situation for virtually nothing. For heaven's sake do not let us lose it".
We fully endorse his remarks. I commend the report to the House. I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on The Implications for Agriculture of the Europe Agreements (10th Report, HL Paper 57).—(Lord Middleton.)
3.47 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, I am delighted that we should have such a debate as the first on the return of your Lordships' House. As my noble friend Lord Middleton said, it is an important report. Perhaps I may say how much the Government welcome it. On another point, I very much regret that, due to some unforeseen circumstances, I may have to leave the debate later on to attend two important meetings. I hope that your Lordships will forgive any necessary absence; but I know that I leave you in the most capable hands of my noble friend Lord Howe, who is to respond to the debate.
The future relationship between the agricultural systems of Central Europe and that of the European Union is more than a technical issue for specialists. It has important implications for the political and economic development of the Central European countries. It goes to the heart of the debate over the future size and shape of the European Union. I also happen to think that it is pretty crucial for all of us who have been in the European Union, struggling at times with the costs of the common agricultural policy.
I should like to congratulate my noble friend Lord Middleton and his committee most warmly for their foresight more than a year ago in choosing to investigate an issue which is now moving to the real forefront of the agenda of the European Union. I commend them on the thoroughness with which they conducted their inquiry and on the content of this excellent report. It is especially useful that members of Sub-Committee D were able to visit both Poland and Hungary to see conditions on the ground. While your Lordships will understand that I cannot say that the Government endorse every single word of the report, it should be pretty clear from the Government's response (in Command Paper 2666) that we share the analysis underpinning the report and most of the recommendations made by my noble friend and his committee.
I heartily welcome this opportunity to debate the issues that the report raises. My noble friend Lord Middleton has already quoted Sir John Birch, our
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ambassador in Budapest. I do not think those words were said lightly and certainly we have a chance now, with those countries of Central and Eastern Europe, to achieve a stability which we have never had before. We have a chance also to put our own houses in order over the very important issue of agriculture.
Sir John Birch's comments remind us too, I think, of a fundamental truth that is too often lost in the bickering and horse-trading that tend always to accompany any trade negotiations. The events of 1989 and their aftermath confront us with challenges and opportunities which are truly of historic proportions. It is important to remember that the Europe Agreements and the Europe Agreement countries are not just another set of demanding trading partners. These are European countries, just as European as any existing member of the European Union. They are countries that are undertaking demanding and unprecedented political and economic reforms. They are reforms which will go a long way to deciding the peace and stability of the European continent for centuries ahead. So we have a real interest in helping those countries to succeed in their endeavour. We have an interest in extending security and prosperity to the East because, by so doing, we will help to reinforce security and prosperity throughout and beyond our European continent. These are indeed big prizes and that is why I say we should keep them before us as we enter the detail of tariff quotas, minimum import prices and above all of CAP reform.
The European Union has a unique contribution to make in helping the countries of Eastern and Central Europe through the painful transition that they are now experiencing. Together, the member states constitute the largest single market in the world. Access to that market therefore is the most substantial form of assistance we could give to any trading bloc, and particularly to our near neighbours to the East. The prospect of eventual membership is the best incentive we can give to them to continue their political and economic reform.
The Government have worked consistently since 1989 to develop the European Union's relationship with the countries of Central and Eastern Europe. Indeed the Europe Agreements with six of them were the result of a United Kingdom initiative. We worked for and welcomed the statement by the Copenhagen European Council that the Europe Agreement countries would, if they so desired, join the European Union. This will happen when they have met the necessary political and economic conditions. We are again working hard—this time under a German presidency—to agree a substantial package of measures for the CEEs: one that will amount to a route map for the further development of their relations with the European Union as they prepare for membership.
I will not pretend, and the Government have never claimed, that the Europe Agreements are perfect agreements. My noble friend Lord Middleton has just shown us quite clearly that that is not so, but these Europe Agreements represent an important step forward in the relationship with the Central and Eastern European countries. First, they establish a framework within which each associate can prepare itself for

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membership of the Union. Secondly, they commit the parties to dialogue across the whole range of European Union business. The United Kingdom has, with Italy, been most closely identified with efforts to give this dialogue substance in the inter-governmental pillars. But we want to see the same sort of process taking place in the Community pillar, including, of course, on agricultural issues of common concern.
Thirdly, the Europe Agreements allow for rapid and far-reaching trade liberalisation. Community barriers to all imports of industrial goods from the Visegrad 4 countries bar steel and textiles will have disappeared by the end of this year, and for Bulgaria and Romania by the end of next year. All remaining tariffs on steel and textiles will have been removed one year after that, by the end of 1996. These are all very positive developments which were, in many cases, reinforced or carried further by the conclusions of the Copenhagen European Council.
However, agriculture is the one area in which the Europe Agreements and Copenhagen fall well short of the needs of the Central and Eastern Europeans. First, this is because the tariff quotas created by the agreements deny the CEEs the extensive market access which they need to assist the restructuring of their agricultural sectors, but, secondly, as the Committee's report so correctly concludes, it is because the trading arrangements enshrined in the agreements,
"cannot of themselves define the path of transition to CEE membership of the Community".
We cannot be satisfied so long as this remains the case. Agriculture is a sector of far more importance in the economies of the Central and Eastern Europeans than in those of the European Union. It is an area in which the CEEs have a natural comparative advantage. It will be difficult, if not impossible, for them to complete the transition to full and successful market economies if they cannot exploit these agricultural resources. They will therefore want to participate in some form of European Union agricultural policy when they accede.
The report is right to identify the common agricultural policy in its present form as a major obstacle to progress. So long as the Community remains a surplus producer of most of the agricultural goods that the Central and Eastern European countries want to export, wider trade access can only be achieved by disposing of more of our own produce through intervention or subsidised export. Neither course makes sense. Both would impose new burdens on European Union taxpayers, burdens which would fall disproportionately on the taxpayers of this country; more subsidised export would run against the grain of the GATT Uruguay Round outcome, an outcome for which the United Kingdom fought hard and in which we believe we have secured the interests of both the European Union and the wider multilateral trading system.
The same logic shows clearly that the common agricultural policy could not be extended to the Central and Eastern European countries in its present form, at least, not at a price that is affordable for the existing member states. The same problems would occur but on a much larger scale, as Central and Eastern European
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production took off under the stimulus of artificially high prices. The best way to prevent this happening is by bringing CAP prices towards market levels before the CEEs accede.
My noble friend Lord Howe will, I suspect, want to say rather more about this later in the debate but I think from the nods of agreement around your Lordships' House that there is no one who disagrees with the statement that I have just made.
The Government's written response, to which my noble friend Lord Middleton referred, refers to the difficulty of overcoming these problems during the negotiation of the Europe Agreements. The common agricultural policy is not a flexible instrument; I need hardly say it. Changes to it require time and patience, as the history of the Uruguay Round negotiations amply demonstrates. But the outcome of those negotiations also shows us that change can happen, that it is happening, and that it is going in the right direction. Against that background, the agricultural provisions of the Europe Agreements need to be seen as an interim solution only. The challenge facing us as we prepare for a further round of enlargement is to reform further and to manage the evolution of European Union and Central and Eastern European agricultural policies in such a way that they will be compatible on accession, and at a point which is not only affordable and sustainable but consistent with the direction in which multilateral disciplines are already taking us.
We need to set about that task with determination if the enlargement of the European Union to bring in the Central and Eastern European countries is to happen in a politically realistic timeframe. I see three main areas; for further action.
First, the European Union and member states individually should, when asked, continue to share their expertise with those responsible in the Central and Eastern European countries for completing the transition to market-oriented agricultural structures. In its conclusions, the report refers to the importance of agriculture in the development of those economies. I am extremely grateful to the committee for the support given to the approach being adopted in this field by our own British Know-How Fund. The committee is also right to note that there is a role to be played by PHARE. As the Minister responsible for the Know-How Funds and for PHARE and TACIS, perhaps I may say a few further words on this score.
The European PHARE programme involves a finite sum of money. We know that the Central and Eastern European countries have many needs covering many sectors, including nuclear safety and the environment. Agriculture is one sector, but it is an important one. We must always remember that the PHARE programme is demand led and the priorities have been established following discussion with the Central and Eastern European governments themselves.
Agriculture already accounts for 11.5 per cent. of the total PHARE programme and is the fourth largest single project, alone worth 416 million ecu in the period 1990 to 1994. Therefore we are trying to ensure that in the agricultural sector we focus help on those reform strategies which will bring the greatest benefits: the

721
restructuring and privatisation of state farms; the development of rural finance, banking and credit schemes; the establishment of independent rural co-operatives; and also providing market information and forecasting systems for the major agricultural commodities. Those are all ways in which, with Britain's help, the European Union PHARE programme is beginning to assist. But, as the Government's written response notes, it must be for the beneficiaries to establish the priorities for PHARE expenditure, and we shall continue to work with them to that end.
The second aspect of the action that I foresee is the review of the common agricultural policy. The aim must be for the European Union to produce recommendations for further reform that will pave the way for the accession of Central and Eastern European countries, with improved market access in the meantime. That in turn will give those countries the greater certainty they need to determine their own policies and priorities in the interim. None of it will be easy. There will be strong resistance from some quarters to any further change in the status quo. But I am glad to tell your Lordships that a growing number of policy makers—in France, Germany and the Commission—are coming to see that not to change is not an option. That is good news.
A review of this kind will take time. Implementation of reforms will take even longer. But we cannot stand still. Therefore, in the meantime we need to look critically at the existing trading arrangements to see whether there is scope for further immediate improvement. The United Kingdom believes that there is. We believe that the German Presidency offers an opportunity for exploiting that scope. We warmly welcome the fact that your Lordships' committee has produced its own menu of suggestions. These have already generated interest in Brussels and in the Central and Eastern European countries. I know that my noble friend Lord Howe will want to comment on these in more detail later.
Suffice it to say that all of this adds up to a formidable work programme. I repeat that the committee's timely report has made a truly valuable contribution to the Government's own reflections on how best to pursue these issues. I am confident that the debate today will be no less useful, and I am indebted to your Lordships for the report which has given rise to our debate.
4.5 p.m.
Lord Carter: My Lords, like the Minister, I should like to thank the noble Lord, Lord Middleton, and congratulate his committee on what has correctly been described as an important, persuasively argued and detailed report which raises considerable questions about the future of the common agricultural policy.
The canvas which the report covers is a huge one: six countries with a total population of nearly 100 million people and with substantial agricultural production, even at the recent reduced levels resulting from the strains of liberalisation. Even at current reduced levels, in 1993 agricultural production in Central and Eastern European countries, as a percentage of European Union output, was: milk, 22 per cent; beef and veal, 15 per cent; pig
722
meat, 30 per cent; coarse grains, 44 per cent; and wheat, 29 per cent Those countries are obviously substantial agricultural producers.
I have had the good fortune to visit, albeit only briefly, Poland, Hungary, Czechoslovakia, Bulgaria and East Germany. Because my visits were short my impressions were in the form of snapshots rather than in-depth studies. My first impression, which I am sure was shared by everyone who has visited those countries, was the enormous task which all the Central and Eastern European countries face in adapting to the end of the command economy and its replacement by more liberal regimes. I also formed the view that if privatisation went too fast there might well be a reaction and a hankering for a more authoritarian style of government.
The agricultural sectors of central and eastern Europe are not homogeneous. They differ in structure and product mix and their role in the economy. The countries themselves range from temperate crop producers to the more Mediterranean conditions of the Balkans. However, there are certain common themes in what has happened since 1989. These are well brought out in the report. Production and rural incomes have fallen; demand has contracted markedly; retail margins have risen; and farm gate prices have fallen in real terms. Despite rising relative profitability of food processing, downstream agricultural industries have also been struggling, increasing the uncertainty in the uncertain environment in which agriculture operates. Those problems are not exclusive to agriculture, but are the common currency of industries and sectors in transition.
As an agriculturalist, on my visits I was struck by what I saw as the impediment to essential improvements in agricultural production which results from what I can only describe as an obsession with land reform. The problems in relation to land reform are mentioned a number of times in the committee's report. With the exception of Poland, state collective and co-operative farms account for a substantial portion of the farmed area in Central and Eastern Europe. I believe that the new democratic regimes have missed a once and for all golden opportunity to achieve a farming structure based on units of a size suitable for modern agricultural production. One possible solution was touched on by Mr. Peter Toth, an agricultural consultant whom the committee met in Budapest. He is quoted on page 50 of the report as saying that, in the case of Hungary, the method of privatisation adopted:
"was mistaken and would lead to too much fragmentation. Privatisation should not mean small scale farming. Efficient co-operatives and State farms should have been transformed into companies and their shares privatised instead of splitting and parcelling out the land to 600,000 people many of whom did not wish to farm. Large scale leasing should have been carried out".
An alternative method might have been to have some form of national agency, acting in effect as head tenant, which would sublet the land in reasonably sized units. Having collected all the rents, it would then have paid them over to the many original owners—if indeed they could be tracked down. However, in my view the obsession with offering the land back in small parcels to the original owners must act as a brake on the improvement of agricultural production. The lack of

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certainty over title has restricted the development of a land market for sale or rent, preventing the consolidation of holdings. That has restricted the development of market behaviour or the provision of greater direction to fanners. Diffuse ownership, even of those holdings over which clear title has been established, has also held back recovery. One extreme example relates to a Slovak farm of 56 hectares with 348 owners. In East Germany—it is outside the scope of the report—I visited a farm of 20,000 acres which has 1,000 owners. Understandably producing coherent farm management in those circumstances has been a difficulty.
Uncertainty has also increased the inherent difficulties of obtaining finance for production as the banks are reluctant to lend in a world of uncertain and multiple title. That reluctance has reinforced the desire not to become enmeshed in the long term relationships which are inevitable in the agricultural sector. Restricted access both to working and long term capital has exacerbated the problems of transition. That lack of certainty and of finance is in many ways the true problem of the agricultural industries of the CEE countries of which falling output and incomes are but symptoms.
A number of the CEE countries, quite correctly in my view, make it difficult if not impossible for foreign investors to buy farmland. The last thing that they want is a new class of overnight rich rentiers. However, one way of getting foreign investment and know-how into farming rather than into the ownership of land would be to have reasonably sized tenant farming companies in which outsiders could invest both capital and know-how.
The committee refers to the excellent annual course for young officials from the CEE countries which is run at the Sparsholt College in Hampshire. I have had the honour to lecture during that course each year and to speak to those young officials about the agricultural systems in Europe and the workings of Parliament. I have to tell your Lordships that they find the House of Lords a difficult institution to comprehend.
The other area in which outside capital and know-how is badly needed is in food processing, distribution and marketing. That is referred to in the report. One possible reason for the failure of the CEE countries sometimes to fulfil their quotas for exports to the European Union could well be the sheer lack of a marketing system capable of meeting export demands in terms of both quality and quantity. However, that is clearly not the only reason for the swing in balance of agricultural trade between the European Union and the CEE countries of nearly 1.4 billion ecus between 1988 and 1993. That swing is from a positive balance of 950 billion ecus in favour of the CEE in 1988 to a negative balance of 420 billion ecus in 1993.
The CEE countries certainly have some justification for their irritation with subsidised exports from the European Union. The report makes some useful suggestions for dealing with that problem and related problems in its recommendations on quotas, reciprocal measures, export licences, rules of origin and minimum import prices. I thought that the Government's response,
724
although helpful, was perhaps a little half-hearted. Perhaps it was hard to find common ground on the topic between the Foreign Office and MAFF.
The report also touches on a subject which is of great concern, and not just to farmers; namely, the possibility of putting the Community's animal and plant health standards at risk if there are no proper standards of veterinary and phyto-sanitary inspection and control. I well remember visiting a state cattle-breeding station in a a CEE country which shall be nameless. I was told before I saw the animals that the average milk yield approached 7,000 litres per cow. Having seen the cattle I would have been surprised if they were capable of giving 700 litres. I have never seen animals in such poor condition. I mention the incident not only because it relates to the animal health problem but because it also illustrates the problem of obtaining accurate information and statistics about what is happening on the ground in those countries. The figure of 7,000 litres probably related to the targets under the previous regime and the old habit of reporting the target production as actual production obviously died hard.
The crucial question of the implications for agriculture of the Europe agreements relates to the relationship between the CAP as it is now and as it might become, and the eventual accession of the CEE countries. That is analysed clearly in the report. One issue is clear. There is no way in which the CAP in its present form could be applied to the possible improved production levels in the CEE countries which might be in place when they eventually join. That is why estimates of extra costs of 20 billion ecus to 30 billion ecus, although I am sure arithmetically correct in the light of the heroic assumptions on which they are based, are way beyond the bounds of political possibility. That was expressed clearly to me when I visited Poland earlier this year. The official, who also met the committee when it visited Poland, said that the CEE countries had to accept that there was no way in which European Union taxpayers and consumers would agree to the approximate doubling of the present cost of the CAP just for the privilege of bringing CEE agriculture into the Union.
We all know that the CAP clearly needs further reform. That requires a debate in itself. Already the first signs of new thinking are appearing. The committee refers to that in paragraph 145 on page 34 of the report. I am sure that your Lordships are aware of the report entitled, An Agricultural Policy for the 21st Century, recently published by DG II of the Commission. I understand that it was promptly disowned by DG VI as the precursor of a change in European Union policy.
If—it is a big "if—ideas of subsidiarity and national support begin to be applied to the CAP, it might make it easier for the CEE countries to accede. Their agricultural efficiency would have to improve so that they, like the remainder of us, could operate at or near world prices and they would undoubtedly require considerable help in terms of capital and of know-how. However, the suggestion in paragraph 148 on page 35 of the report that a drastic curtailment of the CAP budget might make it possible to extend regional support to CEE countries on a significant scale implies a degree

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of optimism about the attitudes of member states of the European Union which experience of the Union does not altogether support.
The policy conclusions are predictable. Reform is needed if the CEE countries are to accede together on the basis of a CAP which obeys the principles of Community preference, common pricing and common funding. But that process is not inevitable. The impact that Central and Eastern Europe has on the CAP is a product of a set of different factors: the likely supply response to reform in the region; the attitude of governments and the political imperative from outside agriculture underlying membership in terms of European security. Above all, the timescale over which production and yield levels increase, and the possible sequence of membership, could mean that the CAP's Houdini-like ability to survive will continue.
The question of timescale is overwhelmingly important. The speed with which yield levels converge is central to the view that the CAP has to be reformed to allow full membership of the CEE countries. That point is well made in the report. But the reverse may be true. Early membership could take place with agricultural production at such a level that serious reform is not necessary. Cereal yields have risen at roughly 2 per cent. a year in Western Europe since 1945. Assuming a similar rate of growth in the CEE countries, if one starts from current levels, those yield levels will not reach the current community average before the end of the decade, and in many cases not before the end of the decade after that. This places a serious question-mark over some of the estimates of the cost of membership. Responses in agriculture are frequently strong, but rarely swift. This places a premium on getting the incentive structure right.
Another important aspect of CEE agriculture which is touched on in the report concerns the way in which the state, collective and co-operative farms in CEE have played an important social role in their local communities: looking after pensioners, for example, and fulfilling a social service role. There was and is a lot of disguised unemployment on these large farms. If there was one job and four people to do it, the wages were divided by four and everybody, nominally, had a job. The collective or co-operative also made sure that everybody had a home or a flat.
It was put to me extremely graphically by the manager of a large co-operative farm in Czechoslovakia who said: "I have six people milking and looking after 100 cows. I only need two. Which four do I get rid of and what do they do? There are no other jobs in our rural economy". I mention this only to emphasise that a breakneck rush to privatisation may have social results which could have serious political repercussions.
CEE agriculture has a great potential, which, when taken with the aspiration to EU membership, in a short time could put considerable pressure on the CAP under certain assumptions. However, it must be noted that there are several imponderables over this timetable. Accession may be later rather than sooner; the likely increase in agricultural output may only take place in the long term as a result of slow recovery from the
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present malaise and the natural growth of production. On the assumption that production levels are more easily controlled by the EC once the CEEs are incorporated in the common agricultural policy, there may be a case for arguing that early accession offers one way of minimising the impact of their accession on the CAP. However, the CEEs will still be a force for reform, pushing the EU towards price cuts as their production potential and domestic political agendas are geared towards these ends.
However, it might be as well not to see CEE enlargement as the inevitable motor of CAP reform; phased membership and the Heath-Robinson evolutionary tradition point to a possible avoidance of the pressures. But some principles remain: if the EU is serious about encouraging membership of the CEEs, then agriculture must be built upon world market prices geared to the long term. The CAP is certainly an expensive way of failing to meet the needs of the CEE countries.
The comprehensive nature of this excellent report means that there are many areas which cannot be properly covered in one speech of acceptable length. The effect of the GATT agreement, the possibility of recreating the trade links between the CEE countries and the countries of the former Soviet Union, the eventual enlargement of the European Union to accommodate not just the CEE countries but perhaps also Slovenia and the Baltic states, and overlaying all of this —and I am sure that this will be touched on by my noble friend Lord Bruce of Donington—the future direction of the European Union itself after 1996 will all have their effect on agriculture throughout Europe, both in the European Union and the CEE countries.
There will be much more debate and many considerations of policy. This report will undoubtedly provide an invaluable source of reference and analysis. The noble Lord, Lord Middleton, and his committee are to be congratulated on its timeliness and its quality.
4.23 p.m.
The Duke of Somerset: My Lords, as a member of Sub-committee D, I should like to start by saying what a fascinating and interesting but complicated inquiry this was, but so well and ably chaired by the noble Lord, Lord Middleton. Its conclusions will undoubtedly be discussed at least over the next six years while reform of the CAP is debated and the CEE countries themselves push for accession to the European Union.
It is these two points which are central to the report, to my mind, together with the concomitant consideration of the political risks of upsetting the electorates in the CEE countries. It is imperative that the process of democracy, of transition to market economies and co-operation with NATO and the West is continued and enhanced. None of us wishes to see a return to a communist form of totalitarian government in the East, but already we are witnessing a return to power of the old personalities under slightly different party names. For instance, in Poland, the post-communists were returned in September 1993. The next electoral danger in that country will be in November 1995 with the presidential elections. I think that result will be a

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significant pointer to the future health of Eastern Europe. Disillusion with the transformation away from central planning has set in among the voters.
The report clearly states that the aim of maintaining political stability in Eastern Europe is of paramount importance for our security, our economy and investments. So it is disturbing to discover that apparent resentment and the report endeavours to pinpoint why this is happening. The Europe Agreements are supposed to prevent it, but I think they are not doing so. Agriculture is only part of these agreements, but it is the largest part of the CEE countries' economies and. thus of employment, accounting for anything between 12 and 25 per cent. of the total.
The CEE countries certainly seem to feel that these Europe Agreements are not working properly and the data and figures bear that out. The evidence section of the report is full of tables demonstrating that actually the European Union benefits more than the CEE countries, despite asymmetry. For instance, Hungarian exports to the European Union fell by nearly 35 per cent. between early 1992 and early 1993. By 1992, the European Union was in surplus with all the states.
The reason for this failure and the popular resentment that results is one of attitude by the West, both at the time of negotiation and still today, or certainly until very recently. The agricultural trade concessions of the Europe Agreements were based on data relating to trade that was happening before the upheavals of the political and economic reforms of the late 1980s and the subsequent collapse of the market in feeding the populace and armies of the former Soviet Union.
Despite the shock of the Moscow coup, there was no intention by the Commission to see these agreements as a paving stone for any future Community membership. EC farmers had to be protected. Even the Copenhagen changes of 1993, as the report states in paragraph 158, failed to take the opportunity,
"to reshape the Agreements in line with the objective of the CEE countries becoming members of the Community".
This was in spite of the reversal of EC trade balances into surpluses. For instance, the Poles complained to us when we visited them that they had large quotas for microwaves, which they did not produce, but they had no quotas for strawberries, which they produced in large amounts.
This attitude of doing the least possible is still prevalent among many of the Union countries, with the exception, certainly, of the UK, among others. Basically, those operating in the agricultural sector of the CEE believe that political commitments by the European Union to greater integration carry little weight in the protectionist world of agriculture. For instance, in the major commodity of wheat, the permitted access to the European Union is equivalent to 0.3 per cent. of the Union's production.
Even the latest German plan to allow Eastern European countries to send representatives to EU meetings met with opposition from France. Again, France procrastinated over plans even to draw up an analysis of future membership by CEE countries, apparently arguing for a hardening of restrictive clauses
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in the Europe Agreements and for more protectionism. However, I know that these noises are quietening now with the German presidency, the country best placed Co gain from increased trade with the East.
There are of course other reasons for the apparent failure of these agreements. Not all the quotas have been fulfilled. That is often a production problem and not one of access, perhaps caused by disruption arising from the abandonment of central planning; by lack of credit; marketing infrastructure; and sometimes drought. Other problems are mentioned in the report.
The worrying aspect is the response by the CEE governments, as opposed to their electorate. That response includes CAP-style subsidies. At the Hungarian University of Agricultural Sciences, the academics to whom we spoke made clear their view that there would be a rising plane of subsidy: their country had one of the lowest support systems in agriculture among OECD countries; and they could look over the border at the apparent prosperity of farmers in the Union.
The dairy policy in particular was previously characterised by massive subsidies—such that the retail price of milk was usually below the cost of production. Market forces then forced large rises under the new regimes, so consumption fell, which in turn caused the prices to fall, and there was an over-capacity leading to debt problems. So Hungary, along with Poland and the Czech Republic introduced regimes based on the CAP model with an intervention system, control of imports and minimum producer prices.
The farmers' lobbies as represented in some of those governments, because of perceived unfair competition from subsidised EU products, have encouraged this policy. That was recognised by the European Commissioner for Agriculture, Mr. Steichen, when he spoke at a conference held in Budapest just before the sub-committee visited that city. His question was: how can we ask the CEE countries not to protect themselves against our subsidised products unless we reduce the subsidies on our exports to them? The only answer so far from the Commission has been a token removal of subsidies from apple exports to the Czech Republic. Otherwise, the problem has been largely ignored.
There are many other important factors to consider, but I shall mention only one in passing. Internal trade between the CEFTA countries should be encouraged. Some of their internal trade barriers are higher than those of the European Union; and it became apparent during our visit that there was a mental difficulty—one that is quite understandable—in reviving any trade links which smacked of Comecon. The European Union could usefully encourage this, perhaps by setting up financial clearing systems as suggested in the report and also by clarifying the fraught rules of origin. I am glad that the Government have supported the sub-committee in their published observations on this issue, as indeed they have on a good deal of the report.
It would appear to be obvious that the way forward is eventual accession to the Community. However, it does not appear to be obvious to the Commission, as the current CAP is incompatible with this aim. German and Irish farm ministers have stated that there is no prospect

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of substantial changes to the CAP before the millennium. Professor Marsh, in evidence to the sub-committee said that to enlarge the European Union and to extend the present CAP to the new countries would be effectively to deny to their largest economic sector the economic benefits of entry. Mr. Steichen has given the impression that the new CAP of 1993 was the end of CAP reform. How can that be giving the right impression to the EC countries, especially when other reports, such as those by M. Nallet, are encouraging the CEE to adopt CAP-style regimes. That uncertainty means that these countries are aiming their policies at a moving target.
The Times recently reported that the Czech Republic now fulfils the full array of Maastricht Treaty convergence criteria better than any of the privileged Twelve, barring Luxembourg. Indeed, it has a higher credit rating than Greece from one particular bank. That sort of pressure will surely force a reappraisal among foreign ministers. Budgetary considerations and the GATT will do the same for agriculture ministers. The report is quite adamant about CAP reform: reductions in the level of agricultural price support must be made across the board towards world market prices.
There are two particular difficulties over future membership besides the immediate CAP. One is the structural and cohesive funding; the other is the environment.
In Poland, we were told that only 40 per cent. of farms have piped water and that the wells are either dry or polluted. There is massive under-supply in gas, electricity, telephones and general infrastructure. The cost of implementing structural fund policies in the CEE would cripple the Community budget and also upset the poorer members, who would expect to see a diversion of cash away from them. It has been suggested that new members might be excluded from structural funds, leading to a multi-tier Community and larger regional differences in income per head. I wonder how that fits in with current government thinking on a wider scale. Or indeed, can one contemplate the accession of CEE countries without their full participation in the CAP—in effect, a very long transition period rather like the one enjoyed by the UK?
However, that will give rise to anxieties over production conditions and standards in such matters as hygiene, animal welfare, employment conditions and wages. I believe, however, that the EU can afford to make concessions over some of these matters. Pollution is another question: all matters such as soil erosion, polluted groundwater, and pesticide and veterinary product residues in food need to be tackled quickly, as, equally, do such matters as veterinary control for diseases such as foot and mouth. The Community could easily organise a stronger animal and plant health inspectorate to operate within the associated countries.
The way ahead is clear; but are the inclination and the will there? Most of the countries that we are discussing meet preset economic conditions. They regard their inclusion as essentially a political decision for the EU—one that will become harder after the
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accession of the EFTA states. Internal negotiations over CAP reform should start now, not at the turn of the century. In conclusion, it can do no harm to follow the first two speakers in strongly drawing attention to the epilogue.
4.37 p.m.
Lord Reay: My Lords, the subject we are now debating is one of major importance. In the words of the Government's reply to the Select Committee's report:
"Extending security and prosperity to Central and Eastern Europe is the major foreign policy challenge facing Europe today".
It is also, happily, not a party political issue in this country; nor even, up to a point at least, an issue of contention between those who were in favour of and those who were opposed to the ratification of the Maastricht Treaty. The committee was in harmony with itself, and the Government were in harmony with the committee. I believe that we all saw the prospective enlargement of the Community to include the countries of Central and Eastern Europe—which is now the agreed policy of the Union, reiterated on every appropriate occasion—as one more urgent reason for further reform of the CAP which was already desirable on many other grounds. As we wait for the irresistible force of enlargement to meet the immovable object of the CAP, we at least are firmly on the side of the irresistible force.
Agricultural trade between the European Union and the CEE countries has developed, as has been pointed out, asymmetrically but not in the way that was intended or expected under the Europe agreements. It is the agriculture of the European Union that has been the bigger beneficiary, its exports growing at a substantially faster rate than those from CEE countries. No doubt that is largely the result of the backward and disorganised state of CEE agriculture, its undeveloped distribution and marketing and the immaturity of its processing industries which cannot begin to meet the increasingly sophisticated demands of a growing domestic market. Nevertheless, it is also true that European Union agricultural exports are heavily subsidised —up to 40 per cent. in some cases. How can the CEE agriculture be expected to develop its full potential against such unfair competition? It is not surprising that in Warsaw and Budapest our hosts talked of introducing measures to curb imports from the European Union. They could hardly be blamed for thinking in those terms and are probably restrained only by their desire not to introduce political impediments into their relations with the European Union.
What we should not do is give any sort of encouragement to the CEE countries to establish their own versions of the CAP. Several factors may tempt them to do so. For instance, the collapse of farm incomes and the introduction of democracy in particular have introduced a vociferous domestic demand for special measures of protection for agriculture. To those factors at work must be added the unfortunate example set by the European Union which is so inspiring to them in other ways. For example, we discovered that Hungary had just introduced an intervention system and that the level of protection there had risen considerably above

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what it had been immediately following the abandonment of communist controls, as the noble Duke described.
Inability to meet the cost will prevent agricultural protection from moving very far in the direction of the CAP. Nevertheless, I suggest that we must not give encouragement in any way to that process as the Commission, which can speak with more than one voice on this matter, sometimes seems inclined to do. The Government's reply quotes a report referred to by the noble Duke, just published under Commission auspices, which recommends that the CEE countries prepare themselves for accession by adopting price stabilisation policies based on the CAP.
It is surely beyond argument that the European Union will not be able to pay for agricultural support at existing CAP levels for the new member states. As the Foreign Office Minister, Mr. David Heathcoat-Amory, put to us with admirable forthrightness,
"it would be impossible to bring these Eastern European countries into the European Union with the CAP in its present form. Put crudely, I think it would probably bankrupt the European budget".
It would also produce an explosion of production in those countries without markets in which to dispose of it. Nor do I see how the CAP can be renationalised or repatriated, at any rate in its entirety. There may be scope for different national levels of compensation for farmers but a single market surely requires a uniform system of price support.
The European agreements do very little to open our markets to their agricultural produce. But while the agreements are all that we have we must keep them in good repair. The committee found that there was scope for improvement. A complaint widely made to us and one that should be addressed is that European Union traders, rather than CEE exporters, drew the benefit from the allocation of European Union import licences. In their reply the Government acknowledge that a greater proportion of the full value of the concessions should accrue to CEE countries and propose the introduction of authenticity certificates, as used in association agreements, in preference to the issuance of licences to CEE governments for resale or auction internally, as proposed by the committee.
Perhaps my noble friend will explain why they have that preference and how such certificates work. That was not something that was put to us or about which we heard in any of the evidence. Perhaps he will also elaborate on the reasons given by the Government for rejecting the enhanced role that we proposed for inward processing relief on raw materials imported by the food processing industry in the European Union for re-export to CEE countries in the form of manufactured products.
In the long term I agree with the Government that we all want to see the food processing industries built up in those countries. But in the short term there may be an advantage in such arrangements. They may help to develop the links between agricultural producers and food processors and improve the quality of agricultural products.
On the broader and more substantial issue of export refunds, perhaps the Government can say why they seem to reject the committee's proposal that the
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European Union should reduce or remove export refunds on its exports to CEE countries and to third markets such as the NIS which are traditional to those countries. They seem to state that there will be little benefit in the European Union acting in such a way unless other countries do so too. Do the Government see any opportunity for the European Union to act alone in the matter? In their reply the Government said,
"This is one of the aspects of the problem to which the Government will give particular attention in the representations it makes to the Commission".
Can my noble friend say what sort of representations the Government are contemplating?
It is perhaps salutary for us to face the fact that not all producer lobbies responsible for the erection of impediments to free trade are foreign. Minimum import prices on soft fruit—about which we received many anguished complaints on behalf of CEE producers—are in existence partly to protect the interests of our own raspberry growers. The Government will seek to introduce an early warning system—something strongly requested by the CEE countries—in a way which will not damage the interests of our own producers. Does my noble friend believe that that is a realistic course? Do the Government foresee that eventually free trade should operate in that sector also?
I am pleased that the Government accept the case for full cumulation of the rules of origin in that it would help secure the desirable goal of developing trade between CEE countries themselves. Intra-CEE trade is something to which those countries, with the hated memory of COMECON behind them, appear to pay little attention. Nevertheless, with the goal of their future integration into the enlarged European Union in mind, an expansion of intra-trade is surely something we have a right to ask them to pursue and an interest in encouraging.
As the Minister reminded us, the reforms of the CAP have begun. Price supports have been reduced; compensation payments have been introduced and surpluses have fallen. Whether enough is being done to enable the European Union to meet its Uruguay commitments is an arguable point. In any event, as the Government said in their observations,
"much remains to be done to take this reform process further".
Further CAP reform does not depend on decisions taken in this country. Indeed, I suspect that the key is held by Germany. Germany today remains suspended between its support for the CAP, called for by its alliance with France and its own vociferous farm lobby on the one hand, and on the other the priority which it is increasingly giving to the European Union enlargement to the East. Germany will have to decide how it wishes to accommodate those two incompatibles. The unprecedented decision last week taken in the Council of Foreign Ministers under the Germany presidency to admit the CEE countries to meetings on a regular basis surely brings that day of decision closer.
Of one thing at least I remain convinced. I do not believe that anything will prevent the countries of Central and Eastern Europe from continuing to seek their future in the European Union. To them the European Union is the guarantor of their democracy, of

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their prosperity and even, strange though it may seem to some, of their independence. It is the star to which they have hitched themselves; the handrail they will use to pull themselves out from their unhappy pasts. Some of our policies may tarnish, may blemish, may render less comfortable than it might have been, that process, but they will not prevent it. There is a historic wave carrying those countries towards us, and we should rejoice that that is so.
4.50 p.m.
Lord Bruce of Donington: My Lords, this is one of the very rare occasions when the whole House appears to be agreed on something concerning the European Community. This very memorable occasion is signalled by the publication of the very excellent report of the committee under the chairmanship of the noble Lord, Lord Middleton. Unhappily, the report will not go far beyond this House. We ourselves and myself in particular have been very interested in every speech made this afternoon. Those, too, will not go outside the House.
The report itself, with the appendices and the government document in reply, costing £2 for five pages, together with the Hansard report covering the debate that will be available tomorrow will involve any individual interested in the EEC with an expenditure of £40, which is rather a large sum for the individual to bear at this time. Nor are our public libraries, whose funds are being very severely constricted, likely even to know about this afternoon's report let alone buy copies for the people to be able to understand. I fancy that we shall not intrude ourselves onto the television screens or that there will be more than half an inch—and that will be lucky—in the press tomorrow. So we are debating the report among ourselves. That enables me to be very agreeable, as your Lordships will appreciate.
When I first came to this place nearly 20 years ago mild noises were being made about the defects in the common agriculture policy. They were very mutely uttered according to whether one was a Euro-fanatic, a federalist, a sceptic, or whatever. Those who were sceptical tended to be rather more vociferous; those who were Euro-fanatics tended to be rather mute. But all agreed that the policy had to be reformed. Well, what stopped it being reformed? There have been innumerable inter-governmental conferences at which large numbers of people have made loud noises about it and yet very insubstantial reforms have been made. However, the politicians have suddenly apprehended— and politicians are alive sometimes—that unless the common agriculture policy is radically changed—and I am using the words in the report of the noble Lord "more radical reform"—we run the danger of extinguishing the emergence—the growing emergence, one trusts—of real democracy as we understand it in the eastern states of Europe which have recently emerged from the Soviet dictatorship. It is only when that suddenly comes before us that we become aware of and treat as a matter of great significance the manifest defects in the common agricultural policy, a point with which even the Government now agree.
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I say "even the Government" because a considerable conversion has taken place. On page one of their reply to the report the Government state:
"But agricultural trade relations continue to present an obstacle to the achievement of these political objectives. The agricultural provisions of the Europe Agreements fall a long way short of the timetable for complete trade liberalisation envisaged for industrial products".
Paragraph 11 of the reply states:
"The undesirability and unaffordability of extending the CAP in its present form to the CEEs are, however, not yet universally accepted".
Of course they are not universally accepted. The Commission will never accept them. The Commission does not want them and the governments are quite unprepared to stand up to the Commission. I heard on the radio this morning that the Commission has issued a reproof to the United Kingdom concerning the extent of its public sector borrowing requirement. Well, nuts to the Commission! It is no business of the Commission's, whatever powers it is alleged to have been given in the Maastricht Treaty, a point to which I and many of my friends on both sides of the House referred at the time. The Commission does not want the reforms. I shall return to that point later.
Other people do not want the reforms. I draw your Lordships' attention to a report in the Observer on 7th August last. That was, I know, when your Lordships' House was in recess and I do not want to strain memories too far. But this is what the report said:
"A total of 651 English landowners, including both wealthy aristocrats and corporations, were each paid more than £100,000 of taxpayers' money not to grow crops last year".
Well, well, well! The report goes on:
"Of these, 45 farm owners netted between £250,000 and £500,000—and a further seven each received more than £500,000. Some 2,325 landowners received between £50,000 and £99,999".
The Earl of Onslow: My Lords, I have large sums of money from set-aside. It is a lovely trough into which I am quite happy to put my snout and both trotters, but it does not stop me arguing very strongly against the evilness of the existence of that trough. They are two totally different things. Anyone who does not take advantage of a trough is an idiot. But it is perfectly reasonable to argue against the existence of the trough.
Lord Bruce of Donington: My Lords, the noble Earl is well known for his ethical standards being far superior to any material reward that he might even seek or not seek to receive. I am giving the facts. If one looks at last year's figures, which are derived from a patient examination of the Official Report of another place, one finds that farm owners were paid a total of £759 million under the arable area payments scheme which compensates them for falling crop prices on condition that they take 15 per cent. of their land out of production. No wonder that there can be no intellectual justification, or moral justification either, for the continuation of the common agriculture policy, which in the United Kingdom—this may not be generally known—adds approximately £20 a week to the food bill of an average family of four. The figures have not been challenged. Indeed, they come from the Government's

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own sources. The Minister will reply in due course. I shall be happy to receive his official note which I shall compare with the Government's own figures.
Why then cannot we reform the common agriculture policy? I believe that there is a general political will among politicians of all parties to do so. I cannot think that they are completely insensitive to the gross immorality of the policy as it is. I cannot believe that in their hearts they do not know that being at the heart of Europe means an acceptance of its rotten core which is the common agricultural policy.
So what are we left with? We are left with the same thing all over again. We are left with the almost complete dominance of the international and the national Civil Service in this regard. Ministers have not got the time either to approve or disapprove of the material which is laid before them because so much of it is prepared completely outside their control and very often without their knowledge.
During the early part of this Recess I studied the legislation coming out of Brussels. I shall give my final report when the parliamentary Recess is complete and I have concluded my examination. But I can tell noble Lords that in the first four weeks no less than 265 items of legislation emanating from the European Community were put in the official journals. Those items do not include legislation which it is not compulsory to publish. They do not include mere amendments to existing legislation which are of little consequence. Substantive amendments are put in the official journals in time. Unless we can stop what is happening and assert our political will, we do not stand a chance. That was realised a long time ago. I do not know whether any of your Lordships have read the excellent diaries by Sir Nicholas Henderson. I recommend them. They are called Mandarin and they are very good indeed. For 29th December 1978 his diaries say:
"I have not been so busy lately, which reflects, I think, the changing role of an Embassy now that we are in the European Community. Officials in the various ministries do an increasing amount of work … with their opposite numbers in Community capitals".
He continues:
"My own feeling is that officials tend to fly about and meet too often. We had a brief discussion of this problem when the Chief Clerk had a meeting earlier this month with the Heads of Missions from the Community countries. Donald Maitland"—
of the Diplomatic Service and head of its news department at the time—
"said that for a recent meeting on agriculture in Brussels sixty officials had come from Whitehall, including two for potatoes—he supposed one for new, the other for old potatoes".
We know that at present a minimum of 60 British civil servants are on secondment to the European Commission. I am not suggesting for one moment that these people are acting in bad faith. I am merely saying this: we have to establish the political ascendency of the members of the government in office, of whichever party, over their own civil servants so that what goes
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out in fact represents their will for which they are able to take personal responsibility and for which, if necessary, they will resign.
Baroness Chalker of Wallasey: My Lords, I am grateful to the noble Lord for giving way. Is he aware of one matter as regards civil servants on secondment to the Commission? We are very pleased to have the opportunity to second most able British civil servants to the Commission because we believe that: it is through the expertise which they can share: with their Community colleagues that bodies like the Court of Auditors and bodies within the Commission will actually do the kinds of jobs which the politicians in Britain wish to see them do and to find some of that financial rectitude for which the noble Lord is so well known. I agree with him wholeheartedly in his pursuit of that goal.
Lord Bruce of Donington: My Lords, I am most grateful to the noble Baroness, particularly in view of the fact that her intervention gives me the. opportunity of expressing on behalf of the whole House our appreciation of her single-minded sense of duty in Rwanda and elsewhere in Africa. That must have occasioned her great physical and mental distress. Perhaps I may say how much we admire her for the execution of responsibilities which she undertook.
I take up the point made by the noble Baroness. Of course, secondment is good. It is also attractive because the Community institutions become part of the Civil Service career structure. It means that after a suitable period of time civil servants can aspire to offices within the Commission and the other institutions. I need not remind your Lordships that the rates of remuneration and reimbursable expenses run roughly double the amounts paid to the average Cabinet Minister at the present time. So there is a little incentive there.
The fact is that if we want to exercise our political will we can do it. We have had every opportunity at inter-governmental conferences, when pressure has been exerted on us, to do things which we have not wanted to do. But for the sake of being at "the heart of Europe"; whatever that may mean, and for the alleged prestige and esteem that stems from that, we have given in on a number of points all the way through. We could have stipulated a complete overhaul from top to bottom of the agricultural policy and that is what I hope we are going to do as a result of this report. At the next inter-governmental conference we should insist that proper measures be taken.
The Commission has an answer as it is entitled to have. It says, "We can compensate the eastern states by bringing them into the structure and pay of the structural funds". Of course it can. The structural funds can be increased and, since their disposition lies in the hands of the Commission, that can increase the political bribery that the Commission is able to exert by reason of it being the source of funds going to individual member states.
At the moment we in this country pay £2.5 billion net each year into Community funds. Under the new system of own resources, on the Government's own admission that figure may increase to £3.5 billion as a net

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contribution each year. If the structural funds are further enlarged by way of trying to compensate the eastern states for their acceptance of the common agricultural policy, on whatever gradual grade it may be, that will add further to the grossly excessive payments already made out of the pockets of United Kingdom taxpayers. We all marvel sometimes that the Government scratch around as regards the waste of £2 million, let alone £2 billion, and the way in which they accept quite blandly the grossly excessive amounts which are paid by this country into the CAP. They know quite well—they would have known better if today's debate on fraud within the Community had not been postponed for a further period of time—that not only does it represent a gross injustice to the British taxpayer, but that it is also a fertile source of fraud and irregularity on the grandest scale, as revealed in the Court of Auditors' report.
That is why I welcome the report and the Government's response to it. I even welcome the contribution of my own Front Bench spokesmen and their agreement with it. We are all in agreement. Therefore, let us at last do something about it. Let us not waffle about it any longer; let us do something.
5.10 p.m.
Lord Boardman: My Lords, when the noble Lord, Lord Bruce of Donington, began his speech, I thought that we would both be embarrassed because we would find ourselves in complete agreement. Indeed, I agreed with a great deal of what the noble Lord said, but I have reservations about some of his remarks and about the emphasis that he placed on others.
I should like to add my congratulations to those that have already been paid to my noble friend Lord Middleton and his committee on the excellence of their report. I should perhaps be dealing with it rather cursorily if I were to sum it up by giving your Lordships my impression of its conclusions and saying that we can have either the central and eastern European states joining the Community or the common agricultural policy—we cannot have both in their present form. This is a serious matter, as was made clear by my noble friend Lady Chalker when she said that change can happen within the CAP, although the clear emphasis was that change is unlikely to be achieved easily, if at all, within the Community.
I was privileged to serve on Sub-committee A back in March 1991 when we discussed the association agreements. We then debated them in this House in June of that year. That report warned of the dangers that would flow to sensitive industries—footwear and textiles were two—and especially to agriculture. Those are the products which those countries would most like—and be most able—to import into the Community. It was clear, particularly with regard to agricultural products, that that would create impossible conditions with the CAP as it was then—and as I believe that it is today.
We were careful in that report, which was produced under the able chairmanship of my noble friend Lord Aldington, who is not in his place, to avoid suggesting that Poland, Hungary or the Czech and Slovak republics
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could gain easy membership of the European Community. Some of us visited the Czech Republic and we heard the constant request, "When are we likely to be able to enter the Community? Can you give us some assurance that we will get in?" Of course, we were quite unable, and without any authority, to give such an assurance. However, we noted in that report:
"It was hoped that those states would be ready to complete 'a free trade relationship' within a 10 year period although the target may prove over-ambitious".
We chose the words "a free trade relationship" carefully, recognising the then problem of any entry into the Community.
I was also privileged to serve under the chairmanship of my noble friend Lord Middleton on Sub-committee D in 1991 which considered the developing future of the CAP. Again, once the committee reported, we debated the matter in this House. Both the report and the debate gave a clear warning that, given the conditions at the time, it was impossible for those eastern European countries to enter the European Community and the CAP.
Both those reports made it clear that the admission into the European Community of those central and eastern European states was not compatible with the CAP as it then was—or even, I suggest, in its amended state of today. However, notwithstanding those clear warnings, at the Copenhagen Council in June 1993 the European Community member states agreed to the eventual membership of the Community of the central and eastern European states, but did not put forward any proposals for the complete amendment of the CAP that would be essential if their entry was to be achieved. I suggest that in its reports this House was rather more far-sighted than were the EC member states at Copenhagen in June 1993.
The report that is now being debated makes it clear that the admission of those states to the European Community is incompatible with that CAP. That has been made abundantly clear in the speeches that we have heard, including from members of the committee. So, what is it to be? Is those countries' membership of the Community to be delayed? My noble friend Lady Chalker said—and I agree—that that would be both an undesirable and a dangerous course. We want to enlarge the Community. We want those countries to join the Community. Or is the CAP going to be radically changed—and quickly? We know from what we have seen in the past 20 years that it is almost impossible to achieve that. We know the difficulties encountered in bringing about the achievements that were secured recently under MacSharry. When giving evidence to the committee, the then Minister of Agriculture, Fisheries and Food said that she had to concede that it was almost impossible to make the necessary changes to the CAP.
There are many other reasons why the CAP needs to be changed. It needs radical reform. What we need politically and strategically, for security and for economic purposes—that is, the enlargement of the Community—cannot be achieved by bringing in those countries unless we have that radical reform. However, many other reasons for reform arise. The noble Lord, Lord Bruce, has given some of them. We should remind

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ourselves of the fact that when the CAP was formed originally, it involved only six states with broadly the same agricultural conditions. They were faced with a shortage of supply.
Now, however, we have 12 states with more about to join and we hope that many more will join before too long. Some states, such as the central and eastern European states, have been promised membership. However, there are enormous differences between the agricultural conditions in each of those states. Let us bear in mind the agricultural and economic differences between the eastern European states, Norway and Finland, and Italy, Spain and Portugal. Those differences and the surpluses of food are such that the conditions that applied when the CAP was created bear no relationship to those of today. Therefore, it is nonsense to think that we can fiddle with the edges of the CAP and find a solution that will establish the common criterion that is needed to meet the needs of those disparate states. Trying to adapt the existing structure can result only in the creation of great unfairness and economic nonsense.
The CAP has not been a great blessing to the United Kingdom. We now pay in considerably more than we receive. We are faced with the massive bureaucracy of the CAP—as of so much in the Community. We are faced with massive fraud. I share the regret of the noble Lord, Lord Bruce, that the debate on fraud that should have taken place next week has now been postponed. We are not allowed to produce some of the indigenous foods in which we have a shortage. Milk is an example. Therefore, we should not necessarily mourn any departure of the CAP. Indeed, matters will get worse as the Community widens unless the CAP is radically reformed. It is ridiculous for a country like this, which believes in free and fair trade and in free markets, to buttress itself with the quotas, bureaucracy, central planning and fraud that goes on in the CAP. For those reasons, I hope that reform of the CAP can take place as a matter of urgency. Enlarging the Community is a good hook upon which we can hang that policy and demand that it be now done.
I shall touch on just two points which arise in the report. They are not related directly to the reform of the CAP but arise from something that the noble Lord, Lord Bruce, said: there is a tendency when any measures are taken in relation to the CAP or anywhere else which appear to be of benefit to the farmer for everyone to get on to their high horse and shout that consumer prices are going up; that once more prices have shot up, and that is all the fault of the farmers. My noble friend Lord Onslow raised the subject in the inquiry. The rise in consumer prices in this country bears hardly any relationship to a rise in farm prices. The price of wheat at the fanners' gate has gone down rather than up, while the price of a loaf of bread has doubled. That goes for a whole mass of things. Those responsible for advocating the farmers' case fail to make that point powerfully enough. There is reference to massive expenditure. The massive expenditure is not going into the poor old farmer's pocket although he may be having a little better time now than he was a year or two ago.
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Another point relates to health and safety. Anxieties have been expressed about the danger of the importation of disease from eastern Europe. That is a real danger and considerable caution must be applied. Grave dissatisfaction has been expressed by fanners who have been exporting live animals to continental Europe and who find that they can no longer do so because of conditions on the ferries. I shall not enter into an argument as to whether that is right or wrong or the degree to which there is cruelty. If there is cruelty, I support exports being banned. The objection that is being made is that while that trade is stopped here, live animals are being imported into those same markets from eastern Europe—from Poland and the like. That is being done in conditions which are far worse than anything that happens during export from this country. That is something which we should not let pass unnoticed.
I accept of course that those are side issues. I raise them because there were references to them in the report. The major point is the impossibility of central and eastern European states joining the European Community unless we have the radical reform of the CAP which is so badly needed for so many reasons.
5.22 p.m.
The Earl of Onslow: My Lords, when I heard my noble friend Lord Boardman opening his remarks I imagined him as Cassandra in white robes upon the walls of Troy warning against disaster if a certain sensible policy was not followed. Whereupon the certain sensible policy was not followed, whereupon disaster followed. Unless we look at the issue of the CAP and eastern Europe as a whole—as he rightly said one is completely impossible without the other—then disaster will happen, and I sincerely hope that my noble friend can continue to wear a grey suit rather than a white sheet.
I was flattered to be allowed to be a member of the committee chaired by my noble friend Lord Middleton because I am not a standing member of it. I have, as your Lordships know, banged on, on occasions, about Odessa, to which I shall refer again later. Eastern Europe at the moment is in considerable turmoil. It is difficult for us to realise how far back that turmoil goes. In 1919, the whole of the world from the Rhine to Vladivostok lost its political history and was upset and destroyed completely. The Hapsburgs went; the Hohenzollerns went; the Romanovs went. All that part of the world was in turmoil. We put into place some bad treaties; we had a war; we then had Russia. That all flowed from those bad treaties.
Everything now has suddenly been lifted. It is in a way an even more dangerous place than it was when it was garrisoned by large numbers of Russian guard divisions. Under those circumstances no one moved without consent. Now we have nationalistic feelings and risings. We have no real sense of authority and a very uncertain journey into democracy. There are Transylvanian and Hungarian minorities. They do not know whether Pressburg is called Pressburg or Bratislava. Again because of the Hungarians there are Rupenes who are not sure who they are but they run

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around somewhere in middle Europe. I think that they are called little Russians. They also have nationalistic tendencies. The situation has not broken out into horror as it has in Yugoslavia. The one that has broken in between Bohemia and Moravia has been settled relatively peacefully and sensibly.
We must get those countries into a trading position. Whatever anyone says, the only way we increase wealth is by the buying and selling of widgets. It does not matter what that widget is. We must make those conditions easy so that those countries can make money and prosper.
The report is fundamental to the whole future of Europe. It is miles more important than just a report on agriculture. The German capital is due to move from Bonn to Berlin. The Germans will, through nothing other than geographical movement and political change, instead of thinking like palatinate Germans start thinking like Prussian Germans because their frontier will be just 80 miles away on the River Oder. They will start thinking like that automatically and their policies will be influenced in that way. The centre of Europe will move eastwards. There is nothing wrong in that. We need not be frightened of it. Germany is a completely responsible, respectable and very decent place. We may not always laugh at all their jokes—they do not make all that many. There is nothing to criticise in their political rectitude and behaviour and their general responsibility to Europe. We should not be frightened of them. It is going to move from the palatinate to Prussia.
The noble Duke, the Duke of Somerset, mentioned the things that we cannot buy. I go back to my widgets. The French are complaining bitterly about Hungarian foie gras, but not because there is no demand for foie gras. The demand for foie gras is limited only by its price. The Hungarian foie gras is just as good and rather cheaper. It is not totally surprising that the French, with their tradition of a centralised market state of Colbert, decided that they do not like cheap imported foie gras from Hungary, however good it might be. So those things are excluded in the agreements.
There is the grain in France, for example. If one drives from Calais down to Burgundy one goes through an enormous grain area. One does not see any set-aside. I do not know why, but one does not. However, that does not benefit French peasants. It benefits the grain barons of Alsace Lorraine.
When my noble friend Lord Middleton went to Hungary he commented upon the beauty of the buildings in Budapest. He was told that they were the result of the agricultural boom that took place between 1880 and 1914. Poland means "land of the fields". According to evidence presented to us, Polish agricultural production could increase by at least two thirds if it brought itself into line with western Europe. I come back to my favourite port of Odessa. In 1913, imperial Russia, through Odessa, exported three times the amount of agricultural produce than did the United States. Romania exported the same amount of wheat as the United States. Part of Poland is part of that old imperial Russia. Part of Hungary is applying to join the
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Community. So the agricultural potential of the eastern European countries is every bit as great as it was in 1913.
Unless we chuck the CAP out of the window we shall have silly things, such as set-aside in Poland which is permanent in Pannonia and rotational in Ruthenia. The concept is so silly that it does not bear thinking about.
I do know whether your Lordships are aware of one of the serious idiocies of European trade involving the importing of horses from Eastern Europe. There is a market in Polish and Hungarian horses because they make good driving horses. I speak from limited experience. There is a duty on geldings but not on stallions and mares because they can breed. What idiot produced such an idea? It may be that the Government want to state that they are agricultural animals. If so, please can we have VAT back on the stables that we want to build? However, the Government should not impose a 12 per cent duty on geldings but not on stallions and mares.
Perhaps your Lordships can imagine the introduction of sheep quotas in Hungary. A rather vulgar story circulated before the war which related to the then Duke of Sutherland and Prince Esterhazy. They argued about who was the richest and it finally came down to who had the greatest number of sheep. Prince Esterhazy proved to his quiet satisfaction that he had more shepherds than the Duke of Sutherland had sheep. I admit that in recent years the Esterhazys may have been dispossessed, but to have ewe quotas on such a scale can do nothing but result in more sillinesses than we now have. Blackcurrant juice was prayed in aid of the silliness relating to trade agreements. Such prices can be changed at 24 hours' notice and that cannot be good for anyone's business, either the buyers' or the sellers'.
Sixty per cent. of the European budget goes on the CAP. As regards the cohesion fund and others, large amounts of money are spent on improving agriculture in Portugal and Spain and on draining the marshes where Byron died in order to increase Greek tobacco farming. For that we pay £1,000 million per year in subsidies and then say that we want to make it illegal to smoke the ruddy stuff! That is too stupid. Bulgaria produces vast amounts of tobacco. Are we to subsidise Bulgarian tobacco, the smoking of which is then forbidden? I recently read about a directive providing that lettuces must contain only X amount of nitrates, which effectively has banned the growing of lettuces under glass in this country. There was no objection from the Ministry of Agriculture, Fisheries and Food and 500 people in the lettuce growing business were put out of business. Perhaps my noble friend Lord Howe will comment on that excellent article by Mr. Booker, which appeared in yesterday's Sunday Telegraph.
We say that we must get rid of the effects of the CAP in order to produce market levels. We do not know what the market levels are. The Japanese subsidise every bit as badly as the European Community, and the Americans are even worse. I believe that sugar produced in Florida fetches less than the cost of the subsidised water used to irrigate it. Unless we get rid of subsidies in world agriculture businesses we shall not escape such nonsense. We must begin in Europe and make radical

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reforms. As your Lordships know, "radical" means root and branch reforms; that is, pulling it up and starting again. It does not mean reform in the old English sense, which was to remake; it means completely to change. Unless we do so we shall head for disaster.
I shall leave your Lordships with a story from Book VI of Livy. Hannibal was besieging Saguntum. The Roman legate said to Hannibal, "I have in the sleeves of my toga peace or war. Take quid placet tibi"; that is, that which pleases you. We have an opportunity to make peace in Eastern Europe but we cannot have the CAP and enlargement. Take quid placet tibi.
5.34 p.m.
Lord Palmer: My Lords, I too would like to pay the highest possible tribute to the noble Lord, Lord Middleton, and his committee for producing this tenth report. The mind boggles as to how much work has gone into it. I just hope that the noble Lord, Lord Bruce of Donington, is incorrect and that someone will read it outside this Chamber. I found of particular interest the tables on page 45 which emphasise the enormous gap in the efficiency of the old East and West. They emphasise also how very different all these countries are and I believe that we must be very wary to take this on board.
Agriculture has always been and, I believe, will always be a long-term business. Many of us involved in it have already planted the vast majority of next year's harvest and yet we have no idea what it will yield in tonnes or in pounds sterling. And now, of course, that we have set-aside we do not even know how many acres we can farm, unlike most other countries which do not even know what set-aside is.
No other business has to wait a year to discover its outcome and that is why I believe agriculture must be treated with kid gloves. I am sure that in the long term it is sensible for the associated countries in Central and Eastern Europe to become full members of the European Union but I believe it is vital that, as specified by the European Council, a number of social, political and economic conditions are met and met in full. Indeed, I agree with other noble Lords that the CAP is becoming a mockery, and that, as was mentioned by the noble Earl, Lord Onslow, it must be taken up root and branch and planted again.
I was interested in what was said by the noble Lord, Lord Boardman, about the price of a loaf of bread. According to my research the price of wheat is exactly the same as it was 15 years ago. I believe that I am right in saying that the price of a loaf of bread has quadrupled in those 15 years. I am sure that the noble Lord, Lord Mackie of Benshie, will talk about the wonderful formula that he has about tonnes of wheat to tractors to buy and how many sheep you need. I shall look forward to hearing from him later.
What we must not forget are the hideous mistakes made by the Commission in the early 1970s. If your Lordships remember, there were grants available to drain the wetlands and the moorlands and now, 15 years later, we are told, "Stop, set it all aside". We must do our very utmost to ensure that this type of fiasco does not happen again.
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I appreciate the political imperative to draw these countries towards a democratic future and I applaud much of what has already been done. But it should not be done regardless of the consequences such actions may have on the stability of agricultural and food markets, with all the horrific ramifications for employment and trade within the European Union.
There are some important details which need to be got right on animal and plant health. Indeed, as I am sure your Lordships are aware, there are well-documented cases of disease being transmitted into the European Union due to the extremely low standards which apply in some countries. What we need urgently is a much stronger European Union animal and plant health inspectorate to be set up and given real teeth.
An attempt was made to stop destabilising floods of Eastern European produce by introducing triangular-made arrangements reflecting the previous trading practices of those countries. I fear that these arrangements, which could allow the former USSR to purchase goods from their former Comecon partners, do not appear to have been very effective. This, I believe, must be rectified.
We must also, I believe, be vigilant. The previous marketing arrangements in many of these countries involved massive central distribution points which were highly inefficient in meeting the needs of the local population but provided an excellent base from which dumping could take place. I believe that the restructuring of marketing within these countries is a priority.
The minimum import price system for soft fruits from Poland is in operation but, as I am sure many of your Lordships would agree, it has proved unsatisfactory. This mechanism is not triggered rapidly enough to take account of low price transactions. I am, of course, particularly referring to the blackcurrant market. This is a major issue for Scotland's soft fruit producers and the industry, centred in the Tayside region, has suffered years of periodic dumping. I believe strongly that future arrangements must not further destabilise this sector. Many jobs in Scotland are at stake.
I believe that the European Union and the UK authorities must take appropriate and measured action to ensure that fanners throughout the European Union are not faced with years and years of economic uncertainty brought about by hasty political decisions as they have been in the past. Agriculture is our lifeline and it cannot be treated like a toy, put down one minute and picked up the next. Long term planning is vital to the whole of the European Union.
5.40 p.m.
Lord Harlech: My Lords, I join with other noble Lords in expressing my sincere thanks to my noble friend Lord Middleton for inviting me to contribute in this vital debate. I also wish to congratulate the committee on its extremely thorough investigations which have resulted in a clear and valuable report. There is no doubt that it gives one great confidence when one hears the Minister expressing such enthusiasm, as she did, for wishing to assist our Eastern European neighbours.

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I should say at the outset that my knowledge of the CEE countries is limited to Romania, and in particular to the mixed farming communities of Transylvania. Therefore, my comments are inevitably based on my knowledge of that country.
A typical farming village in central Transylvania consists of 400 or 500 houses grouped around the main street with a police station and probably three churches—orthodox, Roman Catholic and Lutheran. In the larger villages there may be some form of shop but that would be unusual. There will certainly be a good village school. There will probably be no piped water and no mains sewerage, an inadequate electricity supply and perhaps only two or three telephones in the whole place.
A proportion of the houses—up to 25 per cent.—will have been owned by families of German origin who, over the past 20 years or so, will almost certainly have returned to Germany leaving the houses boarded up. There will be other houses owned by families who have moved into the cities, perhaps many miles away, and who no longer have any interest in the village of their origin. Those houses too will be unoccupied although some of them may have been taken over by gypsy families, of which there is a significant minority.
The former state or co-operative farms which would have been the main employers will now be in a semi-dilapidated state, as will the tractor stations, which is what they are called. There may be some worn-out tractors and machinery in the village to be loaned around among various families, but the organisation to maintain them will no longer exist. It is not uncommon to see groups of men and women mowing corn and hay fields with scythes. In many cases, the nearest petrol pump will be 15 or 20 miles away and petrol or fuel of any kind will be available only intermittently. Each farm will have one or two cows or buffalo to provide milk and to pull the ploughs and carts. It will have two or three sheep, some pigs and a few acres of maize or wheat for animal feed. It will have one or two plum trees and a small vegetable garden. Every village has a communal flock of geese. Each family spends many man-hours a day, particularly in the winter, drawing water by hand from a well to water the livestock and provide for the families' needs.
Probably few of the householders have title deeds to their property. Those who have are prevented by law from selling their farms even if they do not wish to farm them and there is no system of land tenure to enable land to be let. There is no structure for marketing surplus produce apart from, possibly, a market stall in the nearest town or village. But towns and cities are few and far between and in many rural areas poor roads and a shortage of road fuel and vehicles mean that each village is more or less self-sufficient, providing subsistence for the population and little else.
Therefore, the holdings in general are of an insufficient economic size. The people are as intelligent and as hardworking as are the people of Britain and on average, they are probably better educated. But after 50 years of communism, they have no understanding of how a market economy works.
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I am sure that few in Romania regret the passing of Ceausescu. However, the regime which they began to fear makes many Romanians, and perhaps the majority, only too well aware that that period of transition which has brought higher unemployment, higher inflation and which has reduced their sense of stability falls far short of their hopes and expectations. Nobody can say with absolute assurance how the transition to a market economy should best be handled because the circumstances in Eastern Europe are quite new and have never been seen before.
One thing is absolutely certain: if the new governments in Eastern Europe are to retain the support of their electorate, they must be seen to be successful in handling that transition. We in the West will do them and ourselves immeasurable harm if we fail to give the help and support that they now need.
The task facing the Romanian Government would be hard enough if the country were surrounded by politically and economically stable neighbours, but it is made even more difficult when one considers that to their east, there is turmoil in the countries of the former Soviet Union, and to the west is the former Yugoslavia. The cost of international sanctions on Yugoslavia and, indeed, Iraq, has fallen very heavily on the Romanian Exchequer.
The Europe Agreements probably have very little direct effect on a fanner in Transylvania who is not yet in a position to market his surpluses in a town 20 miles away, let alone in Western Europe. But their very existence may help to build his confidence in his own government. That is important. In countries like Romania and the other CEE countries, agrarian stability and political stability go hand in hand.
I turn now to the common agricultural policy, of which we have heard quite a deal this afternoon. I understand the difficulty which the British Government face in negotiating with our EU partners. Urgent and radical reform of the CAP is needed. I sometimes feel that that task is made even more difficult by the insistence of Ministers returning from meetings with our European partners that they have negotiated strongly and well in Britain's interests. Reform of the CAP is not a British question. It is in the interests of the whole European Union and the rest of the world as well.
I have said before in this House that 70 per cent. of the most productive agricultural land in the world lies in the temperate regions of the northern hemisphere. It seems to me immoral that we in Europe should be paying fanners to set aside land when there are millions of people in the world with insufficient food and when the population of the world is set to double within the next 50 years.
It also seems quite extraordinary that the production of agricultural surpluses is taken to be a great problem to us all when in fact those surpluses provide enormous opportunity—the opportunity to breed varieties of food crops, not just for their yields but for quality and flavour; the opportunity to breed varieties of cereals that can produce viable yields with a minimum of artificial fertilisers; the opportunity to reduce yields by taxing artificial nitrogen and other key chemicals, thereby improving the environment by reducing their usage and

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providing funds for cleaning it up as well—unpopular it may be, but it is a useful source; the opportunity to concentrate on growing organic crops which may improve the health of our people; and, indeed, the opportunity to feed the starving of the world. Agricultural surpluses are not negative, they are not a curse: they are an enormous source of opportunity if only we use them wisely.
Some noble Lords may have seen an anonymous letter sent to President Clinton which was published in the January 1994 edition of the Country Landowner. Although it deals with the agricultural policy in the USA, I believe that it is very relevant to the CAP as it is today in Europe and the lessons that we might learn. Perhaps I may quote from it:
"Dear President Clinton,
My friend, Ed Peterson, over in Idaho, received a cheque for $1,000 from the Government for not raising hogs. So I want to go into the "not raising hogs" business next year.
What I want to know is, in your opinion, what is the best kind of farm not to raise hogs on, and what is the best breed of hogs not to raise? I want to be sure that I approach this endeavour in keeping with all Governmental policies. I would prefer not to raise Razorbacks, but if that is not a good breed not to raise, I will gladly not raise Yorkshires or Durocs.
As I see it, the hardest part of this programme will be in keeping an accurate inventory of how many hogs I haven't raised.
My friend Peterson is very joyful about the future of his business. He has been raising hogs for 20 years or so, and the best he ever made on them was $422 in 1968, until last year when he got your cheque for $1,000 for not raising 50 hogs.
If I get $1,000 for not raising 50 hogs, will I get $2,000 for not raising 100 hogs? I plan to operate on a small scale at first, holding myself down to about 4,000 hogs not raised, which means about $30,000 for the first year. Then I can afford an aeroplane.
Now, another thing—these hogs I will not raise will not eat 100,000 bushels of corn. I understand that you also pay farmers for not raising corn or wheat. Will I qualify for payments for not raising wheat and corn not to feed the 4,000 hogs that I am not going to raise? Also, I am considering the "not milking cows" business, so send me any information that you have on that, too".
The letter concluded with the words, "Patriotically yours". There we have what is in effect a CAP policy all akimbo with the interests of the world, but happening in America.
However, in conclusion and on a serious note, I have one further point to make. If Eastern Europe is to go in the direction that is in all our interests, we must help. We must help by assisting the governments of those countries to succeed in the eyes of their electorate and gain their confidence. If all is left to market forces in the hope that all will come right in the end, we could be dangerously wrong because time is not on our side. Political stability depends on the narrowing of the gap between the people's expectations of their government's ability to deliver.
One must observe and draw the conclusions as to what are the basic issues of our time and what policies are best able to solve them—what qualities are most likely to further those policies? If it is essential for the political stability of Central and Eastern Europe that the CAP is reformed (and I believe that it is) then reform it we must. Even if our Government is unpopular in the Council of Europe, they should have our fullest support in doing what has to be done.
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We may be faced with an unattractive choice, but if I had to choose between political stability in Eastern Europe and unrest among the agricultural communities of parts of Western Europe, I would go for political stability in the East. Foreign policy and our dealings with our Eastern neighbours should not be dictated by the ill-natured manoeuvrings of a small minority demanding that EU farmers should never have to compete on equal terms on world markets. The words of Sir John Birch, the British Ambassador to Hungary, quoted in the Epilogue to the Select Committee's report are so true and to the point that I make no apology for quoting them again:
"If, 10 years ago, we thought we could obtain a situation in Eastern Europe where the Russian army had withdrawn into Russia and where the CEE countries were moving into parliamentary systems of government we would have paid billions of pounds to achieve it. Now we have got that situation for virtually nothing. For Heaven's sake do not let us lose it."
5.57 p.m.
Lord Wade of Chorlton: My Lords, I put my name down to speak in the debate because I was so supportive of the conclusions reached by the committee of my noble friend Lord Middleton and because of the need to put at the forefront of our minds the need for central and Eastern European countries to strengthen their economies. Noble Lords may have read in last week's edition of the Economist a very detailed investigation of the impact of the global economy on our various local economies. It confronted the arguments which many of us have heard; namely, that competition from other parts of the world will suck away our investment and jobs and make life more and more difficult for us in the West as the economies of those countries in the East continue to grow.
Nothing is further from the truth. In fact, as world economies grow and as the economies of the other countries of Central and Eastern Europe and Russia grow, and even though in the short term that might have an impact on certain sectors of our industry, it will, overall, bring greater wealth not only to them but also to us. That is something to which the report draws attention in a very specific and important way. There is nothing that could be more against our own interests than maintaining a protectionist approach to the development of markets in Central and Eastern Europe which, in the end, will cause our own circumstances to suffer.
I have listened on many occasions to the splendid speeches made by the noble Lord, Lord Bruce of Donington, when he has talked about Europe, the CAP, the European Union and the European market. I agree with him strongly on how ridiculous is the situation which we have arrived at and which has been outlined by the examples given by many noble Lords. We have now reached the ridiculous position of actually preventing the development of trade not only in our own country but also in Central Europe.
However supportive I may be of the conclusions made by the Committee and of the remarks made by my noble friend Lady Chalker at the beginning of the debate, one has to look at the impact of the changes upon our own rural economy. As many noble Lords

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have said, we are increasingly confronted by environmental regulations and by controls that prevent other uses of land and take more and more land out of production as set-aside (which looks like waste on the sides of the road), for instance preventing the rearing of pigs, as in the example just given by my noble friend.
We are at this particular time importing some £6 billion-worth of food a year into this country which we could probably produce here. Is there a way forward which enables us to open our markets and develop the marketplaces of Central and Eastern Europe and at the same time maintain a viable and effective rural economy within Europe itself? It would seem to me that that is the issue to which we have to address our minds in a little more detail because quite clearly if we pull away one rug we must find what other rug we put in its place, if any.
In New Zealand a decision was made some five years ago to withdraw all subsidies for agriculture overnight. That shows quite clearly that one can change a subsidised system to an open market one. New Zealand farmers are now better off than they have ever been. We have referred on many occasions to the French. The French established the intervention system some 170 years ago. I would not have thought that the French peasant is any better off now than he was 170 years ago. Therefore one can hardly argue that the intervention system has made anyone much wealthier. Certainly the New Zealand farmers, having got rid of their subsidised system, are now wealthier than they were even 10 years ago. Surely that shows us that there needs to be a different system from the intervention system that the CAP has established as the way forward.
It is interesting to note that there are approximately 30,000 farmers in New Zealand, which is approximately the number in this country. It was expected that, from the moment it was decided to remove the subsidies, up to 10,000 of the farmers might become bankrupt and have to give up farming. In practice, 3,000 went out of business. It was thought that the banks would pull the plug on anything up to 10,000 of the farmers but in fact they hardly pulled the plug on any of them, even though the value of land came down by some 50 per cent. It would seem to me that, although there are many arguments as regards how we can deal with this problem, a review of the bond system which creates a mechanism whereby one removes subsidies over a five-or 10-year period is needed. If at the same time one fed capital into the system, that would prevent farmers going bankrupt overnight but at the same time would allow our farmers in the West to have the same level of opportunities that people have in the East. At the same time we should remove many of the unnecessary controls and environmental regulations that now exist as regards other uses of land.
Reference has been made to the northern sectors of the world, where most of the fertile land is to be found. We should establish a system which, over a period of time, could expose us to world markets with little support being given, except only on a local basis for the purposes of conserving the environment, and which could at the same time make all the farmers in a
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particular local area much better off. Certainly the opportunities for production of all kinds of agricultural products in Central and Eastern Europe and Russia are enormous. It would be in our interests if those opportunities could be created for them. That would create wealth for them which they could use to build other industries and create wealth for their people, who could then buy far more of our added value products. We so desperately need that
However, achieving that state of affairs is not just a matter of providing further technical assistance. The people in the countries I am discussing need vast amounts of investment in their road structures to improve their ability to transport products. They also need assistance in understanding the marketplace and in developing enormously improved skills to trade in the marketplace. But surely it would be in our interest to provide this assistance. A major international company may decide now to invest in South Africa in the knowledge that it may be five or 10 years before a return is gained on that investment. However, the company knows it will receive a return on its investment in time. We need to give far greater encouragement to our investors and our financiers to invest in Central and Eastern Europe.
Sir John Birch has made splendid comments on this matter. He also commented that there is far less investment in Hungary from British companies than there is from many other European countries. I heard only the other day that Germany, for example, has recently decided to put a computer in every school in Iraq. I am not necessarily suggesting that we should do that, but it shows that one has to take a long-term view of developing trade and an understanding of our products to enable us slowly but surely to develop trade with other countries.
I very much welcome this report. It has been suggested that nothing will come of it. However, perhaps one thing we could do would be to send a copy of this debate in Hansard to every Member of the European Parliament. That might draw their attention to the seriousness with which this House views the impact that the continuing imposition of the CAP will have not just on the agriculture of Europe and the economic growth of Central and Eastern Europe, but ultimately on the economic strength of the western world.
6.6 p.m.
Lord Mackie of Benshie: My Lords, I have greatly enjoyed the debate. We have heard a series of opinions expressed with vigour and eloquence, with a good deal of prejudice and a little nonsense but also with a great deal of good sense. We heard a tremendous flow from the noble Lord, Lord Bruce of Donington. The noble Lord is of immense value. He produces amendments which he believes would improve the CAP and the whole of the European Union. Unfortunately, every amendment is a wrecking amendment because his object is to destroy the whole concept and not to improve it. That, I think we are all agreed, is wrong.
The noble Lord, Lord Middleton, and his committee, have produced a remarkable report. I sat in on one or two sessions of the committee and it was obvious that

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work was progressing extremely well. I can pay the committee no higher compliment than to say that I could not have done better myself. I have been engaged in the agriculture committee of the Council of Europe in looking at Eastern European agriculture. It has stirred me up no little considering the matter and listening to experts from the OECD telling us exactly how prosperity can come to every region of the earth. However, they have to admit, of course, that in the OECD, which comprises the richest countries in the world, there are 36 million people unemployed. Therefore capitalist enterprise and competition have not exactly solved that problem. If one calculates the figures, one will realise that there are 100 million people in the families of those unemployed people who suffer the effects.
Mention has been made of the fact that many people in Eastern Europe now believe that the rigours of authoritarian socialism were better than being unemployed. We must think seriously about the situation. I believe we have given very bad advice. Admittedly, no one expected that the Russians, as the ambassador said, would withdraw. Ten years ago we would have been absolutely delighted by that. However, no work was really done as regards how one could transform the rather incompetent economies of Eastern Europe. We must respond to the lessons we have learnt. I believe all sensible people admit that we made big mistakes in our advice to rush at this matter.
The Minister, whom I greatly respect and like, said that we negotiated a splendid agreement at Copenhagen. As already mentioned, all that resulted from the concessions to eastern Europe was that we exported a great deal more of our subsidised goods to them while their exports to us fell. That does not appear to me to be a concession of great value. I do not blame the eastern European countries for wanting to protect their agriculture from our subsidised dumping. That seems only sensible.
I have visited most of the eastern European countries recently, but particularly, Estonia, Poland and Hungary. Although it is not extensive I have some knowledge of Hungary's agriculture. My first visit to that country was five or six years ago. A most agreeable man from the Ministry of Agriculture took me to the glorious plain south of Budapest and to good farming country. He showed me a fruit farm which was run very competently. Because I was interested in the minority problem, he also showed me a German co-operative which was doing an admirable job. I could not but admire the crops as I drove through the countryside for two days. I thought that the land was well farmed.
I take issue with the noble Lord, Lord Carter—whom I also greatly admire and esteem—on the question of an increase in production over the previous level. There would certainly be an increase in production over the present level, which is pathetic. I recently drove through the same countryside in Hungary which I had seen five or six years ago and I was shocked by the miserable state of the farms. The reason is straightforward. Financial responsibility was suddenly imposed on co-operatives and state farms which had never had such responsibility before. At the same time food subsidies
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were dropped. The result was immensely bad fanning. A few farms have survived and the situation is now improving, to a degree.
For the first time, Poland imported food in 1992. It had never done so previously in its history. Although there was a drought, that situation was due largely to the total disorganisation of the state farms, which represented 20 per cent. of the farming area. That 20 per cent. was good land which had produced a surplus for sale to cities, whereas the 80 per cent. of the land held as individual farms produced crops which were mostly consumed at home.
I shall now please the noble Lord, Lord Palmer, by quoting standards of comparison in relation to techniques which are possible in Poland, Hungary and elsewhere, using our own system. A tonne of barley fetches about £80 in Poland. That will pay a man's wages for a month. He receives about £5 a week for a tonne of barley. Those of us who farm know that in Britain it takes approximately two tonnes of barley to pay a man's wages for a week. Therefore, there are advantages in a low wage economy, which can lead to profit in agriculture. In order to make the: agricultural economies of those countries prosperous we need to introduce techniques such as local markets and a bank to lend money to enable farmers to buy fertiliser, and so on.
Two young friends of mine have entered into a venture in Poland with 2,000 acres. They wanted to sow their winter corn but could not find fertiliser anywhere. They had to hire a lorry and take money to Germany to bring back fertiliser. They were able to do that because they knew the ropes and had money. However, there is no structure to which farmers can apply in order to buy what they need.
We can help with those aspects, and we are doing so, although not enough because there is not sufficient money to go around. But we have to ensure that individual private farms and co-operatives—which are genuine co-operatives and not imposed from above— have a fair crack at the whip, obtain the necessary knowledge and are able to borrow money in order to produce crops. It has already been said that as Russia improves her economy the Russian market will again open up to consume much of their produce.
I turn now to the CAP. It has been thoroughly damned. It has produced some extraordinarily foolish results. When the CAP attained its objectives under the original concept nobody thought that the rules should be changed. Now we have a ridiculous situation. I do not often agree with the noble Lord, Lord Wade of Chorlton, whom I regard as a rather extreme supporter of free enterprise. But he is right in saying that we have to change the system drastically. One cannot suddenly plunge all the farming communities of a country, together with the rural communities, into a disastrous situation. It seems to me that the bond scheme of compensation could be one solution. The committee has considered the scheme—it did so in my day—and

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recommended it as being of interest. I believe that a scheme of that nature would make rapid change acceptable.
Lord Carter: My Lords, I thank the noble Lord for giving way. Does he agree that most of the proposals for a bond system have argued that it should be degressive? In other words, large farms should not receive the amount they would otherwise receive under the bond scheme simply because they are large. Does the noble Lord believe that exactly the same remarks my noble friend Lord Bruce made in relation to the large payments which go to British arable farmers could be made about large payments which might be made to larger farms under the bond system?
Lord Mackie of Benshie: My Lords, I have never accepted the argument, put forward by people whom I have regarded up to now as ignorant, that just because someone farms a larger area and employs more people he should not receive more money. That does not appear to be logical, unless one wants everyone to be a small farmer. Most people do not want to be small farmers. Therefore, I do not accept that argument. If one wants to compensate the industry one cannot simply say that one farmer, because he has a large farm and is competent, should not receive the same form of compensation as another.
I agree that the CAP has to be reformed. I agree that we have to help to produce a healthy agricultural economy in eastern Europe. I believe that we can do that, and I am certain that we should do so.
6.20 p.m.
Lord Gallacher: My Lords, the debate on the report has somewhat paradoxically become a debate about the future of the common agricultural policy rather than about the question of association agreements in Eastern Europe. I agree that the two are inextricably linked. That has been made abundantly apparent by the many speeches throughout the course of the afternoon and evening. Even the changes that have been made to the common agricultural policy in order to meet the GATT obligations which were considered to be significant, leading to new thinking on the CAP, with set-aside, reductions in stocking densities, compensatory payments, and so on, were hailed at the time as representing a major change in Brussels and in the member states' attempts to conform to what was regarded as necessary in order to bring agriculture within the scope of GATT. Critics can rightly say that there has been no overall reduction in the cost of the common agriculture policy, which is still a high cost policy so far as concerns consumers; and that in addition it remains a somewhat restrictive policy with regard to imports. Eastern Europe is an example of that. Even the pending accession of four former EFTA countries to the Community is not likely to revolutionise CAP thinking, since they also subsidise agriculture in varying degrees. The Select Committee report is favourable to better association agreement terms for Eastern European countries but highlights the levels of food output and farm efficiency in those countries by comparison with
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the 12 member states in the Community. It points out that it is also necessary for the European Community to avoid creating conditions which result in a return by Eastern countries to planned economy status.
There are certainly major agricultural problems in Eastern Europe, as we have heard, especially with regard to the provision of capital. However the availability of capital is the perennial difficulty in food production, whether one refers to long-term working capital for land acquisition or working capital for the needs of the farm or business. The nature of land reform in Eastern Europe appears unlikely to help full membership. We do not know how many large units there will be. We do not know much about land repatriation, or the compensation likely to be made in lieu of repatriation. We know little of who will manage farms in the new Community and who will work on them. We do not know about wage costs—probably one of the most vital issues. The diversity of present patterns of farming in the Eastern European states makes forecasts almost impossible. The report sensibly recognises that. My noble friend Lord Carter amplified that issue on the basis of personal observation.
Despite all those factors, I have the feeling that the problems arising from giving a better deal by association agreements are overestimated. Certainly the difficulties are immense, but they are capable of resolution, perhaps to the embarrassment of the common agricultural policy, which is in a contractionist phase. Even if the cost of the common agricultural policy is not contracting, it reveals a disposition to contract. That factor doubtless explains the Commission's cautious view of Eastern European agreements. However, I take the view that agricultural production is capable of expansion if capital is available at reasonable rates and know-how is sound. I believe that the noble Lord, Lord Mackie of Benshie, would readily agree on that point.
The United Kingdom and Germany may not see as many difficulties for Eastern European states as do other member states of the Community, including France and Italy and certainly the smaller member states. Many problem areas have been illustrated today. They include such mundane issues as the popularity of Hungarian and Bulgarian wines in the United Kingdom, in particular at present prices. Will the French readily accept such competition? Can the European Community afford favourable access terms for commodities which are already in chronic surplus in the Community? There has been reference to soft fruit. We know well the concerns that Western growers have expressed about the excess of soft fruit and the prices charged.
We are entitled to ask this question: what if more added value products come from the East? "Added value" is the cry throughout agriculture at the present time. Will those products have to conform to EC standards and at what price will they retail in cut-price supermarkets? It should not be assumed that our supermarkets are making all the profit. In a petrol station, of all places, I saw a standard loaf on sale at a retail price of 29p. Will countries such as Austria feel as sympathetic to favourable treatment for certain EC neighbours as other EFTA newcomers? How quickly can eastern states improve production? Will they

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intensify output while the European Community moves in the opposite direction, including the adoption of organic methods, which are now much canvassed both in the United Kingdom and in other parts of the European Community?
My limited pre-war experience of pork and bacon imports from Poland—admittedly the country was then on a low wage structure—inclines one to be cautious about estimates of ability to compete. I well remember that countries such as Denmark and Holland which were considered to be market leaders in bacon production were considerably embarrassed at the loss of sales in this country as a result of imports from Poland.
The defects in ways in which current quota systems and licences work lead naturally to questions about how structural changes in Eastern European farming organisations could help to make use of whatever quotas may be agreed, or to improvements made in them. The report makes mention of co-operatives of primary producers in Poland. About 30 years ago the central agricultural union of peasant self-help co-operatives successfully applied for membership of the International Co-operative Alliance. So too did a federation of Hungarian co-operatives. To achieve such membership they demonstrated sufficient autonomy in running their affairs to be considered genuinely co-operative. That was no small achievement at that time. I have no personal experience of the state of play in either country today, but in any case the nature of land reform will condition structural change and fashion economic freedom.
My assessment of the Select Committee report leads to the view that strong national agricultural commodity marketing boards would better achieve whatever the quota or licences systems allow or facilitate better use of concessions. I am a believer in statutory marketing boards because those can help the general run of primary producers, especially when dealing with large-scale purchasers. That point of view is currently heresy in the European Community. However, for associates who ultimately hope to be full EC members, and who have considerable leeway to make up before they become members, marketing boards are more likely to assist than to retard. They will also facilitate tracing supply sources, should that be necessary.
Observations on the report by the Secretary of State for Foreign and Commonwealth Affairs, and the Minister for Agriculture will be a source of satisfaction to the Select Committee. Those observations are contained in Command Paper 2666. The Select Committee's proposals for change are in some measure acceptable to both ministries. No doubt the noble Earl, who speaks well for his department on agriculture, will rely on the reply to the report in that command paper. However, any additions that he cares to make, in particular with regard to radical reform of the common agricultural policy, will excite us.
There has to be some element of finality in reporting on those matters, not least because the workload of Sub-Committee D is the heaviest of all the EC sub-committees. However, I hope that that does not rule out a progress report following meetings with MAFF and Foreign Office spokespersons on what is of
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essentially ongoing concern, not merely to members of the European Community but, as has been pointed out so eloquently this evening, to European states generally.
6.29 p.m.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): My Lords, as my noble friend Lady Chalker has made clear, one of the most important challenges facing the European Union today is the development of its relations with the countries of central and eastern Europe to support reconstruction there and to bolster security and prosperity throughout the Continent. At the pivot of that process will be agricultural trade. I should therefore like to pay tribute to the sub-committee as a whole and to my noble friend Lord Middleton in particular for embarking on this inquiry into the agricultural implications of the Europe agreements.
The committee has produced a cogent, thorough and thought-provoking report. I unreservedly welcome it as a timely and most helpful contribution since discussions within the European Union are now underway on this issue. I particularly welcome the committee's decision to examine not only the way in which the agricultural provisions of the Europe agreements might be extended or reshaped in the short term but also the approach to be adopted in the agricultural sector as part of the preparations for accession by the central and eastern European countries to the European Union.
These are and will continue to be central issues in taking forward the European Union's relationship with the central and eastern European countries. As your Lordships' committee has rightly noted in its report, future policy is inextricably linked with the operation of the CAP and its further reform. It is the latter issue on which I should like first to focus in responding to the report and the views that have been expressed this afternoon.
The reforms to the CAP that were agreed in 1992 represented an important development in moving the CAP closer to the market, reducing dependence on intervention and in curbing excess production. As the House will know, discussions have begun on the reform of sectors which were not covered by the 1992 agreement. However, there is no doubt that if the existing CAP, with support prices above world market levels and direct payments to producers in the arable and livestock sectors, were to be extended to the central and eastern European countries, it would stimulate a substantial expansion in agricultural production there. This would have two important repercussions.
First, as was emphasised by my noble friend Lord Reay and others, the cost of disposing of the additional surpluses would be enormous and unsustainable. My own department's estimates put the figure at between 13 billion and 15 billion ecu per annum for the Visegrad 4 alone. That compares with the current budget for the 12 member states of 36.5 billion ecu.
Secondly, it would not be possible for the European Union to meet its GATT Uruguay Round commitments; to reduce both the volume and the value of subsidised exports. Nor could it stay within the ceilings on internal support for agriculture. Although no date for accession

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by the countries of central and eastern Europe has been set, we should remember that in 1999 the further negotiations on the treatment of agriculture within the GATT agreement are due to begin. These negotiations will have the objective of further reducing the level of agricultural support and protection.
Against that background, what is the way forward? There are some who argue that the CEEs should progressively adopt price support mechanisms modelled on the CAP to ease transition to full levels of European Union support. In the Government's view, that would be quite the wrong direction for the CEEs to follow. It would impose significant additional costs on them, and it would mis-allocate resources. Quite apart from that, it would be counter-productive for them to follow policies which work against the grain of CAP reform and the GATT.
The Government's position is quite clear. As my right honourable friend the Prime Minister said in his recent lecture in Leiden:
"The Common Agricultural Policy as at present operated would be unsustainable and unaffordable with 20 members; wholesale reform will be essential".
It will be even more unsustainable with more than 20 members. I am glad that this message is increasingly being accepted and the Government look forward to further discussions on this issue in the European Union.
Lord Mackie of Benshie: My Lords, if the noble Earl will allow me to intervene, I agree with what he said but will he then alleviate the position of those countries which are now suffering from our dumping by measures such as refusing to subsidise any exports to those countries?
Earl Howe: My Lords, if I may come to export refunds in a moment, I think I can answer the noble Lord's question at that point.
The noble Duke, the Duke of Somerset, questioned the pace of the adoption of the CAP on accession by the CEE countries. The precise terms on which the central and eastern European countries become members will be a matter of course for the accession negotiations. Previous enlargements suggest that there is scope for flexibility; but while some transitional arrangements for agriculture should not be excluded, it would be quite wrong to assume that any transitional arrangements would obviate the need for fundamental CAP reform before accession takes place.
The noble Duke also raised the possibility of the CEEs being denied the benefits of the structural funds on accession. He is right to identify that as a major problem which again would have to be resolved before accession. The unaffordability of extending the funds at their present level to the CEEs suggests either that existing recipients will have to receive less after accession than they do at present—and there may be some logic to that; the funds received so far should have gone some way to meeting their objectives—or that the CEEs will be treated on a different basis from the
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existing recipients after accession. In either event, it is too early to predict what the outcome of the accession negotiations will be in that regard.
The Earl of Onslow: My Lords, before my noble friend leaves structural funds, may we have a formal undertaking that they will not be used either in the present European Community or with any future members of it to improve or enhance the productivity of agriculture? That would be a totally counter-productive exercise.
Earl Howe: My Lords, as my noble friend knows, the structural funds have particular objectives, but it is only the European agricultural guidance and guarantee fund that relates directly to agricultural production. The future of that fund will be a matter of the closest attention, as we negotiate over the coming years.
What kind of agricultural policy would be appropriate to the needs of an enlarged Community? The Government have welcomed and broadly share the objectives for further CAP reform which the Select Committee has advocated in its earlier report, some of which are already being pursued. I welcome too the recent paper published by the NFU on this subject as an important contribution. We shall, of course, study the paper closely and discuss it with them to seek to identify areas of common ground. In the Government's view — and contrary to what the noble Lord, Lord Bruce, seems to think, this is a long held view, publicly expressed— the longer-term aim must be a more market orientated CAP, much closer to world market prices. The removal of inefficient supply controls and phasing out of direct compensatory payments to farmers would also be desirable developments. An agricultural policy based on those principles would not only be in the interests of consumers and taxpayers but it will, in our view—in common with the views of my noble friends Lord Boardman and Lord Onslow—be the sine qua non of further enlargement to the East.
The noble Lord, Lord Bruce, spoke with his customary vigour about the excessive costs of the CAP, both to the taxpayer and to the consumer. He said that the CAP currently costs the average family in the UK around £20 a week. I think that, even though he is not present at the moment to hear this, and even with his deep knowledge of Community affairs, the noble Lord is being a little disingenuous in quoting that figure. The fact is that there is a fundamental difficulty in estimating the cost of the CAP to individuals. Any estimate of the cost of the CAP to consumers depends on estimates of the difference between prices in the Community and the price at which food is available in the rest of the world. However, those so-called world prices tend to overestimate that difference. If the CAP is to be abolished, we could expect prices on the world market to rise. For that reason, the real cost imposed on consumers by the CAP is likely to be a good deal less than the figure we arrive at simply by calculating the difference between EC and world prices.
My noble friend Lord Wade suggested that we should reconsider an income bond system. That point was also taken up by the noble Lord, Lord Mackie. Income bonds may have their attractions, but it is only realistic to

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consider them in the context of doing away with market price support. Their function would be to compensate farmers for the loss of that. Income bonds are also potentially extremely expensive. Our main task must be to reduce market price support substantially.
The noble Lord, Lord Bruce, and my noble friend Lord Boardman stressed their view that the need to bring about radical reform of the CAP should be a condition of enlargement to the East. Extending security and prosperity to the East is a fundamental foreign policy objective. It is not just a hook on which to hang a demand for radical CAP reform. The key point, as many noble Lords appear to agree, is that the enlargement of the European Union to the CEEs, which we want, requires fundamental CAP reform. We shall pursue it, both because CAP reform is desirable in itself and because we are serious about preparing the conditions in which CEE accession can take place.
I turn now to the agricultural trade provisions of the Europe agreements. As the committee noted, these provisions have not operated asymmetrically as was intended—that is to say, more to the benefit of the eastern Europeans. Agriculture has particular importance for most of the central and eastern European countries. They attach great value to further liberalisation in agricultural trade and to improving the operation of the existing access arrangements. The Government sympathise with their position.
Perhaps I might comment in passing on a point that was made by the noble Lord, Lord Mackie, who suggested that trade concessions made at Copenhagen have been of no benefit to the CEEs because of the current trade deficit that they experience. The CEE trade deficit with the European Union owes much to the large imports of capital goods that they make as they make the transition to a market system. That will help their exports in the long run.
It has to be recognised that without further CAP reform substantial additional liberalisation of agricultural trade would increase budgetary costs and make it more difficult for the European Union to meet its GATT obligations. It is an unfortunate fact of life that the bulk of the production in the central and eastern European countries is of commodities which are already in surplus within the European Union. That means that imports would be likely to displace production in the European Union. The result would be higher budgetary expenditure as a result of increased intervention or more subsidised exports. An increase in subsidised exports would, of course, affect the European Union's ability to meet its obligations under the GATT Uruguay Round settlement. Nonetheless, the Government will continue to press for further improvements in the access provisions where these can be accommodated.
Baroness Seear: My Lords, perhaps I may briefly interrupt the noble Earl on a point of information. Is it true that there is surplus in all these commodities regardless of changes in price? Is it true that in some cases if the price were less there would be more demand?
Earl Howe: The noble Baroness is quite right to point to the effect of price changes on production levels in the
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medium term. It would be the period of adjustment that would most acutely affect us, assuming that there was a gradual tapering away of subsidies within the Community. I am grateful to the noble Baroness for the point that she made.
An opportunity to examine the possibilities will arise quite soon since the Europe agreements will need to be adapted to take account of the Uruguay Round and accession by the four EFTA countries.
I am aware that there is disappointment in the central and eastern European countries at the way the agricultural provisions have operated so far. There are two main issues: the under-utilisation of the tariff quotas; and, as a number of noble Lords have pointed out, the extent to which the value of the concessions accrue to them.
On tariff quotas, the committee put forward a number of useful suggestions. I note, in particular, that the committee believes that the European Union should reduce or eliminate export refunds if the asymmetrical goal of the agreements is to be achieved. The European Commission recently proposed that a review should be undertaken to evaluate the reasons for the marked expansion of exports from the European Union to the central and eastern European countries with a view to addressing any serious imbalances. The Commission has also proposed that the reasons for under-utilisation of the tariff quotas should be analysed. The Government welcome those proposals. The review should include the possibility of introducing interim measures to reduce or eliminate export refunds in sectors where subsidised exports from the European Union are having a disruptive effect. That point was well highlighted by my noble friend Lord Reay. It would of course be important to ensure, for any sectors where such action was taken, that the European Union's exports were not simply replaced by subsidised exports from other countries. We will be asking the European Commission to consider such an initiative. More generally, an opportunity will arise to tackle this issue when the European Commission brings forward proposals to implement the Uruguay Round settlement.
The committee also suggested that quotas for similar products might be substitutable. While I accept that this proposal would have the advantage of flexibility, it would be necessary to ensure that it operated equitably. The particular sectors for which such an arrangement might be introduced would therefore need to be carefully examined in order to ensure that those affected by it within the European Union would not be significantly disadvantaged. In fact I am rather doubtful whether there would be significant areas where such an arrangement would be possible or negotiable. Similarly, the Government have reservations about the negotiability of the reciprocal bilateral arrangements covering different commodities. As our response observed, arrangements of the sort proposed by the committee would result in the costs and benefits accruing to different member states. The Government believe that it would be more realistic to seek to negotiate bilateral agreements in specific areas such as spirit drinks.

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The Government agree with the committee that the current method of allocating export licences may prevent the CEEs from capturing the full or at least a reasonable proportion of the value of their trade concessions and that alternative arrangements ought to be explored. The committee recommends that the European Commission should issue licences to the governments of the central and eastern European countries for sale or for auction. This would be one possibility. As is noted in the Government's response, another possibility would be a system of authenticity certificates which would need to accompany any application for import licences under the quotas. Arrangements based on this principle have already been introduced under the EU's preferential agricultural trading arrangements with other countries. This method should enable exports to be channelled through importers within the European Union offering the best terms.
My noble friend Lord Reay asked about authenticity certificates. Perhaps I may clarify for his benefit how they would work. Authenticity certificates would be issued by the exporting countries' authorities. They would then have to accompany the import licence application. The theory is that that would enable the associates to secure the best possible deal by transferring to them the power to choose the importing trader. That system operates for other preferential agreements. However, it is an option which has disadvantages, as the Government's response acknowledges. It could, for example, work to the disadvantage of the private sector in the central and eastern European countries by re-introducing centralised economic control. The noble Lord, Lord Gallacher, rightly warned against that. For that reason, the Government take the view that while they should not be denied arrangements which are available to the European Union's other partners, the decision on whether such an arrangement should be introduced should be left to them and should only be regarded as a provisional measure.
My noble friend Lord Reay asked about inward processing relief. The reason why the Government do not favour an extension of IPR is that to encourage more exports of raw materials for processing in the EU and re-export to the CEEs would undermine efforts by those countries to improve the efficiency of their own manufacturing industry. It is to their advantage to increase their value added manufacturing, particularly for export, sooner rather than later.
Let me now turn to the question of the minimum import prices system for soft fruit which is, of course, a sensitive one for UK growers. The noble Lord, Lord Palmer, suggested that the system of MIPs was ineffective. The Government pressed hard for changes to the MIP arrangements to try to ensure that they provide the protection intended. We shall continue to monitor the performance of the arrangements which, at our instigation, enable the European Commission to take action if MIPs are not respected over any one-week period.
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While the Government favour, as does the committee, the introduction of an early warning system when countervailing charges are about to be imposed on soft fruit because import prices have fallen below the minimum import prices, clearly it will be important to ensure that the proposed system operates sensibly and fairly. If the early warning system is introduced as proposed by Commissioner Steichen, the Government will want, for example, to ensure that it does not encourage a rush of cheap exports each time countervailing charges seem likely to be introduced.
My noble friend Lord Reay asked whether we considered that free trade would operate eventually in the soft fruit sector. Pending accession, when free trade would apply following any transitional arrangements, the aim should be to work towards arrangements which balance the interests of the associates and producers in the European Union.
My noble friend Lord Boardman was concerned about the risk of the European Union importing disease, as was my noble friend Lord Reay. Imports of livestock products and live animals into the European Union from all third countries, including the CEEs, are subject to strict controls to ensure that no threat is posed to our own animal health status in the UK or to that of any other member state. I am glad that the committee emphasised that any further liberalisation of trade with the CEE countries should not risk undermining the European Union's animal and plant health standards. The Government strongly endorse that conclusion.
With regard to improving the effectiveness of the checks on procedures within the CEE countries, increasing the complement of the Commission's veterinary inspection service, as favoured by the noble Lord, Lord Palmer, in particular, would not, in the Government's view, be sufficient. It would need to be accompanied by much better management and training.
This debate touched upon issues of fundamental importance for the future of Europe and I listened with great interest to the many valuable contributions made this afternoon. The Government recognise that the Europe agreements have not so far provided the CEE countries with the assistance they need in order to prepare for membership. I re-affirmed today that the Government attach priority to addressing the difficulties which have been encountered, and they endorse many of the committee's conclusions for improving the operation of the access arrangements. The Government will be vigorously pursuing the proposals set out in their response in the negotiations now underway in the European Union. I hope that our partners will be prepared to adopt as constructive an approach as the UK Government are taking.
6.53 p.m.
Lord Middleton: My Lords, I am grateful to all noble Lords who contributed to this interesting debate. I am only sorry that the noble Lord, Lord Eatwell—a member of our committee and a strong advocate of the need to hold this inquiry—could not take part owing to a commitment in Cambridge.

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If the Government and the committee are not wholly in accord on such arcane matters as inward processing relief and the substitutability—I use the word in the Official Report and my noble friend used it just now— of various parts of a chicken's anatomy, I am in no way despondent. They are matters of detail. I find immensely gratifying the way in which the main thrust of our report was received both in the official government response and in the speeches today by my noble friends speaking respectively for the Foreign Office and the Ministry of Agriculture. I am pleased also that the debate showed agreement on all sides of the House on what my committee saw as the fundamental issues: the need to maintain stability in eastern Europe through hastening the economic recovery and strengthening democratic government; the need to make the European Union more liberal and less protective in its agricultural trade policy, and the desirability of eventual enlargement of the European Union to include CEE countries which cannot be achieved without drastic CAP reform. I commend the report to the House.
On Question, Motion agreed to.

Sustainable Mobility: ECC Report
6.55 p.m.
Lord Elibank Lord Elibank rose to move, That this House takes note of the report of the European Communities Committee on the Common Transport Policy— Sustainable Mobility (8th Report, HL Paper 50).
The noble Lord said: My Lords, I should like to begin by thanking all those who contributed to our report: first, members of the committee who did a prodigious amount of reading to keep in the picture of the evidence that we received; secondly, our clerk, Mrs. Mary Ollard, who guided us with great skill through the administrative maze we encountered; thirdly, and certainly not least, our specialist adviser, Dr. Goodwin, who not only produced the kind of technical expertise one would expect, but also produced the bulk of the first draft of the report.
Finally, I welcome the two maiden speakers to the debate—the noble Lords, Lord Quirk and Lord Northesk—and we wait with great interest to hear what they have to say. On our behalf I wish them a measure of courage in what is often a fairly agonising business.
When we came to consider the report we realised early on that the European Commission's report covered an immense amount of ground and we could not, in a reasonable time, hope to comment adequately on everything therein. We therefore limited ourselves to road transport and rail, thereby eliminating air, sea and inland waterways. On reflection that was a wise decision. It became very clear as the inquiry moved forward that the real problem facing us today in western Europe, and more specifically in this country, is road transport—the car and the freight lorry. Of those two the car is perhaps the more intractable and it is that to which I propose to devote most of my remarks this evening.
This is a detailed report which contains a number of points, with only a few of which I shall be able to deal without overstraining your Lordships' patience. However, it contains other points of equal importance which I hope other speakers in the debate will take up.
The nature of the car has changed through recent decades. For many years it has been a source of great freedom—the freedom to select a job some distance from home but which perhaps offered better chances of promotion; it offered a chance to select a school more in tune with the parents' wishes; it offered social intercourse with friends and families not available by public transport, and it made shopping a great deal easier for the busy housewife. It was therefore a true friend and we all became closely attached to it. But it is slowly turning from such a friend into something close to a monster which must be controlled in its growth and activities if we are to preserve any sort of quality of life in this country and western Europe.
The first point to consider is the supply of roads for transport. For many years the Department of Transport, with the full backing of most of the British electorate, forecast an increase in the amount of motor transport seen on the roads in different parts of the country and sought to provide new, wider roads to accommodate it. That process has to stop. We know that at the moment our roads are grossly overcrowded and that if there is no change in the arrival of new motor cars and lorries on our roads the congestion will double in the early part of the next century. That is simply intolerable.
What is to be done? The first thing that occurs to most of us is pricing. It has been said, and I think said with reason, that the motorist and the freight owner have not paid the full charge for the use of the roads on which they travel. Though they feel on the whole an oppressed bunch of people paying exaggerated taxes, the fact of the matter is that those taxes do not begin to cover elements like congestion, damage to the environment and damage to the health of the citizenry. The pricing of transport has to go up. This is a detailed subject. Modern technology is coming to our aid quite rapidly and will enable us to price road transport on different roads in the country at a selective rate. But it will not be a simple matter because if one gets the pricing wrong and the charges on a motorway are too high one simply drives traffic onto subsidiary roads where the congestion is worse. Any pricing system needs to be flexible and to be adjusted from time to time as events develop.
The corollary of pricing is that public transport must be greatly improved. It is the business of the stick and the carrot The stick is the extra charges which the motorist and freight transporter must pay. The carrot must be much better public transport, which immediately raises the subject of subsidy. This is a very contentious subject in almost any field for almost any Conservative Minister, but if we are to improve the state of our roads it is essential that public transport be subsidised to a much greater extent than it is at the moment.
Some members of my committee had the advantage of travelling to the Continent to see one or two cities operating there. We also heard a good deal of evidence on the state of subsidy and the development of public

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transport on the Continent. Though assessing the amount of subsidy was always difficult—I am talking now about subsidy for operating expenses—it would be fair to say that in general the cities in the western part of Europe subsidise their public travel costs to the extent of about 50 per cent. They pay in broad terms half the price of a ticket. We saw different levels of subsidy. The highest I can remember was 80 per cent., but 50 per cent. would give a fair average. That is an enormous sum of money in total if spent around the country. It can only come from a substantial move of funds from the road budget to public transport. I know, as your Lordships know, that this is no new idea. It has been put forward by a number of organisations with, I think, increasing validity. We must —the Government must and public authorities must—pass more and more money that would normally be spent on new roads and road widening to the development of a form of public transport in our cities which is clean, efficient, punctual and generally acceptable.
We had a remarkable demonstration of this when we visited the city of Munich. Munich has two main railway stations which are connected by a substantial tunnel. Into those two railway stations and into that tunnel come radial routes of public transport, one group being overground like a railway and the other underground, of the kind we are familiar with in London. Above those mainline stations are substantial bus depots. The citizen moving to work or play or anything else in Munich can move very freely from the outskirts to the centre or to another outskirt if he needs to do so. There are problems still remaining, as the city fathers of Munich well recognise. One is that though radial communication is quite excellent, the orbital communications of public transport need to be improved. But they are working on that. To stand in Munich and look around at these various forms of public transport is to feel that they are 10 or 15 years ahead of anything that we have in this country.
We all know that this requires enormous sums of money but it also requires a considerable measure of political will, especially to take the first steps. This the Munich authorities, aided of course by the German Government, have been prepared to do; and having made the breakthrough they have found that the citizenry as a whole are now following them or even pushing them. The situation in this country is not desperate. It can be done, but it will demand political will and education.
I should like to mention two factors that will change transport in this country in the medium term in one way or another. The first is what is sometimes referred to as teleworking. It is based on the computer terminal. To the extent that more and more people can do most of their week's work in front of a terminal, it will cut out a lot of travelling. Children will learn more and more in front of a terminal. Housewives will be able to do their shopping by terminal rather than having to drive to the supermarket. Deliveries will be made to their homes. Many fewer vehicles will be involved. In one way or another the need to travel will be dramatically reduced in the medium term. That will be a considerable help.
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There are of course problems of which we are well aware in terms of the social isolation of children or adults which will have to be resolved, but I cannot go into those in detail today.
The other factor is that, for the future, development of city areas will have to take as a prime point the condition of public transport in those areas—this factor is well covered in the Department of Transport's PPG 13—with the aim that as far as possible movement in a given area can be achieved on foot or by bicycle. Thus one will be able to move from work, to school, to shop, to entertainment with the minimum requirement of transport and where transport is required to city centre or wherever, good public transport will be in place before the development of the area gets underway. In some ways it is a return to something like the old village life our forebears enjoyed 100 or more years ago, but none the worse for that.
This will all require a tremendous effort to influence public opinion as regards the route ahead. One of the committee's recommendations—and I put it strongly to the Minister—is that we need a unified statement, a White Paper, on public transport. The Ministry has been putting out several excellent guides of one kind or another on different aspects of public transport, but what is needed now is a guideline to itself and to local authorities to set objectives for the future.
One cannot underestimate the need for dramatic change in public opinion over the next few years if we are to achieve a sustainable way of life in this country and to free ourselves from the intolerable burden that road transport puts on us at the present time. The prime responsibility for that will have to lie with the Government, although local authorities and even well-informed citizens, will surely play their part.
In conclusion, perhaps I may say that members of our committee brought various points of view to this inquiry based on their experience and philosophy of transport. But we came together with a list of unanimous recommendations. These I commend to the Government not for discussion or debate but for action. I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on the Common Transport Policy—Sustainable Mobility [8th Report, H.L. Paper 50]. —(Lord Elibank.)
7.11 p.m.
Lord Ezra: My Lords, I would like to congratulate the noble Lord, Lord Elibank, both on the report of his sub-committee and on the very clear way in which he has identified the main issues raised in that report. I personally had some connection in the past with Sub-Committee B and I am very pleased to see this report which is effectively on transport and the environment. It is in fact the third in a series of reports on the environment. The first was the report which we produced in 1991 on energy and the environment. In 1993 we produced a report on industry and the environment. I believe that the series is now complete with this further report.

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As the noble Lord has reminded us, there is very little doubt that transport is rapidly becoming environmental problem number one, due in particular to the rapid rise in motor transport. In spite of the efforts which a number of motor manufacturers and oil companies have undertaken to cope with the problem of pollution, transport has become the single largest contributor to air pollutants such as nitrogen oxide, carbon monoxide and smoke. It is also a major contributor to climate warming, contributing something like 25 per cent. of CO2 emissions to the atmosphere. That is a trend which is likely to rise. The Government have accepted as an objective under the Rio commitments that the emission of CO2 from motor transport by the year 2000 shall be reduced by 2.5 million tonnes. It is very difficult to see how that can be achieved with the present trends.
If one looks at the wider European scene similar trends can be seen. In the 20 years to 1991 rail usage in the European Union fell from 31 per cent. of total transport to 17 per cent. The use of inland waterways, which account for much more in the European Union, and which have not been dealt with in this report, as the noble Lord told us, fell from 14 per cent. to 8 per cent. Road transport increased from 55 per cent. to 75 per cent. That trend is continuing. Therefore we are faced in the whole land mass of the European Union with this trend. This report on a sustainable and environmentally acceptable transport policy is extremely timely.
Not only have the developments in transport created serious environmental problems which are likely to increase if present trends continue, there are also serious difficulties over the infrastructure. It is the rapid growth particularly of road transport on the one hand and the inadequate build-up of the infrastructure to cope with it on the other which have led to the serious problem of congestion. So we have this monster, as the noble Lord described it, leading us into environmental and economic problems which have seriously to be dealt with. The answer is clearly not just to build more roads which would encourage more growth in motor transport; it is to take measures which will moderate this growth and limit the harm that it does.
Here we come up against what has been described in paragraph 39 of the report as,
"a lack of coherence or consistency in United Kingdom transport policies".
Reading through the Government's written evidence I have the feeling that there is an attitude of judicial detachment in the way in which it has been drafted where they consider one aspect and then another and leave the matter more or less open. To my mind what seems to be lacking, in view of the gravity of this problem, is any sort of clear commitment or sense of urgency. I very much hope that when the noble Viscount winds up for the Government, he will say that they do feel that way about it. We know of course that the Government's philosophic preference is for matters to be settled as far as possible by freedom of choice and market forces. Of course, we would all like to choose our own form of transport, among other things, as freely as we can, but we know that the growing discrepancy between the current trends in transport and
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environmental imperatives, means that unfettered freedom of choice will create more and more difficulties for us.
The noble Lord also mentioned a matter which is referred to at paragraph 8 of the report; namely, the variety of statements issued by the Government on this subject. Each statement in itself is instructive and informative. I entirely agree with him that the time has come when all this needs to be drawn together.
I shall suggest what we would like to see in such a report. It would obviously need to start with a clear statement of the situation now reached and likely trends. These have been worked on by numerous organisations. It would be helpful if these were brought together and we were presented with the latest thinking. There is not the slightest doubt that there will be serious consequences if present trends continue. Indeed, the first conclusion of the report of the sub-committee, as shown in paragraph 70, is that this would lead to economic inefficiency and environmental damage.
The next section of the report should deal with the measures which would be needed to deal with this, recognising the importance that people should retain as much choice as possible, but that there is a need to achieve a better environmental balance. That would therefore mean that all the various options for dealing with this situation should be discussed and government preferences expressed. The Government are prepared to express their preferences in the White Paper on the Post Office, and I do not see why they should not express their preferences in a White Paper on transport. In my humble opinion it is not good enough just to tell us what the options are and then to leave the matter open, which is more or less what the Government have done in their memorandum contained in this report.
There are three specific areas which need to be dealt with. There is the problem of transport in urban areas;. The trouble with those areas is that they have attracted more transport than they can cope with. Therefore, there is the question of congestion, delay, frustration, economic disadvantage and health hazard. Very serious steps need to be taken within each urban conglomeration to deal with these matters. I believe that guidance should be given—as the Government have already given in some of their documents—as to how these issues should be dealt with as regards road pricing at peak periods, and improved public transport.
I have many times raised in this House the question of the Underground in London. The fact is that 80 per cent. of the number of people coming to work in central London use either the Underground or the railway. It is quite wrong that both these means of transport, which are so essential to the well-being of the metropolis, should be inadequately financed at the present time. I know that the amount of money put into them has: increased, but that is patently not sufficient. It is a serious area of concern.
In urban areas we need to limit the traffic in residential areas which are becoming increasingly swamped by traffic. Measures can be taken to limit that, but in some cases the Government seem to be taking measures which do the opposite. I can quote examples from the City of Westminster itself. There are proposals

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that the Red Route should go through such residential thoroughfares as Eccleston Street and Belgrave Road. That has led to substantial opposition from local residents because, far from reducing traffic in residential areas, the proposition seems to increase it with all the environmental and health harm that could result. I hope that the Government will think again in those cases and in any others where Red Routes might run through residential areas.
Still in the City of Westminster, I should like to refer to the Victoria Coach Station. I happen to live nearby. It is the only coach station in London dealing with long-distance coaches, but the bulk of the long-distance coaches which start in London go north, not south. We need a coach station in the northern part of the city, not the southern part attracting all the heavy traffic through the centre of London, thus adding to the congestion and health hazards. To my certain knowledge that has been under debate for some 15 years—I have been personally involved, being the chairman of a local residents' association—but we are getting nowhere. That is the kind of matter in which the Government should become involved, yet the answer that we hear from the Government time and time again is, "This is a matter for decision by those concerned". However, as far as I can see no local authority wants to have a new coach station in its area. That matter needs to be considered when we are dealing with the problems of urban transport.
I turn now to rural areas—to virtually the opposite side of the coin. Rural areas have been increasingly denuded of public transport as progressive measures of deregulation have been taken. We must consider how to balance the needs of the rural areas in the present transport situation.
Finally, I should like to see a chapter devoted to transport facilities for the elderly and the disabled because the fact is that many of the measures which could be taken to deal with the transport problem could further disadvantage them. I refer, for example, to proposals for larger pedestrianised areas and to the fact that we now expect people to use bikes. That is all very desirable for those who are physically capable of using bikes, but not for those who cannot. I should like to see that considered also.
To sum up, I agree wholeheartedly with the noble Lord, Lord Elibank, in asking the Government for a major statement on transport. We need a policy statement that will reflect environmental requirements and which will indicate measures to improve safety, reduce congestion in urban areas, increase accessibility in rural areas and provide more for the elderly and disabled. I should like to see such a statement produced as soon as possible. Many of those issues have already been dealt with in disparate documents, but they need
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to be brought together. I should also like transport policy to be reviewed annually to see what progress has been made.
7.23 p.m.
Lord Quirk: My Lords, I confront an awkward asymmetry summarised in the words of Geoffrey Chaucer:
"The life so short, the craft so long to learn".
This Chamber has been in session for only five sitting days since I was privileged to take my seat here, and five days is most certainly too short a life to learn the craft of appropriately addressing your Lordships.
Not that I have lacked the wise advice of master craftsmen. I gather, for example, that any speech should be so constructed that its ending be as closely contiguous as possible to its beginning. I have been further taught that, if one is to woo, let alone win, your Lordships' indulgence, a maiden speech should eschew contentiousness—hard to avoid, I felt, in the strife-tom area of education, into which I might otherwise have ventured.
So it is that I have diffidently sought to intervene on transport policy. "What", I asked myself innocently, "could be less contentious than matters arising from a report whose ultimate progenitor (as we are told in paragraph 1) is none other than the Treaty signed at Maastricht?"
The members of the Select Committee chaired by the noble Lord, Lord Elibank, have produced a document of great value, distilling a wealth of complex evidence and argument with exemplary clarity and economy. The goals of enhancing public transport and reversing the relative decline in the market share enjoyed by rail services will surely attract enthusiastic support. I welcome the report's reference to,
"securing improvements to the reliability and efficiency of movement",
in paragraph 45, and, in paragraph 66, to the role of "research and information institutions".
Several of the individuals and organisations giving evidence to the Select Committee (not least my UCL colleague, Professor Allsop) stressed the need for the efficient flow of information. Leaving current research in "telematics" entirely aside, I hope your Lordships will allow me a few minutes on the two quite distinct, if complementary, types of information involved in public transport, both of them depending for their effectiveness on conjoining technology, linguistics and managerial acumen.
The first is operational information, relating to traffic flow, to co-ordination, timing, signalling, security, and so on: the kind of thing to which we as passengers need have little regard so long as there is no accident, no crime, no loss of luggage, and we get there on time. Such information systems at their best incorporate skilled linguistic engineering which intervenes in natural language to produce a standardised, artificially restricted, and studiously unambiguous "nuclear" code, matching a prior needs-analysis and suited to transmission and reception across the whole range of communication channels.

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We in Britain have an excellent record of devising such systems. We played a prominent part in establishing the air traffic control conventions in use world wide. And—with an inventive push from the noble Duke, the Duke of Edinburgh —we were solely responsible for developing "Seaspeak", adopted in 1987 by the International Maritime Organisation for global use in marine navigation. We owe this largely to a team at Wolfson College, Cambridge, led by Mr. Edward Johnson. More recently, the same group came to address land-based travel in particular relation to the emergency services; a notable result is "Policespeak", designed in collaboration with both the Kent Constabulary and its Transmanche counterparts.
Simultaneously, the impetus of the Channel Tunnel has speeded the wider recognition that sustainable mobility—the subtitle of the report before this House— requires special attention to the communication needs at those points in Europe where we cross not just political frontiers but linguistic ones. Thus Eurotunnel has a training programme ensuring that all operational staff function bilingually. But, given that a train or coach from any one country may cross more than one such frontier before its ultimate destination, we are concerned with more than just Anglo-French or Franco-German or Hispano-Portuguese information systems. Indeed, one authoritative source claims that no fewer than 72 language pairs must be equipped with matching restricted codes. This is a very costly and surely unrealistic prospect, but perhaps your Lordships will allow me to take up such matters on another occasion.
I turn now to the other type of information flow: that between operators and their clients, the travelling public. Here, if we exclude travel by air, where passengers are in general well served, the British record is less satisfactory, with inadequate information delivered in modes that are often embarrassingly bad. I cannot be alone in finding announcements in English on the Shinkansen between Tokyo and Osaka more comprehensible than announcements in English at Kings Cross Station. Indeed, a visitor to London told me that the only public address she understood on the Underground (during a period when security alerts were not uncommon) was that antique recording to be heard on some of the more curvaceous platforms, "Mind the gap".
Well, here is a gap that needs minding in our public transport system as a whole, and I am glad to learn that steps are now being taken in London to implement the promising report of 1993 entitled Right Time, Right Place. It is to be hoped that analogous policies on passenger information will be speedily developed for public transport in the rest of the United Kingdom.
But we must be mindful that not all travellers within Britain or any other European nation are wholly competent in the language of the particular country they are passing through—especially if it is spoken with slovenly diction or written on a white-board with careless illegibility. Journeys in the United Kingdom known to be made by a relatively high density of non-British travellers need information systems that recognise this. The need seems to have been noted after a fashion on the Piccadilly Line serving Heathrow, and
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all carriages display signs to show where suit-cases should be placed. "Luggage Gepäck Bagages", we read, stunned by the implications of such minimalist tokenism. How would foreign travellers who do not understand the word "luggage" understand anything else on the Underground?
But, as with operational information, so also with passenger information, there is light not just at the end, but for the whole length, of the Channel Tunnel, which is to have oral information in both English and French, while the variable graphic information by dot matrix will actually be trilingual. A model, I venture to hope, for sustainable mobility throughout Europe, with passenger satisfaction and peace of mind.
7.32 p.m.
Lord Campbell of Croy: My Lords,, I have the greatest pleasure in congratulating on behalf of the whole House the noble Lord, Lord Quirk, on a notable maiden speech. In a distinguished academic career —he was vice-chancellor of the University of London and occupied various chairs of English—he was chairman of the committee of inquiry into speech therapy, reporting in the early 1970s. It was then that I first met the noble Lord. I was a Secretary of State who was glad to start taking action on the recommendations of the report. Because I have been involved over many years with speech therapy, we have met from time to time in that context. I know the outstanding contribution the noble Lord has made in that field. It is always a delight to hear him speak as an expert in the English language. We look forward to hearing his contributions, his sparkle and his wit on many occasions in the future.
I thank and congratulate my noble friend Lord Elibank, the chairman of our sub-committee, on the way he introduced the subject of the debate. He described our recommendations, clearly set out in the report. The Government's response, dated 27th September, is in general agreement but contributes interesting comment on possible ways of bringing in differential road pricing. I shall comment on two or three only of the matters raised.
I mentioned my involvement with speech therapy. Noble Lords will know that I have never myself had any difficulty in speaking, but I intend to be brief. Incidentally, that involvement arose when I was in hospital for over a year at the end of World War Two in the ward of a brain surgeon when I met some of the very first speech therapists who were helping head cases to learn to speak again. I have kept in touch with them ever since.
The "communication" from the Commission which was the starting point of our inquiry—it is not a draft directive, it is merely a communication—urges that increasing road traffic be restrained by higher financial charges. Our committee agreed. However, there is no simple, acceptable way of doing that. A general increase in the cost of fuel would discourage road use but would penalise rural and remote areas where the cost of living would rise disproportionately. Governments are always understandably reluctant to do that because they are bound to lose votes in the countryside.

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In order to avoid or reduce congestion in urban areas, to avoid environmental damage, and to restrain demand on popular and overused trunk roads, some forms of special road pricing and tolls seem inevitable. They have the advantage of enabling choices to be made and decisions to be taken in the places where they will directly affect congestion, without adding financial burdens to parts of the country where those problems do not exist.
If the money raised by such special schemes can be spent on improvements to the roads and facilities concerned, that should seem fair to everyone. That is why the committee suggests in paragraph 45 that such charges should not be part of general taxation but should be a levy on the users and those who are causing pollution and other damage. I hope that the Treasury's traditional objections to what is called hypothecation will not prevent or delay pursuit of those goals. Such schemes would help also to transfer appropriate freight to the railways, though it must be borne in mind that that is not usually economic if the journey is less than 200 miles.
I should like to say a word about pedestrianisation. Much has been done in some cities of Western Europe and there have been similar attempts here. Such schemes are excellent, provided that arrangements are made for disabled people. That should not be overlooked. Wheels cannot be prohibited entirely from a town centre. There are some in the community whose mobility is dependent upon wheels. I draw attention to a city which for many years has been completely pedestrianised for obvious reasons. That city is Venice. No road vehicles have been allowed. It is very difficult for disabled people, whether in wheelchairs or on sticks. To them Venice seems to be all water and steps. Six years ago, when I had to be at the chair at an international conference there, the mayor lent me one of his launches for the week. However it could not go along the smaller canals. Italian colleagues were reduced to searching the palaces and museums to find a sedan chair for the last part of my journeys.
The Select Committee has suggested that the Government should produce a statement, perhaps a White Paper, on transport policy. In their reply, the Government refer to their document entitled Sustainable Development: The UK Strategy, though that goes far wider than transport. Transport is a subject where subsidiarity can apply in many respects within the European Union. It applies also within the United Kingdom. Since the 1950s, the Scottish Office has had responsibility for roads and bridges in Scotland, and much more recently the Welsh Office in Wales. The Department of Transport deals with roads and bridges in England only. Its roads programmes, reviews and White Papers are confined to England, but policies for trunk roads which cross the borders with Scotland and Wales should be based on considerations affecting more than England only. There are also different attitudes and requirements north and south of the Scottish Border.
In England, for some years, new motorways, and trunk roads, and extensions to them have been regularly opposed, in particular by the Council for the Protection
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of Rural England. Of course, that body does not deal with Scotland. In contrast, in Scotland there are usually complaints that not enough is being done in road building outside the urban areas. Of course, there are always problems and objections in urban areas. In England, the Department of Transport has reduced its road building programme and I note that at the recent Labour Party conference a similar view was adopted. However, in Scotland there is a popular demand for new and improved trunk roads.
Scotland is more than one-third of the land area of Britain and has one-tenth of the population. There are different attitudes accordingly to distance and to facilitating travel between regions and cities and towns. I strongly support the committee's recommendation that the Government produce a policy statement on roads and railways which covers the whole United Kingdom and which brings together the various threads that have hitherto been dealt with on a piecemeal basis.
7.40 p.m.
Lord Bridges: My Lords, as a member of the sub-committee which prepared the report, I too support the Motion. It is a valuable, comprehensive and dispassionate survey of an essential subject and it will be of value to all those involved in dealing with these matters. The subject is difficult but I may not be alone in seeing a growing congruence between the attitudes reflected in the Commission document, which was the basis of our study, and public opinion in this country. Furthermore, recent government statements on transport issues have indicated a move in that direction. I hope that the Government will accept perhaps the most important of our recommendations and come forward with a more comprehensive statement. I believe that some of their recent statements have provided the bones which can be fleshed out into a more comprehensive view of the matter.
I wish to concentrate on two general questions and one particular matter. The general questions are two important prior issues which we need to look at in considering the question of a transport policy. The first is the need for a distinctively European transport policy. The second is how far a transport policy for Europe can hope to be sustainable in the full meaning of that word.
As regards the first question—that is, the European nature of a transport policy—there have been clauses about a transport policy in the Treaty of Rome since the inception of the Community. However, it is only since the most recent additions to its text that the Commission and member states have taken up the subject in a serious way. It is also a matter of fact that since the Second World War transport has not received equal priority in the different states of the European Union. In the aftermath of the war most of the states in Europe had to invest heavily in transport because their road and rail systems had been devastated by warfare.
However, that was not the case in this country. At the end of the war our transport system was run down and inadequate but we chose deliberately to give priority to investment in other areas; notably, social security and defence. So for 20 years or so after the war we spent little on transport infrastructure. We are now in a much

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less satisfactory condition from this point of view than our neighbours in France and Germany. We are trying to catch up with the standards which those two countries have set for road and rail.
We also have a particular need; that is, to reshape our transport system because of the fundamental change that has taken place in the direction of our foreign trade. The essential outlets for our foreign trade are no longer, as they were before the war, from our west coast ports to world markets across the oceans but are from the ports of eastern and southern England to the Continental markets. As that change has taken place in our foreign trade there has been a change in our geographical position in world trade which has not been to our advantage. We have changed from being a focal point of Europe's maritime trade with the rest of the world to being at the very periphery of the European market itself. Being in that peripheral position we must have a good transport system to compete properly in the European market.
From that I conclude that we must be a part of the developing European transport system. We must utilise to the full the direct rail connection that we now have over long distances in Europe, which will wholly change the possibilities open to rail freight operations in this country. That is the real bonus of the Channel Tunnel. We also have a vital interest in the standards set in the European Union to reduce atmospheric pollution caused by cars and to promote safety for road travel. I emphasise this European aspect of transport policy. I believe it to be extremely important for our future.
I turn to sustainability. That is a vogue word which attracts instinctive support from many people and organisations. But whatever definition we use to interpret "sustainable" I doubt whether any transport policy can, with honesty, be described as fully sustainable for the foreseeable future. We are, after all, talking about an activity which has been dependent upon the intensive use of fossil fuels for the past century or more and we will continue to use them. But we can and should strive for policies which make better use of those finite reserves. It is in that more limited sense that we may legitimately aim for "sustainable" transport but without deceiving ourselves as to the meaning or intention of that word.
As regards the detail of the Commission document and our report, I wish to raise only one matter. It is the proposal for a trans-European road network, or TERN for short. This scheme was approved by the Council of Ministers in outline on 29th October 1993. In the Government's comment on our report they agree with our conclusion that as regards this country the network will carry only a small proportion of international traffic and will not be given any special priority in planning. I am glad to note this.
However, the Council decision itself states that the projects listed should begin within 10 years—now within eight years—taking the financial constraints of member states into account. The Council decision also approved a map on which the roads in question are marked. I suggest that the intention of the Council is clearly to proceed in this matter and that documents of
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this kind acquire a momentum of their own which cannot easily be deflected or controlled. This is an important document too.
The roads shown on the map for this country seem intended mainly to improve road communications from Ireland to Continental Europe. That has been an objective of the Irish Government for some time. The routes mentioned include Stranraer to Felixstowe and Fishguard to Harwich. This question was discussed at a meeting of the sub-committee with the noble Lord, Lord Mackay of Ardbrecknish, when he was Parliamentary Under-Secretary of State at the Department of Transport. A verbatim record of that discussion appears on page 160 of our report. It is doubtful whether these roads could be regarded as a good investment or the best way to accomplish their purpose. Surely if we wish to provide a way of enabling Irish trucks to arrive more easily at the Continental road system a better way will be to provide an improved sea-service from, say, Cork to Cherbourg. Some of the problems which have arisen in Oxfordshire recently with regard to the planning of roads—of course, Oxfordshire would be affected by the Fishguard-Harwich route—were discussed by the sub-committee with representatives of Oxfordshire County Council. The record of that discussion is on page 154 of the report. I remain sceptical about the whole of that particular plan.
Another significant TERN which may be less familiar and even more controversial is in Greece. The map shows a new road from Istanbul, running west across Thrace to Salonika, across the high Pindos Mountains to reach the port of Igoumenitsa on the Ionian Sea opposite Corfu. At present that route is important because the main truck route from the Middle East and Turkey to Western Europe is blocked by the war in Yugoslavia and United Nations sanctions directed at Serbia. Therefore, heavy vehicles must either make a wide detour on extremely inadequate roads through eastern Bulgaria and Romania or they must make their way through Greece on the line, more or less, of the new route proposed by Brussels and take a ferry to Italy.
I have serious doubts about that road as a major artery for Europe. It crosses the Pindos Mountains near Metsovon and its summit at Katara is at 1,700 metres— roughly 5,500 feet. A tunnel is to be bored perhaps 1,000 feet lower but that will emerge directly opposite the town of Metsovon seriously damaging it and one of the few well-managed forested areas of Greece.
Of course, if Greece wants to build such a road and observes the European Union's environmental assessment directives, she has a perfect right to do that under the subsidiarity principle. But when visiting the area this summer with a group from the International Dendrological Society, I was dismayed to see a sign bearing the 12 stars of the European Union, which indicates that the project receives direct funding from Brussels. No doubt that money comes from the Mediterranean structural funds. I believe that the matter calls for some investigation by the Government because the Select Committee previously expressed anxiety about the correct use of environmental assessment procedure for projects using structural fund money and, at first sight, this appears to be another such example.

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In Greece I believe that the road is known as the Egnatian road after the route of the old Roman road— the Via Egnatia. That was for centuries a famous means of communication for travellers between Rome and Constantinople. In fact, that road followed a quite different route at its western end, terminating at Dyrhachium, which is Durazzo in modern Albania. In fact, that would have been a very much better route to follow since it would avoid the high peaks and precious forests of the Pindos, which are in botanical terms a European treasure.
Of course, there are great political difficulties in using the Community's money to build a road which passes outside its frontiers. Nevertheless, I believe that we have lost an opportunity to create a new route of permanent value to European transport needs in the next century and beyond. The route that I described—the old via Egnatia—is part of the economic geography of the future Europe as well as the past. I note that failure and suggest that the reasons which have caused the road to be diverted to that particular route are worth some study, even if it is too late for the error to be corrected.
I have tried to illustrate some of the general issues and particular problems raised by the report. I believe that this document will serve as a useful, perhaps essential, basis for discussion of transport problems and I join the noble Lord, Lord Elibank, in commending it to the notice of the House.
7.55 p.m.
The Earl of Northesk: My Lords, I congratulate my noble friend Lord Elibank on the sterling work of the Select Committee under his chairmanship and thank him for his most generous welcome to me in today's debate, notwithstanding his caveat with regard to the nervousness involved. I also thank the noble Lord, Lord Quirk, for allowing me to be one of two. I derive comfort from not being the only new boy to address your Lordships today.
I concur absolutely with the presumption that the availability of land for road schemes is of itself an unsustainable commodity in this country. Witnesses have had differing opinions as to the wisdom and necessary extent of ongoing investment in road infrastructure but it must be accepted that the fundamentals of our particular set of circumstances require that the promulgation of new road schemes, together with decisions about them, should take due account of the finite nature of our land resource.
Therefore, if improvement and expansion of road infrastructure is not a sustainable solution to congestion, what other options are open to us? In my view, the Select Committee has come very close to defining the true nature of the problem by stating that "society faces a dilemma". I agree with my noble friend Lord Elibank that it is a dilemma of society's making and consequentially, its resolution is substantially the responsibility of society. The attitudes which society has towards its travel patterns need to change to reflect more fully the problems and difficulties which they create.
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I suggest that what is required, in addition to the measures recommended by the committee—road pricing, increased investment in public transport and so on—is a means of educating society in order that it can make better informed decisions with respect to its mode of transport In contemplating that, I was reminded of a proposition once put to me that only those people whose grandparents had driving licences should be permitted on the road. Facetiousness aside, the underlying logic of that has pointed me towards the potential of the driving test in that regard. That is the single mechanism that gives the populace access to the roads. Also, it is the initial investment that all motorists make towards their driving careers and, as such, represents very good value for the motorist. Thus, if the premise that we are suffering under the yoke of congestion is accepted, a logical way to address it is to apply a brake to the relative ease with which the existing driving test can be passed.
It is my contention that the driving test should not simply examine an individual's ability to cope with the mechanics of driving. Rather, a stiffer and more comprehensive test is required as the means to educate and inform the driving public about the whole transport issue. Further, if there is a perceived requirement that,
"The price of road use should rise to match the costs of congestion and environmental damage, preferably using charges that are perceived at the time of use".
The fee charged for the driving test could be raised to achieve this. Indeed, the general public may find such a mechanism somewhat less burdensome and fairer than increased excise duty on fuel.
As a general principle it can be argued that it is undisciplined and inconsiderate driving that cause the greatest delays. For example, too few motorists obey the provision of the Highway Code that the two so-called "fast" lanes on motorways are overtaking lanes. How often have we all observed the inside lane to be completely devoid of traffic? Not only does that create congestion; it can also be a major contributory factor to accidents which then lead to further congestion. There are many other examples where a bad driving habit has become so universal and so ingrained as to be perceived as normal or even good practice. Thus, quite apart from the potential educational benefits, there is in any event an urgent requirement for a more rigorous testing regime.
There are other potential advantages of this sort of review. I note from a reply by my noble friend the Minister to my noble friend Lord Campbell of Cray that the introduction of photographs on driving licences is planned from July 1996. In part that is to prevent the practice of obtaining a driving licence by paying an impersonator to take the test. Any measure that prevents unqualified drivers gaining access to the roads is very welcome. But additional to that is the possibility that such a new driving licence, based presumably on smart-card technology, would represent the ideal mechanism for administering the whole regime of road-pricing.
I had thought the introduction of regular and compulsory re-testing would be sensible but, with some 32 million motorists on our roads and some 1.7 million

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tests taken each year, that would be an administrative nightmare. Thus I can accept that there would not be a need for re-testing the mechanics of driving. It is like riding a bicycle; once learnt the skill is not forgotten. However, I can see merit in regular oral and/or written re-testing, say every five or seven years, as a means of reinforcing the message about congestion and environmental damage and of sustaining best practice with regard to the disciplines of driving.
We would be deluding ourselves if we were not to admit that, with time and usage, our driving habits become sloppy. It seems only right, therefore, that our competence should be re-examined on a regular basis. After all, it is a sanction already at the disposal of magistrates in certain cases. I therefore commend the driving test as a possible and additional vehicle, if your Lordships will forgive the atrocious pun, for diminishing the effects of congestion.
There is another way in which society could contribute to this process. Like the noble Lord, Lord Ezra, I noted that,
"80% of the total travel to work in and out of central London"
is carried by the rail network. My own experience is that travel outside peak hours, whether by car or rail, is a relatively painless experience. Logic suggests that if the peaks and troughs of necessary travel movements could be made less acute an inevitable consequence would be to ameliorate congestion. Surely, therefore, there is very strong motivation for businesses to stagger their hours of trade where possible with mechanisms such as flexi-time. By the same token, teleworking has a contribution to make here.
Finally, I turn to the issue of land use. There exists a presumption that planning policy should be directed towards centralising rural development in selected communities where appropriate and adequate facilities are within reach of modes of transport other than the car. I believe that this approach is severely flawed and that, far from ameliorating traffic volumes, it actively increases them.
As the potential for minimal development, particularly to provide low-cost housing, in outlying communities is discriminated against, a false market of rapidly escalating prices in property is created. Over a period of time, the population of the particular village or hamlet becomes increasingly affluent because they are the only people who can afford to purchase the houses available in the area. The average age of the community concerned becomes increasingly older. Quite quickly it ends up with a population profile of, in the main, couples aged over 50 owning two or more vehicles with little inclination to use either public transport of any existing retail or community facilities in their immediate area. Ultimately, out of economic necessity, provision of those essential services is withdrawn, a process exemplified in part by Warwickshire County Council's recently-announced decision to reorganise the provision of education in the county. That, in turn, leads to a vicious cycle of yet greater dependence upon the car. The subject may, in reality, be part of a different debate but I do feel that its implications with respect to traffic generation are worthy of some consideration today.
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I am grateful to your Lordships for the patience and forbearance that you have afforded me and very much hope that my words will have made some small contribution to today's debate.
8.4 p.m.
Lord Bancroft: My Lords, it is a very great privilege to follow the noble Earl, Lord Northesk. As a maiden speaker, I believe that his contribution was a model of lucidity, thoughtfulness, style and length. In particular, I thought that the noble Earl's points about the driving test and the driving licence were extremely interesting and very well put. I know that the whole House will join me in congratulating him in the hope that we shall hear many more such contributions from him.
Speaking as a Member of Sub-Committee B, I warmly endorse the tributes to our chairman, our clerk and our special adviser. I play the same tune as other noble Lords, although, alas, on a naturally less melodious instrument. Virtually everyone is agreed that the medium and long-term forecasts of road traffic growth spell the route to national gridlock, economic failure and environmental distress. Virtually everyone is agreed that alleviations must be sought in more effective road pricing; more investment in public transport, including rail; better traffic management; stringent restraints on expanding urban road capacity; and better recognition of environmental needs. Virtually everyone is agreed that the love affair with the car will never end, but that its course and after effects must be better controlled.
The report before us, and the Government's response to it, point the way to the alleviations that I mentioned. They must be brought about and brought about quickly. Agreed words will not, of themselves, stop the concreting over of our urban and rural landscapes, any more than the mantra of market forces will, of itself, increase national growth or restrain inflation.
I select five rather obvious points for special emphasis. First, as other speakers have said, there is the importance of road pricing. I agree with everything that other noble Lords have said on the subject. But as the noble Earl, Lord Northesk, stressed, the critical point is that the price of road use will have to rise, wherever possible, using charges that are perceived at the time of use. That is the nub of the matter.
As Professor Allsop, the former colleague of the noble Lord, Lord Clinton, told us,
"bringing costs to bear at the point of choice is just as important, possibly more so, as increasing them in aggregate".
As one of my grandchildren is in the disrespectful habit of saying—and I repeat it to the Government—"Do it".
The second point that I should like to mention is public transport. As other speakers, including the noble Lord, Lord Elibank, have said, increased investment here marches hand in hand with higher road prices. The second will fail without the first. I believe that that is quite clear both to me and to other members of the committee. A most telling figure is that the traffic levels in central Oxford today are the same as they were 30 years ago. That is due to an enlightened policy of transport investment, including heavy emphasis on public transport, the biggest park and ride scheme in

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Europe—certainly in this country—the encouragement of bicycling facilities, pedestrianisation and traffic calming. Once again, Oxford can point the way to a victorious cause.
I turn now to my third point; namely, local roads and traffic management. The Government's response rightly points out that they are mostly the responsibility of local government. My concern here is that the other head of the ministerial hydra in Marsham Street is busy, through the Local Government Commission, in balkanising local government. The bias—and I put it as modestly as that—towards the abolition of county councils and the creation of a much larger number of small unitary authorities has been criticised by nearly all the organisations concerned with road transport and the provision of road infrastructure. The critics range from the Automobile Association and the Chartered Institute of Transport to the Institution of Highways and Transportation. Perhaps the two heads of the hydra in Marsham Street could attempt a dialogue between the north and the south towers.
Let there be no secret about this: I am thinking here particularly, though far from exclusively, about Cleveland where it is proposed to fragment a smallish county into four small unitary authorities. That is to be done after a fatally-flawed consultation process which the High Court criticised as,
"picking out the plums and leaving the duff … conduct which, in the case of a second-hand car salesman, would lead to an appearance at the Old Bailey".
I end my quotation from the High Court. This is not the way to secure a sensible transport policy for the region.
The point I really wanted to make is that the railway section, which is a very important section of the committee's report, attracts a mention in the Government's response. But I have to say that the response seems to me to take complacency well to the windy side of smugness. There is obvious room for the expansion of rail long-haul freight, inter-urban passenger and urban commuter traffic. This expansion of the railway's role will not come trickling down automatically through privatisation; it needs more efficiency and above all more investment.
It is welcome that the freight facilities and track access grant schemes will be greatly enlarged to £15.5 million by 1996–97 and that total railway investment will be around £3 billion over the next three years. Of this, £2.7 billion will be provided by the public sector. That is good, but comparisons with other European countries for the year 1991 —the latest for which figures were available—show that British railways were on the whole ill-served by the state. As a percentage of gross domestic product, French and German railways received well over three times the financial support enjoyed by British railways. The same is true of the financial support measured per head of population. As a result, in the same year, that is 1991, French railways invested, per head of population, three times as much as BR on new lines, track improvements and signalling. The German railways spent well over three times as much.
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I echo other noble Lords in adding my fifth point which is my regret that the Government have failed to commit themselves to producing a comprehensive White Paper on transport policy. The individual documents which have been produced over the past year or so are interesting and improving. However, they should be brought together, as has been suggested, with an indication of the Government's preferences and priorities. The Government have little to fear from doing this. Indeed I believe that on balance they would get credit. They would then earn the true title of saint; namely, a dead sinner revised and edited. Transport policy of itself cannot produce economic growth and environmental contentment, but it is an indispensable midwife to both.
8.13 p.m.
Lord Lucas of Chilworth: My Lords, when I first received the report that we are discussing tonight I thought what a Herculean task my noble friend Lord Elibank and his colleagues had undertaken because whereas it took the Commission something like two years to prepare its communication, my noble friend Lord Elibank attempted to discuss this matter in something less than six months. Admittedly, as the report states at paragraph 9 in the introduction, the Commission's communication,
"gives the first opportunity in recent years to consider the main thrust of transport policy as a whole, at a time when that policy is changing".
But in discussing the scope of the inquiry the committee chose, as the noble Lord explained to us in his remarks in opening our debate, to concentrate on the central theme of passenger and freight transport by road and rail.
I believe that was a mistake because I do not think one can look at a European policy, or indeed a domestic policy, if one ignores air and marine transport, and to some extent inland waterways, because, for example, there is a great use of air travel for transporting business people on domestic journeys and into Europe which avoids the use of road transportation to a port or a ferry or a non-existent rail system. I think therefore that an opportunity has been missed here. Perhaps if the inquiry had proceeded into a second Session of Parliament, we would have had a more complete view of how the committee felt about a particular policy. What has happened is that we have largely reduced a valuable document to a criticism or a critique of UK domestic road and rail policy with various indifferent recommendations, some of which I shall mention later. I believe that is rather a pity because it narrows the great value of committees of this kind. I know my noble friend is a man of generous nature and I hope therefore he will forgive that criticism.
I was particularly pleased to note that the committee drew particular attention in the report to the doctrine of subsidiarity and indeed to the legislative competence of the Commission in some areas. Provided we bear that very much in mind, we can therefore concentrate on some of the domestic issues. It was interesting to note that the report states in the summary of witnesses'

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views—I read most of the views and I agree with them—that nearly all witnesses agreed that there had to be some restructuring of the pricing of transportation.
However, I noted keenly that those views all contained caveats. In its opinion at paragraph 45 of the report the committee entered five very serious caveats, most particularly a caveat with regard to transport—I take it in that instance the committee was referring to road transport—meeting "full environmental costs", whatever that may mean. Environmental costs are not defined anywhere, and the phrase means very different things at very different times to many very different interests, depending whom one listens to and at what time. I think it is necessary therefore that we should not rush into some great exercise in determining the externalities of road transport or rail transport with the environmental issues in the back of our minds. That will not do. That is not what this is about and it fails to bring about an adequate balance.
I was sorry that my noble friend described the motor car as being a monster bringing an intolerable burden upon us. I make no secret that my love affair with the motor car—the friend of yesterday—has remained undiminished even though it may have become, in the eyes of my noble friend, somewhat monstrous. I believe I can demonstrate why my love affair should remain alive.
The current theme of the communication is to discourage traffic growth through higher prices, as my noble friend Lord Campbell of Croy mentioned. I believe that the committee has fallen into the trap of accepting that the problem laid at the door of transport is one of excess demand rather than inadequate supply. If I were a Treasury Minister that would be music to my ears, because I could price people off the roads and out of the railway carriages without dealing with the problem. I believe that the committee's acceptance of that part of the communication is fundamentally wrong.
The problem that we face is remedying years of total neglect of the provision of an adequate road and rail infrastructure. I lay the blame on no one government. There has been neglect of the infrastructure by virtually all governments since the end of the last war. The noble Lord, Lord Bridges, made that point in rather more delicate terms.
The noble Lord, Lord Bancroft, stole the only quotation which I wanted to lift from the report. However, I believe that it is sufficiently important to repeat because, as the noble Lord, Lord Quirk, said, Professor Allsop, as professor at the London University Centre for Transport Studies, said:
"bringing costs to bear at the point of choice is just as important, possibly more so, than increasing them in aggregate".
The problem is: where is the choice? For many people there is no choice. If, for example, one raises the cost of petrol to £15 a gallon to make people think twice before they embark upon a journey, I suggest that other costs currently borne by way of ownership of a vehicle would be negated. If one wants to shift the burden of taxation in such a way as to make the choice more positive, one must tax usage rather than ownership.
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In 1992–93 direct transport taxes accounted for some £22 billion—between 10 per cent. and 12 per cent. of total tax revenue. What has been spent on title infrastructure—and I do not mean merely the building of new track—to combat environmental damage? Less than one-tenth of the tax revenue. Therefore, if we allow further direct taxes to be levied on transport under the guise of meeting full environmental costs or bearing its true track share, I suggest that a greater share of that tax revenue should be diverted to exactly meeting that problem of environmental cost. If other taxes are needed for other services such as education, hospitals or foreign affairs, that has to be raised in a totally different way. We cannot continue to tax transport at the current rate without putting something in place. Growth in demand, and the new and proper concern for social and environmental considerations, compound the difficulties.
If we begin to rectify the problem we start from that neglected base, way behind our principal competitors. The noble Lord, Lord Bancroft, mentioned figures relating to the expenditure of some European countries on investment in transport. Those countries have pointed the way.
If, as my noble friend Lord Campbell of Croy suggests, we shall have to increase some costs in some areas for certain purposes, then I suggest, as he did, that money has to be ring fenced. That means hypothecation, which is anathema to most Treasury officials and most governments. However, the transport infrastructure, in its broadest and loosest sense, cannot be left to the short-term financial considerations of the Treasury. The start and stop element in investment in road and rail which has bedevilled us for the past 40 years or so has to come to an end sooner rather than later.
I remind your Lordships that in 1955–56 in the United States President Eisenhower managed to have the Federal Aid Highways Act enacted. In effect, that was a hypothecation of some transport taxes. The fund has always been in surplus. It has provided an enviable inter-state highway system which is probably the best in the world. I use that purely as an example of a long-term strategy which has not been diluted for short-term gain. We could learn a lesson from this.
The report states that society faces a dilemma, presumably in relation to transportation. That is not the dilemma which faces society and governments across Europe today. The dilemma is unemployment and stagnant economic growth. There is a need to break out of the current recession, and even recovery in the United Kingdom is patchy and hesitant. There is a need to encourage commerce and industry. Higher costs should not be imposed without a corresponding and perceived benefit to their operations and to those people dependent: upon transportation, which is all of us.
In a submission to the committee, the Royal Automobile Club indicates that there is insufficient sensitivity to the extent to which people are dependent on car use as a result of circumstances not of their making. Most noble Lords have referred to the need for a policy document from Government, and I agree. The RAC believes that a long term strategy with measurable environmental, social and economic objectives needs to

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be put in place with a package of measures aimed at meeting those objectives. That is what the RAC calls for in a comprehensive policy paper.
Finally, my Lords, allow me to quote from the US Department of Transportation Federal Highway Administration annual report for 1993:
"A competitive, growing economy requires a transportation system that can move people and goods quickly and efficiently. Transportation must be a means of encouraging our full economic potential while not constraining growth".
That encompasses what we are debating today. 8.30 p.m.
Lord Mountevans: My Lords, in introducing the debate, my noble friend called the car a monster, as did my noble friend Lord Lucas. I have to say at the outset that that is a description that I accept. As several noble Lords will know, first, I declare an interest on behalf of the railways of this country, and, secondly, I am a pedestrian. I have never had a driver's licence. I believe that the noble Baroness, Lady Castle, and myself could reasonably be called not only passive smokers but also passive road users.
Tonight we discuss an EC communication on sustainable mobility. Let me make a few suggestions on how sustainable mobility might be achieved. First, it will come as no surprise that I suggest that we invest in rail for passenger purposes. That has been suggested by some noble Lords already. I simply cite the example of the Chiltern Rail on which a considerable but not monstrous sum of money was spent on new infrastructure, new stations, new trains and staff training. In the first year there was a 35 per cent. growth in usage. That seems to me good news not only from the point of view of the railways but also for the area from which most of the passengers came—that road users' nightmare, the A40. That investment was funded ab initio by the railways and by the Government through a PSO grant. However, at the end of the day the payoff comes from the 35 per cent. increase in usage. If we achieve the right investment in the railways for the passengers, the passengers will come. It is a matter of investment. It is not a matter of doing what the Swedes did 15 years ago. They halved fares on the basis that traffic would more than double. Of course it did not.
One can also consider freight. There are a number of examples. I shall not rehearse them because they have been rehearsed ever since I attended the Chamber in the 1980s. However, let us consider the Tilcon scheme whereby the Government produced £3.1 million of investment for infrastructure and rolling stock. By so doing they kept 200 lorries a day off the somewhat inadequate roads of the North Yorkshire Dales.
There are other examples. My favourite—I quoted it when we discussed what is now the Railways Act—is the investment made by PowerGen in rolling stock, locomotives, and, I believe with Government support, in infrastructure. That is a double header. We all state that railways are environmentally friendly. If one lives in Norway, as I do from time to time, one has acid rain. One gets acid rain from the power stations of the Yorkshire Dales. They are churning out the electricity
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which keeps the electric parts of British Rail going. The joy of the PowerGen exercise, and the Government support thereof, is that one has a green double header. On the one hand, one gets traffic off the road by moving the limestone into the power stations by rail. On the other hand, we are not crucifying my Norwegian family by pouring acid rain upon them.
The third example is the Channel Tunnel. Now that it is getting going—and is it not a huge thrill that it is getting going?—it is switching freight from road to rail. Perhaps I am wrong to state that; it is switching freight to the best combination of road and railway. It attracts dispatchers in Scotland, the Midlands, the North-East and North-West to load their freight not on trailers but on containers on trains travelling through the Tunnel to Milan or wherever. The freight arrives there more quickly and more economically. Perhaps we should consider the issue of making the best use of the two in combination rather than the argument between road and rail.
I could continue, but I seek to speak more briefly than other noble Lords. I pay tribute to the Government for investing both in the railways as they have done in the past, and as I hope they will invest in the future. I do not believe that privatisation is any solution to the problems. I pay tribute to the Government for investing in freight, as I have already demonstrated. However, I believe that a common transport policy is best left to individual marketplaces and individual countries to decide. Her Majesty's Government, I believe with the support of many of us, have gone for an open skies policy. British Airways has made the most of that. British Midland has done well. Air UK is not doing badly. Virgin is also doing well. However, if one asks any of those airlines what they think of a European aviation policy they say that it is brilliant in concept and appalling in enforcement. Let us consider the bail-out of Air France, Aer Lingus, and TAP, to name but a few.
If we are to pick up and run with the report so ably produced by our colleagues in this House, I very much hope that our debate will concentrate on practical matters with regard to subsidiarity. In other words, it is for us to make decisions. It is not for us to follow a somewhat ambiguous and loosely enforced policy. I have referred to the aviation aspect. The issue is not about passengers, freight, rail or road; it is about making the best of all the opportunities that we have before us. It is not about allowing Europe to set a common standard for railway loading gauges. If it did so, we might as well say farewell to the National Health Service because to bring our railways up to what is called the Berne gauge in terms of width and depth of bridges would crucify most of the other public services.
I suggest that we should take note of consultative documents from Europe. However, at the end of the day we should set out to achieve a policy which suits us best. Our objective to a certain extent is open trade, open skies, and frontiers trading. However, it also relates to our need; and that is the area where we should invest.
8.36 p.m.
Lord Beaumont of Whitley: My Lords, it has been an interesting debate. We have heard a fine introduction

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from the mover, and two notable maiden speeches. There has been quite a lot of agreement. With the exception of the noble Lord, Lord Lucas, virtually everyone now appears to be agreed that the growth of roads and car population is turning from what all admit to have been a boon to a menace.
The dangers are clear. Current transport policy and practice are one of the great threats to future sustainability, to which this country together with the rest of the world is pledged. In this policy the continuing emphasis on road transport is the real problem. There is the problem of pollution, the threats to SSSIs, areas of outstanding natural beauty, National Trust properties and so on.
Above all, I wish to pick out part of the report which deals with the replanning of neighbourhoods, because I believe that that is almost the heart of the problem. The growth of cars has perpetrated a theft of the time of the poor. Shops, hospitals and schools have retreated from serving human-sized neighbourhoods to serving huge catchment areas. At the same time it has encouraged a growth in the size of the institutions themselves because of their distancing which many of us have experienced as harmful to the quality of life.
It may be that the tide is beginning to turn. The Churches have always remained local. A strong rearguard action, largely powered from the Back Benches of the party opposite, is maintaining local post offices. Local cinemas are returning. There are plenty of good signs. But we need to build neighbourhoods where cars can be almost outlawed largely because they are not needed except for the old and infirm, where children can once again safely walk to school and where shops do not need acres of parking space.
One of the steps which needs to be taken is to entrust a lot of policy to local government of the right size. That means the preservation of the counties, because, on all save the most strategic routes, local government can have a feel for what is needed superior to that of Whitehall. Oxford, which was mentioned, is a very good example of what can be done, although I take the point made by my noble friend Lord Ezra about the difficulty with problems like the building of a new coach station in the north of London, on which I entirely agree with him, and the ability to find someone to be host to it. Together with the great trunk roads, that is an area where the Government must not only have powers but must enforce them.
Another step which is necessary has been mentioned by many noble Lords. It is the necessity to make the roads pay their fair share of costs. It is likely that the present European roads plan is in breach of the Treaty of Rome because it proves to be not properly competitive. It is subsidised, as are most other means of transport.
We must, of course, increase the attractiveness and competitiveness of public transport and encourage transfer of freight from roads to rail and water. The growth in the use of the latter is a welcome recent development, another good small sign. We must concentrate on rail. One of the immediate actions which should be taken is the facilitation of park-and-ride schemes for both trains and coaches. Stations should
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provide cheap, secure parking and should be helped to do so. The decline, partly as a result of the deregulation of the industry, in the use of buses in the countryside, must be reversed. If that means a subsidy, then it means a subsidy.
Above all—and this is my last point—what is needed is full information to the public as a whole. It is good news that the report on the Birmingham northern relief road is to be published and now we need the publication of the SACTRA report, which may reveal to us whether the strategy of the Government—and I hasten to add, together with other noble Lords, the strategy of all governments since the war—has been misconceived from beginning to end because of a wrong analysis of the whole problem. One point on which I should like an assurance from the Government in the course of the debate is that the SACTRA report will be published in full as soon as possible.
8.43 p.m.
Viscount Mersey: My Lords, as soon as we started this report, our committee found itself stuck, I feel, between an irresistible force and an immovable object The irresistible force is the motor
car which confers a greater freedom of mobility on our people than ever before. The immovable object is that same motor car, stuck in a traffic jam. To eliminate the jam, while simultaneously retaining our freedom, we sought a middle way: a happy medium, a golden mean. My concern is: is it really possible to have a middle way that is golden, or is it more likely to be made from fools' gold? That is the central dilemma.
The middle way is one of making private transport more expensive and public transport cheaper and better. We cannot go further than that. As the noble Lord, Lord Gregson, who is not with us today, said to a witness: "No politician hoping for election could ever mount a platform and say 'I plan to ban you from driving from London to Birmingham'". No democracy could do that. But we can penalise and above all we can charge.
We can charge the motorist in two ways. There are caveats attached to any system of charging motorists. The first was mentioned by my noble friend Lord Elibank. It is that if we charge him too much for using the motorways and trunk routes, we will merely divert him on to country lanes and make congestion worse than ever. A second caveat is that if we charge the motorist in a painless manner—for instance, by a smart card which he can buy when he fills up with petrol—the perceived cost will not be great and the charging will not deter. As one of our witnesses said, something unpleasant should happen to the motorist when he buys his road-pricing voucher—perhaps a series of high-pitched bleeps, increasing in volume, and a rather prominent display of money, a running total of money being displayed beforehand.
We can also charge motorists for parking; that is a top-class deterrent. If spaces are limited and the few spaces available are hideously expensive, driving into city centres becomes well nigh impossible. The most telling proof of that comes from the island of Manhattan

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where even the president of the Chase Manhattan Bank no longer drives to work. Parking there is too scarce and too expensive, even for him.
Within the European Union, both the Netherlands and Denmark have draconian parking restrictions. The result is that many commuters now park and ride. They drive to their local station, park and ride in by train. However, there is another caveat here, touched upon by the noble Lord, Lord Beaumont. This works, provided that people feel happy to leave their cars unattended all day. Once those peripheral car parks become magnets for vandals, the attraction of park-and-ride disappears. It is a little worrying that at Brussels airport nowadays there are two types of parking: ordinary and protected. The latter has barbed wire, floodlights, bars and guards and, of course, it costs more.
Even when it is safe, however, park-and-ride is by no means the only solution and its success is limited. In the Netherlands, traffic is still increasing. The achievement is merely that the rate of increase is decreasing. That is something, but it is not really sufficient for a small country where the problems of limited road space are no longer confined to the cities. Within the whole area bounded by Amsterdam, Utrecht and Rotterdam, which I think is called the Randstadt, there is no room to put another motorway. It is no longer a question of "not in my backyard"; there are no backyards left. The same applies to the whole of the Ruhr. I must remind noble Lords that the German railway system is already the most subsidised in Europe. So the solution does not necessarily lie in spending yet more money on the trains. It is extraordinarily difficult to find the golden mean for sustainable mobility.
It becomes even more difficult when one moves into the area of freight. We took evidence from TNT and we learnt what a cut-throat business it is in. Factories now operate on a "just-in-time" basis. Components for their products made away from the main factory are, as it were, on conveyor belts from the word "go". If any part of the belt jams, then so does the whole production line. There is no leeway because there is no warehousing.
The conveyor belt today is most likely a truck on a motorway. It will endeavour never to run empty and it could be running anywhere in Europe. TNT has expanded throughout the Union. It is a successful company of road hauliers. I found it interesting that the company is also keen to transport by rail, if the conditions are right. But conditions are not yet right, as noble Lords will know.
Freight transferred by rail has gone outside the control of the company concerned. There is no guarantee that it will arrive on time. For that reason only five per cent. of our freight goes by rail and 95 per cent. goes by road.
I agree with the noble Lord, Lord Bancroft. Of course greater investment is needed. But even with greater investment on the Continent we have 17 per cent. of freight going by rail, still leaving a massive 83 per cent. to clutter up the roads.
I suggest that perhaps the 12 European rail monopolies tend a little towards the complacent. They cannot hope to compete with the free-for-all of road transport until they cease to be the monopolies that they
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are. I approve of our privatisation of rail. We are seeking to open up the network to competition. I would maintain that we lead Europe in that direction, though of course at the same time we need to invest more in rail. Let us hope that one day we shall have SNCF trains running in Germany and Dutch trains in Italy and that, most important, the likes of TNT will have their own fleets of trains as well as their own fleets of trucks running in every country of the European Union.
In this connection I am encouraged that the European Commission is pushing us to upgrade three main lines to high speed status. The lines are London-Cardiff; London-Edinburgh; and London-Glasgow, also known as the West Coast main line. Those, combined with the Channel Tunnel link, will help to make us pàrt of the trans-European rail network which will, one hopes, become competitive with road across the whole Union.
We have a long way to go. I wish to mention briefly one personal experience. Last month I sold 100 trees to our timber merchant in Midhurst, Mr. West. I asked him how he intended to transport them. He said: "Nowadays, I am afraid, by road. We used to transport by rail but a few years back British Rail withdrew that facility. They did not give any reasons". Why did that happen? I do not see how our railways could have turned away business in that manner. There must be a profitable way to carry timber by train—the more so when the alternative is more congestion, more greenhouse gases and more countryside smothered in tarmacadam. It is my hope that, with real rail competition in the future, that story will become a legend of the bad old days.
The central dilemma will not disappear even then. The dilemma is that cars are good. I cannot conceive of any 20th century invention that has given more freedom to our people than has the internal combustion engine. And that great freedom is not one that people will lightly forgo. Yet, if we are not careful, we shall run out of road space, grind to a halt and be hoist by our own petard.
Our committee has pointed the way with, we hope, some sensible palliative measures. Now we look to government to develop those measures and to produce a White Paper which contains a common transport policy that has within it the elixir of sustainable mobility. We wish them luck.
8.53 p.m.
Lord Pearson of Rannoch: My Lords, I join noble Lords in thanking my noble friend Lord Elibank and the other members of his sub-committee for producing such a magnum opus on the European Community's common transport policy and congratulate the two maiden speakers on their excellent and knowledgeable contributions to our debate.
As one of the few Euro-sceptics on your Lordships' Select Committee, I trust that I shall be forgiven if my contribution is a little less than enthusiastic about the policy proposed in the so-called communication. Before I move into what may be regarded as more controversial waters, I am sure that there is widespread gratitude, if only given the lateness of the hour, that your Lordships' inquiry sought evidence only on the communication's new themes of passenger and freight transport by road and rail. We are therefore spared on this occasion the

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duty to discuss the Commission's views on its traditional concerns in European transport policy, such as social policy, competition, working hours, maritime transport, inland waterways, air transport and pipelines. Given this depressingly ambitious range of the Commission's communication, it is not surprising that the committee restricted the scope of its inquiry to a relatively narrow field.
We have before us, I submit, an excellent issue upon which to judge how subsidiarity is working in practice. We also have a good example of the tremendous burden placed upon Parliament in its scrutiny of the Commission's activities and also of the way in which a few seemingly innocuous articles in the Treaty of Rome can allow the Commission to have the temerity to issue what it calls a "global approach" to transport.
As to subsidiarity, I notice that the report admits that some of the communication falls outside the legislative remit of the EU. I am bound to say that I consider that something of an understatement. I fear I also take issue with the report when it describes the extra subject matter as "helpful". If subsidiarity is to be taken seriously, would it not be better for us to reject point blank all improper proposals, even if they are only in a discussion document such as the one that the report considers?
In evidence to the committee, a representative of the Department of Transport several times emphasised the importance of subsidiarity, causing my noble friend Lord Elibank to remark that this showed "a certain nervousness about subsidiarity". The gentleman from the department replied,
"Subsidiarity will run deep. We shall have to see how that comes later".
That strikes me as a somewhat ambiguous statement, but all the evidence in the Commission's communication would seem to show that we shall have to wait a very long time, perhaps for ever, before we see subsidiarity as interpreted by tie Government in action.
Of course, as we so often find with the Commission, its strategy does not involve a frontal assault on national competences but instead a steady infiltration through existing avenues of policy. For instance, the implementation of the internal market (a matter I thought Parliament had dealt with some time ago) is becoming more and more the Commission's excuse for increasingly ambitious plans. The Commission's communication warns us that the magnitude of the task of applying the 1992 measures,
"should not be underestimated. The legislation contains provisions the application of which requires more than the simple deletion of … national regulations".
Furthermore, even as the Commission is warning us of this substantial task ahead it goes on to advise us that what it describes as "unanticipated problems" may require some type of initiative to move the Community on from the 1992 internal market programme. In addition, for the sake of harmonisation the Commission says that the Community may have to address such problems as,
"taxes and other charges, technical requirements, social, environmental and safety obligations, civil liability regimes … a Community framework for the charging of infrastructure, and possibilities for adopting a truly territorial system of taxation for heavy goods vehicles".
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The Commission wishes also to play a part in transport policy under the guise of economic and social cohesion. The communication states that,
'Transport services must be provided under conditions which promote the Community's social cohesion",
and that,
"Community and national actions are needed to ensure that the transport market contributes to the highest possible societal welfare".
What this will mean in practice, I fear, is the spending of British taxpayers' money on transport projects in other countries. To be more precise, from 1993 to 1999 £575 million of our money will, through the cohesion fund, pay for transport in the so-called poor four countries. My evidence for that is a Written Answer in the other place on 5th November 1993.
Nor are we likely to miss out on the social chapter costs of the common transport policy. In an obvious warning to Britain, sections of paragraphs 254 and 255 of the communication are foreboding. Paragraph 254 reads:
"At this point, it suffices to note that in responding to social pressures, some of them flowing directly from the liberalization associated with the completion and functioning of the internal transport market, authorities at national and regional level will find it difficult to act alone when their unilateral initiatives could prejudice the price competitiveness or operational flexibility of their transport enterprises relative to those from other Member States".
Paragraph 255 states,
"Second, on the other hand, measures taken in the context of the functioning of the internal market in transport services should reflect and be fully compatible with the Community's generally applicable social policies. Third, when social measures will affect the functioning of the transport market, particularly the competitive conditions of transport enterprises, they should be adopted whenever possible by the Community as a whole".
Even Community research and development initiatives about transport would take in safety, the environment, the social dimension and efficiency within what is described as, "a new integrated approach".
But surely the Commission's most favoured approach to new regulation is through health and safety standards. And here the communication does not disappoint us. The Commission envisages the adoption of a programme on driver education and behaviour, setting up a Community database to exchange information on road safety and a basic objective of promoting less aggressive driving. It is happy to admit that there are already some 50 basic directives harmonising requirements for vehicle characteristics but immediately looks forward to harmonising standards for, among other vehicles, buses.
I understand that at the next meeting of the Council of Ministers—it is perhaps next week—safety standards for buses will be discussed and a decision made by qualified majority voting. I gather that the Commission proposes that double-decker buses should have two staircases and that the minimum seat pitch (whatever that may be) should be changed to 65 cm. from 61 cm. Such regulations, if accepted, would seem to mean the end of the double-decker bus. With two staircases and fewer seats I understand that they will not be economically viable. Britain has 20,000 double-decker buses—far more than any other country in the

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Community; for example, Germany has only 1,000. Double-decker buses are, of course, of great value to the London Tourist Board and our tourist industry generally. Furthermore, we are now successfully exporting double-deckers to the Far East and, according to last Friday's The Times, to New York where they are proving very popular and are beating off fierce competition from local manufacturers. We are the only country in the Community with so much to lose by those regulations. It must be said that French and German bus manufacturers have a great deal to gain by them.
Will my noble friend on the Front Bench give the House an assurance that the Government will fight those regulations? Will he also explain to the House what further action they can take if they lose the eventual qualified majority vote? But most importantly, can my noble friend explain to the House how it is that, a year after the legal adoption of the doctrine of subsidiarity, this country finds itself having to fight in Brussels, under the shadow of a qualified majority vote, about the design of a London bus?
Over the last 20 years the Commission has created more than 200 regulations and directives concerning the environment. The number per year appears to be increasing. There is evidence for that in an article in the Financial Times of 3rd March 1994 and I saw it with my own eyes in the evidence before your Lordships' Select Committee. Yet the communication says that, "existing Community legislation in this field will require updating and strengthening".
It proposes,
"fiscal measures to achieve Community environmental targets",
and that,
"the Community could further provide the framework for the use of
tax incentives".
It even wants Community action on noise levels around airports.
European businesses are already groaning under the weight of environmental laws which do not burden American and Asian companies. Would not my noble friend on the Front Bench agree that if we are to have true international agreements on the environment then they might better be formed through the World Trade Organisation rather than through the Brussels bureaucracy? Be that as it may, I have some difficulty reconciling the Commission's professed concern for the environment with its plans for vast trans-European networks. The plan for 34,000 miles of road over the next 10 years appears to be regarded by many if not most serious European environmentalists as little short of a disaster. But even if those networks are necessary— which one rather doubts—is it really the job of the Commission to bring them about? I remind your Lordships that the single largest contribution so far to the integration of European transport —the Channel Tunnel—was achieved without the help of a single Brussels bureaucrat. Furthermore, in this country at least, there was no need for public funding.
Your Lordships' report points out that most of the proposed projects would have little to do with Britain; but it does not comment on the possibility that the British taxpayer would have to finance networks
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elsewhere in the Community. Surely if, say, Germany and Austria wish to build a motorway between them, then that should be a matter for them. I note the opinion of the Department of Transport in the report which states,
"We have the national view that we should wait and see how it goes. We are not as enthusiastic as some other member states have been, but we are short of being sceptical".
On this matter it would seem that the Government's policy is similar to that on a single currency.
I have already mentioned some of the cost to the British taxpayer of the Cohesion Fund, but what of the additional sums needed to reach the 68 billion ecu for the Commission's 11 priority schemes? The Corfu Summit presidency conclusions produced the usual vague fudge which said,
"As regards financing of networks, the European Council confirms that measures will be taken—if proved necessary —in order that priority projects do not run into financial obstacles which would jeopardise their implimentation".
Can my noble friend enlighten us as to what those measures might be? Also, given your Lordships' Select Committee's recent report on the extent of fraud in the Community, which devours 10 per cent. of the Community budget or at least £6 billion per annum and which it seems there is little we can do to halt, do the Government think it wise to entrust Brussels with such sums in the future?
I remind my noble friend that the price is paid, in every sense, by the public and, in this case, as I have demonstrated, largely by the British public. The report acknowledged the concerns and diversity of public opinion. But how are the public to be served by the process of consultation and legislation set out in the communication? As things stand it seems that the public already find it difficult to communicate to the Government their views about road building, public transport and the environment. Indeed, the Government are accused of not having a transport policy at all. I would have thought that any sensible transport policy will be well nigh impossible when decisions are made through the Commission, the European Parliament, the Council of Ministers, the Economic and Social Committee and the Committee of the Regions. What is more, the costs will escalate accordingly.
Of course I accept the case for some international agreements on the environment. But from the examples that I have quoted in the communication, it is clear that the Commission has so many opportunities for tightening its grip on the common transport policy that it makes a mockery of subsidiarity. By using policies on the environment, economic and social cohesion, health and safety, the internal market, research and development, social policy and external trade, the Commission can continue to pursue its disingenuous pretence that it is merely the facilitator of the common transport policy, while in fact it is pulling all the strings, including the purse strings.
I have listened to the whole of this debate and I have to say that it has been a largely domestic debate. I do not think that I have heard any noble Lord advocate a policy which could not be fulfilled nationally by this country. So I end by submitting that it should be up to

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national governments to decide what domestic arrangements suit them best in order to achieve their international obligations, and, in a properly functioning democracy, it is the job of Parliament, the public and the press—not of unelected bureaucrats in Brussels—to ensure that the Government devise policies which our people want, and that they carry them out.
9.7 p.m.
Baroness Hamwee: My Lords, I join other noble Lords in thanking the noble Lord, Lord Elibank, and his committee for producing a report which, I would have said before the last speech, reflects an almost complete consensus among the public. Perhaps we should be grateful to the noble Lord, Lord Pearson of Rannoch, for introducing a note of dissent into the debate.
There is a consensus that the use of the car needs to be reduced but it is perhaps worth reminding ourselves that, though the number of cars on the roads in this country is growing, that does not necessarily reflect a wider car ownership. There are more cars owned by the same number of families and families who have not had access to car transport continue not to have access to it.
The need to change public attitudes has been referred to and must be at the heart of this problem. The noble Earl, Lord Northesk, in his maiden speech, referred to the need for education as a process of change. I agree with that. I am an example of one who may be educated in the usefulness of the bicycle. But though I know intellectually what a good mode of transport it is, I am still unable to ride one. Education is perhaps not quite all, but it is important. Comparisons are made with drink driving. I find it notable that by and large the generation now in its early twenties or thereabouts does not drink and drive. That message has been learnt. It is a good example of how we can set ourselves on a course of cultural change.
We need to find comprehensible language. I mentioned yesterday to a number of people that we were having this debate today. When I used the term "sustainable mobility" a look of complete puzzlement crossed almost every face. Someone said, "Is that about perpetual motion?" Let us try to find a way of explaining the problems more clearly.
When people understand that we are talking about transport there are two main issues to which they increasingly refer. One is that of air pollution. I shall spend a little time on that subject because, if transport is to be sustainable, what is more important than that it should not stop us all breathing? We thought after the London smog which killed 4,000 people over a weekend in 1952 that smog was a thing of the past, but it is back. It is not so obvious. It is less visible and it is less obviously dirty but potentially it is just as lethal. In a way I find that even more sinister.
After the Clean Air Acts, Ministers assumed that the problem was over and, sadly, the Medical Research Council's air pollution unit and the Clean Air Council were shut down. We have lost a decade of research as a result. That has left us a little unsure about the effects of pollution. We know that asthma has reached epidemic proportions. It is the only treatable chronic disease that is advancing in western countries. It affects one in seven
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British children, it costs at least £750 million a year in lost production, treatment costs and social security payments and it kills 2,000 people a year. We must all have been aware of the combined problems of weather and pollution conditions over the last summer.
The Royal Commission on Environmental Pollution is to report at the end of this month and its report has been trailed as recommending very strongly a rejection of the Government's long-standing encouragement of the use of the private car. During its 18-month study the commission has made what has been described in the press as the first official attempt to tot up the environmental cost of the Government's policies. As I said, this is a trailer and we have not yet seen the report, but it appears to conclude that the effects of pollution from car exhausts on health, the contribution to global warming from carbon dioxide emitted by vehicles, the loss of land to new roads, the increasing number of accidents and other environmental damage will cost the country tens of billions of pounds.
It is not only cars which are a problem. We talk about public transport, but we need to remind ourselves that not every mode of public transport or every bus is clean. It is not just a question of heavy goods vehicles, although they may be the major culprit. It is not enough to promote public transport if transport itself is dirty. We need to call for the cleaning up of public transport whether it is deregulated or not.
My noble friend Lord Beaumont has referred to the need for information. He mentioned it in the context of the reports on road planning, the SACTRA report and the debate on cost-benefit analysis. I understand that the publication of the SACTRA report was promised in May to be "in due course". Like him, I hope that the Minister can tell us that "in due course" is quite near.
Information is needed too on the issue of air pollution. We need monitoring and the dissemination of information. This country has a real shortage of air pollution monitoring equipment in population centres. I believe that most of our monitoring network is in rural areas. That is important in tracking the effect of pollutants on plants and agriculture, but it does not do a complete job. We have the smallest number of nitrogen dioxide monitoring stations per head of population in the Union. However, the monitoring which does take place shows that children in the UK regularly experience levels of pollution that are of concern or, to put it another way, have been shown to cause damage in other countries.
The Government paper on the UK strategy for sustainable development refers to targets, simply stating that targets for controlling pollution existed. We need new targets and action to meet them. It is a shame that the Government did not take the opportunity in that strategy to set targets at which we could aim. If the Government themselves are not to set targets then the strategy itself states that other agencies will have to do so. It suggests that local government has a significant role. Indeed it does, but it needs the backing and co-ordination of central government action to be. fully effective.

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The next matter which the public almost invariably mentions when one talks about transport, is that road planning tends to move a jam about two miles further on down the road. We must all be aware of proposals which seem to have no objective other than shifting congestion from one place to another not very much further away. The report itself refers—in quoting Mrs. Thomas of Surrey County Council, whom I shall shortly be able to refer to as "my noble friend" when she joins us on these Benches—to the "cascade" down from Department of Transport roads to other roads at county level.
Paragraph 64 of the report refers to a matter which I endorse very fully. It draws attention to the existence in many other countries of a strong level of regional government and also powerful city authorities which have been of importance in developing popular local initiatives. The report says:
"A widely-held view of local authorities in the United Kingdom has been that they are provided with neither the powers nor the resources to implement the policies they are being encouraged to pursue".
With a nice degree of understatement, it concludes,
"and we do not think that this view is entirely an illusion".
The report refers to evidence from the Association of County Councils and the package approach and the need for that to be fully understood. It is also refers to the need for authorities to have the ability to implement it. One quotation taken almost at random states that it is absolutely impossible to explain to the man in the street why we can build a £10 million bypass but cannot put a set of traffic lights in to solve pedestrian or safety problems. Many of your Lordships will have had that sort of experience.
I agree with the reference that has been made to the carrot and the stick. Over the years I have come to believe that it is necessary to have the carrot a little ahead of the stick and not merely in physical terms, with the donkey in the middle. Unless the carrot is in place I do not believe that the stick can be entirely effective.
Mention has been made of road pricing, a matter in which I am very interested, but both the disincentives and the incentives need to be sufficient. The noble Viscount, Lord Mersey, referred to non-residential parking. I wonder whether the lack of parking will prove to be a greater disincentive than road pricing to people driving into city centres. As prices increase, people will find means to pay those charges and it will probably be the people one would most want to discourage who will drive into the centre of a town and use their car there rather than those who really need to have access to a car.
There may be scope for further exploring other incentives, such as the way in which we in this country (and others) use the incentive of imposing a different excise duty on unleaded fuel as compared with leaded petrol. Three years ago the Royal Commission on Environmental Pollution recommended the use of a fuel duty differential in favour of low sulphur fuel. Perhaps such an approach could be pursued. The royal commission also endorsed grants for fitting particulate
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traps to new buses. There must be other methods—small and discrete in themselves—which we could explore which would have immense effects.
Other countries have sought to use incentives. Germany has used incentives and grants to encourage vehicles to be correctly modified. The Germans were the first to take advantage of the opportunities provided by the EC, with their adoption of limits on gas pollutants by fiscal means. They raised the annual duty for cars which met the current standards while lowering the duty for cars which anticipated new standards. That is why they got well ahead of their own targets for meeting such standards.
One cannot argue against the principle of the polluter paying, but it is a complex problem and we risk suggesting that one might have the freedom to damage the environment if one can afford to pay. That is not what we are aiming for.
The first time that I attended a meeting at the Department of the Environment, the Minister referred to integrated transport as "a bus outside a railway station". The thinking has moved on somewhat, but I echo the importance of inter-relationships and the real need for integrated planning, as endorsed by the report.
On the question of railways, at which the debate has merely glanced, I am reminded of the meeting of the Christophersen Committee this Wednesday. I hope that the Minister will be able to reassure us that at that meeting the Government will press for funding of the West Coast route, to which reference has been made in the debate.
I believe that the public mood is open to change. It is up to the Government to provide the leadership and the political will to which the noble Lord, Lord Elibank, referred. I agree absolutely with my noble friend Lord Ezra about the detachment of the Department of Transport and the Government as reflected by their comments in the report. I agree also about the need for commitment and urgency. My noble friend said that the Government should express their preferences. I say that the Government should come off the fence and use the same sort of language as the grandchild of the noble Lord, Lord Bancroft.
9.24 p.m.
Lord Clinton-Davis: My Lords, the noble Baroness, Lady Hamwee, rightly referred to her problems with bureaucratic and Euro-jargon and cited a specific instance. I well remember a reference in a paper that emerged from D-G III, the department dealing with industry and competitiveness, in 1985. It referred to non-material resources when what it meant was workers. It is that type of thing which arises not merely in the European Commission but in government generally, and a greater effort should be made to eschew that type of thing which only confuses and causes the public to be sceptical.
I should like to start by congratulating the two maiden speakers on their engaging, well-informed and humorous contributions. I hope that we shall hear from them many times in the future. The noble Earl referred to a better informed and educated public, and suggested that one of the ways to achieve that was through the

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driving test. That was an extremely interesting proposition. I am a little doubtful about whether the driving instructors would measure up to the severe challenges which he posed to them, but it was an original idea.
When the noble Lord, Lord Quirk, referred to the bold concept of minding the gap, in the context in which he was speaking about having more languages I could not help feeling that the French might have construed that as, "Mind the GATT", but at all events both maiden speakers made extremely interesting speeches.
I should like to thank the noble Lord, Lord Elibank, and his colleagues for their comprehensive report. I am glad that they eschewed the idea of taking on a much wider remit. That was wise indeed. In his equally interesting speech, the noble Lord referred to the issue of subsidy; of it being essential to improve public transport; and that much more was required than is currently the case. I largely agree with that, but it has to be seen against diverting funds, as he put it, from the almost grotesque amount that is allocated to the road budget, to other forms of public transport.
I worry a little about subsidy. I mention this in passing only because this is about the only thing upon which I will commend the Government. Subsidy in the field of aviation has been a bitter blow to those of us who want to see a sensible aviation policy emerging from the European Union. The activities of the Commission in sanctioning heavy subsidies not just to Air France but to Olympic and TAP gave a poor service to the cause for which the Commission purports to stand.
I stand four square with the Government in the attack that they propose to make on that decision in the European Court of Justice. I wish them, and others who are challenging the decision, well, because if we want to have a sensible and efficient aviation policy operating in the European Union, it is no use permitting inefficient airlines to survive by that route; and, more than that, they should not embark on cost-cutting exercises, as Air France has done, armed as it has been with those subsidies to the great disadvantage of its unsubsidised competitors. However, aviation was not the subject of the report, and I do not wish to enlarge upon that any further.
It is different however in terms of rail transport, because here we are not dealing with head-to-head competition among member states or artificial barriers to trade, as we do in aviation. For that reason, there is a great distinction to be drawn between the forms of subsidy to which I have just alluded.
The noble Lord emphasised, as did many other speakers, the need for the Government to produce a coherent White Paper on public transport. I wish that they could. I believe that it is like expecting a large family from a mule. Nevertheless, I award colleagues who have spoken in the debate with a prize—perhaps an Olympic medal—for optimism.
Having made a slight attack on the Government I realise that I have made an important omission, which I shall correct at once. I welcome the noble Viscount in making his maiden speech as a Minister. He has previously answered Questions but he has not spoken in
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a debate in his capacity as a Minister. I have had many debates with him and look forward to many future debates with him when he will be on this side of the House and I shall be on that side. However, I wish him happiness and joy in the few months ahead in trying to correct the Government's appalling transport policy.
The noble Lord, Lord Campbell of Croy, made an interesting comment on the need for pedestrianisation. I have heard the noble Lord speak previously on this topic, unhappily with great experience, and we respect his views very much. I believe that we should deploy more thought to the points that he raised.
I turn immediately to the work of the Select Committee and to the communication by the Commission to the Council. Many criticisms have been made of it. I endorse the views of those who have spoken that there is something of a disconnection between the concept of sustainability in the environment and the transport programme, particularly in terms of road transport. On the other hand, no one has said that we must recognise the fact that the Commission is dealing not only with the central powers and member states inside the European Union but also with the peripheral countries. If the internal market is to mean anything—and transport must be a vital ingredient of achieving that internal market, a point which the noble Lord, Lord Pearson, appears to have omitted in his considerations of the matter —we must think in terms not only of the wealthier countries within the Union but also of the poorer peripheral countries. Although I believe that in some measure the Select Committee was right in saying that this matter is not directly of concern to the United Kingdom as much as to other countries on the Continent, in terms of that element of the completion of the internal market and of ensuring that it works successfully it is still important that we have a common transport policy.
Of course, the common transport policy was supposed to have been put in place by 1970. The decision of the European Court of Justice in the case brought by the European Parliament against the Council to the effect that Ministers had languished in the performance of their treaty obligations eventually brought Ministers to recognise what those obligations were. Even so, and even though the court insisted that the common transport policy should be achieved within a reasonable time, we are still a very long way from achieving that ambition.
At paragraph 76, the Commission—and this is referred to at page 8 of the report—sums up two of the important issues which have figured largely in this debate; namely, charging and infrastructure. Paragraph 76 states:
"One of the important reasons why imbalances and inefficiencies have arisen is because transport users have not been adequately confronted with the full costs of their activities and because the construction of transport infrastructure has been lagging behind what was needed … As prices do not reflect the full social cost of transport, demand has been artificially high".
That sums up the issue.
When I was both transport and environment commissioner, my efforts to pursue that theme were marked, I fear, by delaying tactics and obfuscation on the part of many of the member states, including the

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United Kingdom. And yet as long ago as early 1985, one of the first meetings that I attended as a commissioner was with the European Round Table — a group of European industrialists headed by the then chairman of the Swedish Volvo company, Mr. Gyllenhammar. At that time those industrialists were arguing that there was a need for a policy in transport infrastructure to deal with what they called the missing links. Sometimes they were remarkably un-ideological in their approach. They said: "Public capital will be in short supply and it will need to be supplemented by private capital in some respects, for example, where there is a missing link which is not likely to attract public finance but which is nevertheless vital. That is something which has to be tackled." I thought that that showed a remarkable insight into the problems which confronted European transport infrastructure policy at that time. It is a pity that it has not been developed.
Of course, it is true that my colleague Mr. John Prescott was arguing for that partnership between public and private capital five years ago. More recently, the Government have set up a committee to investigate those possibilities. The Opposition parties are working on similar projects. It is a pity that the idea has not been given a fairer wind.
It is fair to add that, since those days of 1985, the Commission has undertaken much more research and analysis in dealing with those issues. What is now required from the transport Ministers, or perhaps more accurately the finance Ministers, is not more rhetoric but certainly more action if we are to achieve anything.
As stated at paragraph 5 of the report, the Commission itself has gone far beyond the communication. I know that that will greatly concern the noble Lord, Lord Pearson, but I welcome it. It has produced instruments on trans-European combined transport—an extremely important element which should not be forgotten in the debate—and on road networks and inland waterways as well as proposing guidelines for trans-European networks. It has also provided an action programme to improve access for people with reduced mobility. I am sure that the noble Lord, Lord Campbell of Croy, will welcome that.
I believe that these are the anxieties of a European Union. I do not believe that all these issues can be dealt with singularly by saying that everything must be dealt with on the basis of subsidiarity. Of course, the noble Lord, Lord Pearson, does not like the European Union. He is not prepared to give an inch to the concept that we need, for the benefit of completing the internal market, if for no other reason—and there are many other reasons—a proper integrated transport policy. Therefore, the real test is whether Ministers will have the political will and foresight to advance those policies. I hope so but I doubt it.
The major contribution of the communication is to emphasise the inter-relationship between environmental and transport policies. They are complementary. It may fall short with regard to many issues but it has made a major contribution in this regard. I do not agree with the noble Baroness, Lady Hamwee, when she casts doubt on the polluter pays principle. What else is there? I
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recognise the deficiencies pointed out by the noble Baroness. But it is written into the Single European Act and into the Maastricht Treaty, as is the fact that pollution prevention pays. One must deal with such issues at source. I see that the noble Baroness wishes to respond. I give way.
Baroness Hamwee: My Lords, I am most grateful. I apologise for taking up the time of the House, but I feel that I really must put on record the fact that what I was attempting to do when I referred to the issue of the polluter paying was not to say that I disagreed with it; indeed, I very much agree with that approach. However, I sought to point out that it is a vastly complicated subject and that it may be a little too easy just to suggest that if one can pay then that is the end of the matter.
Lord Clinton-Davis: My Lords, I understand the point made by the noble Baroness. However, I do not have time to embark upon that particular debate.
Perhaps I may now turn briefly to some of the conclusions and recommendations made by the Select Committee. One of the most important features to arise was the evidence put before the committee of the huge and apparently insatiable demand on the transport infrastructure which has been heavily weighted towards the motor car. We have had increasing congestion and it looks as though that will continue, with networks reaching saturation point in many instances.
The Government's response has been to undertake a huge road reconstruction programme dealing somewhat marginally with it recently by paring it down a little. But they have essentially ignored the evidence that that additional road space is incapable of meeting the demands of the present, let alone the future. Their failure to come within recognisable distance of that in the commitments that they undertake and to ensure that the country begins to invest as much in public transport as most of our European competitors —and, indeed, our fellow member states—represents a major indictment of the Government over the years.
The Government also stand condemned for not recognising the importance of an integrated transport policy. Minister after Minister says, "I don't know what it means". Everyone else understands what it means. The committee understands what it means, the Dutch Government understand what it means and are implementing an integrated transport policy, and certainly the Commission understands what it means; but not Ministers in the Government. Perhaps I am mistaken. It is possible that this Minister does understand that we need to have a policy in the field which is complementary as regards the different modes of transport. I shall not go into a definition of it now, but it is remarkable that Transport Minister after Transport Minister has cast doubt upon the concept. Yet it is vital to an understanding of transport policy as we reach the 21st century. I hope that the Minister who is to respond to the debate will at least trouble to find out what it can mean in practice. I recommend that he observes what is happening elsewhere in Europe, especially in Holland.
Environmental costs cannot be valued in balance sheets in similar terms to operating costs. A very simple example of that is the driver-only provision which we

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now have on buses. Of course, it is cheaper for the bus companies. The payment of salaries for conductors is measured in balance sheets. But is it better in terms of congestion? Is it in fact better in terms of protecting the environment? Those factors are left totally out of the equation.
As Transport 2000 has expressed it, I believe in a more coherent and environmentally sensitive transport policy. I shall not go into the issue of pricing at any length this evening. A number of interesting concepts which require additional debate have been advanced. I hope that we shall have such a debate in the very near future.
So far as concerns public transport, I entirely agree with the noble Lord, Lord Elibank, and the committee, in that investment must be directed away from the roads in large measure, though not entirely. We certainly need to change the priorities of transport policy in the direction of public transport. To deal with the problems of environment and congestion—that is, sustainable development—the report, at paragraph 47, gives emphasis to the fact that:
"Transport policies simply will not work unless public transport systems are fast, attractively priced compared with the car, ubiquitous, clean, well-marketed and … reliable".
That goes to the very heart of the issue.
The report calls for a major reallocation of urban road space to public transport. The question raised as regards compatibility with the Government's deregulation, privatisation and local government policies is an issue which is deserving of a debate in itself. Suffice it to say that I cannot see—I agree with the noble Lord, Lord Mountevans, here—how privatisation of the railways is relevant to the present problems of this country in terms of transport. What we need is not fragmentation but unification. We have had a hugely expensive exercise costing something like £700 million in terms of just promoting privatisation without providing any additional services whatsoever. It is a complete and utter waste of time and I believe that deregulation will have a similar effect.
I must say one last word and that is on the question of a transport policy. I welcome the call made by the Select Committee for a White Paper on transport policy. It is necessary to set out the transport policy that is appropriate for this country for all modes, and to include objectives, financial arrangements and practical implementation. It will be forthcoming from a Labour Government.
9.46 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My
Lords, I should like to begin this evening by congratulating the Select Committee on its report and my noble friend Lord Elibank on initiating this debate. Many of the issues raised by the Commission communication and examined by the committee go to the heart of transport policy and increasingly affect our daily lives. The committee has been admirably thorough in its selection of witnesses and in its efforts to establish how our European partners are addressing the issues. The final report is clear and persuasive.
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The debate this evening has been interesting and extremely worth while. I welcome the contributions of all noble Lords who have spoken this evening. I should particularly like to congratulate the two maiden speakers. The noble Lord, Lord Quirk, might have enjoyed only a five day career in your Lordships' House so far but he spoke with admirable clarity and wit, a consequence no doubt of his slightly longer career outside your Lordships' House. My noble friend Lord Northesk made a far-thinking speech concentrating on the driving test and the driving licence. However, I feel that we are not quite ready for some of his more imaginative ideas on grandfather rights; but I welcome his contribution, nonetheless. I hope that we shall have the opportunity to hear from both noble Lords extensively in the future. I also take the time to thank the noble Lord, Lord Clinton-Davis, for his kind opening remarks.
I now return to the report itself in which two points stand out clearly: first, the question of transport growth. The Select Committee is right to give prominence to this issue and every noble Lord who has spoken this evening has also done so. Growth in demand for transport throughout this century has been a striking phenomenon. It has in recent years, as the committee made clear, increased the pressure on our road and rail networks and faced local communities with some unenviable choices. Forecasts of future growth in demand for transport present a formidable challenge and we intend to address that challenge.
The second clear message from the report is the Select Committee's recommendation that the price of road transport should be raised in order to meet environmental and other external costs, and that this price should so far as possible be charged at the point of use. For the committee that is an unavoidable conclusion from its analysis of transport growth, and a conclusion for which it demonstrates a wide measure of support. The Government recognise the force of this argument. In our response to the committee's report, we referred to the sustainable development strategy published by my right honourable friend the Prime Minister last January, which stated our recognition that,
"there are good grounds for increasing the price people pay for road use in so far as current prices do not reflect wider social and environmental costs".
These are far-reaching and complex questions. The report addresses them boldly, and we have had a stimulating debate. In setting out the Government's position, I recognise that in the relatively short time available I might not be able to do full justice to all the issues raised in the report and by noble Lords this evening. I accept the point that the report concentrates on United Kingdom domestic issues and that, with the principal exception of my noble friend Lord Pearson, noble Lords have similarly addressed themselves principally to domestic issues.
In relation to the European question which my noble friend Lord Pearson raised, the Government recognise the importance of subsidiarity and will continue to resist Commission proposals which are not justified. The importance of subsidiarity was also stressed in the

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conclusion of the Transport Council of Ministers, which considered the Commission's communication on sustainable mobility of June 1993.
Perhaps I may respond to the question of the noble Baroness, Lady Hamwee, who asked whether the Government support the inclusion of the West Coast main line modernisation. The answer is that we support its inclusion in the list of priority projects.
The question of traffic growth is the dominant theme of the Select Committee's report, and indeed of any sensible consideration of transport policies. It may help if I give some illustrative figures. At the end of the 1940s fewer than 30 billion vehicle miles were travelled on British roads. By 1960 that figure had doubled; it doubled again before 1970 and again by 1993, when more than 250 billion vehicle miles were travelled. On the basis of our current forecasts, we expect that traffic to increase a great deal further.
Those striking figures show the response of our society to growth and prosperity. The link between economic growth and transport growth is clear and forms the basis of our forecasts.
The noble Lord, Lord Beaumont of Whitley, and the noble Baroness, Lady Hamwee, asked specific questions in relation to the publication of the SACTRA report. The committee submitted its report to the Secretary of State towards the end of May. The normal practice is for SACTRA reports to be published together with the Government response. The report is a substantial document and the technical issues addressed are extremely complicated, as the noble Baroness recognised. As would rightly be expected, the department and Ministers are giving it full and careful consideration. The report and the Government's formal response will be published together when Ministers have completed that process. It would be wrong for me to give any response before that time.
The consequences of traffic growth are plain to see in the physical and social shape of our country. Towns and cities have been reshaped to accommodate the motor car. The road network, although increased in length by less than a quarter since the 1940s in response to the eightfold increase in traffic, has improved immeasurably in quality, particularly by the construction of some 2,000 miles of motorway. Ease of transport has opened a wealth of opportunities for people in the fields of employment, consumer choice and recreation. We have also seen significant increases in emissions of harmful pollutants and carbon dioxide, which have an obvious impact on the environment.
That complex mixture of gains and losses defines society's relationship with the motor car, which is perhaps not always as loving as that of my noble friend Lord Lucas of Chilworth.
The Government should not interfere without good reason in the personal decisions of individuals. Nor must we put at risk the competitiveness of British industry. We need to find a balance between enabling people to enjoy the opportunities presented by ease of access and protecting the environment for ourselves and future
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generations. That was the essential theme of the transport chapter of the Government's sustainable development strategy which I mentioned earlier.
The noble Baroness, Lady Hamwee, raised the question of air quality. I can tell her that the Government issued a consultation paper entitled Improving Air Quality last May and we aim to issue full conclusions before the end of this year.
The strategy contained in the sustainable development paper highlighted a number of areas where the Government are taking action in an attempt to strike the right balance. Our national roads programme, recently reviewed and concentrating on bypasses and improvements to existing road corridors, aims to reduce congestion and divert traffic from the most sensitive areas.
Lord Campbell of Croy: My Lords, will my noble friend give way? When he refers to "our national roads programme" will he confirm that it applies only to England?
Viscount Goschen: My Lords, I fear that on the question of application to Scotland I shall have to give the noble Lord an answer in writing, if he will permit me to do so.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend. I do not expect a statement on Scotland. However, it is important that it should be made clear that when my noble friend refers to a "national roads programme" that programme does not apply to Scotland and Wales. That is the point. It is not that I expect to hear some statement specifically on Scotland.
Viscount Goschen: My Lords, I note the point that my noble friend makes. I shall endeavour to acquaint myself further with that issue.
Our approach to vehicle regulation, working with our European partners, has been to aim for substantial reductions in harmful emissions: the consequence of 1993 standards, which effectively required catalytic converters on new petrol cars, will be significant reductions in overall emissions lasting well into the next decade—even despite traffic growth. Further tightening of the limits from 1997 has been agreed, and yet further reductions will be negotiated for the year 2000. In addition to those measures, the Government aim to encourage improvements in less polluting forms of transport. During the current financial year around 40 per cent. of total government spending on transport is being devoted to improving public transport. Our policies of increasing private sector involvement in the financing and operation of public transport have borne much fruit in terms of improved services to the public and exciting new projects. We confidently expect that rail services will become more attractive both to passenger and freight customers through greater involvement of private enterprise.
The sustainable development strategy recognised that new infrastructure and new technology would not by themselves provide answers to all our problems. New approaches are needed. One such is the new planning guidance issued earlier this year by the Departments of

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the Environment and Transport—the note PPG 13, which I was pleased to see received a warm welcome from the Select Committee. PPG 13 has many aims, which can perhaps be summarised as locating new development in patterns which reduce the need for travel and encourage less polluting choices. It will be an important complement to other measures: in particular the new 'package' approach to local transport planning. Together those measures emphasise the role of local planning to address transport problems. Many of the most striking illustrations of good transport practice in Europe are found at local rather than national level. The Select Committee's findings in Munich and Antwerp seem to bear this out. The package approach and PPG 13 together provide many of the tools that local authorities will need to apply lessons that may be learned from Europe.
Other new approaches to transport problems include the principle of attaching more of the environmental and social costs of travel to the price that road users pay. This is a principle to which the Select Committee attaches great importance; and as I mentioned earlier it is one which the Government broadly support. Moreover, we can demonstrate the Government's commitment to the idea by pointing to a specific policy. Last year my right honourable friend the Chancellor announced that road fuel duties were to be raised in future budgets by at least 5 per cent. above inflation, in order to encourage greater fuel efficiency and reduce forecast emissions of carbon dioxide.
This medium-term strategy of increasing transport costs is one of the most efficient and effective ways of reducing carbon emissions. It shows that the Government are prepared to raise the costs of motoring in line with the environmental impacts which motorists cause. But clearly fuel duty increases will not deal with every problem caused by traffic growth. Motorists can respond to fuel duty increases in ways which do not affect their travel demand, by buying a smaller car, for example, or maintaining their engines in better condition. Such responses are very desirable from the point of view of carbon reductions, but will not reduce congestion.
Applying in full the principle that the Select Committee recommends—of charging full external costs at the point of use—presents genuine problems. First, there is the problem of attaching prices to many environmental costs. Academics have come forward with a range of figures for different environmental impacts but we are still some way from a consensus. The Government themselves are conducting research into how far pricing of environmental impacts might be possible.
A second difficulty is finding a charging mechanism. I have already mentioned the limitations of fuel duties. Electronic tolling has many possibilities, as the Select Committee indicates. Our plans for motorway tolling will stimulate the development of this technology; we are also conducting research into the scope for charging in the cities as a means of reducing congestion.
The Select Committee report recognises those difficulties and acknowledges other important issues too, such as the use to which revenues are put and the
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importance of avoiding excessive traffic diversion when charges are not universal. Finding the right solutions to these questions would be a necessary condition of introducing measures acceptable to the public—a point which, again, I was pleased to see the Select Committee emphasised. Of course, there is an international dimension to those questions. The UK is not alone in addressing issues of charging full costs to users. The recent European Union directive on charging infrastructure costs is an important contribution.
Developing new approaches to solving transport problems is a challenge which the Government are pleased to take up. We have seen this process before, for example, in the privatisation of many transport industries and the involvement of the private sector in major projects such as the Channel Tunnel and the Heathrow Express. Just as we have developed new responses to the question of financing and risk-bearing of transport investment, so we have developed new responses to issues of traffic growth and its environmental consequences.
The Select Committee noted and approved of recent measures, including PPG 13; the Department of Transport's guidance to local authorities seeking transport programme funds; and the road programme review. The Government are grateful for the Select Committee's valuable report which has drawn attention to the importance of issues we face. As the report noted, public awareness of the implications of growing demand for travel and of the implications of measures which could influence the demand will be a key issue as further policies are developed in the search for sustainable mobility.
We have had a debate which has ranged incredibly widely from Greek roads to bus stations in Victoria, from acid rain in Norway to the passionate affair with the motor car of my noble friend Lord Lucas. However, the overriding, very strong message which has emerged from this important debate is the absolute necessity of addressing the complex issues of sustainable mobility. I can give the assurance that that is what the Government will continue to do.
Lord Pearson of Rannoch: My Lords, before my noble friend sits down, I do not wish in any way to test the patience of the House beyond endurance, or even to add to my noble friend's trials in his first reply on behalf of the department, on which I congratulate him. However, I put a number of questions to him which he has not been able to answer now and I hope he will do so in the normal way by writing to me. There was particularly one question. I believe that a meeting of the Council of Ministers is to take place soon. Can my noble friend say anything about the Government's attitude to

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the design of buses? Will the Government fight that to the best of their ability? Has my noble friend anything to say on that?
Viscount Goschen: No, my Lords, I cannot inform my noble friend Lord Pearson any further than I have already, otherwise I would have done so. I shall endeavour to find out more and write to him.
10.3 p.m.
Lord Elibank: My Lords, it remains for me to thank all speakers in the debate. I particularly enjoyed the
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speeches of my noble friends Lord Pearson of Rannoch and Lord Lucas of Chilworth who prevented any feeling of complacency creeping into the committee's deliberations. I should also like to thank and congratulate the maiden speakers on two very interesting contributions and also the Minister who was surprisingly positive on many of the recommendations we have made.
All I have to say in conclusion is that the changes demanded are great and the time in which to make them is increasingly short. I ask that our report be agreed to.
On Question, Motion agreed to.
House adjourned at five minutes after ten o'clock.

  GENOCIDE CONVENTION
  GENOCIDE CONVENTION
  MAASTRICHT TREATY: PARLIAMENTARY SCRUTINY OF LEGISLATION
  MAASTRICHT TREATY: PARLIAMENTARY SCRUTINY OF LEGISLATION
  MAASTRICHT TREATY: PUBLIC UNDERSTANDING
  MAASTRICHT TREATY: PUBLIC UNDERSTANDING
  FORMER YUGOSLAVIA: COSTS OF CONFLICT
  FORMER YUGOSLAVIA: COSTS OF CONFLICT
  JURORS: FINANCIAL LOSS COMPENSATION
  JURORS: FINANCIAL LOSS COMPENSATION
  CRIMINAL LEGAL AID WORK: PROFESSIONAL FEE CLAIMS
  CRIMINAL LEGAL AID WORK: PROFESSIONAL FEE CLAIMS
  DR. JAWAD HASHIM: PAYMENTS TO COUNSEL
  DR. JAWAD HASHIM: PAYMENTS TO COUNSEL
  HOUSE OF LORDS REFRESHMENT DEPARTMENT: MEAT AND EGG PRODUCTS
  HOUSE OF LORDS REFRESHMENT DEPARTMENT: MEAT AND EGG PRODUCTS
  OFFICIAL RECEIVERS: CONTRACTING OUT
  OFFICIAL RECEIVERS: CONTRACTING OUT
  CONCESSIONARY FUEL ENTITLEMENTS
  CONCESSIONARY FUEL ENTITLEMENTS
  QUEEN VICTORIA SCHOOL, DUNBLANE
  QUEEN VICTORIA SCHOOL, DUNBLANE
  EC MEMBERSHIP: COST TO UNITED KINGDOM
  EC MEMBERSHIP: COST TO UNITED KINGDOM
  FORMER YUGOSLAVIA: DEBT TO WORLD BANK AND IMF
  FORMER YUGOSLAVIA: DEBT TO WORLD BANK AND IMF
  LOCAL GOVERNMENT COMMISSION: SECOND REVIEWS
  LOCAL GOVERNMENT COMMISSION: SECOND REVIEWS
  LOCAL GOVERNMENT COMMISSION: FINAL REPORTS OUTSTANDING
  LOCAL GOVERNMENT COMMISSION: FINAL REPORTS OUTSTANDING
  LOCAL GOVERNMENT COMMISSION: FINAL RECOMMENDATIONS
  LOCAL GOVERNMENT COMMISSION: FINAL RECOMMENDATIONS
  EC WATER DIRECTIVES AND SUBSIDIARITY
  EC WATER DIRECTIVES AND SUBSIDIARITY
  URBAN PUBLIC PARKS
  URBAN PUBLIC PARKS
  CONSTRUCTION DESIGN AND MAINTENANCE REGULATIONS
  CONSTRUCTION DESIGN AND MAINTENANCE REGULATIONS
  MENTALLY HANDICAPPED: SHELTERED CARE
  MENTALLY HANDICAPPED: SHELTERED CARE
  ICEBERG LETTUCE
  ICEBERG LETTUCE
  SUICIDE AMONG YOUNG MEN
  SUICIDE AMONG YOUNG MEN
  LONG-STAY PSYCHIATRIC CARE PLACES
  LONG-STAY PSYCHIATRIC CARE PLACES
  SHORT-STAY PSYCHIATRIC CARE PLACES
  SHORT-STAY PSYCHIATRIC CARE PLACES
  ORGAN DONATION
  ORGAN DONATION
  EU: PREVENTION OF DISCRIMINATION
  EU: PREVENTION OF DISCRIMINATION
  POLICE FORCE REDUCTIONS
  POLICE FORCE REDUCTIONS
  GAME LICENCES
  GAME LICENCES