House Of Lords
Wednesday, 30th November, 1977.
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Sheffield.
Fish Farming
2.36 p.m.
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether any progress has been made in removing the inequalities between ordinary farmers and fish farmers, especially the legal disabilities from which the latter suffer.
My Lords, a submission by the National Farmers' Union on rating liability is being considered in the context of the Review of Local Government Finance. The Government look forward to receiving other specific proposals which the fish farmers intend to make in areas where they think the law needs clarification or change.
My Lords, while thanking the Minister for that reply and knowing that he has always been extremely helpful in these matters, I am rather distressed that we do not seem to have got any further. I should like to know whether any factual proposals have been put forward by any of the committees which were set up with regard to the alteration in legislation which is at present penalising the fish farmers?
My Lords, apparently the National Farmers' Union study is taking longer than anticipated. We do not complain about that because it is probably not an easy matter. However, I must point out that it is not a Government committee; it is a committee set up by the industry to have talks with the fish farming organisations which are being co-ordinated by the NFU. We are waiting on them.
My Lords, does the noble Lord's answer mean that the Government are taking no action at all with regard to fish farming, but are merely waiting to receive the advice of other people?
My Lords, I am not clear what action the noble Earl, Lord Ferrers, wants the Government to take.
My Lords, is the noble Lord aware that, although fish farming has much to commend it as regards producing extra protein, there are certain dangers in the establishment of intensive fish keeping in the rivers of this country? Usually such establishments are located high up the streams and the intensive keeping of fish means a considerable discharge of pollutant material from the intensive feeding. There is also the possible danger of disease. Moreover, these establishments are often on rivers which have valuable fishing in the lower reaches, and it is most essential that there should be adequate controls both from the Ministry of Agriculture, Fisheries and Food and from planning. As this development proceeds, will the noble Lord ensure that both these controls are adequately established?
Yes, my Lords, certainly. We shall take note of what the noble Lord has said.
My Lords, will the Minister consider that a little urgency should be attached to this matter, especially in view of the fact that the deep-sea fishermen are in deep-sea waters over their troubles and that fishing was mentioned in the gracious Speech? It is time that something happened.
My Lords, the fish farmers already enjoy quite a number of fiscal advantages. The Inland Revenue is prepared to look favourably on fish production for food, for taxation purposes. The fish farmers are eligible for selective assistance under Section 7 of the Industry Act. They can also enjoy and apply for grants under the Farm and Horticultural Development Scheme. As regards legal liabilities, the penalties have been increased under the recent Criminal Law Act against poaching. In Scotland farmed salmon is now excluded under the Salmon Industry (Scotland) Act 1976, and with stock and installations it enjoys the same protection under the law—in England and Wales under Statute law and in Scotland under common law.
Postage Stamps And Charities
2.42 p.m.
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will request the Post Office to consider a further issue of postage stamps to aid charities, and whether these could be made in a form more attractive than the previous issue.
My Lords, this is a matter for the Post Office.
My Lords, that is a reply of which we are all aware, and some of us on this side of the House might have expected a little more. Although scarcely thanking my noble friend for his reply, will he confirm that the designs for the Christmas issue of 1978 have already been approved? Why cannot the Government urge the Post Office to consider a charity issue for 1979, perhaps during the Christmas or Easter period? Would my noble friend not agree that there are at present many charities which are in grave financial difficulties and far more worthy of commemoration than the centenary of the Shire Horse Society which is to have a special issue of stamps on 5th July next year?
My Lords, I must apologise to the House and to my noble friend Lord Segal for my repetitious Answer. However, as my noble friend knows, the Post Office is not itself a charitable organisation and must therefore receive the extra costs involved in the issuing and selling of such stamps. My noble friend will be glad to know that the Post Office, in liaison with the National Council of Social Service, is studying another scheme relating not in fact to stamps but, I believe, to labels. Such a scheme would be simpler to administer and more effective as regards the financial result for the charity.
My Lords, would the Minister not agree that the most charitable thing the Post Office could do would be to reduce the cost of postage stamps, especially for Christmas cards?
My Lords, why cannot the Government urge the Post Office to organise a competition for the most beautiful designs for charity stamps, so that something a little more imaginative and attractive is produced than a wheelchair?
My Lords, I appreciate that the last stamp was hardly inspiring, but we cannot urge the Post Office to do anything. The noble Lord's appeal will be listened to.
Mr Robert Scanlon
2.44 p.m.
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action is being taken to determine the whereabouts and general situation concerning Mr. Bob Scanlon.
My Lords, the Government have taken all steps possible in the circumstances to determine the whereabouts of Mr. Robert Scanlon but, I regret, without success.
My Lords, I thank the noble Lord for that reply. Does not the noble Lord find it slightly disturbing that Mr. Robert Scanlon has been absent for some time; and although we do not have an embassy in Uganda, could we not make representations to those who have?
My Lords, I entirely agree that it is not only disturbing but deplorable that under present circumstances there are no means of finding out where Mr. Scanlon is, and there may be others. We are doing our utmost to find out and are following up every possible lead.
My Lords, for my edification could the Minister say who Mr. Bob Scanlon is?
My Lords, I wonder whether the Minister can help us on this particular question—because, as he will be aware, representations have been made by the family of Mr. Scanlon requesting information and help in tracing Mr. Bob Scanlon in Uganda. Can the Minister assure the House that Mr. Scanlon does not, in fact, have British citizenship, because I believe that this has led to much misunderstanding of the efforts which we are aware the British Government have made in this case? Secondly, has the Minister approached individual States within the Organisation of African Unity asking them to make representations to the President of Uganda on this particular matter?
My Lords, if I may, I shall first answer my noble friend Lord Blyton. Mr. Scanlon was a businessman working and living in Uganda who has inexplicably disappeared. In the interests of his family we have been trying to discover where he is and in what condition he is.
Dealing with the question asked by the noble Baroness, Lady Files, Mr. Scanlon renounced his United Kingdom citizenship at the British High Commission in Kampala on 25th August 1975. The record of that renunciation rests at present with the Home Office. It is true, as the noble Baroness has said, that his renunciation of British and Colonies citizenship and his acceptance of Ugandan citizenship in lieu of that British citizenship has not made it easier for us to try to help the family to ascertain where he is. The second point which the noble Baroness raised related to the attitude of the OAU countries. We are, of course, in contact at the United Nations and at the Commission on Human Rights with a variety of countries, including those that are members of the OAU. I know of no country in Africa or elsewhere which does not join this country in wholehearted condemnation of these barbaric acts in Uganda.My Lords, in addition to communicating with countries in the OAU, could there not be communication with the OAU itself on behalf of Mr. Scanlon?
My Lords, perhaps I may look into the possibility of a personal representation and request direct to the Organisation as such rather than bilaterally to a number of countries who, we know, are as exercised as we are about this and similar cases.
My Lords, does not the difficulty which we experience in this case illustrate the disadvantages we should have to suffer in a number of other countries if we were to withdraw British representation from them, as is suggested in the Think Tank's report?
My Lords, I think it does. The House will be aware that we terminated diplomatic relations with Uganda as a result of a long series of cumulatively disturbing and dangerous incidents. I think that the whole world has agreed that we had absolutely no alternative to what we did and continue to do. As to the implications of this matter in the wider consideration of British diplomatic representation in as many parts of the world as possible, I entirely agree with the noble Lord, Lord Hankey.
Public Services: Remuneration
2.48 p.m.
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether when deciding on the right levels of remuneration in the public services they will have more regard to the question whether in a particular service the strength and recruitment is below the establishment considered essential for the efficient discharge of its functions.
My Lords, the practice on salary determination in the public services generally, subject to the requirements of any national pay policy, is to fix rates of pay which will fairly remunerate employees and should enable those services to recruit and retain sufficient staff of the right quality to undertake efficiently the work required. However, if the noble Viscount has a particular area of the public services in mind perhaps he will write to me.
My Lords, may I ask the noble Lord to accept that I am not setting a trap for him this afternoon, although in general I am always ready to do so on an appropriate occasion? Will he agree that, when in contradistinction to a service which has no recruiting or manning problems, an essential national service is seriously under-staffed, it is a sign that something is seriously wrong? If that is so, will he not agree that the distinction is something that merits more consideration than it seems to be receiving in some cases today?
My Lords, I accept what the noble Viscount has said. This is why I hate to be political in many ways, but the Party opposite wishes to cut down public expenditure which will mean endangering jobs in many public services.
My Lords, is the noble Lord aware that, as I read it, the Question asked by my noble friend did not warrant the interpretation that the noble Lord has put on it? If a service is important enough to serve the nation and to have an establishment fixed, and it cannot reach that fixed establishment, my noble friend seemed to be saying that we ought to look to see whether or not the remuneration was one of the causes for not carrying out efficiently this essential service. There is no Party point on this. The defence and policing of this country are very important, and we ought to look at all their aspects. It could well be that remuneration is one of the reasons why they are not up to strength.
My Lords, may I say to the noble Lord, with all his long experience, that I believe that the pay settlements which I have negotiated in relation to the Civil Service have been fair and have been basically welcomed by the staff. All I did say was that it is all very well to talk about public expenditure cuts—like many noble Lords I hope not in this House, but other politicians in another place—but in the end it means a reflection on the numbers and will harm the Civil Service.
My Lords, can I ask my noble friend whether or not we can deal in special terms rather than in hypothetical terms? The terms "Civil Service" and "public service" as a whole have been applied to particular sections of those services.
My Lords, that is absolutely true. For example, the Fire Service, et cetera, are a matter for the local authorities. I accept that.
Fire Precautions In Residential Premises
2.52 p.m.
rose to call attention to the need to investigate fire precautions in small hotels and old people's homes; and to move for Papers. The noble Baroness said: My Lords, I am very grateful to have the opportunity of bringing this important matter before the House, and I hope that the outcome of this debate will be that some further action will be taken. When the Minister in the other House, Dr. Shirley Summerskill, spoke in regard to inspections and certificates up to 31st December 1976 she gave the following facts in columns 150 to 154 of the Official Report. She noted that 559 hotels which originally applied for fire certificates under the 1971 Act are known to have closed, though the reason for closures is not known. No figure is known for the cost of fire precautions up to 31st December 1976 for hotel owners. Up to the financial year 1975–76, £4 million in loans had been given.
Dr. Summerskill noted that reports from the local authorities indicated that only limited use had been made of this authority. I should like to know from the Minister whether the people really know about these loans, and perhaps he can tell me why they have not applied up to date. Of the estimated 37,000 hotels and guest houses in the United Kingdom— many, of course, housing elderly people—82 per cent. have applied for certificates, 52 per cent. have been inspected, and regrettably only 40 per cent. have been issued with a certificate, and 16 per cent. have reduced their accommodation so as to come out of the scope of the Act, which I think is a worrying factor.
As I understand the present situation, the Fire Precautions Act 1971 strengthens the law's provisions relating to fire precautions where hazard to life is concerned. A system of fire certificates has been introduced in certain places which were outside the scope of the Factories Act 1961, and the Offices, Shops and Railway Premises Act 1963. These include places of public amusement, residential premises, such as hotels and boarding houses, guest houses and very high blocks of flats where people may be especially at risk. In addition the Fire Precautions (Loans) Act 1973 will give local authorities discretionary powers to grant loans to people incurring expense in complying with the requirements of the fire authorities.
Obviously there is a financial problem with expenditure necessary to implement the legal requirements which is very prohibitive on restricted budgets of small hotels, voluntary organisations and the local social services. For example, they have little money at their disposal. For all these services the capital outlay has to be balanced against the benefits. It is often thought easier to contract out rather than meet the requirements.
I must quote an example of an hotel in Barmouth in North Wales where the proprietor decided that the cost of £10,000 for improvements was totally beyond his means, and in consequence he had to reduce the number of the guests in his hotel from 20 to six. Other hoteliers, I regret to say, have not been so lucky and have had to reduce their numbers altogether, or have been forced out of business. Closures are not just affecting smaller hotels. In Cardiff a 43-roomed three-star hotel was also forced to close, and the city suffered a net decrease in hotel accommodation of 300 rooms in 1971 as a result of the present legislation.
Many retired persons live in small guest houses and boarding houses, and, as I understand it, it is the Government's policy to keep the elderly people, so far as they can, in the community and not force them to go into either voluntary homes or those run by social services. Therefore, the cost of implementing the new regulations can be phenomenal. For an hotel in Argyll it was £27,000, and £10,000 for an hotel in Barmouth. In theory these should have been helped by the Fire Precautions Act 1973. It allows local authorities to give loans towards the cost of safety measures. In practice, for some unknown reason, local authorities seem unwilling to go out of their way to let people know that these loans are available. For example, in the seaside town of Rhyl three years after the introduction of the loan service, and before its existence became widely known, several businesses and hotels had been forced to close. Where the loan scheme was in operation penal rates of interest have been asked for. For instance, in Clwyd in Wales 18 per cent. per annum.
Despite the promises of financial assistance, there has in fact been very little. The only possible benefit has been the ability to set costs against profits for tax purposes. Many small hoteliers feel that during this period they have been unable to improve the amenities of their hotels while paying for the increased fire precautions. This puts them at an even greater disadvantage if they wish to have a Continental tourist industry.
The voluntary organisations are also able to quote examples of residential homes for the elderly and the handicapped that have had to be closed, or plans for new homes that could no longer be offered. The National Society for Mentally Handicapped Children, for example, recently closed a home in Liverpool because they felt it to be unnecessary; the fire regulations were too expensive. The major problem with the legislation is, however, the practical application. The Fire Precautions Act calls for the fire certificate to be issued having taken notice of the building and its potential fire hazards. Unfortunately the Act does not lay down statutory requirements to be met, and this of course makes for difficulties. The requirements for the building may be an arbitrary decision of a local fire officer. Like other human beings, fire officers will often differ in their likes, dislikes and preferences, and with few guidelines to go on it is hardly unusual that experts disagree.
I wonder whether the noble Lord who is to reply can say whether the Act can be amended so that we can have further instruments given to the fire officers to help them. May I take a factory as the easiest example I have been able to get hold of; it is a small engineering firm in Halifax. The owner wished to expand by the introduction of a spray bay. This needed fire fitted doors. The owner chose what he thought was suitable and set out what he could afford. His insurance company agreed and said that they were suitable. The factory inspector did not, and instructed that an alternative set were needed. As I said, the fire officer has the final decision. The fire officer came round but did not approve either set and said he would produce another report detailing a correct set of doors. The result is that the fire officer's report is still awaited, and this is three months later. In consequence there has been a loss of capacity in the factory and of employment.
When the fire officer makes his decision and it is implemented there is then the likelihood that he may be replaced—after all, they do change jobs—and the new fire officer is likely to have a different set of judgments about fire precautions. This could result in the certificate given by the previous fire officer being with-drawn on the arrival of the new one.
Voluntary organisations complain that some modern fire precautions are impracticable. The warden of an old people's residential home said that, while since the 1971 Act there had been no fire at his home, there had been 30 cases that is quite a large number—of elderly people having been injured as a result of heavy fire doors closing automatically, by spring-loaded fire hoses and by heavy fire extinguishers. Some of the injuries had been serious and the examples he gave me included broken hips and a broken femur.
Voluntary organisations also complain that in some ways the fire regulations make life intolerable for the elderly and infirm. If a heavy fire door must be opened to reach, say, the lavatory, the person concerned might not be able to reach it to open it, especially if he is in a wheelchair. A recent report was given to the DHSS; the Residential Care Review said there was a call that expenditure on fire regulations should not take priority over other facilities and should not cause such financial hardship that voluntary organisations would have to close clown.
The Abbeyfield Society, with which I am sure noble Lords are familiar and which does excellent work, is a voluntary body which has small residential homes for the elderly. It complains that, because it is not directly covered by the Act in that its homes are too small, it has to employ special fire officers of its own, and of course it is at the whim of other fire officers. As I said earlier, fire officers apply different standards to homes in different parts of the country. Abbey-field feels that while it is able to budget for increased precautions in new developments, it is extremely difficult to do so in older properties, with which the Society began originally, especially when it comes to putting in fire escapes.
I understand that a Home Office committee met to hammer out specific safety standards but regretfully was unable to agree on more than guidelines. I suggest it is time that fire officers and the other organisations concerned had something better than guidelines; in my opinion it should be mandatory. Abbeyfield is now forced to employ two full-time fire officers, both of whom feel that the Home Office should be more explicit in the regulations that are issued and should not be content with guidelines or leave the matter to arbitary decisions. Other complaints from the elderly and infirm concern lifts which are automatically put out of action on the sounding of the fire alarm; somebody confined to a wheelchair, for example, must be carried out of the building.
In the hotel and guest house trade examples have been quoted of fire doors at the top of stairs, and noble Lords have probably seen instances of this. Only the other day such a door was opened and a person, who obviously could not see through the door, and not knowing stairs were there fell down the stairs. This recently happened at a home in Rhyl when a small child went through a door not realising there were stairs on the other side. In the same town somebody was severely injured by tripping and falling through a glass panel in a door.
Although loans are available, they are hardly known about. For example, the Welsh Tourist Board, who I gather have taken a special interest in the matter, particularly from the point of view of small hotels, feel that not enough publicity has been given to this aspect and that loans are taken up, when they can be, at penal rates of interest. The present regulations are not specific enough and, as I have said, they allow for arbitrary decisions by fire officers. Different regulations often apply to different uses of buildings. Further, the system is operating very slowly.
In Wales, up to the end of 1976, only 54 per cent. of the hotels and guest houses which the Fire Brigade wished to inspect had been inspected and only 24 per cent. had been given certificates. The fire brigades and tourist boards disagree on the types of building that need certificates and, again for Wales, the Fire Brigade issued a figure of 3,000 hotels and guest houses while the Tourist Board put the figure at 5,000.
The voluntary organisations are concerned about the fire regulations and have called a special conference for 1st December. Anybody will be welcome to attend and I hope the Minister will be able to send a representative from the Home Office. All the voluntary organisations are perfectly willing to give the Minister any help regarding the reasons for wishing to make alterations, and I have with me a whole list of such organisations if the Minister would like to have it. Only today I received a letter from the National Corporation for the Care of Old People from which I will quote only one passage:
"The main hope there"—
that is, the National Corporation—
"for carrying out the work is that the registering authorities"—
that is, for example, the social services departments—
"in conjunction with the fire officers will agree a programme for spreading the cost over a period of years and for an increase in the fees"—
the fees of the people living in these homes—
"to absorb the annual cost which arises as a consequence."
I hope I have said enough to induce the Government to give me a helpful decision in regard to the action they will take in
future. I hope they will be able to send a representative to the meeting on 1st December so that they may have firsthand knowledge of the reasons why so many anxieties are caused. My Lords, I beg to move for Papers.
3.8 p.m.
My Lords, I wish at the outset to congratulate my noble friend Lady Vickers for adducing some very important facts. She has been brave indeed in attempting to put over what is a very serious problem concerning the fire protection of smaller businesses such as small hotels and old people's homes. This is not an easy subject with which to deal, but my noble friend has dealt with it admirably.
It is the custom in your Lordships' House to divulge an interest from the past or otherwise, if one has one. Some years ago, I was employed by one of the leading industrial fire protection engineering manufacturers and, as a result of that, I learnt about the different aspects of both machinery and fire. I assure the House that the training I received, even though I was on the sales staff of that very senior company, was severe. I treasure it to this day because, in the event of the slightest danger of fire, while I fear perhaps the worst, I know a little more than some about how to handle it. In my experience—though perhaps I am rather biased—the United Kingdom fire protection engineering industry produces some of the finest equipment the world could possibly use. We have the finest scientists who invent and test new chemicals for extinguishing fires. There is the equipment into which the chemicals go, and there are the management and the staff in the factories. They are geared to nothing other than finding the quickest and most efficient way for anyone to fight a fire. This industry is seldom heard of, but wherever we go we can always see its products. It exports a considerable amount. It produces fine products which are bought abroad, and at present there are, in particular, exports to the Middle East. This is a vital and important subject which we are debating. It involves many hundreds of thousands of people, as well as many small businesses and old people's homes throughout the country. I think it would be best if we were to divide the subject into two parts—first, the small hotels, and, secondly, the old people's and children's homes. I say that because the small hotel is a complete business on its own, and many are probably open for only a certain number of months each year. When considering the experts, the fire prevention officers, it should be borne in mind that our legislation is stricter and our fire prevention standards are far higher than in the EEC countries. I believe that this is important, not least because of the tourist trade in this country. Many people stay in our small hotels. It would be a serious setback to the tourist trade if a hotel did not have fire protection equipment and, as a result, tourists were either injured or lost their lives. The 1971 Act was introduced by the Conservative Party to strengthen the law relating to fire precautions where hazards to life were concerned. A new system of fire certificates, to which I shall refer in a moment, was introduced for certain premises which were outside the scope of the Acts covering shops, offices and factories. They were the Acts of 1961 and 1963, as your Lordships may remember. In this context, one should also include railway premises. The intention was to include places of public amusement and residential premises such as hotels, boarding houses and very high blocks of flats. In addition to that Act, there was a further Act, the Fire Precautions (Loans) Act 1973. This Act gave local authorities discretionary powers to grant loans to persons incurring expenditure in complying with the requirements of the fire officer and the Fire Precautions Act itself. We can deal with the latter in a little while. At this stage, I should like to refer to another person who is involved in the implementation of the Act; namely, the fire prevention officer, who, as a result of his training in fire fighting, is authorised by the Act to go into any premises and inspect them for fire precautions. He is the vital man; he is there to ensure that the Act is carried out to the fullest extent. These fire prevention officers, with whom I have worked and whom I much admire, go into buildings solely to find the weakest points where fire may break out. I have every admiration for the work they have done. Indeed, there is no knowing how much good work they have done and how many lives may have been saved as a result. I now want to refer to some figures relating to small hotels. I must apologise to the noble Lord, Lord Harris of Greenwich, as I have been unable to give him prior warning that I may ask some questtions on this. My figures may now be rather out of date, though I believe that, in general, the situation is the same now as it was in March. There may have been a slight alteration, though not much, I think. There are 37,000 small hotels and guest houses throughout the United Kingdom, and at present 82 per cent. of these hotels and guest houses have applied for a certificate. Out of 52 per cent. which have been inspected, only 40 per cent. have been issued with certificates. Your Lordships may imagine that there is an enormous job to be done here. The Act came in in 1971, and so implementation has not taken place all that quickly. What is even more alarming is the fact that 16 per cent. of those premises have reduced their accommodation so as to fall outside the scope of the Act. I say that this is alarming because this country is an attraction to tourists and we are short of small hotels, as well as large hotels for that matter. Thus, if hotels reduce the number of their rooms, tourists from abroad, as well as our own holidaymakers, may find that they are unable to come here on holiday because of lack of accommodation. We should now examine the reasons why this legislation has not been implemented in such a way as to meet what was required. There are certain factors which contribute to the slow implementation of the Act. First, we must look at the cost of fire prevention equipment. This equipment has never been cheap, but in inflationary times, as at present, small hotels and guest houses are faced with enormous costs, to such an extent that many of the people who run them feel that they cannot possibly continue in business. It has been said that fire protection can cost a small hotel anything up to £10,000, and that for a larger hotel the figure could be £27,000. In considering that cost, it must be remembered that some hotels are not open the whole year round. There must also be borne in mind the fact that hotels have other problems because of legislation which is weighted against them. For example, hotels may be inspected by a hygiene officer or a weights and measures officer. If the weights and measures officer does not agree with the measures used for serving drinks he can order the measures, which I believe cost £5 a time, to be sent back to the manufacturer. That means further cost to the hotel. The owners of these small hotels also have to maintain the fabric of the buildings. A preservation order may be put on a hotel, for instance. Thus the hotels are really up against tremendous costs. This matter of costs is always a problem for small businesses. Whenever legislation is passed in Parliament it is not the large businesses which suffer; it is always the small ones. Here, legislation calls for fire prevention equipment, which is vital to save life and limb, but which costs the small hotels far too much. We are everlastingly passing this type of legislation which affects small businesses. A further problem they have is the time fire prevention officers have in which to inspect their premises, and the length of time before they get a certificate—and it is here that I find certain rumours going around. My noble friend Lady Vickers mentioned the fact that one fire officer will go in, will have his survey dealt with, and so on, and will then retire or go on elsewhere, as a result of which a new fire officer will come in. He wants to win his spurs, so he doubles tip on his predecessor's report, though still in line with the fire prevention requirements; and so you are getting a confusion here. I wonder whether the noble Lord could possibly throw any light on this. I feel that if one fire prevention officer goes into a building and carries out a survey, that survey should stand and no other officer should go in there and start another survey, since that would only confuse the issue and, in the end, cause the hotelier himself, or the proprietor of whatever business it is, to withdraw and say, "No more. I am going out of business". There is the further problem, as I understand it (though I have only heard this from rumours), of local authorities saying that they will do fire prevention surveys and inspections. If this were the case I would find it very serious, because in my view no one but the fire prevention officer, with his training and experience, should survey any building, let alone issue a certificate. I am wondering whether the Government can throw any light on this subject. I gather, though, that local government officers have thrown it back on the fire prevention officers. I think that would be a confusing issue in itself. I have dealt with one or two of the difficulties, and have found that, probably throughout the hotel industry, the situation is confusing. Let me now, for a moment, turn to old people's homes. I wonder whether your Lordships know the weight of a fire door, and whether, if you were an old person, you would be able to open it—and a fire door has to be opened in a certain way—especially if you were in a chair, or having opened it, to get your chair through. Within this Act I find there are great weaknesses. It seems to be thought that the staff of an old people's home at night time (which is generally the time when fire strikes; it never seems to be the day time), when there may be only one on duty, could handle all those people through that door, whether they are in chairs or on crutches. I agree with the Fire Prevention Act. I believe its provisions should apply in all our private homes, but I think it has probably gone too far without anybody appreciating the difficulties in applying it. I know full well the weight of a two-gallon fire extinguisher. Try to lift one. It is not the easiest thing to lift. They say that two people can lift one. There are not generally two people on duty at night time. A foam extinguisher, which is used for fire and highly inflammable chemicals, can only be used upside down. In my training it was the most difficult thing to get a foam extinguisher up in front of my face to protect myself from the extreme heat in front of me; and yet we are asking the staff of a small hotel or of an old people's home to handle this equipment. I think that the Act, rather than dealing with two-gallon extinguishers, could be implemented with one gallon foam or one gallon water extinguishers, and that we could look at the situation. I should like to ask the Government whether we could look at the fire protection equipment, to see if it can be altered and made easier to handle. Certainly if it was made easier to handle we might be able to make it cheaper. So I feel that old people's homes must surely have a difficulty and that they will shut down if they cannot find the finance to cope with the fire prevention officers' recommendations. A further tragedy which comes into one's mind when dealing with this subject concerns children's homes. There are many people throughout the country who take in invalid children in order to look after them, but this Act forbids them to do so over a certain percentage. What we are saying now, therefore, is that, instead of these children being cared for in these smaller homes, these small homes will become non-existent because of the insistence of fire prevention officers that the Act should be carried out as it stands. I think this is a great tragedy. I believe that we should, somehow, try to modify this legislation. I feel I have said quite enough. Eighteen minutes is long enough and hot enough, and I am very grateful to your Lordships for listening. This is a subject which is very difficult. I do not think I could point a finger at anybody, including the Government, and say, "Why are you not implementing this legislation?" I believe it will take some years yet for it to be fully implemented. But what I should like to see, as I am sure some of my noble friends would like to see, is this legislation modified and made easier. If we can do that, then I am sure that this legislation will be implemented much more quickly and its provisions carried out much more quickly by the fire prevention officers and others.3.27 p.m.
My Lords, I, too, am very grateful indeed to the noble Baroness for raising this very important matter at the present time. There are one or two rather ironical comments one could make on some of the things which have been said. We are told that in this country our standards of fire fighting and fire protection are among the highest to be found on the Continent of Europe. This is a two-edged weapon, one might say, because on more than one occasion the noble Lord, Lord Gainford, who is going to speak after me, and I myself have raised the question whether it would not be possible to stop people from smoking in theatres, cinemas, et cetera, as occurs in, I think, every other European country I know. We have both always been told that it is entirely unnecessary to do that in Great Britain because the fire precautions are so well done that there is no danger of fire, whereas the point which the noble Lord and myself were trying to bring out was not the danger of fire but the danger to health from people smoking indiscriminately in theatres and cinemas.
Another point which interests me and which was raised by the noble Baroness is this. I was for a very long time one of the governors of the National Corporation for the Care of Old People, so I came across a good deal of mixed information about homes, in addition to which I ran an annexe to my department at the hospital which was, in effect, an old people's home. I think the thing that the fire protection people must have continually brought home to them (this has been said by both speakers this afternoon, but I can see no harm in repeating it a third time) is that fires frequently occur at night, when there is not a very big staff on duty. The fact that there is not a very big staff on duty at night is not due to people not wanting to have them but they cannot afford them. Therefore, it should be made as simple as possible for elderly people to find and manipulate the escape routes and the doors. As I have said before, most of these fires occur at night and if you have a lot of elderly folk being suddenly awoken by a fire alarm then they tend to be far more confused than a younger, normal person would be. You have to take great care that the fire escapes and the way to them can be easily found and that the doors are not too difficult to manipulate. I think that one noble Lord mentioned the question of fire doors being too heavy. It is a simple thing to happen, if you are frail, feeble and confused, that you cannot cope with heavy fire doors—and particularly doors which open on to a flight of stairs so that even though you can get them open you may perhaps be pitched down the stairs and are much more likely to be killed in that way than to be burned to death in the fire. These things are important. The fire precaution officer should bear them in mind when dealing with old people's homes and should not regard those homes as being in the same category as hotels or even children's homes, because children are more active and more able to do things than are these elderly folk. I do not want to go into a great amount of technical detail about the cause of fires in old people's homes, but one quite frequent cause is the habit that elderly people have of taking a cigarette when they go to bed. That is a difficult thing to stop. It is a horrid habit and, it seems to me, a dangerous and unpleasant one, but old people enjoy it. Quite a number of fires get started in that way and it may be that, by the time the fire is discovered, it has taken quite a big hold on the premises because it comes from a cigarette setting fire to bed sheets and it may be some time before the attendants are able to discover it. Another point I should like to make, one to which the noble Baroness referred, is that some kind of permanent or fixed guidelines or rules could be laid down so that individual fire authorities do not make different demands as to the various kinds of criteria required. I think, too, that once a home has been given a certificate of being safe it should not be changed merely because a different chap is appointed as a fire officer. I think that if we could get more of that sort of work done, it would make things easier. Of course, to achieve the ideal in old people's homes—and by this I do not merely refer to private voluntary homes but to places which are part of the National Health Service where elderly folk can stay for quite a long time—comes down, as it always does, to the question of money. You must be able to afford to pay the staff. If you can afford to pay the staff and to find them, then you will get rid of a good deal of the danger, but both of these things are rather difficult to do at the present time. Finally—and I do not want to go into any great detail of what has already been said—I wonder whether it would not be possible for there to be far more fire escape lessons, given both to the staff and to the inhabitants. After all, if you go on to a ship you get boat drill from time to time and you know what to do if there is going to be a collision or a wreck. I wonder whether more people should know what to do in a fire, where the fire doors are or where the escape routes are— and to be taught it rather than to pick it up by going round. That might afford some kind of protection to people when fire breaks out. It might make it easier to have fire precautions rather simpler and not quite so expensive as they are at the present time. My Lords, I have nothing further to say except that I can appreciate the danger in old people's homes and the fact that, if there is a really bad fire in an old people's home, then as things are at present the number of people who will be rescued alive may be very small.3.36 p.m.
My Lords, I rise first of all to thank my noble friend Lady Vickers for inaugurating this debate and to declare that I should gladly support her in any way I can in this debate or on any other occasion, and also to thank my noble friend Lord Long for having forced me to brevity because he brought up some of the things that I wished to speak about. Now I can leave them be, unless I should want to be unduly repetitive, which I do not.
I put my name down to speak today because, a little over five years ago, I was in ray work with the Greater London Council, working in the building regulations division and architects' department and working in connection with fire prevention and in assisting establishments to obtain their fire certificate. Mention has been made of the small hotel owners who have reduced the numbers of their guests. The reduction in order to become exempt has to be rather extensive because exemption is rather restrictive. I have here a copy of an application form for a fire certificate under the Fire Precautions Act 1971. I also have some photocopies should any noble Lord care to have one. It says on the first page of the form:To be exempt from the legal requirements for a fire certificate, means that there must be fewer than six people sleeping in that hotel, guests and staff included, and they must be confined either to the ground floor or to the first floor. To run a business on those lines is rather difficult. Many of the small hotels are really converted private houses. The first thing the owner has to do is to make an application. Unfortunately, he might think that he is exempt and then finds that somebody has told on him, and he gets a letter from the local authority to say that his premises need a fire certificate and asking him to apply for one quickly. He must then get one of these forms, complete it and send it in. Then along comes an inspector or some other authorised person. I never knew exactly what I was when I was doing this job—an aspirant for the job of a fire prevention officer, perhaps—but I was given a warrant card entitling me to go into all sorts of places, and have been involved also in the examination of cinemas and places of entertainment. The noble Lord, Lord Amulree, mentioned my previous inquiries. I remember coming in on a Question some years ago about smoking in cinemas. Then the business begins because the authorities will demand that drawings are produced. They may send a surveyor to make some plans of their own. But, on the whole, it is up to the owner himself to be responsible for the provision of plans of his house. Unless he is qualified and experienced in building surveying or architecture, he is going to have to bring in a professional to do it. That is a further expense that he has to consider. Having submitted the plans, he will find that they are returned with very interesting, helpful, coloured lines on them indicating which parts of the house require fire protection; for example, stairs, passages, and so on, and doors which should be made fireproof and kept shut at all times. There will be indications where there should be fire exit signs. I should also like to thank the noble Lord, Lord Amulree, for referring to fire escape drill in hotels. It is not often in an hotel that a member of the staff will refer to fire drill. This should be the responsibility of the management. I have heard of hotel porters who, once they have the guests comfortably installed in their rooms, promptly draw attention to the fire notices which are usually pinned on the doors. These inform the guests about fire exits, telling them where the nearest exit is. I should like to underline what has been said earlier, that the hotel owner has heavy responsibilities with all the matters he has to deal with: tax, licensing, hygiene and accounts. He is almost afraid of authority because of the further expense that may be involved. In defence of the building regulations, although they may seem harsh or severe, they are practical. London particularly has to be grateful for them. The rules concerning fire go back to 1666 after the famous Great Fire of London when architects like Sir Christopher Wren, and other people connected with building, were determined that such a fire should never again hit London. They took account of this in building regulations. Most of the buildings then were private. In the years to come—and especially in 1940—one of the things that saved London from greater destruction was the fact that buildings had been constructed in accordance with the fire regulations. Although many areas were destroyed by fire, the fires were contained and we never had a fire storm. When our Air Force bombed Germany, in Hamburg they had fearful fire storms caused by fire sweeping through old buildings. Many Governments on the Continent are trying to copy our ideas. The small hotel owner is in the ranks of the small private business which is vital for the tourist trade. I remember going into several hotels in the course of my work in the King's Cross area and, on walking away, I was met by travellers looking for hotel accommodation. They did not know who I was but asked me to recommend any hotels. I was able to give them one or two. There is an example of what a small hotel can do. People coming into London quickly do not want anything luxurious; they want something small, comfortable and central. They often come in at short notice and want to be able to book into somewhere like that quickly. In defence of authority, we have to be consistent but we are also sympathetic. The hotel owner who has problems will be told how he can best overcome them. But there is the matter of expense. There are loans or grants which are available. At the moment they may not be adequate, or it may take time for them to become available. I hope this debate will help in this direction. The hotel owner is almost in a vicious circle and it is nobody's fault. It is not the fault of the Government, the local authorities, the tax man or those in weights and measures. They all have to insist on the law being carried out. There is no such thing as a completely vicious circle; there is a way of breaking it. Usually somebody says something must be done, but nobody can work out how to do so. If everyone gets together, a way can be found to ease the situation. I am looking forward to what the noble Lord has to say on behalf of the Government. I repeat my hope that we will see something beginning soon."Notes on completing the application form for hotels and boarding houses. A fire certificate is required for any premises used as an hotel or boarding house if sleeping accommodation is provided there for more than six persons, whether guests or staff, or where there is some sleeping accommodation above the first floor or below the ground floor."
My Lords, before my noble friend sits down, may I say this: surely the best way to get things moving is for small hotel owners to receive grants to make hotels fireproof. Perhaps that is already done, but that is surely the best way to get things moving.
My Lords, that has been mentioned. Some grants are available but they are not enough. We need to make improvements on these.
3.49 p.m.
My Lords, I agree with what the noble Lord, Lord Gainford has just said, and we are indebted to the noble Baroness for raising this matter today. The response of the House has demonstrated that there is a wide recognition that this is a matter of some importance and, inevitably, a great deal of the time of the debate has been occupied by discussion regarding the situation affecting old people's homes. The noble Lord, Lord Amulree, and others, including the noble Baroness who initiated this debate, dealt with that particular issue.
Certainly it is a serious matter. In a period of a little over two years we have had two extremely serious fires in old people's homes. In December, 1974, in the fire at the Fairfield old people's home, in Edwalton, Nottinghamshire, 18 of the residents died. In January of this year, at the Wensley Lodge home for the elderly, in Hessle, near Hull, 11 residents died. In a situation of this character, it is right for two questions to be asked: First, whether it has been sensible to devote so much time, money and effort into applying the Fire Precautions Act 1971 to hotels and hoarding houses to the exclusion of other categories of premises, because I should make it clear, at the outset, that the Act does not cover old people's homes. Secondly, as the Wensley Lodge inquiry report asks, why should the proprietors of hotels and boarding housesLet me, then, at the outset set out our general approach to this issue. It would probably be agreed by most of those who have participated in the debate today that it would be right, when discussing the case for the introduction of fire precaution controls to any type of accommodation, to ask oneself what is the identifiable risk in respect of that category of accommodation. But, inevitably, that can be assessed only by establishing the losses caused by fires over a period of years. Having said that, let me take the case of hotels. There were serious hotel fires in Church Stretton and Saffron Walden in 1968 and 1969, in which 16 people died. Hotels, as I have indicated, are now designated under the Fire Precautions Act; but the reason for that, quite apart from the two fires I have mentioned which took place in 1968 and 1969, was that hotels in this country had been a major source of preventable fire casualties for many years and had not been subject previously to any adequate form of control. The noble Baroness mentioned the financial problems of, I think, an hotelier in North Wales; but certainly this applies to a number of hoteliers, in introducing these fire precaution controls into their premises. But I think we have to recognise—and the noble Viscount touched on this matter—that when people provide accommodation for profit (that is a perfectly reasonable thing for them to do) they have an obligation to their guests to take reasonable precautions to safeguard their lives. I think that is something we all recognise. In a situation of this kind—when human life is involved as directly as it is in this area we have been discussing today—it would be quite wrong to permit any form of complacency. Nevertheless, I think it is right to examine our priorities extremely carefully. Let me discuss, just for a moment, these two classes of occupancy: on the one hand, hotels and boarding houses and, on the other hand, old persons' homes. During the years 1971–74, before the Fire Precautions Act had really begun to affect the smaller premises, the number of hotel and hoarding house fires was just under 6,000. That related to an average occupancy level of some 400,000 guests. Old people's homes, on the other hand, accommodate about 160,000 guests at any one period of time. Therefore, other things being equal, one would look for a fire and casualty incidence about 40 per cent. as great as that in hotels, In fact, the number of fires, which is just under 2,500, is roughly in that proportion; but when the number of casualties is compared the situation is quite different. If we disregard the single casualty fires—which, as the noble Lord, Lord Amulree, pointed out, are often caused by people, particularly old people, smoking in bed, and sometimes caused by cooking and other accidents which the measures available under the Act for improved fire warning and means of escape can do virtually nothing to prevent, we find that the figure was not 40 per cent. as it would have been if the same proportion has been carried through, but only about 14 per cent., and there were only 15 per cent., as many fires in which there were a number of casualties in old persons' homes as compared with hotels. Overall, therefore, the situation is that fire problems in old persons' homes is one of a significantly lower dimension than in the case of hotels. This particular matter, the degree of relative risk, was touched on in the Wensley Lodge inquiry. Evidence presented by the Fire Research Station, which was accepted at the inquiry, suggested that elderly people are in fact safer from fire in old persons' homes than they are in private dwellings. That is an indication of another difference between old persons' homes and hotels: that is, the extent of effectiveness of the fire precautions which can be achieved without designation. The powers available to control fire precautions in hotels were negligible before designation—very limited indeed—but every old persons' home not only has to be registered with the local authority but is also required by regulations to take adequate precautions against the risk of fire. It is the practice for fire brigades to advise the registering authority on the precautions that should be taken. Although homes provided by local authorities are statutorily exempted from these controls, the same procedure is, in practice, generally applied in their case also—"… be required to provide higher standards for guests, who, generally speaking, are able-bodied and staying for short periods than are local authorities for providing accommodation for residents who are often seriously incapacitated by physical or mental infirmity?"
My Lords, I do apologise for interrupting the noble Lord: I fear I am going to prove my ignorance. What is the difference between an old people's home and an old persons' home?
My Lords, none at all: I am moving from one to the other. There is no distinction at all: it is the looseness of my language. I have dealt with the position so far as the local authority is concerned. I think that in the light of these factors our predecessors decided in 1972 that priority should be accorded to the designation of hotels over other classes of occupancy, such as old persons' homes. I recognise that it could be argued that, had some part of the fire brigade's time and effort which was deployed on hotels and boarding houses been devoted to old persons' homes, we might have been spared at least the Wensley Lodge fire; but, on the other hand, as a consequence of the work which has been done in the hotel field, we have in this country avoided other disasters. The noble Viscount, Lord Long, referred to our position and I think I would agree with him. We have a rather happy situation in this country compared with other countries.
Indeed, in this year alone there have been major hotel fires in both Amsterdam and Brussels. In Amsterdam 30 people died and in Brussels, 18 people, 13 of whom were British. Nor can one discount the potential danger of even a small boarding house fire: one cannot minimise the risk there. Only in 1975 was there a tragic fire in Arbroath, in which six people died. These are the real risks that are involved when people provide accommodation, and inevitably they are ones to which it was right for our predecessors to address themselves when they put the Fire Precautions Act through Parliament and made the designation orders. Certainly I think it is true that at least one problem was not foreseen in 1972: that was that fire certification would be so demanding, both in terms of the costs it would impose and of its demands on the resources of the Fire Service. First, if I may, let me deal with the cost, which was more than touched on by the noble Baroness who initiated this debate. So far as the private sector is concerned, the opportunity exists, at least to a limited extent, to recoup the cost of fire precaution measures by increased charges. Moreover, a great deal has been done to ease the financial burden which the Fire Precautions Act would otherwise impose. Tax relief is available on all expenditure on fire precautions required by a fire authority under the Act. And, under the Fire Precautions (Loans) Act 1973, local authorities may at their discretion make loans to enable the proprietors of small hotels and boarding houses to carry out the requirements of the fire authority, although I must accept that that provision has not been nearly as widely used as might have been expected. The noble Baroness raised the question of whether there was adequate publicity. I will gladly look at that point and discuss it with my honourable friend the Parliamentary Under-Secretary, who deals with the fire service on a day-to-day basis, to see whether anything more can be done so far as publicity is concerned. I think that it is a useful point which she raised, and I will gladly have the matter looked at. The noble Baroness and the noble Viscount also referred to the situation in which there could be unreasonable demands—I do not want to put particular language into their mouths, and I shall try to summarise their case as fairly as I can—made by a fire prevention officer when he looked at buildings. All I can say is that this matter is dealt with in the Fire Precautions Act itself. There is a right of appeal to a magistrates' court against what could be regarded as an unreasonable requirement. Section 9 of the Fire Precautions Act lays down this procedure, and anybody who feels that he has been harshly treated therefore has redress so far as the courts are concerned. There was another issue raised by the noble Baroness and the noble Viscount; that is, the situation in which it is said that a fire officer carried out a survey and then, after a period of time, another fire officer turned up, carried out another survey and imposed far harsher conditions than the first. The Home Office has, indeed, heard suggestions of this kind in the past, but I am bound to say that, despite the fact that we have asked for evidence, we have not yet received any. All I can say to the noble Baroness and the noble Viscount, and to anybody else who has information on this point, is that we would gladly look into such a case if we were furnished with evidence and would discuss the matter with the fire officers concerned. We certainly would not wish a situation of this kind to arise if it could be prevented.My Lords, I said that it was a rumour, rather than a fact.
My Lords, I am much obliged. Nevertheless, if any Member of your Lordships' House has information of this kind and passes it on to me, I shall gladly have the matter looked into within the Department and, if necessary, it can be taken up with the fire authority concerned.
Having dealt with the question of cost affecting people in the private sector, let me now turn to the public sector, because, clearly, any increased charges here must be met wholly from the public purse. At the present time of economic stringency, despite the suggestions made in the report of the Wensley Lodge inquiry, these resources cannot be stretched to allow fire precautions to be funded otherwise than at the expense of other developments; otherwise, there is no way in which one can maintain a proper control of public expenditure. The Fairfield inquiry was very conscious of this point, and in their report they used the following language:that is, old people's homes—"Excessive expenditure on fire precautions, particularly in existing Homes—"
In this situation, the Government thought it right to issue guidance to local authorities and, indeed, to fire brigades, emphasising that schemes should be devised for spending any available money each year to produce as much improvement as possible in fire prevention in old people's homes, with the aim of ensuring that all premises will be brought up to an adequate standard. Secondly—again, dealing with the public sector—I turn to the burden which the certification procedure imposes on the fire service. Although the initial fire certification of hotels and boarding houses is now probably somewhere in the region of two-thirds complete, there remain substantial arrears of work in some fire authority areas. While restrictions on manpower ceilings remain, the opportunity for the designation of other classes of premises will inevitably be limited. It would clearly be difficult, when many small hotels in all parts of the country have already been certified, to seek now to change the criteria for certification. It would, indeed, be regarded as wholly wrong by those who had brought their premises up to a proper standard, if suddenly the Government changed the basis of the standards applying to accommodation of this character. That being so, we certainly do not think that it is an appropriate policy to follow. What we want to do in the situation that I have described today is move on to designate other classes of property, as soon as this is possible. We want to extend the Fire Precautions Act on a phased basis, as soon as resources permit. The central problem which we have before us at the moment is to select what are the priority areas—the areas of greatest risk so far as death and injury are concerned—and then decide to make these the next candidates for designation. The Wensley Lodge inquiry recommended that old persons' homes should be picked out for this purpose, and this question is now being urgently examined by a committee set up by the Central Fire Brigades Advisory Council, which is reviewing the present working of the Act and making recommendations as regards any future possible extensions. I hope that we shall receive a report on this fairly shortly, and I can assure the House that my right honourable friend the Home Secretary will make his decision on this matter as soon as possible thereafter. In the meantime, I will ensure that all the points made in our debate today are passed on to the members of the committee, so that they are aware of your Lordships' views on this matter."could result in fewer newer Homes being built, and some existing Homes might have to close if too stringent requirements were imposed on them. Accordingly we take the view that some degree of risk from fire has to be accepted in homes for the elderly. The difficulty lies in drawing the line between precautions which are vital to safety and precautions which, although contributing to a reduction in fire risks, are too elaborate to warrant adoption."
4.9 p.m.
My Lords, may I thank the noble Lord the Minister for a much more helpful reply than I thought I would get, and for the consideration which he has given to the points raised. I should also like to thank the noble Viscount, Lord Long, the noble Lord, Lord Amulree, and the noble Lord, Lord Gainford, for their support. Perhaps I should have made it quite clear at the beginning that this debate has nothing to do with the present situation. I should not like it to be thought that it had anything to do with that, and of course the Motion was put down long ago. I want to put it on the record that this debate is completely separate.
I feel that many of the points raised will be very helpful, and I hope that we shall soon see the designation of old people's homes which are not at present designated under the Fire Precautions Act 1971. This point is most important, particularly for voluntary organisations, and I am very glad that the noble Lord is to draw the attention of his right honourable friend in the other House to the points raised. One point which the noble Lord did not mention was whether any Government representative is to be at the conference on 1st December which is being organised by the National Society for Mentally Handicapped Children and other voluntary organisations. They will discuss the problem and may be able to give further information which will be valuable. There is no need for the Minister to answer. Perhaps he will let the Society know whether a representative can attend. I therefore thank very warmly the Minister and those who have joined in this debate, and I beg leave to withdraw the Motion. Motion for Papers, by leave, withdrawn.European Communities And China
4.10 p.m.
rose to call attention to the proposed framework agreement on trade and co-operation between the European Communities and the People's Republic of China; and to move for Papers. The noble Earl said: My Lords, last week, on 22nd November to be precise, the Council of Ministers of the European Communities authorised the Commission of the Communities to negotiate an agreement with the People's Republic of China. The Community and its Member States are thus, in one way or another, involved in the development of political and economic relationships which concern more than one-third of the people of our planet—the people of Europe and the people of China.
The British people enjoy a unique position with the People's Republic as the custodian of Hong Kong until 1999. This enables British firms, universities, research institutions, leaders of cultural and intellectual life and even, I may say, Members of Parliament to set the pace in developing a relationship that should transcend the geographical separation and remoteness of our civilisations. As I observed on a recent visit to that country, the Chinese people are now embarking on a new stage in their development under Chairman Hua Kuo-feng.
After this visit I concluded, first, that the Chinese Government would continue to pursue foreign trade policies which will lead to the strengthening of the European Community politically, economically, industrially and militarily and that the proposed agreement would be an important step in the developing relationship between the Chinese and Western Europe. Secondly, I concluded that the restoration of Mr. Teng Hsiao-ping to his previous appointments would lead to the selective adoption of modern managerial skills and the pragmatic acquisition of technology and capital equipment. My third conclusion was that the Chinese Government intend to modernise their defence equipment and equip their armed forces with the most advanced equipment available.
Fourthly, there seemed to be identifiable opportunities for Community firms in the following sectors: raw materials' exploration, extraction and refining, chemical fertilisers and petro-chemical plant, insecticides, modern technology for heavy automotive equipment—the railways are most important and, indeed, railway technology generally—aircraft, defence equipment and also, perhaps, opportunities for deep-sea drilling equipment, coal mining equipment, computers and electronic components. Fifthly, it seemed clear to me that the Chinese, in order to balance their trade, might well agree to make available, on fair terms, raw materials needed by the West.
Sixthly, it was clear that the Chinese Government attached great importance to the Community's Lomé Convention, a method of trade and aid which China supports. There may well be here unexplored areas for co-operation between China and the European Community on the one hand and the developing countries, particularly in Africa but generally the ACP countries, on the other.
China and Europe, therefore, meet one another in new and, in my view, unique conditions. The Chinese leaders know that European traditions assume that mankind has more important aims than the purely material. We Europeans understand the sacrifice that all the Chinese are making for the political and economic progress of China. There is pride in China—pride in self-eliance—but China finds a Europe still struggling to unite after two catastrophic wars, still struggling to create an effective European Community, an aim wholly supported by the People's Republic.
The Chinese took the initiative in diplomatic recognition of the Community. Such recognition now calls for a response and a new partnership between us. Europe must, in my view, approach the Chinese people with the same humility which Chairman Mao advised in his famous speech on the 10 major relationships.
"It must be admitted"—
Chairman Mao said—
"that every nation has its strong points. If not, how can it survive? How can it progress? On the other hand, every nation has its weak points. Some believe that socialism is perfect, without a single flaw. How can that be true?"
asked Chairman Mao. Well, the Chairman may not have lived long enough to identify the flaws in Socialism, but he has prepared the people he led for the relationship which the European Community and China are about to build. Chairman Mao instructed his people in these words:
"Our policy is to learn from the strong points of all nations and all countries. Learn all that is genuinely good in the political, economic, scientific and technological fields, and in literature and art. But we must learn with an analytical and critical eye."
We who, I believe, have the responsibility for the political leadership of the European Community must give expression to and support the organisations that will be required to implement what the Community's Council of Ministers has now called for. Together with Chinese leaders, we must examine the particular needs of China and see where an association with Chinese manufacturing organisatons would be fruitful. The noble Lord, Lord Nelson of Stafford, and others are, I believe, doing just that. At the same time, so that the agreement should not be one-sided, let us examine the needs of the Community, particularly for raw materials, some of which can well be met from Chinese sources. The Chinese have assessed the results of recent geological surveys in the South-West of China and Tibet. Indeed, during my recent visit Tibet was described to me as the "future boom rooftop of the world". As I say, Chinese officials gave me the impression that their country would look favourably on the possibility that China might help to supply Europe's raw materials in the medium to long term.
The Community must, in my view, show a generosity of spirit and commercial wisdom which will make a lasting success of Sino-European friendship. China, as we know, is not a consumer society—at any rate, in our sense of the word—but I have seen in Chinese factories in the Northern Provinces and in the oilfields of Taching the first signs of an incipient consumer society. Chairman Hua, quoting Chairman Mao, has exhorted China to accomplish the comprehensive modernisation of agriculture, industry, national defence, science and technology in order to bring their national economy to the front rank in the world before the end of the century. "Learn from Taching", "Learn from Tachai" (the agricultural commune), "Learn all that is best in other nations", are the frequently expressed slogans of today's China.
My Lords, the Chinese people are being asked to achieve a degree of industrialisation in 23 years which took the nations of Europe more than 100 years. In a country endowed with up to 900 million souls—a great human asset—such industrialisation will be achievable only by the most methodical organisation. Industrialisation on this scale by the Chinese people in their chosen time scale will require unique working arrangements with firms and other institutions of the Community if these same firms are to prosper in helping the Chinese people themselves to prosper.
If the proposed agreement is to be implemented, a greater degree of political and economic co-ordination will be required than possibly in any other human project. In the financial sphere, the scale of the projects will require the European Investment Bank, commercial and merchant banks in each Member State, to raise substantial capital sums to finance these projects. I ask this very important question—not of noble Lords, but perhaps rhetorically: Would the Chinese Government exceptionally permit European capital to play its part in assisting the development of the Chinese economy? That is a very important question which the Chinese must answer.
Industrialisation and the innovation which accompanies it will require reciprocity in the acknowledgment and use of intellectual property, such as royalties. The agreement with the People's Republic must contemplate a more substantial relationship than has been the case in previous framework agreements of this kind. It should be a framework in which the Chinese can make substantial steps in helping to meet the needs of Community firms, particularly, as I said, for their raw materials, such as ferro-manganese, antimony, platinum, tungsten, perhaps even uranium, to name a few. At the same time these and other Community firms can take the necessary steps to help the Chinese to implement their plans. All this will take time.
But in the short term the Community must make arrangements to accommodate China's exciting traditional manufactures, in which they show great ingenuity, until such time as the Chinese people have acquired new product and material capabilities. The Community may well he called upon to make unique and imaginative changes to make a success of this challenge. For example, there could be a need for a standing conference on the development of the economic and the commercial relationship which we contemplate. This could be a conference consisting of Chinese ministerial and official representatives, the chairmen and overseas directors of large companies, bank experts, Commission and Council representatives and also perhaps nominees of the European Parliament and the Economic and Social Committee. The conference could be chaired alternately, say, by the Chinese Ambassador to the Communities in Brussels, and perhaps by the Commissioner for External Affairs. It is noteworthy that it was my right honourable friend the former Commissioner for External Affairs, Sir Christopher Soames, who inaugurated the present talks between the Community and the People's Republic.
The Commission might also now consider the establishment of a permanent delegation of the Community in Peking, such as they have in Brussels and as also exists in Washington so far as the Community is concerned. Such a delegation might differ from traditional diplomatic establishments in that it would house temporarily the senior executives of Community firms who were negotiating or implementing contracts in China. Firms and trade organisations would make contributions for these services. Among the tasks of this delegation in Peking would be the preparation of the next meeting of the suggested standing conference. Such a conference could decide, among other things, the broad principles of the contracts which Community firms would negotiate with Chinese corporations. The conference might bring together Community firms with the management, financial and technological skills required by China. It might also meet to deliberate and define the involvement of the Community in one industrial sector at a time. I should be grateful to the noble Lord, Lord Goronwy-Roberts, if he would be prepared to make comments on these suggestions. I believe that the scale of investment which the People's Republic will be undertaking each year—considerably larger than the budget of the European Communities—calls for special measures of this kind.
The European Parliament last July, in its debate and resolution on the Community's relations with China—and I am glad to see another Member of the European Parliament entering the Chamber—considered it desirable for the agreement to go beyond the customs administration provisions laid down in the standard draft framework agreement with State trading countries, and that it should contain arrangements and instructions for close and more diversified economic relations between the Community and the People's Republic. All six political groups in the Parliament were unanimous about this.
The leaders of China are looking for a response from Europe. Given equal technical and commercial conditions I am sure China is prepared to contract work to European Community firms preferentially because of their desire to strengthen Europe politically, economically and defence-wise. What will be Europe's response? It is fundamental that in defining the European response the efforts of Community firms should not be stymied by political hesitation once Member States are agreed about the response. It is fundamental that a political impulse should be given to Europe's relationship with China that engenders confidence, encourages initiatives, results in increased understanding and reaches for mutual esteem.
China is not a conventional Socialist State. It is more attractive than many other Socialist States. In a world where deeds and objectives count as much as philosophy, Europe and China will find that they have similarities and, if I may use the word, complementarities. In the historical conditions in which Europe and China find themselves, they are well matched—if they will but forge the relationship.
In moving for Papers, may I express to your Lordships the hope that neither Her Majesty's Government nor any other Government will be found wanting when China tests British sincerity towards that great country. I am perfectly happy with the views of the noble Lord, Lord Goronwy-Roberts, about this. He will not be found wanting. As for China's sincerity and self-awareness, Chairman Mao wrote on the 10 major relationships:
"China is inferior to other countries in many respects and so has no reason to feel conceited".
Let our approach to China be characterised by the same humility.
My Lords, the outcome of the Commission's negotiations, and their recommendations, will be of the first importance. Directors of the Bank of China have visited institutions of the Community earlier this year. The Chinese Electronic Society, for example, spent 40 days in the Community this autumn. Now Mr. Li Chiang, the Chinese Trade Minister, is happily with us in this country. So I think we should be hopeful of good progress. The Chinese are earnest about their relationship with Western Europe; I truly believe that. They would like to see a more effective European union. We should not, in my view, disappoint them, any more than we should in this respect disappoint, say, our Atlantic allies. I hope these few ideas may help our respective Governments in their task of bringing our great peoples of East and West together. I also hope that other Members of your Lordships' House may make some constructive suggestions in regard to the contents of the proposed agreement, if not today perhaps on other occasions. My Lords, I beg to move for Papers.
4.32 p.m.
My Lords, I am sure noble Lords from all sides of the House would wish me to thank my noble friend Lord Bessborough for his elegant, instructive, informative, and most constructive speech on the forthcoming trade agreement between the European Communities and China, and for drawing the attention of your Lordships' House to the political and commercial importance of this prospective agreement. Indeed, the enthusiasm of my noble friend is shared by all others who have had the opportunity to enjoy the hospitality of the People's Republic of China in recent months, and I believe that no one more suitable could have initiated the debate than my noble friend, as a former Minister of Science and Technology and as a current and distinguished Member of the European Parliament.
At different stages of the world's history, over centuries, there has been an interchange of the products of Chinese civilisation with the West, with intermittent withdrawal and enclosure of China behind its vast frontiers. China being the world's longest existing identifiable country is now, after a short period of withdrawal following the Cultural Revolution and other political and military events, once again taking an interest in the possibilities and prospects for better commercial and trade relations with the West. It should be pointed out that, although the West has also shared cultural and philosophical links for several centuries, the particular part of the West with which China is considering dealing, the European Community, is very young. After all, the European Community has only existed as a politically recognised organisation for the last 20 years. So I think that, in terms of years, we can indeed look humbly to the long established country of China. This new contact between the West and China is indeed much to be welcomed. The re-opening of Western relations with China, particularly since 1970, has intensified in the last two years and has been marked, first, by the entry of China to the United Nations. Then followed a succession of visits by distinguished statesmen to China and, more recently, the very important visit, in the context which we are debating this afternoon, of Sir Christopher Soames, the then Commissioner of the European Communities in charge of external relations, in 1975. Following that visit came the appointment of an Ambassador by the People's Republic of China to the European Communities. Then followed a further initiative, this time from the West—the visit earlier this year of a European Communities' delegation led by M. de Kergoulay. All these events have led to a more favourable climate for the development of relations between these two great areas of the world. No visitor to China can fail to be impressed by a sense of the immense potential and strength of the Chinese people; by their discipline and their service to their country. How often did we hear, "It is my duty". This was the constant reply to expressions of thanks. Their ingenuity and their skills have, as my noble friend has reminded us, been transmitted through centuries; and they are today carrying on the same traditions and expressions of their culture. It is clear that there are several areas of national life where the Chinese people could, if they so wished, benefit from the advanced scientific and technological developments of the West, and could step more rapidly into a modern industrial era. The lack of transport facilities—and I am not referring to the battle of cars versus bicycles—the lack of high-speed trains and aircraft, and the absence of the consequent facilities, the lack of means of communication, telegraph, telephone and so on, all contribute to the isolation of one part of the country from another, impeding a more general distribution of agricultural and other products. These are all aspects which could benefit from Western scientific and technological contributions. I need only enumerate such things as aircraft, in particular Concorde, railway engineering, which has already been referred to by my noble friend, other engineering projects, energy programmes and so on. In all these sectors, if the Chinese wish it, the West could make a great contribution. Here lies a decision of vital importance to the Chinese people themselves; to what extent and at what speed do they want to draw off some of the 80 per cent. of their population in the rural areas and involve them in the work of the cities and in urban industrial activities'? This is the great problem which the Chinese people have to decide for themselves. The vast untapped resources of raw materials within the frontiers of the People's Republic of China would and could provide opportunities for that sensible and fair basis of exchange which underpins the majority of commercial and trading agreements. The principles underlying the Chinese approach to trading agreements have been clearly expressed over and over again—self-reliance, no foreign debts, the preference for exchange of goods or commodities, a reluctance to enter into world banking mechanisms which is easily understandable after the dramatic and sudden withdrawal of Soviet technicians in 1960 and the breakdown in financial exchanges which left China heavily in debt and in a disastrous technological situation. The long-term policy was laid down by Chou En-lai in 1975: first, the development and modernisation of agriculture by the 1980s, then, light industries followed by greater development of heavy industries so that, by the end of the century, it would be envisaged that China could become a fully industrialised nation. I believe that one of the most impressive achievements in China under the chairmanship of Mao Tse-tung has been the elimination of basic poverty and hunger. No one, of whatever party or philosophy, could fail to be impressed by the apparent well-being and the feeding of these millions of people, and by the building up of the health of the nation. When I was in China, nowhere did I fail to recognise the extraordinarily healthy appearance of the children and the people of China. Whatever one says about their philosophy, I think this is a tribute which must be paid to the leadership and to the people of China. Contrary to what the Soviet Union has done, the Chinese policy has been to build up their agriculture first; that results in the comments I have made on the feeding of the people of China. The Chinese have learned their lesson from the Soviet Union. The Soviet Union directed its energies first towards the development of heavy industries and, 60 years after the revolution of October 1917, it still remains unable to feed its people without large imports from abroad. We were told over and over again in China that the wheat is sown in the Ukraine but reaped in Canada. Already since the early 1970's, commercial relations between China and the West have intensified considerably. The European Community has consolidated its position as the second largest trading partner with China, the share of imports being about 22 per cent., and the exports about 13.3 per cent. Individual countries within the Community have succeeded in increasing their exports to China, particularly, of course, France and the Federal Republic of Germany. It is certianly to be hoped, and I share this hope with my noble friend Lord Bessborough, that the present visit of Mr. Li Chiang, Minister of Foreign Trade, to this country will lead to an increase in exports from the United Kingdom with beneficial trade exchanges for both countries. However, as we know, since 1st January 1973 the European Community itself is now responsible for implementation of the Common Commercial Policy of the Member States. It is, therefore, for the European Communities to devise a satisfactory framework agreement with the Chinese Government which will enable commercial relations to be increased and developed, and to encourage a flow of scientific and technical knowledge and experience between the two countries. That increased flow will, of course, also imply a need for cultural exchanges and the study of languages. The benefits of the Lomé Convention are beginning to be appreciated by not only those who are benefiting from its terms already, but those outside the Convention as well as the ratifying States, and, as I have always believed, it serves as an example of one approach of the European Community in its external trade relations which is of considerable benefit to developing countries. Within the new trade agreement there is a need to look for new solutions. I do not believe that we can always go back on the old agreements to find solutions. A certain flexibility must be maintained to ensure that the terms of the agreement operate to the benefit of both areas of the world. I believe that with imagination, encouragement and hard hammering out of details, such an agreement can serve to contribute to the increased prosperity of the peoples of China and the further benefit to individual Member States and to the European Community as a whole.4.42 p.m.
My Lords, I do not see how any of your Lordships can do other than support the plea of the noble Earl, Lord Bessborough, that there should shortly be in existence a "framework agreement" between the European Economic Community and China. In his eloquent and, indeed—if I may have his attention for a moment—moving speech the noble Earl fresh from his recent and clearly most profitable visit to China, has produced all the main arguments in favour of such an agreement. As I say, I do not see how any of his arguments can possibly be faulted. What exactly the "framework" will be, and how it will be operated is, of course, another matter upon which opinions, will, no doubt, differ. However, first I should like to make a few reflections on the general Chinese theme.
For the last quarter of a century this vast country of between 800 and 900 million people—no one knows exactly how many—has been going through a period of convulsions. The total abolition in 1949–50 of the old feudal system—no doubt inevitable and almost certainly in the circumstances desirable—produced a kind of vacuum in the Chinese society which was filled, as we all know, by hastily constructed communes and even more hastily nationalised industries, large and small, all often the result of the application of a rather crude Leninist philosophy. The revolutionary process was halted, renewed, halted again and eventually gained great impulsion in the so-called Cultural Revolution which, by over-reaching itself under the direction of the so-called "Gang of Four", has now resulted in what appears to be a stable régime that may perhaps be described as totalitarianism with a human face—at least we must all hope so. Anyhow, it is a régime which seems intent above all on industrialising China with some outside assistance and even perhaps on furthering this process by allowing rather more initiative to local authorities than has been possible up to now. More especially it is, or seems to be, much less xenophobic than previously, in the sense that some foreigners are now regarded as better than other foreigners, or at least less unattractive, if only because they are obviously less dangerous! In my view—and noble Lords may disagree with me—the continuing fear of Russia has nothing to do with ideology. It is based, on the correct assumption that the Russians, with their own central Asian empire in mind, cannot view with pleasure any successful economic development of, for instance, Sinkiang by the race of Han. It is also based on the perfectly legitimate apprehension that Russian occupation in great force of Eastern Siberia and the Maritime Provinces—which since the end of the 18th century has replaced a kind of vague Chinese suzerainty that existed for many centuries—can only represent a long-term threat to the Chinese people who have, after all, withstood barbarian invasions from this very direction on many occasions in the past two or three thousand years. The Americans, too, though happily much less unpopular since the spectacular arrival of President Nixon in Peking, still. I think, encounter a certain Chinese wariness if only because of past experience of American power, to say nothing of the position of Taiwan. Japan will always be a sort of rival, though I suspect that some day Japan will come to terms with China and abandon any tendency to do a deal with the Soviet Union, the dangers of which must be evident to any Japanese Government now or in the future. So, among all the industrialised nations, with Canada possibly as a special case, there remains only Europe, and Europe, in Chinese eyes, can only mean the European Economic Community which is to be commended, as they see it, not only as a kind of counterpoise to Russia, but chiefly, I suggest, because it is something with which the new régime can happily work without any arrières pensées or without any fear. What a chance this is for the Community! It is true that a colossal market for European industrial goods will not open up at the touch of some magician's wand. What goods or services China can absorb for the purpose of starting up its own type of industrial revolution, and how these can be paid for, must be the subject of long, patient and no doubt wearisome negotiation. However, what would be quite dreadful would be if the various nation States in the Community tried to pursue individual policies and, still more if, as is still, alas!, sometimes the case in economic relations with the Soviet Union, they compete in respect, for instance, of credit terms. The noble Earl, Lord Bessborough, suggests that there should be a "standing conference" in Brussels and a permanent delegation of the Commission in Peking. I have no doubt at all that both would be desirable and I trust that the noble Lord, Lord Goronwy-Roberts, will accept that this suggestion is a good one. But if the Council of Ministers have any sense they will allow the Commission to take the lead in the subsequent negotiations, just as in the last few years Sir Christopher Soames so successfully took the lead in commercial negotiations when he was, so to speak, the Foreign Minister of the Community, to which fact the noble Baroness, Lady Elles, referred. To sum up my few remarks, I would say that the coming negotiations for a profitable relationship with China—at any rate, an economic relationship with China—can succeed only if the Community firmly sets its face against those national rivalries which have prevented it from functioning successfully as an entity up till now, and recognises that only in unity lies its influence and, indeed, its potential strength. This could mean, in practical terms, the drawing up in advance of plans whereby all relevant Community firms—on the basis, of course, of fair competition—will have an equal chance of profiting from the potentially vast Chinese market and not indulge in the tempting but suicidal game of cutting one another's throats to the benefit, of course, of other powerful competitors and rivals. Finally, if the idea of a framework agreement gets under way it will—as the noble Earl, Lord Bessborough, recognises (indeed, I think he said so)—be greatly assisted by the debates of a directly-elected European Assembly from which all kinds of profitable proposals will certainly emerge. For the Assembly is the one body in which great problems of this kind can be given political consideration from a general European point of view rather than from a narrow nationalistic one. That is, therefore, yet another reason for proceeding with direct elections to the European Parliament in accordance with the agreed timetable. No doubt our anti-Europeans—and there are a good many in this country—would prefer, for purely ideological reasons, to appal our Chinese friends by wrecking the Community and reverting to economic nationalism. A good start in this direction will certainly be made if they succeed in forcing Mr. Callaghan to ask for a delay in the elections. How exactly such an operation would be consonant with any collective effort to profit from what is now probably the greatest potential market in the world must, alas!, be left to the anti-Marketeers to explain. But I fear that they are so prejudiced that they cannot perceive any merit in any Community action whatsoever. Whom the Gods wish to destroy they first make mad—a sentiment which no doubt can be reflected in the probably no longer repudiated doctrines of the great Confucius!4.43 p.m.
My Lords, first, I must thank the noble Earl, Lord Bessborough, for introducing this debate. Secondly, I must apologise because inadvertently I left the Chamber for a While during his most interesting and informative address and missed what I know was something worth listening to from someone who has quite a vast knowledge in this field. I do not intend to speak for long because I, too, want to have the benefit of the knowledge that the noble Lord, Lord Nelson of Stafford, can give to this House from his engineering projects and from one of his latest visits to China and Peking, in search of trade. I am sure that the House awaits the noble Lord's address with as much interest as I do. Consequently, I do not intend to delay the House too long.
However as someone who has been interested in the Far East for more than 30 or 40 years, I should like to point out that to me the clock of history has moved right round. I remember standing for Parliament a number of times when the Conservative candidate was singing all round the constituency "We'll put Davies on a slow boat to China". Letters were pushed through my door saying that I should visit China and its red people, and that if I liked it that much I should go and live there, and rubbish like that. They did not know that history changes. The noble Lord, Lord Gladwyn, referred to Japan making an approach to China. Japan has already done so; she has done so in Korea where they are building ships faster than we can ever do at Swan Hunters unless we must get the assiduity and the purposefulness of the workers in Korea and China in the building of their country's prosperity. Apparently this short debate is on the proposed framework agreement on trade and co-operation between the EEC and China. Of course, we want co-operation. Some people still seem to regard China as Marco Polo did; they still seem to think that these little people run around with slant eyes and cannot speak proper English. We are dealing with one of the most civilised countries in the world, where village democracy is at a higher level than it is in some of the villages of Britain. In a sense, mark the words of village democracy. Here we are dealing with a country whose know-how is famous and a country that may solve the riddle of the Sphinx, the relationship of the machine to human beings, the balance of machinery and the power of the machine as reflected in the enslavement of the human being who is now dominated by the machine rather than dominating the machine. No one has found the answer to this problem either under Socialism or capitalism because we do not know how to distribute man's leisure profitably. I do not know the answer to that, but all the philosophers almost from eternity to the present day have looked at the problem. Because of China's massive size and its huge population there are many diversities and the two greatest ones still outstanding are ancestral worship and, as I have said, village democracy. Whatever dictators have come into China at different times, in the village itself the democratic cell has always worked through the head man, sometimes better than it works in a British or a Welsh village. Therefore, China is not a country that we can approach in an attitude of arrogance, and if the European Community adopts a framework agreement and an attitude of, "We are better than you" or, "We are offering you a new approach to civilisation", we shall be just as likely to be turned away as the Portuguese were when they first put their feet on the shores of China centuries ago. Fortunately, those of us who have been around in China and its vast areas have seen what I consider to be three outstanding virtues of Chinese labour—and I mean labour in the sense of human effort—namely, assiduity, perseverance and endurance. Those are characteric features of the Chinese people. No one asks on our side that the British worker should be a slave. All we ask—and I sometimes wonder whether we are asking too much—is for us to have the same honesty and quality of workmanship that the Chinese are willing to put into an effort for the sake of the nation, the village and the community. How then should we look at this framework agreement? I should not want that framework agreement to push arrogantly aside the know-how of the British nation. Since 1792, when we had our first ambassador in China, the know-how of the British trader, British engineering and British captains of industry as they grew up was greater than that found elsewhere in the world, including the United States of America. We must not lose that. I shall give noble Lords a concrete example. I purposely travelled by train from Peking to Hanoi—,a four-and-a-half day journey. On moving up and down the train an old Chinese gentleman spoke to me in moderately good English and asked where I was going. I told him that I had to go down to Hanoi. I asked him where he was going and he said that he was going to Wuhan. He said, "I am working with the Russians on building the new bridge at Wuhan over the Yangtse River. I am 73. I am an old engineer". I said, "Where did you qualify?" He said, "I took my degree in engineering in 1910 at the Imperial College of Science in London. You had the best engineers in the world". That is how our engineering was looked at in India, the Far East, Argentina, everywhere in those days. God forbid that we should lose that! I want therefore the quality of our workmanship and engineering to be maintained. The noble Lord, Lord Nelson of Stafford, will know much more about this than I do. I am watching the clock. I notice that I have spoken for seven minutes. It will be about 10—if you are suffering. My warning is that we must not let relationships with the new China he stultified by the massive bureaucracy that could be built up in a European framework unless it is carefully watched. At the moment we are strangled with bureaucracy throughout the world. Bureaucracy, as much as anything, is causing so much of the ill feeling that exists in society today. If we are building up machines again with masses of bureaucrats, it stultifies initiative and stultifies progress. The Common Market has an affinity for bureaucracy. Let us choke that. I would draw attention to the report we debated the other day on the Select Committee on Commercial Agents with Portugal, Morocco, Tunisia. Let us be careful that we do not draw up masses of verbiage. When businessmen negotiate—captains of industry or financiers—in the last analysis one will work down to the grain of professional common sense that those men have acquired over years and years of work in their trade or industry. It is the same in a profession. You do not saddle a surgeon or a GP, I hope, with masses of bureaucracy and ask him to fill five forms when he is building up a diagnosis of a man suffering with bellyache or a bile condition. This is one of the things we seem to have forgotten in the world we live in today.My Lords, I wonder whether the noble Lord would allow me to intervene?
My Lords it is a pity to interrupt me, but the noble Baroness can interrupt me with pleasure.
My Lords, I was going to say how very much we agree with everything that the noble Lord is saying.
My Lords, that is wonderful. You see how the clock has gone round. There was a time when they might have said, "Sit down, Lord Davies". This is the right time of the year to talk about China. October is the busy time for trade fairs. I should like a delegation not just to go to China for fun but to go there and watch our commodity buyers, our market men sweating it out at the trade fairs. I am delighted that more firms are getting involved.
A number of high-level representatives of business leaders, technical negotiators, have all been there, and that is where I pay my tribute to the noble Lord, Lord Nelson, for his mission together with Sir John Keswick. Then, 20 company chiefs were led by the noble Lord, Lord Roll of Ipsden, head of Warburg, the merchant bankers. These were all excellent efforts. We should like to know what they think, and advice must be taken from these people when the Common Market are trying to negotiate a new framework. One Vice-Premier, Wang Chen, confirmed his Government's interest in the Harrier Jump Jet aircraft. We could sell them in China. We want the Government to step up their help to honest merchant adventurers who are trying to enter into this difficult market. I see that the 10 minutes allocated for my speech are up: I might take 11 minutes. Finally, we should pay a tribute to the marathon efforts of those who work their hearts out at trade fairs. If any noble Lords have been to Kwangchow to the trade fair and the market in commodities, which is pretty well the most important of the lot, they will know how, at a humbler level in trade, the merchant adventurers, the commodity dealers, have to sweat it out without the comforts of VIPs to try to get markets for Britain. British traders are still in the fore. Do not let us lose that. The autumn trading session now is important. When Edmund Dell, our Minister of Trade, went there and offered a visit to a Foreign Trade Minister, Li Chiang, who is now here, it was a great move on the part of the Government. I have come to the end of saying my part because we want to listen to the noble Lord who follows me. I would point out that China is now setting up a new container terminal port at Tientsin. The first container terminal in Hsinchiang is now nearly finished. This is a new stage in China's approach to modern trading methods. Therefore, whatever framework may be built up by the Common Market, never let the British people forget that we have the know-how and the ability, and I hope that whatever the European Community does we shall not be stultified by frameworks that may be littered with bureaucracy rather than the know-how of our engineers and traders.5.6 p.m.
My Lords, I must first of all thank the noble Lord, Lord Davies of Leek, for his kind comments. I should like to endorse everything he says about those who sweat it out in trade fairs in Canton and elsewhere to promote China trade. I should also like to pay tribute to my noble friend Lord Bessborough for introducing this debate on trade with China. We do not hear enough about this great country, with its enormous distances, its great resources, and its vast population of 900 million people.
My noble friend Lord Bessborough spoke on this subject more from the point of view, understandably, of the European Community. I must speak to it from the point of view of British trade with the People's Republic of China having since 1973, been president of the Sino-British Trade Council—that is the area advisory group for China for the promotion of British trade—and having in my company a certain involvement with trade in this country. I have had the privilege, as the noble Lord, Lord Davies, said, of recently leading an important trade mission to China. I am only sorry that my noble friend Lord Roll is not also here to speak in this debate, as he also led a similar mission quite recently to that great country. I agree very much with the analysis which my noble friend Lord Bessborough made of the situation in China. He was there a few months before myself, and I. agree with many of his conclusions. The only thing we have to bear very much in mind in considering China is that it is very easy to think of the great history which lies behind this country, and its ancient civilisation, but if you go to China, you will find that the history of China begins in 1949 with "liberation". That is the starting point of new China, and that is what we are dealing with today. My comments will be largely confined to the question of increasing trade with the China of today since liberation in 1949. It is fortuitous that this debate has come up when this country is receiving one of the most important delegations from the People's Republic of China that we have ever received. My noble friend Lord Bessborough referred to this, but I should like to emphasise it. The Minister of Foreign Trade, Mr. Li Chiang, is here with his delegation. He has been Minister of Foreign Trade since 1973. He is a very good friend of this country, but he is here for the first time. What is even more significant to my mind is that he has with him the Vice-Minister in charge of the planning commission, Mr. Yuan. These two gentlemen have come to this country for the first time and they have come here specially; they have come to this country first, before proceeding to France and then returning home. Perhaps I should explain to noble Lords who are not familiar with trade with China that the Ministry of Foreign Trade is in fact the purchasing department for that great country. It has within it a series of trading corporations which do all the buying all over the world for that country. It also has within it the China Council for the Promotion of International Trade (CCPIT), which is the opposite number, if you like, of the Sino-British Trade Council here, with which we have extremely friendly relations and which promotes China's international trade. Commercial councillors in all the countries, including this country, also represent the Ministry of Foreign Trade. The Planning Commission is concerned with the long-range planning for the whole of that great economy. It is concerned with the production of the five-year plan—I say "production" and not "publication" because in fact it is never published, which is a pity because it would be very useful reading for those of us who have to do trade with China. It is responsible for safeguarding the feeding of 900 million people, to which my noble friend Lady Elles referred. It has to do the necessary planning to ensure that those people are properly fed, and I am sure that those who have visited China will agree with me that today they are properly fed. It is concerned with planning the whole of industry, the whole of the nation's internal consumption, and it is concerned with the planning of foreign trade—where that trade is done, how it is done, who it is done with and how foreign exchange is allocated. It is also responsible for making changes to those plans, changes brought about by such national disasters as the earthquakes in 1976 which threw the economy completely off course. It is also concerned with adjustments to the plans with changes of Administration, with which it has been very much involved recently until the present Government came to power. Therefore, the Planning Commission is an extremely important body in the People's Republic of China. We have in this country at the moment a visit of great significance, and I wish to say how much I and others concerned with China trade welcome the excellent reception that has been given to this mission by Her Majesty's Government. My mission went to China at a very timely moment; it was there as the new Administration under Chairman Hua came to power and when new economic objectives were declared. Those objectives—this was made plain to us—leave the doors open to foreign trade. It was also made clear to us that the objectives would be governed by the so-called Four Modernisations: the modernisation of agriculture, industry, science and technology and defence. It was also made clear to us that the policy of self-reliance and development of their own resources would remain a cardinal policy of the present Administration, but equally it was made clear that that policy did not mean that they would not buy from overseas where advanced technology was necessary for the development of their economy or where their own resources were not adequate to meet their needs. It was made quite clear to me that this opened great opportunities for British industry to develop its trade with the People's Republic of China, provided—this was emphasised—that our prices, delivery and technology were competitive. It is therefore very important to convince the Chinese that we can meet those criteria, and that is the prime consideration we had in mind in our mission; namely, to convince the Chinese purchasers that that was the case. That is what we have to do to this important mission now visiting this country. In this respect we have one important advantage, and that is that we are able to show both the user and the supplier working closely together, often the user being a public enterprise—such as the Coal Board, the Steel Corporation or British Rail—working alongside the manufacturers and suppliers of plant. It is very convincing to the buyer of plant when he can see such plant in operation and can see close collaboration existing between those who develop and manufacture plant and those W. ho use it. The object of our mission, which contained members of public as well as private enterprises, was to put this across to our friends in China, and this equally will be the objective of those charged with looking after the mission to this country. Our mission was extremely well received; the reception we had was very friendly indeed and I agree with my noble friend Lady Elles that the hospitality accorded to us was excellent. In addition, we were given every facility and assistance to talk with the people who mattered in the cause of trade and co-operation between our two countries. We met, of course, the officials of the Ministry of Foreign Trade, all the various trading corporations dealing with different ranges of plant and commodities, and we met—rather unusual on these occasions—the user Ministries, who had very meaningful talks with the experts I had the privilege of having on my mission. We also had discussions with technical societies; in the People's Republic of China technical societies are not learned societies in the sense we have here. They are groups of technically qualified people working in the same field and who are intimately involved in decisions on the purchase and installation of plant. We also saw the Bank of China, which is intimately involved in the financing of overseas trade. We had many useful and lengthy discussions with all those people, including visits to plants. It was made clear to us that the Chinese are looking into the possibility of purchasing supplies from overseas and of obtaining co-operation in meeting the needs of the Four Modernisations to which I have referred. I believe that British industry has much to offer China in the possible areas of interest—and what are they This is something which interests so many of us in industry. As I see it, they include the coal industry—they have vast coal resources—the steel industry and the metallurgical industry. My noble friend Lord Bessborough referred to "the boom on the rooftop of the world". That boom will not take place until the transport is available to move the materials from the rooftop of the world, and that is going to be a very long haul. I would put it that way. However, there is plenty of scope elsewhere for the metallurgical industries to assist in the needs of this great country. The oil industry is expanding fast, and with it the chemical and petrochemical industries. The power supply industry is an essential to all these programmes. Communications for a country of this size are of great importance. Finally, there is the question of defence—opportunities can arise in any or all of these fields. In looking at all these areas, I should like to emphasise how important it is to maintain the momentum of the technological advance in these industries in this country, if we are to be able to convince buyers such as our friends in China that we have the latest technology. They are very far-sighted. They go around the world. They know what is happening, and they see what are the development programmes which the supplying industries are pursuing. If those programmes are not sufficiently advanced and progressive, they pass on to another country where they find more advanced technology. Therefore, the sale of plant is not just a question of sweating it out at the Canton Fair, though that is a very important part of the matter, but it is also a question of ensuring that a progressive technological policy is pursued in our industries in this country, if we are to convince them that we have the equipment they need to meet their programmes in the years ahead. In conclusion, I should like to emphasise that there is much goodwill and much friendship towards Britain in the People's Republic of China. In this respect I also want to add to the remark by the noble Lord, Lord Davies of Leek, about meeting during his visit to China a Chinese who spoke English. I had a similar experience. During my recent visit to Shanghai I visited a generator plant, and I was met by the chief engineer who showed me around. He spoke perfect English. I asked him where he had learnt his English. He said: "I learnt my English in your factory in Trafford Park, where I spent two years after completing my degree at Liverpool University." So we have much goodwill among many people in that country. There are many opportunities for developing both trade and areas of co-operation between this country and China. My noble friend Lord Bessborough referred to a possible Community approach to this question. I find his proposal very interesting, but at the same time somewhat puzzling. China is a highly competitive market. It is one of the great competitive markets of the world. Some of our biggest competition comes from Europe, and at the present moment, quite frankly, we are not doing quite as well as some of our European partners. We have to do better. It is a hard market. We have good friends, but they are good negotiators, and they will negotiate with those who make the best offer. We will be in competition with our friends in the European Economic Community. I am a little puzzled therefore about how we should co-operate in Europe, while at the same time we are in very strong competition. Perhaps the answer is that the co-operation must start, as I think it is starting, on a political level, and then perhaps go on to an economic level. But I still believe that we have quite a way to go before I can visualise co-operation on the industrial level. I see an interesting market, a challenging market, but I see a competitive market in which one of our biggest competitors will be our friends in the European Economic Community.5.24 p.m.
My Lords, first, I should like to offer my sincere congratulations to the noble Earl, Lord Bessborough, on his excellent speech. At the end of his speech he asked for constructive suggestions, and I have two to make. But, before putting them forward, I should like to say that I had the opportunity of visiting the People's Republic of China in 1961. I think that I was the first Member of Parliament—at least, the first Conservative Member of Parliament—to go, and I went alone. There is a great advantage in going alone. One can go more places, and see more things intimately. I visited six cities, and I went everywhere by train. As the noble Lord, Lord Davies of Leek, will know, the trains are not exactly fast, but they are clean and pleasant to travel in. One acts a marvellous opportunity of seeing the people and seeing how the country is run.
I took an all-Party delegation to China in 1973, and I was able to state there what I thought about China when questioned, as one so often is, by the Press. I was able to say quite sincerely that the changes in housing, in consumer goods, in the appearance of the people—both how they were dressed and how they were fed—were amazing. I was able to say, too, how much happier they seemed, and how much freer they were. When I went to the Great Wall, I saw that they were carrying little transistor radio sets and thoroughly enjoying themselves, having picnics. That was quite a change since 1961. Noble Lords will recall that, in 1961, the Russians had just left, taking with them all the materials they could, as well as all their blueprints. This represented a great crisis for the Chinese, so I was rather privileged to be there at that time. In 1973, I was taken to see the Nanking Bridge, which is a copy of the great bridge over the Yangtse. I was amazed at what they had been able to achieve on their own in such a short time. It is an extraordinary bridge. It is a double railway bridge, with a four-lane road above it. It is a great help in opening up other areas in the neighbourhood. The noble Baroness, Lady Elles, said that the Russians had concentrated on industry, whereas the Chinese had concentrated on agriculture. I believe that one of the reasons why the Chinese have been so successful is that, for the first time for centuries, people have enough to eat; and the other great factor is that there is no civil war. This gives them the encouragement to carry on with their work. I am very pleased that the noble Lord, Lord Nelson of Stafford, gave us such an interesting speech on expansion of trade. It is interesting to note that the Chinese Minister of Foreign Trade, who is visiting Britain at present, is the first such Minister to have been here for 30 years. This is an event that we should remember for some time. But he is also going to France, and I know that, on the whole, the French and Germans respond more quickly than the British in regard to trade. I, too, visited factories, including steel factories, where I saw the old Bessemer system working. I also went to tractor and textile factories. I found that between 1961 and 1973 tremendous progress had been made. I turn now to the two suggestions that I should like to make today. I am concerned here with the cultural aspect, which has not been mentioned so far today. There is now a Europe-China Association, of which I am a member. I hope to persuade some noble Lords and others who are interested in securing a better knowledge of China to join this association. We held our first conference in Montreaux, in Switzerland, and I should say that the membership is not restricted to EEC countries; it is wider. I am glad to say that the second conference of the Association was held in London, and the dinner took place in the House of Lords. There were 17 different nationalities present, and we had the honour to have the Minister, Mr. Evan Luard, to address us. In July, we ran a seminar for one week at Lady Margaret Hall, Oxford. That seminar discussed education and art, which are very important in getting to know people personally. Courses were run by the Chinese in German, French, and English, and these are being continued in the various countries for those interested, either through correspondence courses or by attending classes. I believe that to be able to speak the language and to be able to understand other people's cultures is one of the most important efforts we can make. I was delighted that among those who attended the conference was the Italian Minister for Communications. He could not speak a word of English, but he had his speech written out, and he was so full of life that we all felt that we could understand everything he said. He was so enthusiastic. This is the kind of spirit we want. We can help with the technical information, but I should like to see far more interchange of, particularly, students—another point which has not been mentioned. I think that to get young people interested in our various countries and to give them some knowledge is very important. One has to remember that at the present time most of the leaders of China are rather on the older side, and it is very important indeed to enlighten the younger people, if we possibly can, on the different types of life: and they should not go only to universities or colleges, but should be allowed to see factories and other things of interest to them. So I suggest that as many people as possible in Europe should join the Europe-China Association—the headquarters are in Brussels, and I can give your Lordships the addresses and all the details—and that your Lordships should also, please, join the Great Britain-China Association in this country. This is headed by the right honourable Malcolm Macdonald, and has done a great deal of work. We have had the pleasure of having Lady Elles and Lord Bessborough to speak to us, and many of the visiting delegations. Also, delegations are arranged by the Great Britain-China Association. And recently we have had I think eight Chinese journalists here, who are at present touring the country. The impression they take back, if they can print it in their papers, may make a great deal of difference to the relationship between this country and China in the future. I should therefore like to put those two suggestions to your Lordships: that more people might take an interest in joining the various cultural associations, which can broaden their outlook and make for a better understanding between this country and China as well as, through the Europe-China Association, between the other European countries and China, in order that we do not talk only business but can, because it is so important, get a better understanding of the people themselves. Because one of the great things about having a better partnership or co-operation with China is the fact that it may help to keep the peace of the world. This is one of the great things which I hope will come out of future co-operation between the EEC and China.5.32 p.m.
My Lords, the noble Earl, Lord Bessborough, has indeed rendered your Lordships' House a signal service in introducing this very important subject for debate today. Indeed, a much wider audience, I am sure, will consider what he has said with such authority and grace, as they will the content of what I regard as an extremely valuable and important debate. Britain's trade relations with China span many centuries, of course. It is true that political and economic structures in China and in Europe have changed inevitably with the passage of time, but the basic need and opportunity for trade and exchange between the two peoples remains. In pursuance of a common commercial policy towards the State-trading countries, in 1974 the Member States of the Community, as we have heard, decided to terminate their bilateral trade agreements with such countries, and the Community circulated to them draft outline agreements on which it was suggested that negotiations should be based. The response from the Chinese came during the visit of Sir Christopher Soames, Commissioner for External Affairs for the European Communities—or, as he has been described by the noble Lord, Lord Gladwyn, the Community's Foreign Secretary—when he went to China in 1975. The Chinese then appointed an Ambassador to the Community, and expressed a wish to take up the Community's offer to negotiate a trade agreement.
As the noble Earl reminded us, intervening political changes in China inevitably delayed matters, but in July 1977 the Commission delegation, led by M. de Kergorlay, visited China to discuss with responsible authorities in Peking the shape and nature of an agreement. These talks bore fruit, and the Foreign Affairs Council of the Community approved, on the 22nd November this year, an outline negotiating mandate for agreement. Meanwhile, British businessmen have been visiting China. A regular exchange of trade missions covering specific industries has been built up; and in the last few weeks or so there have been two major British trade missions consisting of senior industrialists representing important sectors of British industry, led by the noble Lord, Lord Nelson of Stafford, and the noble Lord, Lord Roll of Ipsden. I am sure I am speaking for everybody in the House when I say that we have listened with interest and great respect to what the noble Lord, Lord Nelson of Stafford, has had to say during this debate. We are grateful to him and others for the great work they have already achieved in increasing meaningful commercial contact with China, and we wish him and his fellow industrialists even greater success in the future. The noble Earl, Lord Bessborough, has himself, of course, visited China—it was this year, I believe—as the guest of the Chinese Institute of Foreign Affairs. I personally, and I am sure many other noble Lords, have read with great interest his speech to the European Assembly on the 17th November on the subject. He, of course, speaks with authority of China's ambitious plans for a development of her economy—in particular, perhaps, of the raw materials which China possesses in such abundance and desires to develop. There is, therefore, an acknowledged need in China today for Western equipment and technology. What one noble Lord called the "complementality" of the situation is certainly in that direction pretty obvious to us all. I believe that we in Britain and in Europe can help to meet this need. We have heard from my noble friend Lord Davies and others the conditions in which this country can rise to the occasion. To a very large extent it rests with us, with leadership not only among management but among those who guide our workforce. China has a potential for massive and sustained economic growth, and therefore presents an equally massive opportunity to Western Europe, including the United Kingdom. In the People's Republic the will and discipline exist to bring about rapid change, and Britain, within the Community, hopes to be in the forefront of China's partners in this development. A trade agreement will strengthen the existing basis for economic co-operation, to our mutual advantage. There are also sound political reasons for Britain and the Community to open up their relationship with China. In the long term, benefits—political, cultural and commercial—must flow to both sides from increased contacts. There will develop a better understanding by the Chinese of the Western World, and of China by the West. Through our businessmen, scientists and technicians, and, as the noble Baroness, Lady Vickers, reminded us, through our scholars and students—through interchange at that level also—we in the West would hope to improve our contacts and understanding in China and our developing co-operation with their Government and their people. So the exchange of trade and technology will also improve and enhance the exchange of information and ideas. I have often said to my counterparts in the totalitarian East of Europe and could equally say it to the Chinese—although I bear in mind the distinction between China and other countries that come to mind when the words Communist or Socialist is mentioned—that there is a readiness to exchange technology and there should be an equal readiness to exchange techniques or, more precisely, philosophies. I believe that, as these exchanges—these interchanges, as the noble Baroness described them—proceed at all levels, they will imply an increased exchange of philosophies, of ideas, of attitudes to society; and it is in that way that the two great systems of the world—broadly speaking, the dirigiste and the democratic—may grow towards each other rather than attempt to subdue one another. The Government welcome the proposed trade agreement which will, we hope, be signed in the new year. In passing, I hope that the noble Earl will detach himself from the attentions even of a former Chancellor of the Exchequer to take full note of this very encouraging piece of information which I bring to him and to the House. I will repeat what I have just said. Pace a former Chancellor of the Exchequer, the Government welcome the proposed trade agreement which we hope will be signed in the new year. We strongly favour the improved contact with China and the exchange of visits, and we particularly welcome the Chinese Minister of Foreign Trade, Mr. Li Chiang who is at present in this country—and may I express my appreciation of what the noble Lord, Lord Nelson of Stafford, had to say about the part that my Department and, if I may say so, I, personally, have played in making quite sure that this very eminent Chinese leader was (as he, himself, assured me yesterday) received in this country in such a way as to meet every one of his requirements. I know that the noble Lord particularly wishes to extend to guests from China, and particularly guests of Mr. Li Chiang's calibre and importance, the traditional British graces and hospitality. We have done so, and he is very pleased indeed. So is Mr. Yuan whom the noble Lord himself knows well and took care to mention. I now turn briefly to a number of specific points made by those who have taken part in this debate. In his very comprehensive and constructive speech, the noble Earl raised a number of points of which the Government, I can assure him and the House, will take very full account. We are certainly prepared to look carefully at the interesting proposal which the noble Lord has made about the establishment of a permanent Community delegation in Peking, a proposal which received the powerful support of the Front Bench Liberal spokesman, the noble Lord, Lord Gladwyn. We will wish to see whether we could usefully discuss this with the Commission negotiators before they meet the Chinese. I would expect that a joint committee would certainly flow from and support the proposed agreement. It is usual, under agreements of this kind, to establish a joint committee, as the noble Earl knows, and I would expect that practice to be followed on this occasion. My noble friend Lord Davies of Leek, I think, raised the question of fairs and exhibitions in Peking. I am glad to assure him that discussions have taken place in Brussels and Peking with a view to mounting an exhibition in Peking. It is expected that a small delegation from the Commission will visit Peking early next year to put the proposal to the Chinese authorities. As I have said, the noble Earl had powerful support from the Liberal Benches and, certainly, from the Opposition Front Bench. From both came speeches which I am sure the noble Earl, like me, welcomed very much. There has been a singular unanimity of view in the House this afternoon about this matter. I fully share it. Part of my responsibilities in the Foreign Office is a special oversight of our relations with the Peoples' Republic. I am very glad of this. Noble Lords may have wondered from time to time, having regard to the variety of subjects on which I am expected to be able to make some answer from this Box, whether the world is my parish. In a sense it is; but I am glad to say that I have special responsibilities for a number of subjects and for certain parts of the world and that China is one of them. It gives me very great satisfaction, as clearly it does to other Members of the House, to work for a new rapprochement and a new consensus of purpose and, eventually, (who knows?) of humane philosophy between the old West and the very new East. We are, of course, dealing with an ancient civilisation which has revived itself and renewed itself with new ideas. We, too, are an ancient culture and an ancient civilisation and we, too, have survived and renewed ourselves with new ideas. We are doing so now. I think that the "complementality" of the East and West may well be specially signified by the co-operation of the United Kingdom and the Peoples' Republic.5.48 p.m.
My Lords, I am most grateful to the noble Lord, Lord Goronwy-Roberts, the Minister with responsibilities in regard to China, for having made such a very valuable and encouraging speech. To me, this has been a mini-debate more satisfactory than any other I have partaken of in 21 years in this House. I found it extremely satisfactory and I am very happy that by some extraordinary chance I was fortunate in the ballot just at this moment when we welcome to this country Mr. Li Chiang the Trade Minister and Mr. Yuan, the Vice-Minister of the Planning Commission. I should like to repeat the welcome which other noble Lords have already given.
There are very few points I have to raise. As I say, this debate as I have said has been fortunately timed. I think it is a good idea, in Community matters, that we should express our views in our own Parliaments before negotiations have been concluded, or even started, and that we can give our views and that they can be taken full note of by our own Government and also by the Commissioners concerned in Brussels. I should like to thank all who spoke: my noble friends Lady Files, Lord Nelson of Stafford and Lady Vickers and, of course, particularly, my noble friend Lord Nelson of Stafford for the tremendous contribution which he has already made to the aims of the proposed agreement. I do not think that competition will necessarily be impeded by the formation either of a joint committee, such as the noble Lord, Lord Goronwy-Roberts, mentioned, or even ultimately a standing conference. In the case of some firms which have partners in France, Germany, Belgium or Holland, there could not be much to impede their progress if there was a delegation in Peking and a standing conference. The noble Lord, Lord Roll of Ipsden, greatly regrets not having been able to make his maiden speech on this occasion. Unfortunately, it was impossible for him to come to the House this afternoon. He assures me that he is going to make his maiden speech fairly soon. I am sure that it will be in a very important economic debate. I should like again to thank all noble Lords, including the noble Lord, Lord Gladwyn—whom I very often call my noble friend—and the noble Lord, Lord Davies of Leek, who also in a way is a friend, too, for having taken part today. I am grateful to the Government for having supported the ideas which we have adumbrated. I beg leave to withdraw my Motion for Papers. Motion for Papers, by leave, withdrawn.British Airways And Foreign Suppliers
5.52 p.m.
rose to ask Her Majesty's Government whether they will make a Statement on the apparent intentions of British Airways to place their major re-equipment order for new aircraft with foreign suppliers. The noble Earl said: My Lords, it is not my intention to keep the noble Lord, Lord Oram, and other noble Lords—in particular the noble and learned Lord the Lord Chancellor—very long from the festivitities of St. Andrew's night with the bagpipes, dancing and everything that goes With it, including haggis.
The purpose in putting down this Unstarred Question tonight is a serious one. It stems entirely from remarks which the deputy chairman of British Airways, Mr. Ross Stainton, made on this subject at an informal Press conference in New York last week. I am informed that, in effect, Mr. Stainton was saying—I must be fair to him; I have not seen a transcript of exactly what he said because one is not available—that British Airways had evaluated the aircraft available to meet their immediate requirements. There are three aircraft—the Boeing 737, the Douglas DC.9 and the BAC.111—to replace the now ageing Viscount and Trident fleet. The evaluations point at this stage to an American buy. When one says "buy" in the terms of British Airways, on this first stage of their re-equipment programme one is talking of £120 million worth of aircraft, or some 20 new aircraft being purchased. So it is a major order.
This glimpse into what one supposes is the Board's thinking raises issues far beyond this single order in the first stage of the re-equipment programme. It spills over into what could prove to be the most catastrophic body-blow for the British aircraft industry, and could spill over to the European industry as well, about which my noble friend Lord Bessborough is so keen. The potential damage could prove far worse than the many cancellations of both civil and military projects which our aircraft industry has suffered in the past. It is feared that the effect could be that our once very proud industry could fast dwindle into a capability and rôle of subcontractor.
It is for this reason that I believe it is better to ask this Question now than at a stage when British Airways have come to their decision and the final sanction of Government is being sought. In raising this Question and in expressing a view, one is mindful of the pitfalls of apparently taking up a position either in one camp or another, with the camp of British Airways fiercely defending their right to make an independent commercial judgment to purchase what, in their view, is the most attractive, competitive aircraft, and on a time-scale that they require. On the other hand, there is the position in the industry's camp where they expect a right for home support from the major national flag carrier.
The ideal solution is for a close and continuing co-operation between these two parties. It is this apparent lack of close co-operation, demonstrated by the informal Press conference in New York, which is one of the prime purposes for my wishing to press Her Majesty's Government to try to rectify it. I do not profess to know what spurred Mr. Stainton, who has served British Airways with admiral dedication and zeal for many years, to make those remarks. I do not know whether it is that the British Airways Board as a whole are now fed up with the apparent incessant delays and procrastinations in making decisions, and are genuinely worried about the time-scale and delivery of their new aircraft.
But both the timing and the venue of the remarks were somewhat unfortunate, to say the least. To choose the occasion of an inaugural flight of Concorde to land at New York—which in itself is a great achievement and was not exactly encouraged by our American friends—to give this Press conference and indicate that British Airways were planning to buy American when, so my spies inform me, British Airways only a fortnight before invited British Aerospace to tender for this very market, is not a classical way towards close co-operation. I hope that the noble Lord, Lord Oram, will be able to say whether my information is correct; that is, that British Aerospace are currently preparing a tender to be submitted in a couple of weeks to British Airways.
What would be the consequence to the aircraft industry if British Airways decided to do this and received the blessing of the Government to place this vast order with American companies? I believe the damage would not just stop with British aerospace and its airframe division. The damage would reverberate to Rolls-Royce and all the thousands of equipment companies, and to in excess of 300,000 people who depend for their livelihood on this industry. The damage would not just stop at the loss of this huge order. Other airlines regard British Airways as pace-setters and they would also buy American. One would be faced with the familiar airline argument of commonality. One would see generations of American aircraft in the future.
One would have the repercussion on the potential European industry, which is still in its puberty and which so desperately requires even a medium-term policy and a demonstration of the Government's faith in that industry. Out of all this gloom one must recall that the Government when facing industrial problems have shown over the past three years a vigorous policy to protect jobs wherever possible. One must recall their attitude and policy in subsidising the American Chrysler car company. One must recall their recent attitude and policy towards the Polish shipping industry. I am not criticising them for that, and I am hopeful that the noble Lord, Lord Oram, will have something encouraging for the British Aircraft industry to say when he replies to the Question. Perhaps he could take this opportunity to confirm that the Government are willing, if asked, to provide finance for launching aid and funds for research and development, to help to secure the new generation of aircraft.
However, the key question to which I should like the noble Lord to reply as regards this massive British Airways order is: can we as a nation afford to allow a British order for £120 million-worth of new aircraft to be placed abroad when we have the capability and the resources to provide them from our own industry?
I do not wish in any way to imply that British Airways should be forced to purchase unattractive, uncompetitive and uneconomic aircraft for their future fleets. Luckily, I do not think that buying British or, for that matter, buying European would have that effect. Certainly, in the past we have seen the VC.10s rated as the aircraft with the greatest passenger appeal of all time. We have also seen the Tridents, the Viscounts and of course the BAC. IIIs, which have served both British Airways and British Caledonian. I do not believe that any member of the British Airways Board would relish the decision to buy American, although I might add that British Airways' policy on purchasing equipment, and particularly training equipment—for instance, the flight simulator—has shown a singular lack of enthusiasm for the British equipment that was available. I think that is regrettable. But I believe that there is a national case for finding a formula for this re-equipment programme to sustain this—
My Lords, I apologise for interrupting the noble Earl, but, on a point of order, I wonder, as there are only two Back-Benchers on the other side of the House, whether they would refrain from conversation so that we can attend to this most interesting discussion.
My Lords, British Airways have, I believe, a duty to try to achieve this order through British industry. British Aerospace have a duty to make it feasible; and the Government have a responsibility to see that the duty is made possible. But, having said all that, it is not a bad duty, because most of us believe that British-designed and British-built aircraft happen to be the finest in the world.
6.3 p.m.
My Lords, I know that all your Lordships present tonight will be most grateful to the noble Earl, Lord Kinnoull, for putting down this Question. Likewise, I would think that practically everybody who is concerned with British Aerospace in whatever capacity would feel the same: but it is sad that such a Question should have had to be put down.
Very briefly, may I go into the back-ground to why this has arisen. British Airways appear to have been overwhelmed by a potential stifling by a shortage of equipment without becoming aware of it. I think that it is almost unheard of for any major airline to decide that it wants to add a new type of aircraft to its fleet at less than 24 months' notice. If British Airways' medium requirement is for 4 to 8 new aircraft by the 1979 summer season, I very much doubt whether even any of the American companies could supply those aircraft in time. It is perfectly true that for quite a long time British Airways have been very short of short-haul aircraft. They have plenty of Tri-Stars but are very short of aircraft on the dense Continental routes. Perhaps one reason is that they, unlike certain major American airlines, have not reordered since 1967 types which they already use and which are in service. Perhaps that is because they regard the BAC. 111 or the Trident as passé, perhaps because they are too noisy or perhaps because British Airways have been waiting hopefully for a new-technology aircraft to appear. Unfortunately, there is no sign of a new aircraft in the 100- to 120-seater bracket and that is what I believe British Airways would like. As the noble Earl said, that makes them fall back on the 111, the DC.9 or the Boeing 737, and of course those American aircraft are very fine products from the United States. There is one possible product which might do, but the time factor is wrong: that is the Fokker VFW Super F.28. However, I am given to understand that that will not be ready until 1983 at the earliest. So we are left with three choices among the existing more or less conventional aircraft. The BAC 111–500 was developed in the late 1960s specifically for British European Airways and all it is is a stretched version of the original 111. That was developed following a requirement by Freddie Laker, who was then running British United Airways. I believe it is no secret that, at that time, BEA said they would infinitely have preferred the Boeing 737. One reason is that the 111's main problem is its engine. I agree that it is built by Rolls-Royce, but basically it is smaller and less powerful than the American JT 8B. The 111's capacity has been increased but at the expense of performance. Also, alas! the noise factor has not decreased. It is true that its operating costs per mile are lower than the American aircraft but that does not really offset its slightly smaller capacity. What is worse is that I believe that British Airways could not legally enlarge its fleet of 111's unless the new aircraft are fitted with silencers and water injection systems, because, after September 1978, British airlines will not be allowed to add aircraft to their fleets which do not meet British noise standards. Worse is to come, because the 111's payload is further restricted in hot weather and also from short and high-altitude runways. However, after this somewhat gloomy picture, there are some rays of sunshine. If British Airways should buy American aircraft, it does not necessarily shut the door to a larger new British or Anglo-European aircraft. By the mid 1980s, I am led to believe that British Airways will need a new 160- to 200-seater aircraft. However, that is a somewhat vague requirement of theirs and, like the noble Earl, Lord Kinnoull, I should very much like to know whether the noble Lord, when he winds up, will confirm that British Airways have given a particular specification to British Aerospace about this. I was going to say that the BAC XII would fall into this category but, unfortunately, I see from The Times today that it has come to a most untimely demise. I wonder whether the noble Lord can confirm today's report in The Times and also confirm that, if we have the new A.300 Airbus, the proportions quoted are right—namely, British 40 per cent. French 25 per cent. and West Germany and Holland 35 per cent. Also, will British Aerospace continue to negotiate to be a full member of the consortium for the A.300/B.10 Airbus? Basically, it seems that British Airways' requirements, if they are not already specified, are not very tangible. I think they really ought to look into the crystal ball and get right what it is they want. To sum up, it seems almost unbelievable that the management of British Airways—one of the major airlines of the world—should allow themselves to be short of aircraft. They seem to have blinded themselves to the fact that too many of their short-medium range seats are tied up to too few large aircraft. They seem to have severely underestimated the task which they faced in re-equipping their fleet by 1980. So they have got themselves into a terrible mess. But, as I say, something might be done which would, in the end, be beneficial in clearing up the mess. The mistakes could be put to some use by keeping the present 111–500 in production. This would cut production costs and give our sales team, who are presently in Japan, a great chance of selling some there. As the noble Earl said, the timing of Mr. Stainton's announcement in New York was very unfortunate, because he made it exactly 24 hours before a sales team from BAC went to Japan to try to sell the 111. Anyway, if the 111–500 could be kept in production, it would at least keep some work going in British Aerospace in the United Kingdom, instead of presenting it to Seattle and Long Beach. I am also given to understand that Rolls-Royce are presently engaged in testing a new type of silencer, which is called an acoustic-lined ejector. That would make the present 111 much more sociable, and would also help improve the export sales drive for it. The development costs of this work would not be unreasonable, particularly if they were spread over an order of the size of British Airways. The old chestnut, or argument, that a captive home market leads to uncompetitive aircraft is a load of old rubbish, because we are talking about the continued production of an existing aircraft. Before I finish, I should like to mention one of my favourite aeroplanes—the Concorde. Can the noble Lord say how much longer British Airways are going to take before there are enough crews to utilise fully their Concorde fleet? One wonders what would have happened if there had not been 19 months' delay in our arriving at Kennedy. And is Kennedy now going to delay the Australia route? I mention this only because there seems to have been a lack of forward thinking about this aircraft by British Airways, and there also seems to have been a lack of forward thinking about the training of their Concorde crews. So, to go along with the noble Earl, would the Government consider substantially subsidising British Aerospace to help it advance its new projects? Otherwise, if British Airways are allowed to buy American and other airlines follow them, as they are trend-setters for most of the other world airlines, our own newly nationalised aerospace industry will lose not only British orders but also wide export orders.6.13 p.m.
My Lords, we are tonight, as so often, grateful to my noble friend Lord Kinnoull for raising this matter, and for having the luck—I suppose it is only luck at this stage in the Session—of being able to find a slot before the Christmas Recess for this Unstarred Question. It is indeed an appropriate moment to make these points, and I am happy that we have, as some Unstarred Questions go, come on to this debate at a fairly early hour. Some of us were here till nearly midnight last night on another matter.
Of course, as both noble Lords who have already spoken have said, this debate is prompted by Mr. Stainton's remarks in New York a week or so ago. British Airways' re-equipment problems differ significantly from division to division. There are four major divisions within British Airways—the overseas division, the European division, air tours and the helicopters. I shall not touch on the helicopters, but will run through the other three important divisions. First, there is the overseas division and the problems which confront them are not as serious as those which confront the European division, but are worthy of mention. The present fleet consists of Tri-Stars, 707s, some elderly VC.10s, some 747s, including a small number of Rolls-Royce powered 747s, and of course the Concordes. As for new aircraft, the overseas division is planning for, and has indeed ordered, 500 series Tri-Stars which are a smaller aircraft with a longer range. We are told that they have been considering a variant of the DC.10, but I rather think that, for the moment at least, that option is closed. They will certainly be buying some more 747s fitted with the Rolls-Royce engine. Hopefully, they will be buying some more Concordes one day. But they are also faced with the problem of replacing the VC.10s and the 707s. This is not an immediate problem, certainly not so pressing as the problems facing the European division, but it is one which they ought to be, and no doubt are, considering now. The options are fairly limited. For example, they could go along the route of a new variant of the 707 fitted with a quite new engine, the CFM 56, which is a joint venture between General Electric and a French manufacturer. Alternatively, they could choose the B.11 variant of the A.300. "Variant" is perhaps hardly the right word, because it is planned to equip that aeroplane with four engines instead of two, which by any standards is a major modification. None the less, that is a real possibility and one which they are no doubt exploring in depth. I Would not want to express a view on the technical merits of the two aeroplanes; they are both only paper projects at present. But I hope that the variant of the European aeroplane, the B.11, will prove to be the more acceptable for their requirements, because of course it has a much larger content of Anglo-European workmanship. May I now come to the European division, which is really the core of the problem raised by my noble friend tonight. As he said, the urgent requirement is to replace the Trident Is and IIs. Both of these marks are approaching the end of their working life, and are becoming very noisy by modern-day standards. Certainly the Trident Is must be considered ripe for retirement by next year or early 1979. Indeed, we are told that British Airways will require the replacement for the summer season of 1979. As has been said, the choice in front of British Airways to replace those two types is the III, the Boeing 737 or the Douglas DC.9, but none of those three types would do as a replacement for the Trident III, and thus they can be regarded only as an interim solution. Of course, the Trident Ills will have to be replaced in due course and, in parenthesis, may I ask the noble Lord, Lord Oram, whether he can give us some guidance as to the planned retirement date for the Trident Ills, particularly in the light of the much publicised difficulties with those aeroplanes which occurred a few months ago? Is it the case that the retirement date has been brought forward and, if so, will that affect the decisions concerning British Airways which we are discussing tonight? In the long term, whenever they may come up for retirement, all the Tridents must be replaced with a somewhat larger aeroplane than the three types which we have mentioned this evening, and that would be either the BAC.XII—the British Aerospace production, which I understand would be manufactured in conjunction with French partners—or the A.200, which would be a totally new technology of aeroplane, as distinct from the 2.XII which would have a strong flavour of the 111 about it. The immediate problem which faces British Airways is to replace the Trident Is and IIs. I certainly believe that the BAC.111 alternative—the 500 series aeroplane—is the best solution. None of the three types under consideration is ideal. However, when one remembers the drain on the balance of payments which would follow from a decision to buy the American aeroplanes, I believe that these wider considerations, which may not be immediately apparent to the directors of British Airways whose responsibilities lie elsewhere, ought to weigh with the Government at least, and that they ought to use their influence to see that the 111 is the aeroplane which British Airways purchase. We come now to perhaps the most thorny problem, and perhaps a political minefield for the unwary—namely, Air Tours. Air Tours is the charter company that was operated originally by BEA; it is now part of the British Airways group. If my memory serves me aright, the company was originally set up in 1968 for the single purpose of finding a home for the Comet fleet of British European Airways, aeroplanes which were then coming to the end of their life with BEA but which still had some flying left in them. Therefore a separate charter company was set up, based at Gatwick, and it has been operating from there ever since. The Comets lasted for three or four years with Air Tours and were then replaced by the early Boeing 707 models which were then becoming surplus to the requirements of BOAC. Now those 707s are also coming towards the end of their life and British Airways have to decide what to replace the 707s with. As I have explained, Air Tours have always operated, so far at least, cast-offs from British Airways main line divisions, but no suitable cast-off is now available. For various technical reasons, the Trident Is and IIs, which will become surplus shortly, are not suitable for the Air Tours operation, so British Airways have been endeavouring for some time to acquire a fleet of second-hand Boeing 737 aeroplanes for this purpose. I do not believe that to be a proper operation for Air Tours to undertake. They were set up originally for the distinct purpose of operating cast-off aeroplanes—that is, a home for aeroplanes which might not otherwise have been saleable was found for them in that company—and it was very proper for them to do that. However, during their time in the charter business Air Tours have been able to establish a highly competitive position because of certain favourable arrangements which they enjoy as part of British Airways, not the least of which is access to cheap aeroplanes. But another favourable arrangement—one which is most important nowadays—is access to comparatively cheap fuel, since British Airways, as a huge consumer of aircraft fuel, enjoy the most favourable price. Thus, British Airways Air Tours have been able to compete very favourably, and some may say unfairly, in the passenger charter business. For most of the period of the existence of Air Tours, the market has been under-subscribed. That is, there has been more business than aeroplanes. However, that situation has not always pertained. When there has been a shortage of business Air Tours have, by and large, taken at least as much of their share as anybody, and perhaps more than their share. I believe that the protection which British Airways generally enjoy in the scheduled service market is such that the same kind of protection ought to be enjoyed by the major independents in some areas of charter business. For that reason, I believe that British Airways Air Tours should not be allowed to purchase 737 aircraft, be they new or secondhand, and that now that there is no suitable aircraft available for their use the operation should be progressively wound down and the staff reabsorbed into British Airways main line divisions. In conclusion, I believe noble Lords are entitled to ask whether British Airways ought to have a totally free rein in choosing their aeroplanes or whether any political or national constraints should be placed upon them. I believe that British Airways ought to buy British aeroplanes, particularly when they can be shown to suffer no significant penalty. Indeed, I recall that when British Airways ordered the Trident III some years ago they complained that the aeroplane was less competitive than the Boeing 727, which they were then considering as an alternative, and that they were able to persuade the Government of the day, which I believe was a Labour Government, that they were entitled to a subsidy because they were being required to buy the Trident. Whether or not that subsidy was justified I cannot say, because I am not sufficiently in tune with the figures to be able to judge, but they received a subsidy of £25 million or £26 million and they bought the Trident III. I do not believe that British Airways should again be paid a subsidy. I believe that British Aerospace, in conjunction with Europe, ought to be able to stand on its own two feet. But I also believe that British Airways ought to be sufficiently patriotic, if that is the right word, to buy the European aeroplane, certainly in the long term. As I have explained, they have a choice, so far as the European division goes, of American or European aeroplanes in the short term, but in the long term the choice is either the X.II or the A.200. Both of those aeroplanes are, of course, European. I hope very much that British Airways will choose the BAC 111 for its immediate requirements in the European division. From what I have heard and from what the noble Earl, Lord Kimberley, has said tonight, I believe that that aeroplane can be supplied to comply with the very properly strict noise regulations which are now in force and that, furthermore, the aeroplane will be compatible with the fleet of 111s which British Airways already operate. I always hesitate before suggesting any kind of interference in the management of nationalised industries, but noble Lords will recall that under Section 40 of the Civil Aviation Act, which set up British Airways, power was retained to the Minister, in certain situations where the national interest was said to be involved, to make directions to British Airways to adopt a certain course of action. Whether it will be necessary to go to those lengths in this case remains to be seen, but if occasion demands I believe that the Minister should stand ready to use that power. I say this with hesitation, because I am wary about interfering in the day-to-day management matters, or even in the major management matters of nationalised corporations, but, unhappily, British Airways have not always got it right in the past when purchasing aeroplanes. For example, the Trident I, although a splendid aeroplane in many ways, was too small and was made too small at the insistence of British European Airways. If they had followed what was the manufacturers' wish at that time, the Trident I would have been a larger and perhaps more successful aeroplane. For that reason, I believe that British Airways ought to listen very carefully to what British Aerospace, the largest single unit of British manufacturing expertise, have to say, and I hope that they will buy their products.6.30 p.m.
My Lords, I agree with the previous speakers that we should be grateful to the noble Earl, Lord Kinnoull, for putting down this Unstarred Question at this time, and we should be grateful to him, too, for the speech he made in support of it. I am sure that noble Lords will agree that the speeches we have heard so far show how extraordinarily well-informed are the noble Earls, Lord Kinnoull and Lord Kimberley, and the noble Lord, Lord Trefgarne. I agree with all they have said. Consequently I shall be extremely brief for I have not very much to add.
With the noble Lord, Lord Trefgarne, I believe that the first thought of British Airways should be to buy British, unless there is nothing British suitable. From what we have already heard this evening it is clear that there is something British suitable—the latest BAC.111, Series 500, and still further editions of that aircraft, which could replace the aging fleet of Viscounts, BAC. 111s and Tridents I and II, so I heartily agree with the noble Earl, Lord Kimberley, that the BAC. 111, Series 500, should be kept in production. My own information, which comes from a most reliable source, confirms what we heard from the noble Earl, Lord Kinnoull, that British Airways and the British Aerospace Corporation were indeed in negotiation and I think, from the Corporation's point of view, are still in negotiation for a solution on the lines I have mentioned. So Mr. Ross Stainton's reported remarks in New York are particularly surprising. The noble Earl, Lord Kinnoull, referred to an evaluation of the three aircraft we have been speaking of. I do not know how far that evaluation has gone. Indeed, I am surprised that it has finished. My own evaluation, which is certainly not detailed, suggests that there is little to choose between these three aircraft—the BAC.111, the 737 and the Douglas DC. 9. Short of some very compelling reason, of which I am not aware, British Airways should choose the BAC. 111, Series 500. The noble Earl, Lord Kimberley, said that this aircraft is noisy. The fact that the BAC. 111 is noisy has been a thorn in its flesh for quite a long time. Many years ago when I was chairman of the Air Registration Board we were conscious of this fact, but all those years ago there was designed by Rolls-Royce what they called a "hush-kit" which would have reduced the decibel level very appreciably indeed; I have no doubt that what can be done today would be better than what would have been done then. On price the BAC.111 obviously scores. The airline would pay in pounds and not in expensive dollars; a significant proportion of that would come back to the Inland Revenue, and it certainly would not come back to the Inland Revenue in the case of the 737 and the DC.9. Moreover, my understanding of the situation is that those aircraft would incur a 5 per cent. import duty. So on sheer financial grounds there seems a very strong case for the BAC. 111. Furthermore—and this is not insignificant—British Airways is used to BAC.111 spares, simulators and training. That means that the later versions of the 111 aircraft would require only modification to those three things and not wholesale change which would follow the adoption of a foreign aircraft. Finally, if British Airways go abroad for their new aircraft, as indeed the noble Earl, Lord Kinnoull, pointed out, this would be a body-blow. It would mean another nail in a coffin which has already had too many nails stuck in it. To deny the British aircraft industry the opportunity of this vital order would be disastrous for the Aerospace Corporation and the aircraft industry as a whole. This unfortunate affair suggests an unexpected lack of co-operation between the nationalised airline and the nationalised construction industry. I suggest that the Government should insist that their two organisations should work together for the national, and indeed the European, good.6.36 p.m.
My Lords, I am sure we are all indebted to the noble Earl, Lord Kinnoull, for raising this very important subject. It seems to me that it can give no pleasure to the British Airways Board to have to contemplate placing an order in America. Obviously they are as patriotic and as wishful to help British industry as any other body of citizens. It seems to me that this raises a simple question, but one of major Government policy. Do you wish British Airways to be allowed to order and use aircraft which the Board consider are the most efficient in performance, in price and in delivery? Or do you wish to handicap them in their maximum operational efficiency by compelling them to buy what they do not consider is absolutely the best for their purpose? That is an issue of major Government policy.
We have heard tonight from many noble Lords very powerful arguments in favour of British products. I am not going into the technicalities of the various possible replacements for obsolete and semi-obsolete equipment, but I am fearful of the suggestion of the noble Lord, Lord Trefgarne; that is, that the Minister should consider issuing a direction to British Airways to order a particular type of aircraft on wide national grounds. If you do this you open the door again to what British Airways had to tackle with the Trident III; that is, making our nationalised operational airline a subsidised servant of the Government and remembering also that that airline has to compete with the airlines of other countries and therefore that you are imposing upon it a handicap. The noble Earl, Lord Kinnoull, asked: "Can we afford to allow an £120 million order to go overseas?" Equally, I would put the question: Can we afford to impose upon our nationalised major airline a handicap in their competitive ability against other airlines unless they are continually subsidised to make up that deficiency? That seems to me the major question and, in my view, British Airways—and I shall regret it if they have to do it—should be free to buy equipment most suitable for their purposes. Whitehall support, advice, and assistance, short of subsidy, I am sure are needed by British Airways and welcomed by British Airways. But I do not believe that it is sound national policy from the operational point of view to come down on the side of forcing the company to order what they do not want, for general industrial reasons, even for political reasons. I would conclude with this. I have been involved in this in the past. Many years ago, when I was a member of the British European Airways Board, we as a Board wished to order a product from de Havillands, the Trident I. I would differ very much from the noble Earl, Lord Kinnoull, in his criticism of the Trident I. In its day it was a splendid aircraft which did much for British prestige in Europe, in China, and in other countries.My Lords, I think the noble Lord is referring to what I was saying about Trident I. Yes, indeed, it was a magnificent aeroplane. It was a bit noisy by modern-day standards, but even by the standards of its own day it was too small.
My Lords, I am not going to argue on that. But it was a better aircraft than the one which Her Majesty's Government at that time endeavoured to force upon British European Airways. The Board wished to order the Trident. Heavy political pressure was brought upon us to order a product from a large and very fine aircraft factory in the Midlands, for industrial reasons. No doubt politics was a background to that, but there is no harm in that. As a Board we stuck to our guns and said that if the Minister gave that direction, as the noble Lord suggests the Minister should give it in this case, the day we opened the post and found that direction we as a Board, including executive members—I was not an executive member—would resign and say why. That is the danger of allowing Ministers to exceed what I believe is their power in a great national issue. It is a balance of considerations. Noble Lords here have all been on one side. I am rather on the other side, because I am for the operator having the maximum chance. So I shall be interested to hear on which side of this balance the noble Lord, Lord Oram, comes down.
My Lords, can I ask the noble Lord, before he sits down, whether he is saying that at no stage should there be an attempt to bring two nationalised corporations into such agreement with one another? Is it not, therefore, essential that at some stage Ministers do intervene?
My Lords, I certainly agree that the construction industry and the operational industry should work closely together. It is no good trying to dig up the past, who was to blame and to what extent either party was to blame for the lack of cooperation, or the lack of foresight, if you like. We are today facing a situation where we must not have an inquest on the past but resolution and decisions for the future.
6.45 p.m.
My Lords, we are grateful to the noble Earl, Lord Kinnoull, for raising this question tonight. I think he has rendered considerable service to the aircraft industry by constantly initiating these debates and raising these very important questions which affect the future of the whole of the industry. I am afraid I do not agree with the noble Lord, Lord Balfour of Inchrye, in his exchange with my noble friend. I think that what is really behind all this is the question whether or not we are to have an aircraft industry in this country. I do not know much about the motor industry, or shipbuilding or steel, but the aircraft industry is a vital technological industry which feeds a great field of engineering in this country; that is what we proved in 1935 when the rearmament programme was begun.
I think we know the power of the American lobby, certainly with regard to recent happenings in relation to Concorde. Of course, we get our aerospace orders and we get our co-operation with Europe; we get sub-contracting in the supply of hovercraft and equipment and engines and so on. But we have proved in the past that we are makers of aircraft, and if we had not been so in 1939 we should have been in a sorry state. We need employment in this country. I suggest that we should send Mr. Harold Lever to talk to the aerospace industry lobby in Washington: it is their power which is the whole problem. It is no good sending the Foreign Secretary because he does not understand the problem. America understands straight talk. If we tell them that we are determined to have a viable aircraft industry in this country, and if we stick to our guns, I think they will understand. Without an efficiently designed technological aircraft industry we have no real defence in this country, and this was, of course, proved in 1937, 1938 and 1939. Therefore, I hope very much that the Minister will tell us tonight, in reply to the case so adequately made by noble Lords, that the Government are to give a new deal to the aircraft industry in this country. We have nationalised it. We are constantly losing our best brains overseas. I think that the time has come, if only in terms of employment, for the Government to give a new deal to the aircraft industry.6.48 p.m.
My Lords, all speakers in this debate have begun by complimenting the noble Earl, Lord Kinnoull, on having raised this Question tonight, and I am sure that in no case was it a formality; it was, and certainly it is in my case, a genuine compliment to him for having raised the matter. This subject is, of course, one of very great importance; it has generated a great deal of attention in the Press and on the radio; the noble Earl is to be congratulated on being quick off the mark and timely in bringing it to your Lordships' House. I rather gathered from his earlier comments that he thought his timing was rather better than the timing of the Press conference in New York. He may be right in that. In any case, it has certainly led to a balanced, responsible and well-informed debate, and I am sure that he takes satisfaction from that.
The balance was particularly helped, in my view, by the contribution from the noble Lord, Lord Balfour of Inchrye. He looked forward to seeing upon which side of the argument I would come down, but I am sure he would not expect me to admit to coming down on either side. However, I genuinely point out that I felt that many of the points which he raised about the need for an airline company to be able to exercise its commercial judgment in these matters were extremely wise. A number of speakers have been able to inform the House on the basis of a great deal of technical knowledge about varieties of aircraft. In that respect I would not attempt to rival or comment upon what they have said. I do not think that it is my role, certainly this evening, to enter into that area, but the debate was improved by the knowledge which quite a number of noble Lords obviously have in this area. Before turning to the main controversy, I should like to deal with two specific points which were directed to me. The first was raised by the noble Earl, Lord Kimberley, and the second by the noble Lord, Lord Trefgarne. The noble Earl, Lord Kimberley, referred to The Times article this morning. I think he asked me whether I would confirm it or otherwise. Once again, that is a question that the questioner would not expect anyone at this Despatch Box to say Yea or Nay to, knowing journalism as we do. However, I point out that the article was purely speculative. According to my information, the Government have not yet received a report on the meetings of the study groups of British and European manufacturers and therefore it is not possible for me to comment. However, we may have other opportunities for pursuing the matters that he has raised. The specific matter that the noble Lord, Lord Trefgarne, raised with me—I am grateful to him for having given me notice—concerned the retirement date of the Tridents and whether the recent difficulties with the cracks in the wings had altered the schedule in that respect. It is not yet clear whether those difficulties with the Trident aircraft will have an effect on their operating economics and hence on their retirement date. I am informed by British Airways that this was not a significant factor in their fleet studies for the progressive replacement of the Trident fleet, the older members of which are not, of course, affected by the wing cracks. There were considerations other than the one to which the noble Lord has referred. It might be useful if I remind the House of the procedure which exists for the sanction of purchases of aircraft by British Airways. Under the requirements of the British Airways Board Act, approval of the Government needs to be sought by the airline for the acquisition of any aircraft. It has been widely known that some time in the next few years British Airways would need to begin to replace some of the older aircraft in its European and domestic fleets. The precise timing of the replacement programme has been dictated by the operating economics of the existing fleet and of possible replacement aircraft, but the airline now feels that it must shortly take a decision on a short to medium range aircraft of 100 to 130 seats with which to begin the replacement programme. British Airways have not yet completed their evaluation of the various types of aircraft on offer. I think that the noble Lord, Lord Kings Norton, said that he would be suprised to hear that they had done so. I can confirm that they have not yet finished this evaluation, but their examination includes the British BAC.111, the Boeing 737 and the McDonnell Douglas DC.9. The initial evaluation process is one for British Airways to make on the basis of their requirements in terms of aircraft size, range and other operating factors governed by the markets which they serve. As has been pointed out by several noble Lords, this Question arose from remarks attributed to Mr. Stainton, the Deputy Chairman of British Airways, at a Press briefing in New York last week. Some of the reports that have followed that Press conference may have given the impression that decisions have already been taken. However, I assure your Lordships that that is far from the case. Indeed, I should like to quote, first, from a statement which British Airways issued only today and, secondly, from Mr. Stainton's interview. The British Airways statement said:I think that that meets the point raised by the noble Earl, Lord Kinnoull. British Aerospace has been notified, as one of the manufacturers, of British Airways requirements and British Airways is awaiting their response. It then says:"No new aircraft of this type is on offer or seems likely to be within the time available. The choice must therefore be between three existing types or comparatively minor developments of them. They are the BAC.111, the Boeing 737 and the McDonnell Douglas DC 9. British Airways has notified these manufacturers of its requirement".
I suggest that that is in line with one of the answers which Mr. Stainton gave. He said:"No immediate decision is likely".
I think that those two quotations substantiate the point I have made that decisions have not already been taken despite the implications to the contrary in some recent statements. I have been making inquiries and I can quite definitely say that the British Airways Board has not yet decided on a replacement aircraft. Again, it was the noble Earl, Lord Kinnoull, who said that some of his informants—I think that he called them spies—had indicated that British Aerospace was in a position to put something before British Airways. It so happens that in quite an unofficial capacity today I met my noble friend Lord Beswick and discussed the matter with him. Although, naturally, he is not anxious to become involved in public controversy on this matter at this stage, he authorised me to say that British Aerospace is in a position to make a very attractive proposal and that that would be made within the time-scale that British Airways has laid down. So I hope that that reassures the noble Earl on one of his points. He then raised two other matters, some of which have been repeated or backed up by other speakers. He asked, as he put it: Can the United Kingdom afford a British Airways order to be placed abroad? It is clearly desirable that the requirements of our national airline should be met as far as possible by the British aerospace industry or possibly by collaborative ventures involving the British aerospace industry, but only British Airways can make a commercial judgment as to whether there is a suitable British aircraft available to meet their requirements. Both British Airways and British Aerospace are expected to make an adequate return on the capital which they employ and they must, therefore, formulate their proposals on a commercial basis. The noble Earl also asked me—and this has been echoed elsewhere—to state the Government's position in respect of possible aid to British Aerospace. Since nationalisation of the industry British Aerospace's finances are provided by loans from the National Loans Fund, public dividend capital and its own internal resources. British Aerospace is not eligible for assistance for civil aircraft projects under the Civil Aviation Act 1949, under which launching aid has previously been provided. The Aircraft and Shipbuilding Industries Act enables up to £30 million, which can be extended to £50 million by Order, to be granted for projects which it would not otherwise be in the Corporation's commercial interest to undertake, but both the Corporation and the Government intend that any new developments should show an adequate financial return. I hope that that at least sets out the legal situation. I do not think that the noble Earl would be disposed to press me for any further indication of possible future developments. I hope I have made it clear from what I have said and from the quotations I have given that the decision on this matter has yet to be made. But once the airline has made up its mind, as I said earlier, it will then need to seek Government approval for its intentions. The Government will, of course, need to take into account all the wider implications of national interest, and particularly the interests of the British aerospace industry, before they come to a decision. They certainly will take that sort of factor very much into account. As I have said, no proposals have yet been put to the Government and noble Lords will not therefore be surprised if I say again, as I have implied before, that it would be quite premature for me to speculate on the outcome. Each case must be considered very carefully on its merits, and each case will be considered very carefully on its merits. In conclusion, I would assure the noble Earl, Lord Kinnoull, and others who have spoken, that in reaching decisions in the procedure that I have mentioned, certainly this evening's Question and the debate which ensued have been a valuable contribution. All these expressions of view will be carefully taken into account, not only by Her Majesty's Government, for whom I speak, but also one would expect by British Airways, who can read Hansard. Again, I thank the noble Earl, Lord Kinnoull, and the other noble Lords who have contributed to the debate."It looks to me as though there are probably not more than two or three candidates for this and they are British and American in origin, and I think during the next three months or so we shall be making up our minds which it is".