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Lords Chamber

Volume 432: debated on Wednesday 30 June 1982

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House Of Lords

Wednesday, 30th June, 1982.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Gloucester.

Hazardous Waste Disposal

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 when they are going to set up a Hazardous Waste Inspectorate and to implement the outstanding recommendations of the Select Committee on Science and Technology concerning hazardous waste disposal.

My Lords, although a final decision on the location of the Inspectorate for Hazardous Waste has still to be taken, we expect to be able to establish it by the end of the year. In the period since the report was published, interested organisations have submitted views on it to the Department of the Environment and a series of very valuable meetings has been held with the major groups—the local authority associations, water authority representatives, industry and the disposal contractors, the Institute of Waste Management and environmentalists. The Government's commitment remains to seek the best means of implementing most of the recommendations and, while a wide measure of co-operation has been expressed at those meetings by all parties, there is still much work to be done.

My Lords, I thank the noble Earl for that reply, but is he aware that there is extreme public concern about all questions relating to toxic and hazardous waste? Is he also aware that it is now twelve months since your Lordships' Committee reported? I should have thought that that was sufficient time, even for the Department of the Environment, to come to some conclusion on the matter. The recent programme on BBC television, in which a number of noble Lords on the Government Benches took part, I think highlights the need for much more urgent action. May I also ask how, when in the fullness of time, decisions will, I hope, have been made, those decisions will be disseminated to the public? They need in effect to be notified to the various local authorities and to the contractors—

May I therefore ask that some thought be given to the issue of a waste management paper?

My Lords, unlike some of my noble friends, I was in great sympathy with the noble Lord until he used the words "even the Department of the Environment". The department is very proud of its record and of the speed at which it acts. I can say that the programme of research is continuing and, partly based on its results, work on the waste management papers on landfill and co-disposal is going ahead. Encouragement for the adoption of co-disposal in the right circumstances is continuing, as is the identification of further research. The Health and Safety Commission's notification scheme for new substances has been introduced informally and includes provision for information on wastes.

We hope to make a series of announcements, which will be followed in due course by a document containing a collective response. The Government feel that this remains the most appropriate way to focus attention on securing real improvements.

My Lords, would the Minister agree that one of the committee's most important and urgent recommendations was that all professional handlers of hazardous waste outside the place of production must be licensed by their waste disposal authorities? Can he tell us how soon that very important recommendation is going to be implemented?

My Lords, as I said in the House last November, the Government feel that waste disposal authorities should progress further into the preparation of waste disposal plans before bringing in Section 1, which I think is what the noble Baroness is referring to. The Government still believe that this is the best course. A considerable number of other authorities are now nearing the completion of their plans and the Government feel that a good momentum is now being maintained in this area. The Government are still firmly of the view that implementation of Section 1 must await further progress on these plans.

Nuclear Weapons: Risks Of Deployment

2.40 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 are aware of the statement in the Labour Party's letter to Mr. Reagan that each new nuclear weapon, wherever deployed, serves only to increase insecurity and instability, and whether they are further aware that this applies to all nuclear weapons and not only to Soviet missiles.

My Lords, the Government do not agree with this statement. Our objective is to achieve stability and security at lower levels of armaments. But we need strong defences, including new weapons if necessary, as long as our potential adversaries devote enormous resources to the means of war.

My Lords, is the noble Lord aware that the Labour Party letter, to which I have referred in my Question, also says that in the field of nuclear arms both the United States and the Soviet Union long ago passed the level of destructive power which might be thought necessary to deter an aggression by the other? In these circumstances, will he not think again? Is not the doctrine of parity of overkill a lunatic proposition, whoever utters it?

My Lords, in these circumstances, the Western alliance attaches the greatest importance to the arms control talks which are in progress at the present time.

My Lords, without in any way wishing to criticise my noble friend, does he not think, if he reads the Question carefully, that the answer, Yes, or, No, would have been quite sufficient?

My Lords, it was a Question which by its nature was rhetorical. In line with many other Questions which the noble Lord, Lord Jenkins, asks me, I thought that there was really no satisfactory Answer.

My Lords, would not the noble Lord agree, and agree strongly, that the talks in Geneva on this subject between the Soviet Union and the United States, in the context of my noble friend's Question, are indeed very important at this time? Would he not also agree that there is a prospect of success, although it is dangerous to make any predictions in this field? Could he tell the House to what extent we are in close touch with the United States' Government in connection with these talks? One would like to feel that we have a certain amount of influence, although we are not ourselves participants in the talks.

My Lords, I share the noble Lord's hope that there should be a real prospect of success in the talks to which I referred. Indeed, the START talks on intercontinental ballistic missiles began yesterday. We are, of course, in close touch with the Government of the United States. But there is one criterion which has to be met if these talks are to succeed. I refer, of course, to the talks across the whole board and, whether we are talking about intercontinental, intermediate range or conventional, the agreements must be genuine, they must be balanced and they must be verifiable.

My Lords, would not the Government agree that, as between the super-powers, any struggle for what is called nuclear superiority is an absurdity? All that is necessary for the purpose of deterrence—and I repeat, for the sole purpose of deterrence—is the assured ability on a second strike to inflict unacceptable damage on the adversary.

My Lords, I think that we are starting to go wide of the Question. The noble Lord is going off into first strike and second strike, which I know is of enormous importance. I would content myself with this answer. The deterrent power of nuclear weapons, much as the West abhors them, has kept the peace of Europe for 37 years.

My Lords, arising from the latter part of the original Answer, is the Minister aware of the mood which is now sweeping America for a freeze in nuclear weapons and which is now endorsed by the Democratic Party there? What is the attitude of the Government to this very hopeful proposal?

My Lords, the whole of the Western alliance, not least, of course, the United States of America, with its great influence and great power, looks to the need to deter and that means having nuclear weapons for the foreseeable future. But I repeat that we attach the first importance to balanced and verifiable arms control and, therefore, arms reductions in the talks which are taking place.

My Lords, would the Government look again at their proclaimed unwillingness to have our independent nuclear forces considered in any of these disarmament talks, in view of the fact that in a year or two's time the British and French independent nuclear deterrents, taken together, will amount to no less than one-quarter of the number of warheads of the American nuclear deterrent forces?

My Lords, a durable agreement must be based on the principle of parity between the United States and the Soviet Union, which is clearly breached if third party systems are included on one side.

My Lords, is the noble Lord aware that one of the qualities of the noble Lord, Lord Carrington, which we lost when he left the Front Bench, was that he was capable of dealing with these matters seriously? Will the noble Lord endeavour to address himself to the proposition that overkill is an absurdity, and that either side increasing the amount of overkill necessarily increases instability? Will he address himself to that question?

My Lords, I repeat that it is precisely because of the concern, which is shared throughout the Western world, at the level of armaments that we attach the highest importance to genuine reductions in arms in the talks which are proceeding at the present time. But I remind the noble Lord that deterrence has kept the peace for nearly 40 years. If the noble Lord is in any doubt about the views of the Western alliance, may I just remind him of words which were spoken by the Prime Minister only a week ago to the United Nations. My right honourable friend said:

"As President Roosevelt commented during the last war, we, born to freedom and believing in freedom, would rather die on our feet than live on our knees".

Israel: Assurances Sought By European Community

2.47 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 publish in the Official Report the assurance sought from Israel by the European Community following the invasion of Lebanon and the reply received: and as a result what consideration has now been given to the further postponement of the 40 million dollar financial protocol, to a revision of the Community's trade agreement with Israel, and to trade sanctions and an embargo on arms supplies.

My Lords, I am arranging for the text of the assurances sought from the Israeli Government to be circulated in the Official Report. I regret that no satisfactory reply has been received. The situation in Lebanon was discussed at the European Council in Brussels on 28th and 29th June. The Belgian presidency announced on 29th June that signature of the European Community/Israel Financial Protocol would remain suspended and that a forthcoming ministerial meeting between Israel and the Community had been postponed. The presidency also noted that no military equipment was being supplied to Israel by member states of the Ten.

Following is the text referred to above:

The following assurances were sought by the Belgian Presidency, on behalf of the Ten, from the Israeli Government on 14th June:

  • 1. That the Government of Israel will apply the relevant Geneva Conventions, especially as regards prisoners.
  • 2. That it will admit international relief organisations to the territory which its forces have occupied, and will facilitate their work.
  • 3. That it will similarly admit and give normal facilities to representatives of the media.
  • 4. That it recognises both the sovereign state of Lebanon and the international frontier between Lebanon and Israel.
  • 5. That it has no wish to annex or occupy any part of the territory of Lebanon.
  • 6. That it will not interfere in the internal affairs of Lebanon.
  • 7. It will co-operate fully with the Secretary General of the UN in all the areas of his responsibility.
  • 8. It has no hostile intentions towards the Palestinian people.
  • 9. It has no aggressive intention towards neighbouring countries, particularly Syria.
  • 10. Its intention is to observe the cease-fire which has been established, so long as all combatants in the region do likewise.
  • It was made clear that these concerns of the Ten Governments were expressed in the context of their wish to work for the establishment of a global, just and lasting peace in the Middle East, in the framework of which a Lebanon free from the cycle of violence would be able to take its place as an independent, sovereign and united state.

    My Lords, does my noble friend agree that, if the Community's high-sounding protests are to be taken really seriously, they must be accompanied by some more positive action; in particular, perhaps, a total ban on arms supplies and an end to all trade preferences and credits, while Israel remains in occupation of the Lebanon? Secondly, may I put a brief question about prisoners which is worrying many people? Can my noble friend say how many prisoners are in Israeli hands and whether the Red Cross is still not being allowed access to them? Can he confirm that what Israel is doing is in flagrant breach of Article 4 of the 1949 Geneva Convention? In particular, can he confirm the many frightening eyewitness accounts of the brutality being shown by the Israelis towards their prisoners? Will he tell your Lordships' House that Her Majesty's Government are doing all they can with our partners in Europe, and I hope with America, to bring to an end this extremely unsatisfactory situation?

    My Lords, my noble friend calls for a total ban so far as arms and trade are concerned. I should like to make it clear that Her Majesty's Government have decided that approval of licences for the export of British military equipment to Israel will be withheld until further notice. So far as trade is concerned, a number of measures were discussed in Brussels, but it was felt that those measures, subsequently announced by the European Community presidency, were as far as the Ten wished to go in present circumstances. Thirdly, my noble friend asked me: whether Article 4 of the Geneva Convento whether the specific Question which my noble friend asked me: whether Articles 4 of the Geneva Convention applies strictly to the PLO in this conflict, it is our hope that the Israelis will act according to the convention's principles.

    My noble friend will notice from the text of the assurances which were sought that the first assurance sought relates to whether the Israeli Government will apply the relevant Geneva conventions, especially for prisoners. I repeat that I regret that no satisfactory reply has been received to that or to the other assurances. So far as the position of the International Committee of the Red Cross is concerned, I am advised that it has not gained access to prisoners at the present time.

    My Lords, does the noble Lord the Minister agree that in difficult international situations such as exist at this moment in the Middle East, one-sided questions and one-sided debates in this House do not enhance the role of the United Kingdom but depreciate it?

    My Lords, we have made, on behalf of the Government, our position absolutely clear. We very much hope that Mr. Philip Habib's continuing negotiations with the Lebanese Government will result in a durable cease-fire and withdrawal of forces as a first step. After that, our position—when I say "our position" I mean the position of the Ten in Europe—is absolutely clear. We have voted for Security Council Resolution 509, we have made our statement in Brussels and we stand by the Venice principles. It is the last point which answers the noble Lord's question. The Venice principles are even-handed. We hope and pray that, through that even-handed approach, peace may come to the Middle East.

    My Lords, would it not be true to say that, in war, civilian casualties are inevitable, especially when the enemy uses the civilian population as a shield? Why is there so much more compassion for civilian casualties inadvertently caused by the Israelis than there was for the civilian casualties caused by the PLO when they shelled settlements and planted bombs?

    My Lords, I agree with the noble Baroness that civilian casualties in a conflict of this nature are tragically almost inevitable. It was for that reason that the second assurance for which the Ten asked from the Israeli Government was admission of international relief organisations to the territory which Israeli forces have occupied and facilitating the work of international relief organisations. We are still waiting anxiously for a reply to that question, although I am glad to have been advised before this afternoon's Question that relief organisations are now making their way into Lebanon.

    My Lords, has the noble Lord noted that the noble Lord, Lord Chelwood, apart from a wholesale condemnation of the state of Israel without regard to any justification on the side of Israel whatsoever, is asking for assurances of the most drastic character from Israel, is demanding the imposition of sanctions, is demanding that there should be withdrawal of the necessary finance to which Israel is entitled? In the circumstances of the condemnation for which the noble Lord, Lord Chelwood, is responsible and as there does not appear to be a satisfactory answer from the Government—indeed, it is far from satisfactory—has it occurred to the noble Lord that there is an opening for the noble Lord, Lord Chelwood, and those who agree with him: that if they cannot obtain satisfaction by imposing sanctions, by destroying Israel's trade, by imposing financial difficulties on them, they should go to war with Israel?

    My Lords, I am not entirely sure whether the terms of my noble friend's Question are, in a sense, being imputed to the Government by the noble Lord, Lord Shinwell, or whether the Answer which I gave to my noble friend is being described by the noble Lord as unsatisfactory. Certainly I do not think that the stance of the Government in this difficult and tragic matter is unsatisfactory. We have put our name to the statement made yesterday by the Ten in Brussels. I believe that statement to be right. We stand by the principles of the Venice Declaration. I believe that declaration to be even-handed and to be fair. And we are signatories to the United Nations Security Council Resolution 509 which calls for a complete withdrawal of Israeli forces.

    My Lords, while the statement may well have been right, is there any reason to suppose that condemnation and exhortation, whether by the Community or by 127 members of the United Nations, will have the slightest effect on people like Mr. Begin and Mr. Sharon? Can the noble Lord say what arguments were used by those Community Governments which opposed the imposition of sanctions? They were quite effective against the Argentine régime.

    My Lords, in answer to the second question, I am afraid that I cannot, because I was not present at the discussions. However, I repeat that at the discussions among the Ten there certainly were countries which felt that the Ten had gone far enough in the stance which had been taken in this very difficult matter. So far as the power of exhortation and words are concerned, what we hope—this was the first point I made and perhaps your Lordships will agree that it should be the last—is that Mr. Phillip Habib's negotiations are now going to bring peace to the Middle East.

    My Lords, may I ask the noble Lord why Her Majesty's Government subscribed to a communiqué which had the glaring omission of not declaring unequivocally that the PLO should leave Lebanon? Does he not agree that the communiqué envisages that residual units of the PLO should still remain in Lebanon? Does not the Minister also agree that there would be no hope for stable statehood in Lebanon once there was a base in Lebanon for the PLO as an international terrorist organisation and a base for acts of murder and destruction against Northern Galilee?

    My Lords, I am not entirely sure that the noble Lord is not, perhaps inadvertently, being a little unfair so far as the statement is concerned.

    The reason I reply in that way is this. The statement included as a first step a call for withdrawal to be simultaneous: the Israelis from their positions around Beirut, the PLO from West Beirut. The statement then went on to call for the withdrawal of all foreign forces except those which would be authorised by a legitimate future Government of Lebanon. I believe that is the right way to go about it. That is what the statement said.

    My Lords, the noble Baroness, Lady Hylton-Foster, has been trying to get in for some time. I suggest that she should ask her question and that then we should move on to the last Question.

    My Lords, am I right in thinking that the noble Lord is still obliged to tell me that the Israelis are not allowing supplies into Beirut by sea by the International Committee of the Red Cross but that they are allowing civilians to be evacuated out of Beirut by sea?

    My Lords, I must apologise to the noble Baroness, but I cannot give a direct answer to that question. This is bound up among the assurances, to which we have asked for a direct reply. We have not received the direct reply which we had hoped for from the Israelis. I, like the noble Baroness, have of course been reading the newspapers and hearing the news, but I cannot give a better answer than the one which I have given during our short debate this afternoon.

    I think it really would be appropriate now to move on to the next Question.

    Registration Of Fishing Boats

    3 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 are the conditions for a British registration of fishing trawlers and whether they will explain how Spanish-owned trawlers, with one and occasionally two British crewman, can register as British ships, as a result of which they can fish within British inshore limits and their catches are counted against United Kingdom quotas.

    My Lords, any fishing boat which satisfies the conditions laid down in the Merchant Shipping (Fishing Boats Registry) Order 1981 may register as a British shipping boat. This order requires that the boat is wholly owned either by British subjects or by a company established in the British Islands and having its principal place of business there. British fishing boats registered in the United Kingdom must satisfy the manning requirements contained in the Merchant Shipping (United Kingdom Fishing Vessels: Manning) Regulations 1980, but these are not a condition for registration.

    My Lords, is my noble friend aware that as of last Wednesday there were six such Spanish boats fishing within our waters in the South-West area? Is he really saying that any foreign company of trawlers can so register with a £100 company in this country and, by employing only one British seaman—although I understand that the most employed by any of these six Spanish trawlers was two British seamen—make it possible to evade the regulations and obviously not carry out the letter of our registration? If this is to be the case and any of our competitors abroad can by this manoeuvre invade our inshore waters, does it not make a nonsense of the present negotiations which we are now having on a common European fishing policy?

    My Lords, I agree with my noble friend that the present position is unsatisfactory, but it is not perhaps quite so easy to register an ex-foreign fishing boat in this country as she suggests. It is essential that the company owning the boat should have its principal place of business in the United Kingdom. Investigations are made to ensure that these conditions are fulfilled. Recently, two such ships were removed from the register and we are now considering what further measures should be taken.

    My Lords, does the noble Lord the Minister accept that Spain has, if not the largest fishing fleet, then a fishing fleet which is as large as any in the Community, and does he accept that this situation is one of the consequences of having no agreed common fisheries policy? How soon are the Government going to get a settlement—which is now urgent—and one that takes into account the fact that the vast majority of the fish in all the Community waters is within our 200-mile limits? Is this not essential if our fisherman are to get a net return profit?

    My Lords, the question of a common fisheries policy lies outside the scope of the Question on the Order Paper. What we are dealing with is a form of legal avoidance of the British registry conditions. We ought not to exaggerate the problem, important though it is. Only about 60 such Spanish or ex-Spanish fishing vessels are registered here, out of a total of some 7,000 boats on the fishery register.

    My Lords, although the Minister was good enough to say that the present position is unsatisfactory, is it satisfactory for a £100 company with a principal place of business in this country to be in a position to be allowed to conform with registration?

    My Lords, the basic problem is that the powers we have are those conferred by the Merchant Shipping Act 1894, which I believe was passed by a Liberal Administration. If we were to seek further powers, it would require primary legislation.

    My Lords, would the Minister be good enough not only to pay a tribute to the Liberal Party but also to answer my question: whether a £100 company with its principal place of business in this country is satisfactory for the purposes of registration under the present Acts?

    I was totally unaware of the fact that I had paid a tribute to the Liberal Party and apologise for so doing. So far as the remainder of the noble Lord's question is concerned, the fact of the matter is that there are many £100 companies registered in this country which have their principal place of business here. I have already said that I do not regard the present position as being satisfactory, and we are investigating what further measures might be taken within the powers available to us.

    My Lords, would my noble friend not agree that, although he may have evidence of only half a dozen or so boats, if they are allowed to get away with this, there is no limit to the number of French, Spanish and other trawlers which will abuse what are our traditional rights in the inshore fishing limits?

    My Lords, I am well aware of the point my noble friend makes, and that is why I have said that we are now studying what further measures can be taken in this field to deal with the matter.

    My Lords, if that is the Government's real intention, will the noble Lord the Minister then tell the House what has been done?

    My Lords, whenever the Government take action of this kind it is, of course, a matter of public record. But, if at any stage the noble Lord, Lord Molloy, wishes further information I should be very willing to provide it—either in reply to a Question or in correspondence.

    Transport Bill

    My Lords, I beg to move the Motion standing in the name of my noble friend Lord Bellwin on the Order Paper.

    Moved, That it be an instruction to the Committee of the Whole House to whom the Transport Bill has been committed that they consider the Bill in the following order:

    • Clauses 1 to 26
    • Schedule 1
    • Clauses 27 to 40
    • Schedule 2
    • Clauses 41 to 48
    • Schedule 3
    • Clauses 49 and 50
    • Schedule 4
    • Clauses 51 to 61
    • Schedules 5 and 6.

    —( The Earl of Avon.)

    On Question, Motion agreed to.

    Taking Of Hostages Bill Hl

    3.7 p.m.

    My Lords, I beg to move that the Commons Amendments be now considered.

    Moved, That the Commons Amendments be now considered.—( Lord Belstead.)

    On Question, Motion agreed to.

    Commons Amendment

    [ References are to Bill 94 as first printed for the Commons]

    1 Clause 1, page 1, line 6, leave out "without lawful excuse".

    My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 1. I am advised that the original purpose of the inclusion of the words "without lawful excuse" in Clause 1 can be safeguarded, should the need arise, by the proper exercise of the Attorney-General's or the Lord Advocate's discretion to refuse to give consent to a prosecution in cases of a clearly non-criminal nature, even though they may be technically caught by the definition of the offence. This was a point to which my noble friend Lord Renton originally drew attention on Third Reading when this Bill was before your Lordships' House. Although on that occasion my noble friend withdrew his amendment, subsequently in another place the Government have met the point by bringing forward this amendment, which I now commend to your Lordships' House.

    Moved, That this House doth agree with the Commons in the said amendment.—( Lord Belstead.)

    My Lords, I welcome this amendment, the substance of which—as the noble Lord indicated—was raised during debate in this House on 22nd March on an amendment tabled by the noble Lord, Lord Renton, to which I gave support on behalf of the Opposition. As I said in the earlier debate, the words "without lawful excuse" do not appear in the convention nor in legislation which other countries have tabled. These are important points. I agree that the inclusion of the phrase "without lawful excuse" is bound to suggest that there could be circumstances when the taking of hostages could be reasonable and indeed acceptable. As the noble Lord has said, Clause 2—which requires the Attorney-General's consent—takes care of the situation. The amendment which was originally raised here and which has now come to us from another place is certainly welcome, and I will pay tribute to the Government for having reconsidered the matter, which has now been debated in both Houses.

    My Lords, as the originator of this amendment, which found scant favour in your Lordships' House, and notwithstanding the fact that it was moved on Third Reading by my noble friend Lord Renton, I commend ii to your Lordships yet again, albeit that it comes from another place. The reason for commending it is simply this: that it is wholly requisite in submission to give legal precision to Clause 1, within the general intendment of the Bill.

    My Lords, I owe an apology to my noble friend Lord Campbell of Alloway for not attributing the origination of this amendment to him. The fact that my noble friend originated it and my noble friend Lord Renton spoke to it, and now the noble Lord, Lord Bishopston, has commended it, makes it, I hope, all the more attractive to your Lordships' House.

    On Question, Motion agreed to.

    Commons Amendment

    2 Clause 3, page 2, line 18, at end insert—

    "(1A) In Schedule 1 to the Suppression of Terrorism Act 1978 (offences not to be regarded as of a political character) after paragraph 11 there shall be inserted the following paragraph—

    " Taking of hostages

    11A. An offence under the Taking of Hostages Act 1982.".".

    My Lords, I beg to move that the House doth agree with the Commons in their Amendment No. 2. This is really a drafting amendment.

    Moved, That this House doth agree with the Commons in the said amendment.—( Lord Belstead.)

    My Lords, as the amendment indicates, the offence of hostage taking is added to the list of offences in Schedule 1 to the Suppression of Terrorism Act 1978, a measure which gives effect to the Convention on the Suppression of Terrorism. I think it is appropriate thus to extend it by this amendment, which I welcome. In view of the fact that the passing of this measure and the amendment to the Suppression of Terrorism Act are most urgent, I wonder whether the noble Lord can indicate at this final stage the chances of getting ratification by the number of countries required to bring the convention into effect? I understand the number required is 22. It is urgent, not only for the defence of British citizens in this country but also for the defence of our own citizens and indeed others in other countries. If the noble Lord could indicate that, I think it would be reassuring to your Lordships' House.

    My Lords, if I may reply to the noble Lord on that point, the United Nations convention, as Lord Bishopston said, will not enter into force until 22 states have either ratified or acceded to it. We shall certainly continue to encourage other countries to take this course. My latest information is that at the moment the total who have so far signed, including the United Kingdom, is 18 countries.

    On Question, Motion agreed to.

    Stock Transfer Bill

    3.13 p.m.

    My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

    Moved, That the House do now resolve itself into Committee.—( Lord Glenarthur.)

    On Question, Motion agreed to.

    House in Committee accordingly.

    [The Earl of LISTOWEL in the Chair.]

    Clauses 1 and 2 agreed to.

    Clause 3 [ Regulations and amendments relating to the computerised system and exempt transfers]:

    Page 3, line 41, at end insert—

    ("() No regulations shall be made under subsection (1) above unless a draft of the instrument containing the regulations has been laid before Parliament and has been approved by resolution of each House of Parliament.").

    The noble Lord said: Your Lordships will recall that this Bill itself is a completely non-controversial Bill; in fact, it received but perfunctory attention in another place. We have already debated it on Second Reading, when there were a number of most interesting contributions, particularly from those noble Lords who have considerable experience in the City of London.

    All this amendment seeks to do is to ensure that any regulations made under Clause 3 of the Bill are subject in your Lordships' House to the affirmative rather than the negative procedure. It is thus not a party matter at all. If the Government would today give me an assurance that they will accept the amendment, then I must immediately say, after having consulted with my side of the usual channels, that we are prepared to allow the Bill to go through on Report and all remaining stages today if necessary.

    I gather that, for reasons which are not quite clear, the Government are not prepared to accept the amendment, that they regard the negative procedure as being quite adequate for this purpose. That being so, I have to support my amendment by some argument, which I hope will commend itself to your Lordships on whichever side of the House your Lordships sit.

    This Bill provides uniquely that specific securities can be transferred without written instrument of transfer through a computer based system. This is the essence of the matter. I would not wish to go through the whole of the arguments that I brought up at Second Reading, but I did, I think with some justification, point out that this was a unique event. There have in the past been a number of ways in which property has been transferred, in which title to goods and other things has changed, and by virtue of which transactions are concluded, either verbally or under seal or under hand, whichever it may be. There has been a recent modification where the transfer of shares could be accomplished on the basis of the signature of the transferee only.

    But now we are dealing with the question, if I may put it this way, of transfer by silicon chip. This is really what it is all about. This is not a most momentous thing so far as most of our citizens are concerned; they have no interest in the transfer of securities. But it is rather a novel form, and the question is whether, in view of the fact that this is an enabling Bill, admittedly an enabling Bill, it is proper that the regulations made under Clause 3 of the Bill should be by affirmative instrument. This is the sole issue before us.

    The affirmative procedure is so designed that it lays an obligation on the Government to bring the order before the House itself for affirmation. Normally speaking, if the original Bill is non-controversial and the regulation is merely a technical, though important, one, it goes through this House in well under ten minutes and nobody is inconvenienced thereby.

    The disadvantage of the negative procedure so far as this House is concerned is twofold. First, it means that the House itself has to depart from its own traditions. A tradition in this House, I believe, though I am subject to correction by those more experienced than I am, is that it is unusual to pray against orders. The other inconvenience is this. A negative order tends to be lost among the plethora of negative orders which appear before the House from time to time. If the noble Lord looks at the list of statutory instruments—No. 13—dated 26th June, he will find that there are already no fewer than 74 orders waiting the due passage of time and that can be prayed against under the negative procedure. In Part II there are certain schemes and ordinances which may be prayed against and these number some 12. In Part III there are some 15 orders which are going to be subject to the affirmative procedure in this House.

    All one is trying to do is to say that, in a Bill of this uniqueness, however non-controversial it may be, it is quite proper that any regulation made in respect of Clause 1—and the noble Lord will, I am sure, agree that I have deliberately omitted Clause 4—should be subject to the affirmative resolution. It is necessary for all Governments of all political persuasions to conduct their administration through a series of orders and regulations. All Governments do it. Most departments, if they can get away with it, like to have the negative procedure because they know that there is very little likelihood among some 70-odd regulations outstanding at any one time, of anybody picking upon theirs. The affirmative resolution ensures that it comes before the House.

    However, is it really important? Are the principles involved important? I must cite in this respect the view of the noble Lord, Lord O'Brien of Lothbury, who has very considerable experience and standing in the City, when he said on Second Reading:

    " I agree very much with the noble Lord, Lord Bruce of Donington, that a Bill of this character, although a highly tech- nical Bill which interests relatively few people, is of immense importance. Everybody who engages in the transfer of securities can be affected by it. I think it is important that his point should be dealt with carefully and that in your Lordships' House we should examine the Bill very closely indeed".—[Official Report, 25/5/82; col. 1079.]

    That is precisely what we are doing.

    The noble Lord, Lord Glenarthur, may say, "Well, what is the real objection to the negative procedure at any rate? It makes very little difference". If it makes very little difference why cannot the affirmative procedure be agreed to anyway? Why can we not have the affirmative procedure if there is not very much difference between the two? The principles remain exactly as I have stated. All these matters are, of course, relative and without wishing in any way to say that any of the orders to which I shall refer do not merit the affirmative procedure—because I do not wish, in common with most other constitutionalists, to reduce the number of statutory instruments that are subject to the affirmative procedure—may I refer him to the following statutory instruments which are subject to the affirmative procedure. First, there is the Town and Country Planning (Minerals) Regulations 1982—a very small order with practically negligible effect upon a citation of certain extremely unimportant regulations in the Town and Country Planning (Minerals) Regulations 1954, 1957 and 1971; an order that, in the ordinary way if one applied the criteria of the Treasury, ought to be not merely a statutory instrument subject to negative procedure, but possibly not subject to any procedure at all because it is a very small one. Then we have the Draft Pool Competitions Act 1971 Continuance Order 1982 for which there is no explanatory note save to point out:

    "This order continues in force the Pool Competition Act 1971 until and including 26th July, 1983".

    That is a world-shattering regulation to put up for affirmative procedure.

    Alternatively, let us take the Pilotage Commission (Additional Function) Order 1982. This is another one which, if the noble Lord examines it, he will find that there is nothing earth-shattering about it either and that there is no real reason why it should not go into the negative procedure even though I am quite sure, along with the noble Lord, Lord Renton, that we would not wish to restrict the numbers going for affirmative resolution.

    However, perhaps the best example of all is one that occurred last week where we had—and the noble Lord may recall it—the Sheep Variable Premium (Protection of Payments) (Amendment) Order 1982 which was brought before us under the affirmative procedure. The debate upon it took exactly eight minutes and consisted in the main of the insertion of the words:

    "from any place outside the United Kingdom".

    The noble Earl, Lord Ferrers, in explaining it said:

    " The main, and I think by any standing not monumental, consequence of these changes, is that animals which come into Great Britain from Northern Ireland must be marked".— [Official Report, 24/6/82; col. 1179.].

    That does not seem be be a world-shattering event that, in the ordinary way, would demand the affirmative procedure.

    One can, of course, take the reductio ad absurdum argument too far and I do not wish to embarrass the

    Government or any of their predecessors by citing these matters. But occasionally there does come a time, particularly here in your Lordships' House where we have a special function within the constitution, where we have to take a stand. I repeat that it would be no inconvenience to the Treasury—however irritated they may be that somebody wants to amend their precious Bill—to have the affirmative procedure, and I invite all those who regard the function of the House to safeguard Parliament as against the executive and to preserve the liberties of the subject—all constitutionalists on whichever side of the House they may sit—to support the amendment that I venture to lay before your Lordships. I beg to move.

    I think that the noble Lord, Lord Bruce of Donington, is right to be vigilant about this matter. There is a great deal of nonsense in our subordinate legislation and I think that he was fully entitled to draw attention to one or two cases which are at present subject to affirmative resolution and to point out that really those cases are not justified. However, I am afraid that if we accept his amendment we shall be adding to the nonsense to which he has drawn attention. Of course, the important matter of whether there shall be an affirmative or a negative resolution—and it is an important matter and I do not take the view that the noble Lord was suggesting that it matters very little in some cases—is a matter of judgment, of our judgment as parliamentarians, and not only judgment in this House but judgment in the other House.

    It so happens that in another place the suggestion which the noble Lord has made here was not made at all. That is not conclusive. We are entitled to improve upon the work of the other place. Indeed, in my humble opinion, that is largely the reason why we exist. But I do not think that we would be improving upon that work by making the particular regulations referred to in Clause 3(1) and, by reference, the other parts of the Bill under which regulations can be made, subject to affirmative resolution. I say that because, clearly, the affirmative resolution is right for use when substantial changes of the law may be made by affirmative resolution, when a very important power is being exercised in an enabling Bill; and I agree that this is an enabling Bill. But surely the affirmative procedure is not right for use when the regulations are to deal with detailed technical matters, and, indeed, are regulations containing administrative procedure and guidance. I should have thought that to use it in those circumstances was a misuse of the affirmative procedure.

    As I understand it, the regulations are not likely to have to deal with matters of privacy, because in the matters which the regulations cover, or in the procedures which follow from those regulations, there is no question of privacy being divulged. So although one must be vigilant—always vigilant—about the interests of the subject, I do not think that the subject's right of privacy, to the limited extent that it is a right under our law, would be infringed if regulations were made. As I say, this is a matter of judgment. If, by some unlikely possibility—some mischance—there were ever to be another Labour Government, I do not think that the Chief Whip in another place of that Government, looking back to our debate today if this amendment were to be carried, would praise the blessed name of the noble Lord, Lord Bruce of Donington. I think he would say, "We have enough of these affirmative resolutions with which to contend. We have to make time specially for them. It is far better to leave it to Parliament to demand time for discussion under the negative procedure if there is any real uneasiness". Therefore, for those reasons, I hope that my noble friend Lord Glenarthur, whom we are so glad and proud to see handling his first Committee stage, will consider rejecting this amendment.

    I have listened with great care to what the noble Lord, Lord Bruce, had to say about his amendment. I do not think that there would be any point in my going over the background to the Bill, which has been discussed before. Nor can I comment usefully upon the many orders which he cited as examples of, perhaps, time-wasting discussion which has to be held on them in the future, because I have no special knowledge of them. But I do have one personal piece of knowledge about a Bill in which we rejected a piece of legislation in this way, and that was in the Deer Bill, which the noble Lord may remember took a certain amount of time earlier this year.

    It might be useful if I were to describe the sort of regulations which are envisaged under the Bill. As the noble Lord said, the principal regulations which will be made, following enactment of this Bill, are those under Clause 3, which establishes the technical framework for computerised transactions—that is, the nuts and bolts of the scheme. The remaining regulations will parallel existing regulations in respect of transfers by instrument in writing and cover such matters as the certification of stock holdings and the protection of the office running the computer installation against notices of trust, et cetera.

    The regulations under the Bill will not deal with such matters as privacy and safeguard against fraud, rather in the way that my noble friend Lord Renton described just now. These matters will be the subject of separate arrangements and will principally be those adopted by the people establishing and running the scheme in their own interests. The expected users of the scheme are, naturally, conscious of the need to ensure that the system is proof against fraudulent use or accidental misuse. They are also strongly aware of the need to preserve confidentiality. There is, of course, the possibility of legislation on privacy in respect of computer records coming before both Houses in due course, and the operators of the system have already given an assurance that if such legislation is enacted, they will ensure that the system complies with any such legal requirements.

    This Bill simply clears the way for the Bank of England and the Stock Exchange to do more efficiently by new technology what they at present do by hand—namely, process large numbers of stock transfers. To make the regulations which I have described subject to affirmative resolution would, in the Government's view, be unnecessary. The regulations will be of a specialist nature and ideal candidates for the negative procedure, as the Bill envisages and as my noble friend Lord Renton said just now, particularly when one considers that any alterations to the regulations which would be made in due course would also be subject to the affirmative procedure, which, of course, is a thoroughly time-consuming process. Furthermore, as my noble friend Lord Renton also said, if the case of the noble Lord; Lord Bruce, is as strong as he feels it is, I am a little surprised to find no clamour for the affirmative procedure in the Second Reading and Committee debates in another place. I hope that the noble Lord will accept the assurances which I have given about the scope of the regulations which the Bill envisages and will agree that his amendment is not needed.

    I am most indebted to the noble Lord for having provided some further information which was not given on Second Reading as to the form and the approximate parameters of the regulations that it is proposed to issue in connection with subsection (1). While I am about it, I should like to felicitate the noble Lord on his first appearance at the Box and sincerely hope that we shall have many other opportunities possibly of crossing swords or of forging plough shares, as the case may be.

    I do not find the arguments that have been adduced against this amendment very satisfactory. The noble Lord, Lord Renton, laid down what seemed to be an astonishing doctrine, that if a regulation were replete with technical matters, that seemed automatically to disqualify it from the affirmative procedure. I was always taught—and indeed I aver—that experts should be on tap, never on top, and that if a regulation contains an undue amount of technical matter, that is all the more reason for drawing it to the attention of the House, so that the appropriate expertise may be obtained, by way of advice, in helping to elucidate any matters that appear obscure.

    The noble Lord said that he thought that perhaps a Labour Government might reproach me for having insisted on the affirmative resolution in this particular case. Quite frankly, I do not mind in the slightest. If the noble Lord will look at my record in another place he will find that I had plenty of arguments with them there on these exact principles to which I hold. No, it is quite clear that the Government do not intend to give way on this matter, for reasons that to me still remain obscure. Therefore, all I can say is that I shall obviously have to review the matter again to see whether on Report I can produce something that may go some way to allay their fears—because they obviously have fears—in the hope that then, on Report, they may be able to quieten my suspicions. It is not fitting that I should seek to divide the Committee on an issue of this kind. I rather hoped to carry your Lordships' agreement to the arguments on a purely constitutional basis. Therefore, I shall be content to have the amendment negatived.

    On Question, amendment negatived.

    ( Amendment No. 2 not moved.)

    Clause 3 agreed to.

    Remaining clauses and the schedules agreed to.

    House resumed: Bill reported without amendment.

    Supply Of Goods And Services Bill

    3.42 p.m.

    Bill read a third time.

    [ The amendment that had been tabled was not moved.]

    Moved, That the Bill do now pass.—( Lord Mishcon.) Question put.

    3.42 p.m.

    My Lords, on the Motion that the Bill do now pass, which your Lordships have so happily agreed to, it falls to my lot to express some appreciation, and I do it very happily. My first words of appreciation go to the Secretary of State who himself and with his department, both here and in another place, have assisted those who have promoted this Bill in draftsmanship and in very sound advice. I thank the National Consumer Council who have been at my disposal on all occasions when I needed them. I know that this was also true of my right honourable friend in another place when he sponsored this Bill there.

    I am grateful to the Scottish Consumer Council who put their plea for the inclusion of Scotland with all the enthusiasm that one would expect. In turn I am grateful to the noble and learned Lord the Lord Advocate who, when he dealt with that matter, expressed himself in a very helpful way in regard to the co-operation that he hoped would exist between the Scottish Law Commission and the English Law Commission in furthering the inclusion of Scotland in legislation so that Scottish consumers can similarly benefit.

    Lastly, I am most grateful to the Members of your Lordships' House from all parts of the House who have expressed their interest in, and enthusiasm for, this Bill. I do not think that I will get appreciation from your Lordships' House if I detain you much longer, having expressed the whole purpose of this Bill at Second Reading.

    My Lords, I inadvertently collected the voices, I must apologise to the noble Lord, before he started to speak. Therefore, I will now put the Question that the Bill do now pass.

    My Lords, if I may at all times have such a helpful and courteous intervention in the middle of any speech I make I shall be so grateful, as indeed I am on this occasion. I was about to say that I do not think that it is necessary for me to repeat myself. All I would do, and I promise it in very summarised form, is to say that there is contemporary proof of the great need for consumer protection by this legislation in two publications which have recently been issued. The first one was on home improvements. It was a discussion paper published in March of this year by the Office of Fair Trading. That highlights various problems of poor performance, delay, and high cost in the home improvement market. Secondly, in May of this year, and therefore a matter of only weeks ago, a document was issued at the instance of the County of Cleveland, Car Servicing and Repairs, which tells, if I may paraphrase it, a sorry tale of the instances of poor servicing in garages of motor cars that had been taken to them for servicing, or repair, after a spot check and examination had been carried out in that area.

    I think we have done a useful job in seeing this Bill through this House, and I hope your Lordships will agree with me that it is to be devoutly hoped that consumers will now know more of what their rights are and will therefore be able to take advantage of them. While commending all those who supply good services and who supply goods to our citizens as they should do, there are the fringe who ought to be looked at with criticism, and against whom there ought to be protection.

    3.47 p.m.

    My Lords, I shall be equally brief, and everything I have to say with one small exception is congratulatory. First, I should like to join with the noble Lord, Lord Mishcon, in saying that I think all sides of the House are agreed that this is a good Bill and that we are very pleased that it has made such quick progress. I should like, first, to congratulate Mr. Fred Willey in the other place both on his very good fortune in securing the first place on the ballot and in choosing this Bill, and, if I may, I should like to congratulate my noble friend Lord Mishcon on the way in which he has taken this Bill through the House. I think we all enjoyed what he had to say. He has one great gift, if he will allow me to say it, and that is that it is a great art to say "no" to amendments that are put forward, but to say it so nicely that nobody minds. I can say that quite unbiasedly because I did not put any forward, but I was lost in admiration at one or two of the legal points which arose and which the noble Lord, Lord Mishcon, dealt with so pleasantly and so firmly.

    I certainly agree with him that we wish to congratulate the National Consumer Council and the Scottish Consumer Council. I should also like to say "thank you" to the Government in another place for the support they gave originally, and in particular to Mrs. Sally Oppenheim who, on Second Reading, really said all that she could in favour of the Bill. I come now to my one, I think, non-congratulatory point. I am glad that we now have the Secretary of State for Trade in our House. I do not think that he can do anything about it, but doubtless he will dwell on it.

    I was sorry that we were not able to include Scotland in this Bill. I know the reasons why. The only point I wish to make is this: When the noble and learned Lord the Lord Advocate spoke to us at the Committee stage he did, at column 442, say that he gladly paid tribute to the work of the Scottish Consumer Council. What I had hoped—and I do not know whether the Secretary of State would feel that he could say it this afternoon on the Motion that the Bill do now pass—was that what I considered the very reasonable request of the Scottish Consumer Council could receive an answer. They hoped that the Lord Advocate, on behalf of the Government, would be able to offer some commitment that the law in Scotland in relation to the supply of services would be the object for consideration by the Scottish Law Commission in the near future. The only point I wish to stress to the Secretary of State is that, obviously, the relevant detail there is the phrase "in the near future". If he were able to say that, he would bring great joy to the Scottish Consumer Council.

    I wish the Bill well. I am sure our new Secretary of State will do all he can to put it through. I think it will benefit consumers. Finally, once more I offer my congratulations to the noble Lord, Lord Mishcon.

    My Lords, perhaps I may respond briefly on behalf of the Government. As the noble Lord, Lord Mishcon, said, the Bill has been widely welcomed both here and in another place. It will, I believe, benefit both suppliers and those acquiring goods or services, since it will be helpful to both to have the basic legal rights set out in clear statutory form. It is difficult for people, with the best will in the world, to he certain about their rights and obligations under the law unless it is set out in clear and simple terms, as this Bill does.

    A number of anxieties have been expressed in various parts of your Lordships' House during the passage of the Bill, and it might be appropriate if I took this opportunity of repeating the assurances which my honourable friend the Minister for Consumer Affairs and I have given during the passage of the measure. I recognise that Part H is intended to codify the existing common law. I shall not make a commencement order bringing Part II into force until those who provide services have had an opportunity to consider whether the Bill would impose additional responsibilities and whether they wish to make representations about that. If they do, they should do so without delay. I shall consider carefully any cases put forward. If I am satisfied that the Bill would impose new obligations on a particular sector of the service industries, I shall be prepared to consider whether to make an order excluding that sector from Part II. There is clearly advantage in any such order coming into force at the same time as Part II itself. That itself would indicate that any representations should be made promptly.

    The noble Baroness, Lady Burton of Coventry, asked me to give a definition of the phrase "in the near future". I imagine that providing such a definition has defeated many a draftsman. Nevertheless, I will bring her remarks to the attention of my noble and learned friend the Lord Advocate.

    As the noble Lord, Lord Mishcon, said and as the noble Baroness also remarked, a large number of people have contributed to the Bill—the Law Commission, the National Consumer Council, the Scottish Consumer Council, the sponsors, and indeed the supporters of the Bill both here and in another place but—I would pay tribute particularly to the noble Lord, Lord Mishcon, who has steered the Bill successfully through your Lordships' House with skill, eloquence and courtesy. I believe that the Bill will prove beneficial both to suppliers of goods and services and to their customers. On that basis, I am sure your Lordships will wish the Bill well.

    On Question, Bill passed.

    Eec 2Nd Report: Agricultural Trade Policy

    3.55 p.m.

    rose to move, That this House takes note of the Report of the European Communities Committee on Agricultural Trade Policy (2nd Report, 1981–82, H.L. 29.)

    The noble Lord said: The committee is most grateful to the House, my Lords, for making time available for this short debate. We have come up twice already to the starting post only to be turned aside, quite rightly, for more important business, and we realise that it is a great luxury to have a third chance, and we are most appreciative.

    Before we enter on the discussion of the details of the report, it is perhaps as well to remind ourselves that the European Community is the world's largest food importer and the second largest food exporter, that exports have been growing faster than imports and that its deficit on agricultural trade exceeds 30 billion dollars. It is against that background that I ask your Lordships to consider our report. The subject is the Community agricultural trade policy; in other words, how the common agricultural policy and, to a lesser extent, the common commercial policy as at present implemented, affect the Community's agricultural and food trade with third countries, both developed and developing.

    Sub-Committee B considered the matter at the end of last year and we were reinforced for the purpose by certain members of Sub-Committee D, to which we look as the source of wisdom on agricultural matters in this House. As the chairman of the sub-committee I pay tribute to the diligence of its members, to the wisdom of its adviser and to the skilful guidance of the clerk and the willing help of her staff. While we were preparing the report, we were very conscious that the Government were about to enter on discussions at the highest level for the reform of the CAP and the Community budget. Those discussions were intended to reach a climax in November last at the Council meeting in London.

    As your Lordships know only too well, no agreement was reached and, since then, we have had the drama of the Luxembourg Compromise and a good deal of mutual recrimination among Community members. Without foreknowledge of those unhappy events, our committee had hesitated to bring our report to the House for debate and would have preferred to allow its observations to be available for reflection by the Commission and Governments during the period of those intense negotiations. Moreover, the report deals with very difficult areas of conflicting interests, not only between Community countries but within individual countries. The report tried to set them out fairly and dispassionately and, as a result, may be thought to be long on discussion and short on clear-cut practical recommendations.

    When the report was published, it provoked rather a testy response from the President of the Commission. The gist was that we underestimated the just balance and careful co-ordination of agricultural trade policy by his branches in Brussels. We thought that a little complacent; and indeed, as the Duke of Wellington observed in another context, if you can believe that you can believe anything. Nevertheless, members of the committee are hopeful that the seeds of some of our opinions will fall on less stony ground both in Brussels and in the capitals.

    I am grateful to noble Lords for putting their names down to speak. I am particularly glad that the noble Lord, Lord Soames, has done so. He has, so to speak, been on both sides of the barricades and his observations will therefore carry special authority. I am also very happy that the noble Lord, Lord Peart, a distinguished Minister of Agriculture, is taking part. But I should like to point out that these matters are not for the Minister of Agriculture alone. The Department of Trade is very much involved, and I am very glad indeed to see the noble Lord, Lord Cockfield, present this afternoon, and we look forward to deriving great benefit from his presence in this House.

    In order to avoid at this stage going into too great detail, may I give a rather simplified view of the committee's main conclusions, as follows? The agriculture Ministers of the Community have traditionally had a very good run for their money. At their council they have, for the most part without serious challenge, decided the Community agricultural policy primarily on the basis of their own domestic needs. The spin-off effect on external trade has been given a very much lower priority, if not ignored. It is, I believe, now recognised that they have had in the past far too much rope. If they have not hanged themselves, they have come very near to choking many others. High Community farm prices have led to surpluses. Surpluses have led to subsidised exports. Subsidised exports have distorted traditional patterns of trade. Many of our friends and natural allies have suffered from this, and are now thinking how best to make the Community suffer in return.

    Of course, no one has a monopoly of justice and the Community policy-makers have substantial argument to deploy on behalf of their existing policies. But the fact remains that damage is being done not only to developing countries, but to others, such as Australia and the United States, whose relationships, not only in trade, are of great moment to us.

    At present the EEC agricultural trade practices are the subject of dispute in the United States International Trade Commission, and more importantly in the GATT. On sugar they are being attacked by 10 GATT members, including Australia, India, the Philippines, and Brazil. In addition, we have been in serious dispute with Thailand over cereal substitutes. Your Lordships may say that there is nothing very new in that kind of situation; it is the usual process of "pots calling kettles black", and the give and take in international trade between competitors finding their established positions under challenge. The special cause for concern is that in the current world trade situation these disputes are more likely to invite retaliation, inflame agricultural trade relations, and spill over into other important trade matters.

    So far the United States have taken it all fairly patiently, perhaps because they are not themselves beyond reproach. But they are likely to become more hostile, and more hostilely vociferous and active, as their rural recession deepens. Moreover, the new United States Secretary of State is vastly more interested in economic affairs than were his predecessors. Those who heard him lecture in London a few months ago will recall that he put great emphasis on "playing the rules" in GATT, and it was perfectly clear that he took a critical view of the Community in some of these trade matters.

    Therefore, in order to introduce a better balance between domestic and external needs, our sub-committee consider it desirable for an explicit agricultural and food trading policy to be formulated by the Community. This is the clearest and central recommendation of the report. Only such an exercise, involving, as it necessarily would, all the director-generals of the Commission concerned, will start clearly to identify and show the way to eliminate the contradiction in Community policies affecting its agricultural trade. I can well believe that the first attempts to formulate such a policy in a formal way would generate a strong debate and might achieve only very limited advances. It is easy to argue that there are more urgent tasks to be done, but we believe that the process of trying to get agreement would in the long run be useful. It would of course be touching on sensitive matters, and as such might well be asking too much in the present difficult circumstances.

    The number of apparent contradictions between the external effects of the CAP and the other objectives of the Community's other external policies seem to us to justify a more rigorous examination. The contradictions are clearly set out in the report, and I shall not enumerate them all now. The situation was put very neatly some time ago—and this is quoted in the report—when the then Secretary of State at the Department of Trade remarked that the Community's external trading policy is founded on the principle that the interests of the world community are best served, agriculture aside, by an open world trading system. Consistency is not necessarily a virtue, but the Community should, not least for political reasons, as well as economic reasons, both short and long term, examine more closely the external consequences of its present agricultural policies. The Community is dependent on many third countries. developing and developed, for both raw material supplies and markets for its industrial exports. It can ill-afford to ignore these interests.

    Furthermore, it is surely particularly important that by its agricultural trade policies, by subsidised exports of cereals, for example, the Community should not act in such a way that developing countries are discouraged from producing their own foodstuffs and in various ways deprived of legitimate export markets.

    Members of our sub-committee will wish to develop points of special interest to themselves; for example, of the Community countries, the United Kingdom is probably the one most involved in food processing. It is far from clear that our manufacturers are getting a square deal in the Community where the impact of tariffs, import levies, and export refunds is detrimental to our manufacturers. There is also the interesting point on how far the desire for self-sufficiency should dominate Community agricultural policy. There is, of course, a different historical approach to this matter between the United Kingdom and the continental members of the community. As the report shows, views in our own Department of Agriculture appear to be changing. But the majority of our sub-committee thought that less emphasis should be given to it, and the views of noble Lords on this debatable point would be valuable.

    Alongside the problem of self-sufficiency is the future export policy of the Community. This is clearly the subject of debate within the Commission. There are those who favour what is described as a dynamic export policy—long-term contracts of large quantities of food. Others are suspicious of the intrusion of state trading. Our committee felt that this matter needs careful and cautious examination for both political and economic reasons. The constant failure of agriculture in Eastern Europe suggests that there is scope there for balancing the need for food against the supply of gas.

    There is one particular plea that the committee makes; that is, that the agricultural trade problems of enlargement—the entry of Portugal and Spain—should be tackled energetically in advance of entry. In this way we shall not add to our internal conflicts by misunderstanding and half-promises, as we did at the time of our own entry.

    This debate and, for example, the recent excellent debates on competition policy and state aids have, we hope, the effect of nudging the Community to more sensitive patterns of behaviour. We are growing more and more accustomed, and even resigned, to small steps forward. From time to time one is bound to wonder whether this is enough, and to ask whether a more radical reform of the Treaty of Rome is urgently needed to realise the high hopes many had of harnessing the political, economic and cultural strengths of Western Europe. What is happening now certainly does not measure up to the need.

    Even more important is the question whether the world situation does not call for more dramatic and radical steps to ensure not only a unified European response but a wider Western response to present economic and political threats. I beg to move.

    Moved, That this House takes note of the Report of the European Communities Committee on Agricultural Trade Policy (2nd Report, 1981–82, H.L. 29.) —( Lord Greenhill of Harrow.)

    4.11 p.m.

    My Lords, we are debating the subject of agricultural trade policy on the report of the Select Committee on the European Communities, after some delays. I wish to pay tribute to the committee's chairman, the noble Lord, Lord Greenhill of Harrow, and its members. We thank them for the report and for the evidence of the detailed examination of witnesses whose expertise and views contributed to it.

    Agriculture is one of the United Kingdom's most productive industries, whereby 2.7 per cent. of the labour force produces 60 per cent. or more of the food we need. We have excellent farmers, excellent technicians, and I believe we should be very proud of what our farming community have contributed over the years. They often get sniped at, but I think they play an important part in our economy. For obvious and climatic reasons we cannot produce all our food. For that reason it is often thought that we cannot therefore export food and drink. In fact, our agricultural exports are worth several billion pounds a year—a considerable help to our balance of payments. As the report states, agricultural trade policy derives from the CAP and the common commercial policy (CCP), and it is vital that in the review of the CAP which is taking place the aspects of agricultural trade policy and external relations are borne well in mind.

    Agricultural trade among individual EEC member countries and between the EEC and the rest of the world is important. The United Kingdom makes a significant contribution to it. Important ingredients include support, as I said earlier, for the farming communities, promotion of agriculture in developing countries and the fostering of good relations with other major producers and, of course, with overseas consumers.

    In my time as a Minister of Agriculture (like, I am certain, the noble Lord, Lord Soames, whom I succeeded; he was a distinguished Minister, and I am sure he will also remember that visits were paid by Ministers and that they were very important and welcome) I visited a number of countries on trade missions because other countries recognise that United Kingdom agriculture is so well organised and productive. They seek our products, and our know-how, too. The Community must do more to encourage trade with non-EEC countries. I have always urged a greater liberalisation of EEC trade especially, and of non-EEC trade. I note that the report states in paragraph 9 that the Treaty of Rome, Article 110, has the objective (if I may quote) of,
    "the harmonious development of world trade",
    which does not appear to refer to agricultural trade. I think that is an important defect.

    As the CAP is based, as the report points out in paragraph 13, on a system of prices which are distinct from world prices, the EEC has to apply a set of levies covering the difference between EEC and world prices. Although there is little possibility of imports undercutting EEC prices, the Community must do something soon to change and improve the CAP so that EEC prices are not generally higher than those outside the EEC, regardless of adjusting factors. However, I had better not stray on to this subject, which includes EEC pricing policies, the prevention of surpluses and so on.

    Unjustified protection against non-EEC countries discourages competition, which could bring lower prices, and discriminates unfairly against EEC low-cost producers. Some of our former trading partners in the Commonwealth are most critical of EEC export trade inflexibility (paragraphs 20 and 21 of the report). I think the report's reference to recent Commission proposals (paragraph 48) and to the Mandate Report, with questions of principle for trade, is helpful. For example, two points of importance are as follows: that there should no longer be full support for products in structural surplus; and that the Community should adopt,
    "a more active export policy designed to stabilise world prices by means of co-operation agreements with other major exporters. These could be supplemented by long-term export contracts".
    Paragraphs 66 and 67 of the report, detailing the opinion of the Select Committee, will find general agreement, although they must be considered not only in relation to EEC and non-EEC trade but in the wider area of international organisations, such as GATT, and the needs of the third world, with the Brandt recommendations kept very much in mind. I agree with the recommendations, including those which suggest that international commodity agreements are another effective way to stabilise world markets. I believe the Community should assume its responsibilities in the sugar market by joining the International Sugar Agreement.

    Again, more attention should be given to the impact of tariffs, import levies and export refunds on food processing. Also, the enlargement of the Community to include Spain and Portugal may well lead to surpluses of new products which would distort world trade in Mediterranean products and adversely affect other associates. More determined efforts should be made to solve these problems before enlargement takes place.

    As the CAP represents well over half the cost of the overall EEC budget, it follows that justified criticism of the CAP, including some of the aspects referred to in this report, reflect on the EEC as a whole. I believe that the Select Committee has added to our indebtedness for their painstaking work in assessing the evidence so helpfully given by so many with experience of the problems.

    I do not know whether noble Lords have read an article in the Guardian today, but that says that there are likely to be grim figures indicating that there could be a new United States farm-led slump. Many of our people fail to realise that we in our own country play a very important part, and I am quite sure that if we are lax we might well suffer what happened in the early 'twenties. However, I believe that the report is a fine one, and I pay tribute again to all those who took part in its preparation.

    4.20 p.m.

    My Lords, I should like to congratulate the noble Lord, Lord Greenhill, and other members of his committee on the report that they have produced. Sticking to his guns has always been a notable feature of Lord Greenhill's life in the past and this has been no exception. As he said, "Third time lucky!". He has twice been up to the starting post and he has persisted with bringing this matter before your Lordships and, as it turned out, what an extremely appropriate moment it is that this matter should be debated. The communiqué following the summit meeting in Brussels (as reported in the daily editions) refers to a dialogue being opened with the United States over potentially severe differences of trade between the European Community and the USA; and noble Lords will be aware that the USA, if they enter into this "constructive dialogue" are going to wish to put many matters of agricultural trade high on their agenda; so I think it is good that we should be discussing this subject today.

    We are not discussing the common agricultural policy; it is the report on agricultural trade policy that we are discussing; but it is not possible to discuss Community agricultural trade policy without saying a word or two about the way in which the common agricultural policy, as at present conceived, calls for such large surpluses in so many commodities that they have to be put on the world markets. There are, I suppose, three major objections most often put forward to the CAP. One is the cost to the Community; and I often wonder whether this is right, other than the cost of the subsidisation of the exports of their surpluses to get what the farmers receive down to the world price. Other than that, I do not believe it is a fair attack on the CAP to carp at its cost; for the deficiency payments cost a great deal as well, and I wonder very much whether, if the Community were pursuing today a deficiency payments system, it would not cost as much.

    The second objection is that the traditional exporters through the EEC have seen their exports decline and even disappear, and the USA has been the country that has taken the lead in this assault on the CAP. I want to put to your Lordships that neither is this a fair proposition for exporting countries to make; because here set out in Annexes 6 to 9 of the report are the EEC net imports of food products from 1973 to 1979. During those years, the imports from the world as a whole increased from £4,000 million to nearly £8,000 million. From the USA, they doubled from £900 million to £1,800 million, and although I agree that those imports are different foodstuffs, different commodities, in 1979 from what they were in 1973, this is not necessarily a bad thing and the customer must have a certain right in saying what it is he wishes to import. The hard fact is that in money terms the USA has been exporting double in terms of work, of value, to the Community in 1979 compared with 1973, and, indeed, all countries have, with two exceptions. One is Australia, whose figure has fallen unfortunately low from just over £200 million in 1973 to £80 million in 1979, and EFTA have been net importers from the Community of £197 million in 1973. They grew to over £400 million, nearly £500 million, in 1979.

    Apart from Australia and the EFTA countries, it is not true that the Community has not been importing increasing amounts of foodstuffs from the world. Taken as a whole, by and large, grosso modo, I do not believe that this charge stands up; but there is a third charge. That is that the traditional exporters at world prices on to the world markets are having their markets interfered with and world prices forced down by subsidised exports in large quantities from the EEC on to what were traditionally their markets. I fear that this charge does stand up.

    I would draw your Lordships' attention to Table 6 of the report, where you will see that, compared with during the later years of the decade of the 1970s, looking at sugar, the EEC exports as a proportion of total world exports grew from 7 per cent. to 21 per cent. In beef, they grew from 6 per cent. to 24 per cent. of total world exports; in wheat, from 6 per cent. to 14 per cent.; in butter from 15 per cent. to 62 per cent.; in skimmed milk powder from 30 per cent. to 60 per cent. There are some figures which I think tell quite a story and mean that we have really got to look again, when we realise that all these exports were highly subsidised, interfered with commercial producers' livings and also were very costly to all of us within the Community.

    Take sugar, for instance: sugar production between 1973 and 1981 rose from 9 million tonnes to 15 million tonnes within the Community. That is 50 per cent. more. The exports from the Community—because consumption of sugar hardly rose at all—rose from under one million tonnes, (780,000 tonnes) in 1973 to 4 ½ million tonnes (5 ½ times more) in 1981. It is as a direct result of this that ten countries, varying from Australia, on the one hand, to the poorest of developing countries on the other are taking us to the GATT because we are ruining their living on the world markets. That is but one example that I would give your Lordships.

    None of this was ever envisaged. This degree, this explosion of production and the proportion of our production that must be exported in a highly-subsidised manner was never envisaged. I remember that when I was taking part in the first negotiations in 1961 and the second negotiations in 1972, none of this was envisaged: that the CAP would call forth this sort of trade problem for the Community which has to live off its trade. It is the biggest trading entity in the world. We expect to behave well and we must look to our laurels to ensure that we behave as well as others.

    Let us look, for instance, at the Japanese. We grumble a great deal—and rightly so—about how the Japanese are hesitant, to say the least, in encouraging exports from outside their country into Japan. We also grumble a good deal about how effectively they can swamp a market with their motorcars, hi-fi equipment or whatever it may be. But just think. We would be squealing like stuck pigs if that equipment and those motor cars were subsidised. Yet, do we think nothing of subsidising all our agricultral exports just because they happen to be agricultural? But other countries mind about agriculture to the same extent that we mind about motor cars.

    What can we do about this? The noble Lord, Lord Greenhill, has rightly said that what we want is an agricultural trade policy. The Commission is making noises about bringing agricultural prices more into line with world prices. Are they hell!Barely was the ink dry on that piece of paper than they increased by nearly 10 per cent. the prices for this year regardless of what world prices were. Of course our farmers have to be properly treated; but equally they have to be made aware of the movement of world prices.

    We had standard quantities. When the noble Lord, Lord Peart, was such an effective Minister of Agriculture following upon myself—he was almost as good as me, I thought!—in those days, when we had standard quantities, the objective was that once the farmers had produced what Government thought was in the national interest should be produced at home, any production over that was at world prices. Whether there is a deficiency payment system whereby the taxpayer pays a large proportion of the return to the farmer or whether there is the continental system whereby the consumer pays the lot and the taxpayer just pays for the subsidies on the exports, if you do not somehow bring in some control—call it standard quantities or what you will—if you have it totally open-ended, but never mind whether it is 1 million or 2 million tonnes of a particular commodity which is produced, the farmer will get the same price for every tonne he produces, then you are bound to be riding for trouble.

    Although there is a great deal of good commonsense and soundness in the CAP, if you are going to have an agricultural trade policy—and certainly the Community needs to have one now because we have become big dealers in agricultural commodities—the first prerequisite is to have a common agricultural policy which is so managed as not to call forth vast surpluses which have to be put upon the market and therefore have to be subsidised and have to be got rid of somehow. If you do not have the right agricultural policy, you cannot have an agricultural trade policy.

    So, how are we going to do it? I, and I am sure other noble Lords, were interested to see that the Commission proposed and the Council of Ministers agreed that where sugar is concerned—which has got well beyond a joke—the producer will pay the subsidies over a certain quantity. The subsidies are paid not by the taxpayer but by the producers. There is a levy on producers for sugar above a certain level of production. The effect of that has been to reduce by 81 per cent. in this year—because it has only just been brought in—the acreage under sugar.

    I am not saying that this can fit exactly every commodity, but we have somehow got to work out a scheme whereby the Community can benefit from the farmers' efficiency and effectiveness and the production of their food within the Community. I am not going to argue what the level should be; whether it should be total self-sufficiency or marginally less. This is another argument in itself. However, we should agree what commodities should be produced by the farmers in the interests of the Community within the Community. Beyond that point there has to be some way of it being brought home to individual farmers through the price that they get for their products what the world market price is on the market on which they are putting such a high proportion of their production. It is as simple as that. However, it is one thing to say it; I know that it is another to get it.

    Something is sure—until we get it do not let us fall into the trap of making long term contracts for the sale, for instance, of wheat to Egypt. When I was a commissioner responsible for external trade, those who were responsible—the agricultural lobby—tried like mad to get the agreement of the Commission—and I was determined that they should not—that a long-term contract should be made with a number of countries to buy wheat.

    What does that mean? What was the objective? The objective was that not only should the farmers of the Community be feeding the Community, not only should they be providing our food aid to the poorer of the world, but that also built into this machinery should be a number of long-term contracts to Tom, Dick and Harry outside. Maybe in the long run this will be possible, but only after we have put our house in order first. Do not let us go for making any long term contracts until we know that in the short term we are going to be able to put our house in order. It is a good house and it is worth putting in order.

    4.37 p.m.

    My Lords, we would all agree that much water has passed under the bridges since this report was published last November. Farm prices have been fixed by a qualified majority over the—perhaps not entirely dissentient—head of the British Minister of Agriculture. Our contribution to the EEC budget has been agreed, if only provisionally, and the anti-Community feeling which undoubtedly was engendered by these events in the nation generally has, to some extent at any rate, been appeased by the way in which our Community partners sprang to our assistance in the Falklands affair by imposing sanctions against the Argentine when economically it was very greatly to their disadvantage. So we are perhaps now in a better position to consider the recommendations of Lord Greenhill's report objectively than we would have been had we discussed it some six months previously.

    The main conclusion we arrived at in the subcommittee has already been referred to. It is surely incontestable. As has already been said, it is desirable that an explicit agricultural food trade policy be formulated involving all the Directorates-General of the Commission, an exercise that will start to identify and eliminate the contradictions of Community policies affecting agricultural trade. That is surely an incontestable conclusion which I am sure will be accepted by all interested in the matter.

    Of course it involves consideration of the CAP, which cannot altogether be dissociated from this debate though it is not as such the subject under discussion. After all, we must admit that the CAP provided a common market for agricultural products, resulting in relative stability of prices and the broad safeguarding of the position of farmers, without raising the cost of living in the Community unduly. The latest increases in farm prices, which were referred to by the noble Lord, Lord Soames—10 per cent. or so—I believe only raised the cost of living in this country by an insignificant percentage, so I understand. And if it were not for the Common Agricultural Policy we should have to subsidise our own farmers to the extent of something like £1,500 million a year—more than twice as much, incidentally, as our contribution this year to the general EEC Budget.

    I know that some argue, generally speaking, that we should be better off if we could buy all the extra food we need on the world market. These arguments are not to be ignored, but, as we all know, world prices tend to fluctuate greatly over the years and would anyhow tend to rise if we ever re-entered the market on a large scale. Therefore, surely it is not so much from the strictly internal point of view that the Common Agricultural Policy is open to criticism in this country as for the reason, in the first place, that it still accounts for an enormous proportion—some 67 per cent. I think—of the whole Community budget. Secondly, and above all, no doubt, is the fact that, as I think all previous speakers have agreed, it necessarily result in a number of surpluses which can only be disposed of at world prices on the world market, thus giving rise to complaints from "developed" nations that they are being ousted from some of their traditional markets by what they call "subsidised" EEC exports. I believe that the Commission objects to that phrase and says that they are not actually subsidised, though of course in practice they are. It is also complained of by some of the underdeveloped countries, who believe that they should be encouraged to produce more of their own food themselves, and who in some cases would like to export more of it, notably sugar, to the Community. I had intended to make some extended remarks about sugar but the noble Lord, Lord Soames, has said everything is necessary about that, and I entirely agree with his observations.

    All this is duly noted in the report, which, as I have said, very rightly lays primary emphasis on the need to formulate an explicit agriculture and food trade policy. But it is rather difficult to see how this admirable objective can be obtained or successfully formulated in the absence of some rather radical reform of the Common Agricultural Policy—more particularly, as is suggested in paragraph 67(a), by somehow regulating production and hence reducing surpluses. Some such action no doubt will become imperative in the course of time owing to the prospective shortage of funds with which to finance the whole of the Common Agricultural Policy. But I must say I do sometimes wonder how exactly the apparent miracle w ill be accomplished in practice. All the nations concerned are out to protect their own farmers by one means or another and most are reluctant to do so by individual means involving deficiency payments, even if that were not contrary to the whole present philosophy of the Community. Perhaps we might consider some arrangement—this may be a contentious suggestion: I do not know—whereby the agricultural Ministers, when they meet, are occasionally flanked by Foreign Office officials or Department of Trade officials, or even by Ministers, who might possibly regard debates on, for example, dairy products from, shall we say?, a rather more general point of view. I do not see why this should not be considered if the situation got really out of hand.

    Another possibility—and I only throw this out—might be for the Ministers to attach more importance than they seem to do at present to any resolutions on the Common Agricultural Policy passed by a suitable majority in the European Parliament. After all, members of the European Assembly, whatever their political affiliations, of necessity regard European problems, including agricultural problems, from a broader and less nationalistic point of view than national Ministers. It may thus well be that some kind of compromise solution of agricultural difficulties could best be formulated by the Assembly, in close co-operation, of course, with the European Commission.

    Anyhow, unless the EEC is to break up or become completely stagnant (which would be much the same thing) and God forbid it should happen—it really must, and quite soon, arrive at some solution of the agricultural problem, even if this should involve some partial reversion to deficiency payments, which I think is what was suggested by the noble Lord, Lord Soames. When and if that happy moment comes, then it will also be necessary to increase the "own resources" of the Community to a considerable extent, notably by increasing by some percentage the VAT contribution of members, in order to finance a regional policy, to say nothing of a common transport and industrial policy. The advantages of so doing would be so enormous that even national politicians, I believe, will have to contemplate such possibilities within what is commonly known as "the foreseeable future".

    Perhaps as a start in reforming the Common Agricultural Policy,—and here I entirely agree again with what was said by the noble Lord, Lord Soames—the Governments might agree on one thing: that is to say, some appreciable reduction in sugar production in the Community. If I heard him aright, I understand that some initiative has already been taken and a start has been made in that direction. I did not realise that when I drafted my remarks. As a contribution towards the development of the underdeveloped nations, such a gesture would be enormously welcomed and even if home farmers objected—as they would, of course, sugar beet being such a helpful and such a profitable crop the sacrifice would surely be toleraable if it were only moderate and general. This said, I hope the report will commend itself to this House and join the numbers of those reports which, increasingly, so we are told, or credibly informed, are consulted by experts all over the Community and notably in the European Parliament and in the Commission.

    4.47 p.m.

    My Lords, Committee B, under the very able and distinguished chairmanship of the noble Lord, Lord Greenhill, are to be congratulated on producing a most valuable report. It is an extraordinary fact, which the report brings out in its first paragraph, that the EEC treaty does not include provision for common agricultural trade policy in the way it does for common agricultural policy and common commercial policy. In my view, as I have said in previous speeches this is due to an obsession with production.

    The disposal by the EEC of its surpluses on the world market at heavily subsidised prices has not only depressed world markets but has also displaced long-established exporters from markets they have served for many years. As the report states—and I quote—
    "Issues of agricultural trade continue to irritate relations between the Community and some of its main trade partners."
    This has affected not only developing countries but the developed. The need to find markets outside the Community for its surpluses and its policy of protecting its home market has led to a distortion of trade, as is so well stated by the World Bank in its 1981 development report. I quote again:
    "Agricultural trade is everywhere severely distorted by national price support and protection policies, epitomised by the EEC's Common Agricultural Policy."
    Article 110 of the Treaty of Rome includes the harmonious development of world trade, but this policy does not appear to have been followed in the case of agriculture.

    One of the objectives of the treaty, as we all know, was to ensure the availability of supplies. This has led to the aim of self-sufficiency, though there was no explicit reference to self-sufficiency in the treaty. Increased production, encouraged by high support prices, and, in the case of some commodities, static consumption, has led inevitably to the creation of large surpluses. The EEC is now more than self-sufficient in many commodities; for example, dairy products, wheat, barley and sugar. But, as the Ministry of Agriculture pointed out in its evidence, Community self-sufficiency is to some extent illusory, in that it is dependent on imported fertilisers, fuel and feedingstuffs. Also, producing internally in the Community what can be more efficiently produced elsewhere leads to a serious waste of total world resources.

    I have already referred to the way in which the common agricultural policy has led to serious difficulties in our relationships with the Commonwealth and other countries. May I now be more specific and deal with sugar? This is of particular concern to developing countries. As I said in a speech on the common agricultural policy on 17th April, 1980, at column 447 of Hansard:
    "For certain developing countries, sugar is their only export crop. It is often their sole means of earning vital foreign currency."
    But it is not of concern only to developing countries. As the noble Lord, Lord Soames, said recently, Australia and nine other governments have filed a comprehensive complaint in the GATT against the export of Community sugar at heavily subsidised prices. The noble Lord, Lord Soames, also said that the Australian Government has estimated that the EEC's share of the world "free market" export trade in sugar increased from a 7-year average of 7·8 per cent. in 1975 to 22·4 per cent. in 1978. A few days ago, the London daily price for raw sugar was £95 per tonne. The last time it was this low was in 1972.

    Turning to dairy products, although the butter mountain has for the time being largely disappeared, its return may be imminent. As the Ministry of Agricuture, Fisheries and Food witness said in evidence:
    "It has gone, but the shadow is still there. A series of reasons have done the butter mountain temporarily in. The butter foothill will be back with us in a year."
    In the early days of the United Kingdom's entry into the Community, quite naturally New Zealand was very concerned about its effect on its agricultural exports. They are now largely reconciled to a smaller share of, for example, the United Kingdom's butter market compared to their exports before our entry. But what they are still very concerned about is the Community's subsidised competition, which has impeded New Zealand's efforts to develop satisfactory alternative markets.

    I now turn to grain and to one of its greatest producers—namely, the United States—where some ex-perts predict the worst farming crisis since the Great Depression. They fear that a large proportion of the millions of bushels of grain which American farmers will reap this year will have to be added to the heavy stocks that have been carried over from the previous harvest. In these circumstances, one can understand the increasing importance of foreign markets.

    According to the United States Secretary of Agriculture, the United States provides 45 per cent, of the world's exports of wheat and 70 per cent. of the world's exports of feed grains. Key markets, such as Latin America and China, are now receiving large quantities of Community subsidised wheat, jeopardising traditional United States trade with these countries.

    There therefore seems, in my opinion, a strong case for the Community to discourage increased production resulting in more subsidised exports. Their original aim, over a period of years, of bringing wheat prices nearer to the world level should not be forgotten. What is more, these prices should apply only to an agreed level of output or quota. The Economist, in a recent number, put the matter far more forcibly than I have:
    "Raising prices to the producers of a glut that is harming your most powerful ally is bad politics and worse economics."
    Of course, we should not pretend that the United States are entirely blameless in their agricultural policies. They recently introduced a system of import quotas for sugar to protect their own producers against depressed world prices, although they claim that it is only a temporary measure. They have also, as a consequence of their support programme, developed large dairy surpluses, which will reach an estimated 200,000 tonnes of butter, 371,000 tonnes of cheese and 545,000 tonnes of skimmed milk powder by August. The US claim that they will not deal with these surpluses in the same way as the EEC, but it seems certain that they will eventually have to be unloaded on to the world market.

    Other dangerous ideas have emanated from the Commission from time to time which would further harm our trade relations with other countries. One example is the proposal, shelved for the time being, to limit to 3 million tonnes a year the amount of corn gluten imported into the EEC from the USA without duty. The Americans view this idea with dismay. The possibility that they will take retaliatory action seems to be supported by their recent action over aids to the European steel industry. Another disturbing proposal in the EEC's efforts to limit its imports of cereal substitutes is further to restrict imports of manioc from Thailand and Indonesia. I have, on a previous occasion, spoken about the very serious potential consequences of such a measure for the economies of developing countries.

    One further idea which is harmful to the interests of the third world countries is the imposition of a levy or tax on oil seeds and vegetable oils and fats. These are attempts to solve the surplus problem in one sector by increasing the price of competitive products—in other words, an attempt to increase the consumption of butter by making margarine dearer and, similarly, increasing the consumption of olive oil by making other vegetable oils dearer. Once again, consumer interests do not appear to be considered. These ideas seem to me to be the economics of the madhouse and must be resisted.

    In conclusion, may I say that, as one who advocated and welcomed British entry into the Community and who believes it would be a major disaster, both on political and on economic grounds, for us to contemplate withdrawal, it gives me no pleasure to be a continuous critic either of the Commission or of the operations of the common agricultural policy. Nevertheless, we should not ignore the inadequacies of the present policies, and I thoroughly agree with the view of the Committee that it is desirable for an explicit agriculture and food trade policy to be formulated. More important is the need to limit the production of large surpluses, which are the root causes of the understandable complaints of our trading partners throughout the world.

    Reform of the common agricultural policy has been discussed now for a long time but little progress seems to have been made. Is it too much to hope that member countries will concentrate less on their narrow self-interest and live up to the harmonious development of world trade which is laid down in the Treaty of Rome?

    5.3 p.m.

    My Lords, those of us who serve on Sub-committee B of the European Communities Select Committee have very good reason to appreciate the way in which our chairman, Lord Greenhill of Harrow, guides us through a series of complex issues. This subject of agricultural trade policy is but one example, and by no means the most simple, of the subjects with which he has helped us to deal, and we appreciate his chairmanship.

    In opening this debate he has explained that the question before us was—and is in this debate—how the common agricultural policy affects the agriculture and food trade of non-member countries. Those non-member countries are, of course, very numerous and very varied. They range from the great granaries and meat-producing lands of the world to tiny, sugar-producing tropical islands. Therefore any analysis of the effect of the common agricultural policy on their trade and on their economies must be complex. This means that to make, briefly, any useful comment on this subject one has to be selective.

    For my purpose, I have selected the effect of the Community on the agricultural economies of developing countries. Throughout the report there are many references to this aspect of the problem—so much so that I have reflected, somewhat ruefully, that perhaps the committee, in organising the sessions for the oral examination of expert witnesses, did not give sufficient specific attention to the agricultural trade of the third world. Certainly I am not complaining about the submission of written evidence in this respect from Government departments, because the document which we received from them was most comprehensive and a very valuable compendium. I have it in mind, rather, that it was not until the second half of the last sitting that we had the benefit of an expert witness on developing countries. On reflection, I think that was a pity. I am not blaming anybody—except, perhaps, myself—for this. I could and perhaps should have asked for more information, but I failed to do so. However, I should like, as I have said, to comment to a degree on the problem of the third world over this matter.

    My first reflection about the EEC's trade relations with developing countries is that the developing countries, too, are a very varied bunch. It is not easy to draw any general conclusions, because the overall category which we call "developing countries" contains several sub-groups, with varying and very often opposing interests within themselves. There are, for instance, those developing countries which benefit from the LoméConvention and those which do not. There are those which import food and those which export food. There are those which are very poor and those which are not so poor. And 10 of the countries which the United Nations lists as very poor do not benefit from the LoméConvention. Those countries include India and Bangladesh. So, as I say, it is very difficult to generalise.

    In thinking of the effect of the common agricultural policy on the third world, it depends very much which particular commodity and which particular country one has in mind. Nevertheless, I do believe it is possible to discern three basic needs of almost all developing countries. It is perhaps useful to examine the effect of EEC policy in respect of each of these three. The first is access to the European market. The second is the need for stability of prices. The third concerns the sound development of third world economies, particularly their agricultural economies.

    First, as to access, basically—as has been pointed out by the noble Lord, Lord Sainsbury, and others—the common agricultural policy is protectionist. It protects European producers against competition from producers, including those in the third world, who have some form of comparative advantage and who, but for the common agricultural policy, would be able to enter the European market much more fully and much more profitably than they are allowed to do. The report points out, moreover, that, even from the European point of view, this protectionist nature of the common agricultural policy is self-defeating, because, as the report says at the top of page xxvi:
    "[Liberalisation] would be the surest way for most developing countries [to increase] their ability to afford to buy EEC exports both of agricultural and industrial goods".
    In addition to this general protectionist defect, there are other harmful effects of CAP protectionism against the Third World. For example, as I have suggested, the Lomé Convention sets one group of developing countries against another. With this in mind, the sub-committee in its earlier report on Community aid policy advocated extending the provision of the Lomé Convention to a much wider group of developing countries. Then, even when primary products from the Third World have reasonably free access to the Community, as indeed they do, there are undesirable barriers to the import of such products in a processed or semi-processed form. This must have the effect of preventing Third World countries from raising their economies to a higher level of development.

    Thirdly, some developing countries with a climatic and cost advantage—such as Kenya—would be able to develop a European trade in, for example, vegetables but for the imposition of import levies under the CAP. On the question of commodity prices, it was on the basis of the opinion expressed by one of our witnesses, Dr. Christopher Stevens of the Overseas Development Institute, that our committee was able to include in its report what I believe to be a pertinent, critical comment on the attitude of the EEC to the question of international commodity agreements. This opinion of Dr. Stevens, which we endorsed, is set out in paragraphs 39 and 40 of the report. It is to the effect that the Community has been helpful in joining those commodity agreements which suits its own interests—that is, when the commodities are those which the Community needs to import, such as coffee, cocoa and rubber. But the EEC has been unhelpful in not joining the sugar agreement, the benficiaries of which are likely to be developing countries and not the sugar beet producers of Europe. That is perhaps a back-handed compliment to the Community but one which it deserves. I believe it is a criticism that is properly directed and I certainly support the report's firm recommendation in paragraph 67(d) that the Community should join the International Sugar Agreement.

    Finally, there is the question of the development of agriculture within developing countries. In this connection I should like to call attention particularly to paragraphs 37, 38 and 60(e) of the report. These deal with that vexed question of cheap food exports from the Community to developing countries and the associated question of food aid. Opinions vary widely—and they did within the range of witnesses whom we saw—as to whether these policies are beneficial to developing countries or not. I believe the truth is contained in all three paragraphs to which I have referred. Obviously, both cheap food exports and food aid from the Community can in the short run be of benefit to developing countries, particularly those which need to import significant quantities of food. But there is the long-term danger that if they come to rely too much on such sources of food, they can, and here I am quoting from paragraph 37:
    "…reduce the incentive for developing countries to invest in their own food and agricultural production for both domestic consumption and for export."
    That is where the dilemma lies. On the one hand there is the obvious short term benefit to developing countries from cheap food and food aid but on the other hand there is the disincentive to develop soundly their own agricultural policies. Surely it ought to be possible to escape from this dilemma. If we can ensure careful administration of food aid projects and if developing countries do pursue sound internal policies, we can get the best of both worlds; both the short-term advantage of cheap food and the long term advantage of greater food production in developing countries. I am not saying this is easy, but I do believe it to be possible, and certainly that should be the objective.

    The Community's aid and trade policies should have this problem in mind and those policies should be adapted and pursued with that objective in view. That is the summary of the Committee's conclusions as I see them with regard to the effect of the Community's agricultural trade policies for the welfare and development of the developing countries.

    5.16 p.m.

    My Lords, when the noble Lord, Lord Oram, began his speech he paid tribute to the noble Lord, Lord Greenhill of Harrow, who, he said, guided the Committee through a series of most complicated subjects. I am quite certain that the noble Lord, Lord Greenhill of Harrow, did that. This evening, he has introduced a debate of vast complexity, and, if I may say so, I admire enormously the skill with which he managed to encompass such a wide range of matters in the opening speech with which he introduced this debate.

    The debate is on agricultural trade policy. I am bound to say that I find this one of the most difficult debates to which to respond because, of course, there is no agricultural trade policy to start with. But as the report itself makes out, there are in reality very many different strains of policy at issue here, centering on the provisions of the common agricultural policy itself. The Select Committee on the European Communities have indeed done a great service to the House in producing this report. For the first time, to my knowledge, one of the Houses of Parliament has before it a report which focuses specifically on the external aspects of the common agricultural policy. Because there are so many different factors at work the Committee has had a very difficult task of analysis, but one which has enabled your Lordships today to look at agricultural policy from a different perspective to that from which it is normally surveyed; that is, its impact on world trade. I should like to pay my modest tribute to the Committee and its members for the way in which they have pursued their work in such a wide and complicated field. Of course, the common agricultural policy is a vast subject. It has implications which touch on a whole host of separate subjects. Perhaps one might think for a moment about just what these are. On the one hand, one has domestic considerations, such as securing a fair living for our farmers, increasing agricultural efficiency, providing food at reasonable prices for consumers, and producing a commonality of régime between member states.

    Those are very difficult problems—but that is only one side of the coin. The other side is the international aspects, such as our trading relationships between the Community and the developed countries, our responsibilities towards developing countries, not only their needs but also their exports, and achieving some balance between the need not to upset or to distort international trade and the need to dispose of food which is surplus to the internal requirements of the Community; and also, of course, the moral problem of the least developed countries and the hungry. I am glad that the noble Lord, Lord Oram, referred, as he has on other occasions, to this aspect, because I think this is important. It is also important, as the noble Lord, Lord Oram, said, that one tends to lump together by description the under-developed countries, whereas in fact their needs and requirements are different; therefore, it is dangerous to consider them as just one group requiring similar attention.

    The noble Lord, Lord Greenhill, said that agricultural Ministers had had it their own way. As a result, he said, agricultural Ministers in the Community had agreed to high prices which had created too great surpluses, which therefore had to subsidise exports and which thereby interfered with the trade of others. I think in a large measure I would have some sympathy with what the noble Lord has said. My noble friend Lord Soames said that the common agricultural policy is frequently criticised, and he said that two ways in which it has been criticised were unfair, but the one which was fair was that the charge of disrupting trade with other countries did stand up. My noble friend went on to suggest that if Japanese cars were exported with subsidies on them we would all squeal like stuck pigs. I think that applies at the moment whether the cars have subsidies on them or not. But I think there is a difference here. I do not wish to dwell too much upon it. The manufacture of cars is a totally commercial undertaking, maybe of economic significance, but the problem which we are discussing this afternoon is the problem of food, which is not only of national importance but human importance, and therefore the two are not wholly similar.

    In the discussion of this problem I think we should not lose sight of one of the contradictory factors, which is that two-thirds of the world today is underdfed while the other one-third produces more than it can eat. And yet the countries of the two-thirds who are underfed cannot afford to purchase the surpluses from the one-third who produce them. This is a moral, economic, political and human problem of great size. I still find it astonishing to think, as I have said before to your Lordships, that there are now 50 per cent. more people in the world than there were at the end of the last war. And the plain fact is that they can only be fed by agriculture and by international agriculture. It is to me almost an obscenity and an absurdity that our surpluses should in fact be creating problems rather than solving them. It is this, I think, to which the Community in the fullness of time will have to direct its attention much more.

    Your Lordships' report brings out very clearly that there are a number of apparent contradictions, and even conflicts, between the different interests which are affected by the common agricultural policy. It emphasises, quite correctly, that the Community's external trade policy in agricultural products is primarily a derivative of its internal agricultural policy. This is absolutely at the heart of the matter. The noble Lord, Lord Peart, said that European Community prices should not be too much above world prices. I think that is true, and it is something which this Government certainly have tried to impress upon the European Community in their negotiations. The common agricultural policy, in common with agricultural policies of many other countries, is formulated primarily with domestic considerations in mind. The fact that that was how the CAP started may be right or wrong, but that is the position in which we find ourselves. The Government continue to maintain their view that improvements in this are needed. We are indeed grateful for the contributions from your Lordships suggesting how this should come about.

    The noble Lord, Lord Sainsbury, and the noble Lord, Lord Peart, both referred to the prospect—one must put it no more than that, because I think it was a newspaper article—of a national slump in agriculture in America. This would be a frightening prospect and would affect many people and many industries. Clearly this is partly the effect of United States' interest rates and the general world recession. The United States traditionally produces about 60 per cent. of its agriculture for export. It has benefited from the large scale of its agriculture, which was established recently on virgin lands. The Community, though, is different, in that it has had to rid itself of the inheritance of the fragmentation of holdings and of inefficient farming practices which have been carried on over the centuries. Therefore, the conditions of over-supply on world markets are naturally a severe threat to the United States' agriculture and its exports. Perhaps it may be that all developed countries should examine their agricultural production policies and not just the European Community alone.

    Of course, in a perfect world agricultural output, whether within the European Community or outside it, would be geared to meet the world's requirements. But the fact is that it is an impossiblity in agriculture to get supply and demand in equilibrium. Natural forces such as the weather and disease are unpredictable and uncontrollable. And a small shortage over requirements has a totally electric effect on price and on demand, an effect which extends much further than just to the commodity which is in shortage. Therefore, I suggest to your Lordship that in criticising the common agricultural policy—and heaven knows we are all entitled to do it and it is very much open to criticism in many spheres—for permitting surpluses, or even planning for surpluses, is not necessarily fair, because it can be regarded as a prudent insurance exercise. In times, and in commodities, of surplus this does affect others, and it does and can distort trade. I do not seek to excuse the Community's chronic surpluses, of which many of your Lordships have spoken, of some very important commodities. Indeed, it has been the policy of this Government to try to get the Community to reduce its surpluses and to lower the prices of those commodities which are in structural surplus.

    My Lords, would my noble friend permit me to intervene? I think it would be a pity if he left with us the view that Her Majesty's Government are of the opinion that, to take, for instance, the production of sugar having risen from 5 million to 9 million tonnes over a period of a few years, was, to use his own words, a sensible insurance policy.

    My Lords, I am coming to sugar in a few moments. I would not wish my noble friend, nor would my noble friend wish, to distort or put a wrong impression on what I have said. All I was trying to say was that to allow for, or even to plan for, a surplus in general is not necessarily a wrong thing, because shortages, which are the other side of the spectrum, can be even more of a problem. But I will come to the question of sugar later.

    Against that background some kind of conflict of interest between domestic producers and those in other countries is, in fact, inescapable. It is clear—and the committee are right to emphasise this—that the Community cannot exist in isolation even behind the walls of the common agricultural policy. The Community is, if it is not the major world trader, certainly a major world trader, and it has a duty to act responsibly in the conduct of its affairs. I do not think that anyone would disagree with that as a general principle. The difficulty is interpreting this principle in day-to-day terms.

    The noble Lord, Lord Greenhill of Harrow, emphasised that the committee recommended that the Commission and the Council of Ministers should be charged with the task of producing an explicit agricultural trade policy. While I appreciate the feeling behind that, I think that it is precisely because of the variety of responsibilities and the impacts which arise from the combination of agricultural and commercial policies, that the makings of an agricultural trade policy is an almost impossibly difficult thing to do.

    Let me elaborate a little. It is wrong to suppose that there is a single world market in agricultural products generally, with a single set of trading relationships. In some commodities, for example, the Community is a net importer; as regards others it is a net exporter. In a few cases—for instance, in pork and bacon—most of the world trade takes place within the Community. Indeed, it is generally true that across the whole spectrum of trade, member states of the Community have their largest market within the Community. Therefore, while trade with third countries remains vitally important, in Community terms it is a relatively small proportion of total Community trade and it would not necessarily be right to subordinate all other policy considerations to that. Account obviously has to be taken of different interests in each case according to its merits. That is what the Community's frantically complicated tariff and levy systems, attempt to do. They may not always succeed.

    The noble Lord, Lord Gladwyn, said that agricultural ministers should be flanked by foreign ministers and by ministers of trade. I would only assure him that agricultural ministers do not operate in a vaccum of their own; they consult with other members of their Government and they merely represent the Government as a whole. It will not have escaped the notice of the noble Lord, Lord Gladwyn, that there was an occasion only a few months ago when the United Kingdom took a line which was individualistic because there were other considerations to be borne in mind and which caused the drama that we had over the last price fixing. Therefore, he would be erroneous to think that agricultural ministers operated on their own.

    My Lords, we have achieved something by this debate and I am glad to be able to enlighten the noble Lord. I never thought in all my years that I would ever be able to do that.

    The report rightly refers to the Community's relations with developing countries. Clearly special considerations must apply here and the noble Lord, Lord Oram, addressed his mind to that particulat fact. No other developed country—if one can consider the EEC as a country—operates a scheme which is comparable to the Lomé Convention under which virtually all agricultural exports of 61 African, Caribbean and Pacific countries enter the Community duty free. That is quite a concession and it is a recognition of the vital needs of these developing countries.

    My noble friend Lord Soames and the noble Lord, Lord Sainsbury, referred to sugar. It is perfectly true that sugar exports from the Community have gone up 5.8 times since about 1973. The Community's sugar exports have gone up. it is perfectly true that sugar production in the Community has expanded. But under the Lomé Convention the Community now imports 1.7 million tonnes of sugar from the developing countries and part of the agreement, was that by taking this large amount from the developing countries' sugar production into an already tight market, the Community would be allowed to export a similar amount in addition to its traditional levels. So the Community does act, I hope, responsibly towards developing countries as regards sugar. No other developed country or group does as much. The Community is, indeed, at present holding nearly 2 million tonnes of sugar off the market in order to try and regulate it. My noble friend Lord Soames said that we ought to have production quotas on some other items.

    My Lords, I apologise for interrupting my noble friend again, but before he proceeds I should like to raise one matter. It would be a mistake to try and take too much credit for importing 1.7 million tonnes from the Lomé countries, of which 1.3 million tonnes come as a hangover from our own Common-wealth Sugar Agreement, as we are exporting 5.4 million tonnes. To import 1.7 million tonnes because we are committed so to do, and then to go on and produce so much more at home as to be exporting 5½ million tonnes is not really much of a dividend.

    My Lords, my noble friend is perfectly fair, as he always is, but he will be the first to recognise that there was an expected expansion in the sugar market.

    My Lords, the noble Lord says "why"? I am saying that there was an expected expansion in the sugar market which, for a variety of reasons, did not come about. It so happens that the Community's system has resulted in a surplus of sugar and that I entirely accept. It may be that one ought to try and reduce the surplus of sugar in the Community.

    My Lords, the noble Lord, Lord Gladwyn, who is so vociferous in saying, "Hear, hear", will, I know, repeat, "Hear, hear", when I tell him that there was an occasion when the Community exported sugar and made a profit on so doing of some considerable sums of money. Of course, it is not easy to get the balance right and we want to see the balance right. It may be that the imposition of quotas, not only on sugar but on other commodities as well, might be a possibility and it is an interesting example which we could try and follow. However, I would only draw the following distinction. It is easier with sugar because most Community countries did have some form of sugar quota because the sugar which was produced had to be processed and had to go through factories. That is not so with other commodities and it would be very difficult to get commodities, such as wheat, to go under a quota system. However, it is certainly a point worth looking at.

    The committee suggested, but I do not think that your Lordships have suggested it so much this evening, that the degree of preference which the Lomé Convention allows, discriminates against those developing countries which are not in the scheme. This is, of course true, but those who are in the scheme are there precisely because of the Community's sense of responsibility towards those who are our former colonial and dependent territories. One obviously cannot have it both ways. If one recognises these historical responsibilities, then one has to make special provisions for them.

    But there is for those who are not in the Lomé Convention, the Generalised Scheme of Preferences. It is true that this is less generous than the Lomé Convention, but the Generalised Scheme of Preferences does extend to a total of 146 developing countries, and the 36 which are classified as least developed benefit from entirely free access to virtually all the products under the scheme. The committee made some specific recommendations about it. The first of those referred to self-sufficiency—a matter to which I think others of your Lordships have referred this evening and I think that the noble Lord, Lord Sainsbury, certainly insinuated that we should give less emphasis to it

    The Government do not support the pursuit of self-sufficiency—whether it is in the United Kingdom or in the Community—just for its own sake. But a certain amount of protection for home production must be justified, if only on strategic and economic grounds. One merely has to look back at the recent events in the South Atlantic to see that one of the countries which has been a traditional supplier—and an important one—of beef and other food to us is now caught up in a different set of circumstances. We cannot be too dependent, and it would be short-sighted to discount the strategic value of adequate home production.

    I would emphasise that the price levels of the Community have to take factors of this kind into account. I do not wish to dwell on that unduly tonight, but I would just comment that the price levels, which are fixed, are, of course, one of the major factors behind the generation of surpluses, and this, in turn, lies at the root of many of the problems of external trade. I would remind almost every noble Lord—certainly the noble Lords, Lord Sainsbury, Lord Gladwyn, Lord Soames and Lord Greenhill (that is almost everyone, except perhaps the noble Lord, Lord Oram, and I might have missed him out inadvertently)—that the Government have a record of constantly badgering the Community not to increase prices over and above a reasonable limit and particularly those in structural surplus, because this creates the very surpluses to which this evening your Lordships have been addressing your minds and about which you have been so concerned. The percentage of the Community budget which is spent on agriculture is now about 65 per cent. as against 80 per cent. or so a few years ago. That is a reasonable and encouraging improvement.

    The noble Lord, Lord Greenhill, referred to the introduction of supply agreements, and he referred to it with caution. This is also a matter which concerned the Committee. I can tell the noble Lord that the Government are not convinced that these are necessary. The Community already has a wide range of ways in which it can promote its agricultural exports—such as refunds, which can be prefixed some months ahead. I agree with my noble friend Lord Soames that there is a risk in introducing "supply" or "long-term" contracts in that these could increase, rather than reduce, the costs of the Community's exports. By making a commitment to supply certain agricultural goods, the Community might appear to be encouraging producers to increase their production yet further, and so to continue the production of surpluses. A further cause for concern is the fact that the introduction of such agreements could clearly upset some of the Community's major trading partners. In any further discussions of supply contracts there are a number of aspects which we shall want to watch very closely.

    I know that there have been complaints—and your Lordships have mentioned them—in GATT against the Community's use of export refunds. Her Majesty's Government have always sought to ensure that the Community respects its international trading obligations, especially those under GATT. We must be careful not to prejudge the outcome of the current cases which are being considered by GATT, but I think I must point out that GATT does allow the use of export subsidies for agricultural products, subject to certain conditions.

    The noble Lord, Lord Greenhill, referred to the complaint on sugar in GATT, as I believe did the noble Lord, Lord Sainsbury. Ten countries have made a new complaint under GATT rules on European sugar exports. The normal procedure for disputes under GATT is for them first to ask for consultations. The European Community has agreed to bilateral talks with these complainants and we shall have to await the outcome of those discussions. Your Lord-ships should also be aware that the United States, which had previously complained about European Community sugar and other matters this year, has, in fact, withdrawn that complaint.

    As I have said, we have a number of imports from the Lomé countries. While on the point of GATT, I would disagree with one part of the report, where it says that the Community has not been ready to discuss in GATT the effects of the common agricultural policy, or to take action when it is ruled against. The fact is that apart from that to which I have just referred, the only recent GATT ruling on export subsidies was in 1979 in the case which was mounted by Australia and Brazil on sugar. This called only for discussions to take place, and they did so exhaustively up until a month or two ago when the cases were finally closed. The conclusion of the GATT panel which studied this was that there was a risk that Community policy did not conform with the rules of GATT, and the Community immediately changed that policy so as to conform. Therefore, I do not think that it is correct to state that the European Community will not discuss the effects of the CAP on GATT or change its policy. It has done so, it does do so, and it is doing so.

    With regard to the international commodity agreements, these have to be considered on their merits in the light of the Community's position as an importer or an exporter and in relation to the other countries concerned. On the specific question of Community accession to the International Sugar Agreement, to which two noble Lords referred—and I think that, curiously enough, the noble Lord, Lord Sainsbury, was one of them—it is a fact that the United Kingsom has always been in favour of this, provided that equitable terms can he negotiated.

    The noble Lord, Lord Sainsbury, also referred to maize gluten. In our view, maize gluten feed is not a straight substitute for cereals. It is high in protein, and the Community has a large deficit of protein for animal feed. Raising the levy on this would push up costs to our livestock industry while doing little for the cereals sector. Therefore, we do not favour the proposal on agricultural grounds. In addition, it is clear that if the Community restricted this trade, the United States would also take reprisals on some other lines of trade. In our view it makes no sense to start such a confrontation. I am glad to tell your Lordships that the latest news which we have from Brussels is that, in response to pressure from the United Kingdom and from other delegations, the proposal appears to have been shelved.

    Both the noble Lords, Lord Greenhill and Lord Sainsbury, referred to Thailand and to manioc. The European Community has initialled an agreement with Thailand over manioc and this maintains the current trade levels. In return for restraining expansion of current Thai production levels, which in any case had been distorting their own trade, they will be able to be in receipt from the Community of some offers of help for future development of their own agriculture.

    In this debate we have covered a very wide field over what is a very complex subject and over which the issues are conflicting. I believe that the committee's report has done a great deal to help and has done a great service in exposing these questions. It is quite clear from what has been said that the tentacles of the common agricultural policy extend far wider than just European farmers and European consumers. Their influence across world trade affects an enormous range of different interests. I think that your Lordships' debate this evening has highlighted some of the major areas of difficulty and, in that respect, it will have proved very helpful.

    My Lords, I shall not detain the House for more than a moment. There are already two debates stacked up behind us and the participants in those debates have been very patient. I should like to thank the noble Earl, Lord Ferrers, for his comprehensive reply to the debate and I would thank the speakers who have participated. We have had two former Ministers of Agriculture, one former Minister of Overseas Development, an internationally acclaimed expert on European affairs and the most successful and admired food retailer. All these have added greatly to the authority of the report, and I acknowledge now to the noble Baroness, Lady White, that the committee was wrong in hesitating to bring this subject for debate on the Floor. I think that the debate has been extremely useful. Thank you very much.

    On Question, Motion agreed to.

    Derelict Land Bill

    Brought from the Commons; read a first time, and to be printed.

    Ecc 12Th Report: Revision Of The European Regional Development Fund

    5. 51 p. m.

    My Lords, I beg to move That this House takes note of the Report of the European Communities Committee on Revision of the European Regional Development Fund (12th Report, 1981–82, HL. 126).

    I hope in initiating this debate that I will not be regarded as being presumptious, since I am not a member of the committee. Indeed, the committee in their report did not recommend your Lordships to debate this most recent of their reports, perhaps because they were too modest or perhaps because they felt that the last debate was too recent. It is only just over a year ago since the Regional Fund was debated in your Lordships' House, on 13th April last year.

    On that occasion my noble friend Lord Banks, who I am pleased to see is going to join in the debate again tonight, said:
    "I hope that when the Select Committee produce the next of their excellent reports on this subject, in 1985 or whenever it is, they will be able to report progress".—[Official Report; col. 805.]
    The items on which he hoped for progress were:
    "support for a very much larger Regional Fund as part of a larger Community budget … support for a co-ordinated regional policy including a much increased proportion of the Regional Fund distributed on a non-quota basis, and support for more direct formal access to the Commission for regional authorities and agencies".—(col. 804.)
    Had I been here I would have supported that speech most wholeheartedly. Unfortunately, by sheer coincidence, that was the day before announcements of a new list of peerages was given to a waiting world, of which I was one, so sadly I was not able to take part in that debate.

    When it was suggested that I might initiate this debate today I was happy to do so for three reasons. First of all, I have always had a great interest in regional government in the United Kingdom. I was in fact chairman of a committee of Liberal candidates as long ago as 1964 which produced a report on regional government in the North-West of England. I am a powerful believer of a federal United Kingdom within a federal Europe, but I do not propose to pursue that in great detail tonight, but I merely state my position.

    I also am pleased to initiate this debate because I believe that it is important that when there is something good to say about the European Community we ought to go on record and say it. After listening to at least part of the last debate, I hope that in some ways we can make some positive contribution to burnishing the image of the European Community in this debate. Secondly, it is a good thing that we in this House should show the good work that is done by your Lordships' House, particularly when it is under attack from all sides, and it seems to me that the Select Committee on the European Community is a good example, perhaps a prime example, of the excellent work which your Lordships can do in Parliament. I think that this report is highly commendable, and I am sure that I shall be joined from all sides of the House in congratulating the noble Lord, Lord Plowden, and his hardworking committee on the work that they have done. They certainly deserve our heart-felt thanks. It is a lucid report on a complex subject.

    May I return to what my noble friend Lord Banks said in that last debate. I believe that there has been genuine progress in the Commission's thinking on the basis of what he said and what was included in the 14th Report of the 1980–81 Session which was debated last time. It is true that there is no significant or perceptible increase in the size of the fund. It ramains foolishly low. It is true that behind the report there is the sad fact that regional inequalities are widening in growth, in income, and in employment. One is reminded that that was what lay behind the 14th Report debated last year, and led the committee at that stage to recommend, among other things, the inclusion of industrial projects in broader development programmes; the suggestion that the ERDF support should be confined to those member states who were below the Community average level on a common criteria in order to focus aid where it was most desirable and most needed.

    I think it is true to say that the new Commission proposals go at least some way in these directions. We have the recommended introduction of programme contracts. Although there are some doubts about the contract aspect of that phrase, whether it is over-legalised, nevertheless I think that the idea of programmes versus individual projects is something which will find support in your Lordships' House, and certainly found support from the Committee. There is indeed the restriction of quota payments to countries who are below the average of an index based on GDP and employment. It is, of course, one of the facts that this country is one of the bottom four in that league table. It is something which should constantly give us pause.

    The other thing is that there is the recommendation that the non-quota payments should be increased to 20 per cent. Certainly from these Benches all those recommendations are welcome. We give a particular welcome to some aspects of the regulations drafted by the Commission which seem, to me at least, to be a genuine attempt to increase transparency, or visibility—I am not sure which is the proper word; I think they probably both mean the same thing even though they are contradictory—to additionality and to local authority involvement.

    Of course, there remains enormous problems to which the committee has drawn our attention. The question of the exclusion of Yorks and Humberside, and parts of Devon and Cornwall, to which I suspect that the noble Lord, Lord O' Hagan, may refer at a later stage in the debate. Certainly he has my support there. There is indeed, as the committee says, a need for flexibility. It is worrying that some of the decisions are based apparently on out-of-date statistics. Some of them are as much as four years old. One of the things that we hope to hear from the Minister in his speech is what plans the Government have to try to improve the flexibility in that area.

    There is the problem, particularly to this country, of the lack of regional authorities in this country. Again, that would make an interesting debate to be initiated from these Benches. There is the problem of the size of the standard English regions in comparison with those in Germany and France, which all add to some of the distortions and some of the anomalies which are being thrown up in the United Kingdom.

    There is, of course, the question of black spots. I should like to ask the Minister how he envisages this problem being handled. May I quote from the committee's report where it says, on page xxi, paragraph 40.10:
    "Aid for black spots 'from the non-quota section should rest on the individual needs of those areas, whether or not the United Kingdom Government has granted them assisted area status".
    We are anxious to hear from the Government how far they are prepared to go down that road.

    Then there is the vexed question of additionality. It is a continuing problem and I detect from the tone of the committee's report that they are becoming somewhat resigned to never getting to the nub of the problem. But it seems to me that Parliament cannot have blind faith in the Government in a matter of that sort; it is not the job of Parliament to take the Government on trust in such matters, and the onus is on the Government at some stage to prove that additionality is part of their policy and is taking place. I say that, not just for basic reasons, as one would do from an Opposition Bench, but because for those of us who are interested in convincing our fellow countrymen that the European Community is working, it is important that it is seen to be working, particularly in areas like the Regional Fund. On the question of additionality, it is not seen to be working at the moment and the onus is on the Government to try to increase the visibility of that additionality. I well understand that it is extremely difficult to prove one way or the other, but if we believe in the fund, it must be seen to be putting its resources where they are needed.

    It is difficult to escape the view that the Treasury sponge is gleefully mopping up some of the gravy. That feeling is somewhat reinforced, I would say, by the evidence of the Department of Industry on page 2 of the addenda to the report, where, in the third paragraph, they say:
    "The exclusion of certain United Kingdom assisted areas is unwelcome and we shall certainly resist it. However, if the inclusion of such areas seemed likely to result in a significant reduction in the United Kingdom's overall receipts from the Community, we should obviously have to consider that situation very carefully".
    That is a somewhat revealing quotation, and it was picked up by the noble Lord, Lord Roberthall, in the questioning on page 8 of that evidence, questions 26 and 27. Again the Department of Industry reply is extremely revealing, for it says:
    "At the end of the day, the overall consideration must be the national interest—the overall national interest—and, if the inclusion of these areas the Commission has excluded meant the United Kingdom was going to get less money as a whole, I think the answer is fairly obvious".
    That is a fairly obvious answer to the question, but it seems to indicate a central Government view of the matter, one that is prepared to sacrifice black spots and regions, be they Cornwall or Corby, if at the end of the day the going gets too tough; and I worry that perhaps the Government are not applying themselves quite so firmly to the problem as they should.

    With that emphasis on the central coffers, I wonder whether we are to be surprised that people remain sceptical about additionality.

    I have a slightly critical comment of the committee's response in paragraph 18 on page xii of the report, where they say, talking about that reply from the Department of Industry:
    "The Committee well understand this point of view. They believe nonetheless that the rights of the poorer United Kingdom regions to benefit from the ERDF should be determined on the merits of their case."
    I wish they had put that point rather more powerfully; they might have been rather more critical of the Department of Industry in their evidence at that stage.

    I am also slightly critical of conclusion 40 at page xx, where, talking about the expansion of the non-quota section, the report says:
    "The expansion of the non-quota section is the necessary complement to an increasingly geographically concentrated quota section; but it will be difficult to distribute 20 per cent. of the entire ERDF under the non-quota section over the next three years".
    Nobody doubts that it will be difficult—I think it will be extremely difficult, and all the evidence they received tended to reinforce that point of view—but I wish the committee had taken a more positive view over the increase in the non-quota section. They might well have said that they really believed that 20 per cent. was the direction in which we should be going, because, frankly, I do not think it is up to us to offer excuses as to why that cannot work, particularly if it is based on pure administrative problems. That is a problem for the Government and the Community to solve, and we should state our case more clearly; and certainly from these Benches we would state quite clearly that we believe that the non-quota section should be increased to 20 per cent.

    With those two minor, though important, caveats, I commend the report to your Lordships and I look forward to hearing the Minister's response, and particularly to hearing the contribution of the noble Lord, Lord Plowden. I beg to move.

    Moved, That this House takes note of the Report of the European Communities Committee on Revision of the European Regional Development Fund (12th Report, 1981–82, H.L. 126). —( Lord Tordoff.)

    6.6 p.m.

    My Lords, we are grateful to the noble Lord, Lord Tordoff, for initiating this debate and for the thoughtful speech he made, and to the noble Lord, Lord Plowden, who I am glad to see is in his place, and his colleagues on Sub-Committee A for their report, which is to be read together with their larger report which was debated here on 13th April of last year. It is unnecessary in the light of that debate to traverse the whole ground again. However, during the last 12 months there have been changes and, on the whole, although they are not great changes, they point in the right direction.

    It is encouraging to note that some of the proposals of the committee have been accepted by the Commission, as is pointed out in paragraph 11. The restriction of the quota system to four countries, including our own, appears prima facie to be a helpful development and we should be grateful if the Minister would say what additional assistance in practice that will bring us. I would refer specifically to the words at the end of paragraph 10(b):
    "The revised United Kingdom share of 29.3 per cent. of the proposed smaller (80 per cent.) quota section is close in absolute terms to the present 23 8 per cent. of the larger (95 per cent.) quota section which it replaces".
    In other words, it seems there is to be no more cash for the United Kingdom than before. France, Germany and the others are to receive little or nothing, as the table on page 7 shows, and the money saved is to go to Greece, as is shown in table 2 at the end of paragraph 10. I do not object to money going to Greece—that is something we must accept, now that Greece is in the Community—but it must be made clear that we are not to receive any great benefit as a result of the readjustment.

    That really goes to the root of the long-standing British complaint. We are net contributors to the budget and seem likely to remain so until there are radical changes, especially in the common agricultural policy. The Regional Fund is one source from which the United Kingdom could obtain resources to balance the account. Indeed, as the report reminds us, it was set up with that very much in mind when we entered the Community. But the fund and the sums involved are small by comparison with CAP expenditure, and the report reveals that we are unlikely to receive more cash from the ERDF. I think it is important for that point to be made absolutely clear at the very outset of this debate.

    The argument about the budget will, of course, continue, and it must not be expected that the ERDF in its present form and size will help to resolve the problem. However, that does not mean that ERDF is of no value; on the contrary, it can be of great assistance to those regions which have serious structural problems. The committee accepted the two indicators used by the Commission to determine the eligibility of regions for ERDF aid; that is, regional GDP per head and the rates of long-term unemployment. Those seem to me to be the proper criteria.

    However, in paragraph 17 of the report the Committee strongly criticises the use of only 11 "standard" regions in the United Kingdom, pointing out that that,
    "appears grossly to understate the economic difficulties of many areas"—
    of this country—
    "where there are large pockets of structural underdevelopment within relatively prosperous 'standard' regions".
    The committee points to Corby and Cornwall, and there are other places as well. It urges the Commission to show greater flexibility and suggests that the Government should provide more detailed regional statistics to the Commission in future. I hope that they will do so, and I shall be interested to hear the Minister's comments on that important recommendation.

    Again, paragraph 33 draws attention to the views of the Association of District Councils on the black spots to which the noble Lord, Lord Tordoff, referred in his speech. The committee takes the view that these unfortunate areas should not be discriminated against by the new non-quota section, and that their case at Community level should rest on the merits, whether or not the Government have granted them assisted area status.

    Another case in point is that of mid-Wales, and I am glad to note that the Secretary of State has announced additional help. I think that it was announced in a Written Answer on 28th June. Will the Minister be good enough to confirm that the measures announced by the Secretary of State for Wales will in fact qualify mid-Wales to receive assistance under the ERDF? This is a very important point. In your Lordships' House on Monday the noble Lord, Lord Trefgarne, repeated a Statement made by his right honourable friend, and we were grateful for that. We then had an exchange of questions, but I think the crucial point is whether or not the measures bring mid-Wales within the ambit of assistance from the ERDF.

    The committee also maintains that the main responsibility for the black spots rests with the Government and that it is from this quarter that local authorities must receive redress at the end of the day.

    Another matter of importance to which the noble Lord, Lord Tordoff, referred in his speech is "additionality" —I am attracted to the principle; I dislike the word—and the report goes into some detail about it. The committee is quite specific in paragraph 4(a), where it reminds us of what it said last year. The committee's Fourteenth Report,
    "criticized the reluctance of member governments to allow grants from the ERDF to be added to what they had already allocated for regional aid in their national Budgets. Disrespect for this additionality principle called into question the value of the ERDF and acted as a brake upon its further expansion".
    That I think was a very serious criticism, and one which I hope the Government will have taken seriously, though nothing seems to have happened since then.

    In paragraphs 31 and 32 of the report the committee makes further recommendations, and, if I may, I shall quote from this part of the report as well. The committee states:
    "the present methods of distributing the ERDF quota section finance conceal what little additionality there is, thereby making a strong case for change. The new Regulation could provide the means for achieving greater additionality, especially using the programme contract approach. This appears to be the view of other Member States.…If the programme approach does not succeed in achieving greater additionality, it would at least provide greater visibility to the financial contributions made by the ERDF. That would be a significant gain. The Committee emphasize that the goal of additionality is vital if the ERDF is to have a future and if the credibility of the Community's regional policy is to be maintained".
    Those are strong and positive words from the committee, and they call for a clear response from the Government. I was disappointed by the evidence of Ministry officials on this point. They were vague and inconclusive. I do not blame the officials; they were merely reflecting the Government's uncertainty on the matter. The impression is given that the Government do not wish to be precise on the principle of additionality. Therefore, may I ask the Minister a plain question? It is this: are the Government committed to the principle that the regions are entitled to receive the assistance from the ERDF on top of any assistance that they may receive under the United Kingdom's own regional aid programme? A plain answer to that question would clear the air considerably.

    Furthermore, the important section on programme contracts also calls for some clarification. I understand that the Government regard these as complicated and as additional burdens on an already overworked Civil Service. Well, I sympathise with that view. The Minister's reaction to this matter will be appreciated. Would it not be possible to use the services not only of government departments—the Department of the Environment, the Welsh Office and the Scottish Office—but also of the Welsh Development Agency, the Scottish Development Agency, and the National Enterprise Board, as well as local authorities, at both county and district level? They would be glad to participate, and I note that this point is recognised by the committee in its report.

    I should now like to draw attention to the tables at the end of the report. They make very depressing reading, and they show how vital it is that the resources of the fund should be used effectively and urgently. For example, Table 3, giving the combined indices for the regions, provides a picture of the problem and the need. I hope that I may be permitted to point out that, while many regions are hard hit, Wales has the worst combined figure. Last Friday I attended a meeting of the newly-formed Welsh Committee for Economic and Industrial Affairs, and it is clear that local government in Wales is deeply concerned that the control exercised by the Government has resulted in a failure to maximise the benefits of European funds, especially the ERDF.

    One point made was that local authorities receiving grant for infrastructure projects are not permitted to spend more than the pre-award budget. The net effect is to replace loan sanction with grant—a saving to the Treasury without any extra projects being initiated. In my view that is not a good development.

    It seems also that the Commission's objective and our own Government's policies to some extent are in conflict. Let me explain. The Government's imposition of stringent controls on local government, limiting local authority expenditure within centrally determined limits, is clearly at variance with the Commission's initiative. The two do not go together. While we understand what the Government are doing, I think it is important that the effect of their actions on the Commission's policy should be made plain to the House and to the country, and I should appreciate the Minister's reaction to this criticism. If it is true, then we may as well know where we stand.

    I also assume that the Government's wish to control stands in the way of any possibility of direct dealings between the local authorities and the Commission. That, too, is a matter of much discussion within local government today. It was also made clear to me last Friday that local authorities are ready to co-operate in the development of programme contracts under the direction and guidance of the Government themselves.

    In considering the ERDF we should not overlook the importance of the European Social Fund. The relationship between the two funds should be carefully monitored to ensure that both have distinct areas of operation and that resources are not wasted. Local authorities have made valuable use of the ESF indirectly through the Manpower Services Commission's special programmes. In my view that has been very effective work indeed.

    We should also consider the importance of integrated development plans, such as the plan for the Western Isles of Scotland. Here agricultural aid, the ERDF, and the ESF can come together, and I should like to know whether the Government believe that this kind of co-ordination is desirable and should be supported.

    Finally, my Lords, may I say that we are grateful to the committee for a very instructive and valuable report. May I also urge the Government to make the maximum use of the ERDF with an energy and an urgency which matches the gravity of the problems facing many parts of the country.

    6.20 p.m.

    My Lords, before the House addressed itself to the problems raised in the report submitted by the noble Lord, Lord Plowden, and his committee there was a brief moment when a Bill was read a first time—a Bill entitled the Derelict Land Bill. There is something particularly appropriate about the conjunction of that Bill and this debate, because the ERDF (the European Regional Development Fund) is an attempt by the European Economic Community to prevent dereliction in the more remote, the more disadvantaged and the more handicapped areas.

    These problems cannot be solved by national means alone, and neither can they be solved wholly by the European Economic Community; but the ERDF is an aspect of the Common Market social conscience, and if we are now beginning to clear up some of the remains and the consequences of the first Industrial Revolution, and to re-equip and restore the social and economic balance in remote areas where natural resources are weak and communications are difficult and very expensive, then, as was the noble Lord, Lord Tordoff, we must be glad that the EEC looks at the human consequences of economics, the social aspects of the greater freedom in the distribution of wealth, as well as concentrating on the pure free market and the creation of greater wealth by the exchange of goods and services. So I believe that the case for remaining in the European Community depends in part on extending, making more efficient and consolidating the European Regional Development Fund, and I am grateful to the committee and to the noble Lord, Lord Tordoff, for providing us with a background brief as well as the occasion to discuss this issue.

    My Lords, as my noble friend Lord Harmar-Nicholls is absent today I can say with some degree of safety that I agreed with nearly everything that the noble Lord, Lord Tordoff, and the noble Lord, Lord Cledwyn, had to say. It is reassuring that, although we approach the way in which the Community and the Regional Fund itself works from different political angles, in the House there is, I sense already, particularly from the report, a convergence as to what is best for Britain when we are looking at the Development Fund's future. I would not want to traverse the ground which has already been covered by the two noble Lords, so I will merely make one or two marginal comments on some of the things that they have said.

    The accessibility of Brussels to local authorities is an important question, but it is not one where the problems are readily appreciated by every local authority in Britain. The number of staff in the Commission (as we should be grateful) is under 10,000, and those concerned with regional development are a very small fraction of that 10,000, a large number of whom are translators. The logistical problems of organising visits continuously from local authorities in 10 member states are very severe; and I hope the Government will consider giving guidance, through the Association of District Councils or the Association of Metropolitan Authorities, or whatever, on the best manner in which aplications can be made, and some understanding as to why it is difficult to get your place in the queue. There are simply too few people in the Commission to give easy access to everybody when they want it the first time. So I would add that note of caution.

    Another point that I think noble Lords may feel worth pursuing is this. Grants are given from this fund for a wide variety of projects throughout the United Kingdom, yet many people know nothing about what has been given from Brussels, or what it was meant to do. They are not aware that a quarter of the local fire station or one-third of an advanced factory can be directly attributed to help from the European Economic Community. I wonder whether my noble friend would consider encouraging local authorities, where they are in receipt of moneys under the ERDF, to put up a simple plaque recording that the money has come from Brussels. Some particularly progressive local authorities, such as Devon County Council, do this already, but it is not uniform. I am sure that your Lordships, while regretting the pursuit of uniformity for its own sake, would agree that some form of token indication of gratitude would help the public to know that some of the money that they are so concerned about when they read about the amount that we pay into the Community actually returns in the form of helpful projects.

    My Lords, I say no more about additionality except to express the feeling that the Government are a persistent sinner in this regard, and that the prospect of redemption is being ever delayed. If there is anything that my noble friend can tell me to startle me, I shall look forward to it, but I do not expect it. It is particularly useful that we are having this debate today, because the new fund regulations are reaching a conclusion. Rumour has it that there is going to be a Council of Ministers' meeting in July on this proposal; others say it is going to be wrapped up in the Summit. I wonder whether my noble friend is able to give any clue as to when a decision is likely to be taken, or at least when a ministerial meeting is likely to have the new ERDF regulations on the agenda.

    There are two other points in the margin. I share the scepticism of the committee that even if the Council of Ministers were able to agree on the non-quota section being extended to 20 per cent., it might be difficult to use all the money. Like the noble Lord, Lord Tordoff, I do not see that as any obstacle against trying, and I see a particular urgency in this country to use some Regional Fund money for those areas that do not happen to fall into the zones used by British Government statisticians for regional purposes. We all know that they are imperfect, and it is a pity that all black spots are excluded. I would welcome reassurance from my noble friend that it is the policy of the Government to allow an increase in the number of projects associated with tourism which can qualify under the Regional Fund for assistance from Brussels. At one point there was some doubt about this. It seems to have been dealt with, but I should like confirmation.

    I agreed very much with what the noble Lord, Lord Cledwyn, said when he was reminding us about the difficulties of measuring and the awkwardness of statistics in regard to regional assistance. The standard regions are very awkward for Brussels. They are clumsy, they are big; and, as he indicated, they tend to conceal within them pockets of poverty which are drowned in a sea of wealth. This is certainly true of the South-West. The region itself contains some very striking examples of poverty, with unemployment rates up to 25 per cent. in parts of Cornwall. From a document recently produced by the Devon and Cornwall Joint Committee—a committee of both county councils—it is clear that the average net annual income in Devon and Cornwall, in the assisted areas, is lower than the average net annual income in Northern Ireland. That is not a figure that one would immediately believe, but it is quite true; and when one looks at the statistics of the average weekly earnings, particularly of women, one sees that the position in the extreme South-West is the lowest, bar one, in England.

    It is not the steel-hearted and cold-blooded men of Brussels who have looked at Camborne or at North Devon and said, "You people who are unemployed (or, if you are employed, are on low rates of pay) cannot have money from us". It is not Commissioner Giolitti and his team who have studied the statistics of wealth and have said that Humberside and other areas in Britain under threat were too rich; they made no decisions of the statistics of their own; the statistics were those that we supplied and as, the noble Lord, Lord Tordoff, has said, they are now out-of-date and in the case of the South-West and elsewhere the subdivisions of the map do a gross disservice to the nature of poverty in certain areas.

    I would suggest to my noble friend that with his recent experience in the Foreign and Commonwealth Office and knowing the difficulty of reassuring people in this country that membership of the Community is really worthwhile, were the British Government to allow areas in the South-West and elsewhere in the country (for purely arbitrary statistical reasons) to be swept off the ERDF map, it would play a significant part in those areas in creating further hostility towards the EEC; and no doubt the MEPs would be blamed but certainly Her Majesty's Government as well and I think it would undermine the position of the Government in trying to influence opinion in the Community.

    On opinions in this country about the Community—I do not want to speak for too long—I think that your Lordships would welcome an up-to-date account of the progress of the new Regional Development Fund Regulations. Where do we stand? How firm are the Government going to be? The noble Lord, Lord Tordoff, recounted some parts of the reports. I received a Written Answer recently in which my noble friend Lord Trenchard informed me:
    "The proposal for the exclusion of the English regions is … unwelcome, and we are resisting it firmly".
    I should like to know what is meant by "firmly". While we still have the veto in the Community, will the Government veto the proposal unless these regions are reinstated? I think that this is something on which we would welcome confirmation. As I understand it, these proposals are severely unpopular in many other member states and therefore a change in what is suggested so far is necessary and likely, from their point of view; and if they are going to get some concession, then we should, too.

    In the next debate, we shall be listening to the noble Lord, Lord Harris of High Cross. No doubt his approach to these matters, supervised by the Institute of Economic Affairs, would lead to the abolition altogether of regional aid. I do not think that we can indulge in the economics of the laboratory. I remember a recent occasion at a meeting in a remote part of Devon where the chairman and his wife were the only members of his form at grammar school who remained in the locality. Everyone else had gone. Cumulative denuding of the human and physical wealth of our remoter regions will increase the problem of the member states and of the Community. ERDF is a small, perhaps even token advance towards rectifying these natural defects. By whatever proportion the fund is increased in size, we stand to benefit disproportionately. It is a national to increase the size of the regional fund and it is in the interests of everyone who believes in the Community to welcome its existence and further development. With those words, I thank once again Sub-committee A and the introducer of this debate for giving us the opportunity of looking again at these matters.

    6.35 p.m.

    My Lords, I am sure that the House is grateful to the noble Lord, Lord Tordoff, for having introduced this Motion and to Lord Plowden's committee who produced the report which is the subject. It seems to me that Lord Tordoff's Motion offers a useful and timely opportunity to debate the relationship between our national regional policy and the Community's regional policy, embryonic though that may be. On the national side, we heard only the day before yesterday of the Government's proposals for completing their reduction of the population covered by assisted-area status from 40 per cent. to 26 per cent. or 27 per cent. It is clear that if resources are scarce they should be targeted where the need is greatest. However, this begs a number of questions.

    The first is whether it is right that a nation's regional policy should command only one-quarter of 1 per cent. of GDP. A nation is, after all, the sum of its regions and so we are not talking about some form of fringe activity. There is also the question of the notorious blackspots, already mentioned, some of which are situated in areas which do not attract support as they are not justified by their aggregate characteristics taken as a whole. This leads one into the question of criteria for designation. The rate of long-term unemployment should be a very important indicator, but there are others; and the Committee had some pertinent remarks on the choice of eligible areas in paragraphs 17 to 19 where they point out that using Level 2 regions as a basis, in some cases there are greater disparities within than between regions and we must try to achieve greater flexibility.

    It will come as no surprise that we on this Bench attach great importance to these matters. This stems naturally from our commitment to the decentralisation of Government. But there is another very important consideration which is that the success of any advanced and innovative industrial strategy depends crucially on the co-operation and acceptance of sacrifice by those regions in structural decline where the brunt of the unemployment and its attendant miseries is borne. If serious attention is not paid to their needs for help and rehabilitation, there is no hope whatever of securing general consent to the slimmer line of modern competitive industries. The noble Lord, Lord O' Hagan, referred to the Social conscience of the Community. I think he saw the ERDF as embodying that social conscience.

    I turn now to the European dimension. Well presented and lucid though the 12th Report of this Session is, the 14th Report of last Session still seems to me to remain the essential background reading. It makes the point very early on that the ERDF is not the executive arm of a Community regional policy based on common Community criteria but simply provides funds from the Community budget which contribute towards the separate regional policies of member states. One wonders if this is really a sufficient role for the fund in a Community whose regional disparities of income still run from 35.1 per cent. to 231.6 per cent. of the average per capita GDP of the EEC—an enormous range.

    Indeed, this point is given some prominence by the CBI in the paper they submitted to the sub-committee which is printed along with the 12th Report. They see a big reduction in these discrepancies as an essential precondition of proceeding towards monetary union and other desirable things. It is interesting to note in passing that they do not seem opposed to the aim of a federated Europe, to which the noble Lord, Lord Tordoff, proudly proclaimed his commitment.

    The 14th Report of last Session stressed the total control by central Government of ERDF receipts. The local authority applications are processed by the appropriate regional offices of the departments. Payments from the ER DF are made direct to the Department of Industry in the case of industrial projects and to the Department of the Environment for infrastructure projects. The vexed question of additionality here raises its head and it was one of the themes of the 14th Report that there was little or no evidence of additionality in the whole operation. In fact the sub-committee said in paragraph 38 of that report:
    "the system is merely a book-keeping exercise on the part of central Government".
    While preparing that report, the sub-committee heard views that there was not enough direct contact with Community institutions for applicants, that there were too many intermediate bodies; several local authorities were not content with the way Government departments handled their applications and appealed for more direct access to Brussels. The committee itself appeared to view sympathetically the suggestion that regional agencies, such as the Scottish and Welsh Development Agencies, the Highland and Islands Board, the Development Board for Rural Wales and the Northern Ireland Development Board, should play a greater role in the selection and administration of projects. This was referred to by the noble Lord, Lord Cledwyn of Penrhos, who I think added one or two more organisations. I should like to ask the noble Lord whether the Government can say that they share this view.

    In their current report the sub-committee summarise the main recommendations of the 14th Report and remark that there is a substantial measure of agreement between these and the Commission's recommendations for revision. That is gratifying, but it is not going to be much help if the Government will not play ball, too. One of the main new proposals is the shift from project to programme aid, which is I think in accordance with the sub-committee's earlier recommendations. This brings one up against the apparent unsatisfactoriness of the regional development programmes so far presented in Brussels. This may in part be due—in fact, I imagine it almost certainly is—to our lack of a decentralised administrative structure such as they have in Germany or Italy, but it would be a great pity if we were to lose out on this account. So my next question to the Government is: what have they in mind for improving this situation? Will they let regional groupings of local authorities take more of a part in shaping such programmes in line with the suggestions put forward by the North West Industrial Development Association in their submission which is printed along with this report?

    Another important proposal is the increase to 20 per cent. of the non-quota section of the fund. This is seen by one witness as,
    "a significant step in favour of the additionality principle".
    Do the Government agree with that assessment and will they support such a change? If so, I wonder whether they agree with the Commission's idea that proposals for non-quota aid should not require un-animous agreement in the Council of Ministers but should be subject instead to decision in the fund management committee. The sub-committee suggest in Section 22 that this would reduce delays in distributing non-quota resources and relieve the Council of Ministers from the type of decision to which they are not well suited. It will be interesting to hear the Government's view on that.

    On the issue of direct contact between local authorities and Brussels, a number of local authorities raised the question of the outdated data base used by the Commission for assessment of eligibility. West Yorkshire made a particular point of this, holding that they have been penalised by the use of 1977 data, whereas on 1981 data they would have qualified for ERDF aid. Does the Government agree with the North West Industrial Development Association—who wrote a very sensible paper—that it would be helpful if regional and local authorities could submit directly to the Commission regular and frequent information on the economic situation in their areas? This, of course, would not require the stream of visits against which the noble Lord, Lord O' Hagan, warned.

    Merseyside, in their submission, raised the important question which has already been touched upon of visibility or transparency—whichever your Lordships prefer—of ERDF aid. They say:
    "The EEC should be able to obtain full credit for the amount of resource being realised in the region—a current problem because much of the present EEC aid goes into Treasury coffers in support of Government programmes, like MSC and regional develcpment grants, which are recognised locally as solely United Kingdom Government initiatives".
    I think they have a very significant point here, and it behoves the Government to decide what their attitude to the Community really is. The Government are, on the face of it, pro-European up to a point. They do not want to withdraw like the Labour Party. That being so, surely the Government will want to be helpful in correcting unfounded anti-Community feeling in the country, and what better way could they choose than to pursue additionality with a little more resolution and give credit where credit is due?

    In the end, this is all a question of attitude and approach. In their thoughtful Part III, entitled "A Community regional policy: the long-term prospect", the sub-committee say:
    "The Commission has put forward proposals … which deserve support in principle and close attention to detail. A marked shift away from the strait-jacket of an ERDF only providing support for the national regional policies of member states can be detected in many of the new clauses of the proposed regulation. A genuine Community regional policy could be constructed alongside support for national policies by means of programme contracts and the non-quota section".
    The Committee add a note of caution on the question of resources and the ultimate dependence of a stronger Community regional policy on resolution of the budget problem. That is fair enough; but we should have a much better case for the shift of resources from the CAP and other things if we could be seen to be using ERDF existing resources properly, which it appears to me we are not.

    6.45 p.m.

    My Lords, the noble Lord, Lord Tordoff, said he hoped he would not be regarded as presumptuous for opening this debate. Far from being so regarded, I am sure that noble Lords will be grateful to him for having done so. We already have had clarification of some of the problems, particularly local problems, from the noble Lords, Lord Cledwyn of Penrhos, Lord O' Hagan and Lord Kilmarnock. I must confess, as will be obvious from our report, that my committee felt that virtually everything that could usefully be said about regional policy in the short term had been dealt with in our debate last year. Already this debate will have shown that more has been added to it. That is my view.

    In opening the debate last year, I said that the purpose of regional policy was to help the poorer areas of the country to come nearer to the general level of prosperity and, in the words of the Community, to correct the principal regional imbalances within the community—a policy of convergence. In that debate, the noble Lord, Lord Tranmire, said that in 1971 the richer regions on an income per head basis were 61/2 times more prosperous than the poorest regions. In 1981 the sub-committee, taking evidence, were told by the CBI that there had been no change. Indeed, therefore, in 10 years there had been no progress in improving the difference between different regions within the Community.

    According to the Giolitti Report, which was published by Commission last year, in an enlarged Community of 12 countries, the richest region, which I understand is likely to be Hamburg, would be 15 times more prosperous in terms of income per head than the poorest regions of Portugal.

    In considering ERDF spending, we must put it in perspective to total Community spending. ERDF spending is something less than 3 per cent. of total Community spending, while the CAP is about 70 per cent. A major transfer from the CAP to the ERDF in the near future must be regarded as politically extremely remote. A major increase in ERDF funds from new sources is improbable. We must work for a better distribution and a better use of whatever funds are available.

    In the Select Committee's 14th Report we made a number of recommendations of which perhaps the most important was to concentrate funds on those countries whose per capita income was below the average of the Community, to be assessed on some agreed economic indicators. We suggested more concentration on development programmes and also on the so-called "integrated programmes" which are being tried out in Naples and Belfast at the present time.

    The Commission's proposals suggest, among other things, that the quota section should be confined to Greece, Ireland, Italy, the United Kingdom and the overseas departements of France and that the non-quota section, which is now 5 per cent. of the whole, should be allocated 20 per cent. and devoted to helping any part of the Community adversely affected by serious recent industrial decline or by problems arising from the operation of other Community priorities. The noble Lord, Lord Tordoff, suggested that the Government should press strongly for the allocation of 20 per cent. to be done as quickly as possible. I hope it will not be regarded as unduly cynical if I say that if that were to be done without adequate preparation it might result in less funds in total coming to this country than if it were done in, I will not say a more leisurely way, but in a more considered way.

    The Commission proposed that programme contracts—that is, the financing of programmes, in contrast to the financing of individual projects—should be the main vehicle for transferring aid to the regions. There are problems here. It is suggested they should be three-year contracts. How binding would that be, when the budgeting is done on an annual basis? Nevertheless, this is a positive recommendation. They recommended the development of integrated operations, such as Naples and Belfast.

    We must recognise that there are real administrative difficulties the Government in preparing programme contracts. Unlike Germany and some other countries in the Community, there is in this country no developed form of regional authority and each government department deals directly with local authorities. It is a vertical organisation rather than a horizontal one. The noble Lord, Lord Cledwyn, suggested that other institutions such as the Highlands and Islands Development Board, and so on, should be brought into assist. That is a positive suggestion that I would urge the Government to consider. Other noble Lords who have spoken about local authority problems mentioned the question of "black spots". This is a real problem but it is something that we ought to deal with: it is not one for the Community. Even given the difficulties of the Government in dealing with programmes of this kind, the committee felt, nonetheless, that the Government should prepare for the change now.

    Lastly, I would mention the question of additionality, which other noble Lords have mentioned. The Government claim that ERDF funds would permit more to be done than would otherwise be done. But can this really be true? Perhaps, as a former Treasury official, it would be unfair of me to suggest that if people believe that they will believe anything. But national industrial aid in the regions under the various industry Acts is virtually open-ended; and on infrastructure the Department of the Environment guidelines say:
    "It is not the Government's intention that the availability of assistance from the fund should enable local authorities to undertake additional projects".
    In practice, what happens is that a local authority which has been allocated a grant for a project from the ERDF will find that its loan sanction approved by the central Government has been reduced accordingly. Real additionality in this area would produce more money for local authorities to devote to improving communications, industrial sites, drainage schemes and sewerage systems and so on—all improvements which noble Lords will know are urgently needed. I do accept that, although no one has produced any figures, nevertheless there must be some additionality and not purely a book transfer.

    If aid from the ERDF is to be limited to some countries, as is proposed by the Commission—and I have just referred to that—then those countries which are giving the money and not receiving are, I believe, bound to insist on additionality. They are bound to insist that their money goes to help to solve regional problems which would otherwise not be solved, rather than to help to solve the budgetary problems of the countries which are receiving the aid.

    Finally, it would be arrogant to believe that the Commission had followed the advice given in the Select Committee's 14th Report; nevertheless, it is gratifying that so many of the Select Committee's suggestions are included in one way or another in the proposals of this most constructive and positive report of the Commission. I want to bring that out, because we tend very often to be highly critical of the Commission, and here is a case where they have, in my view, attempted to make positive suggestions. I believe that their proposals, if adopted, will lead to a quite definite improvement in the operation of the ERDF and should be welcomed; but we must recognise that they will make only a marginal contribution to Britain's Community budgetary problems and they are no substitute for reform of the CAP.

    6.57 p.m.

    My Lords, I should like to join in thanking the noble Lord, Lord Plowden, and his committee for this most valuable report that we are discussing this evening. It contains an informative and helpful summary of the proposals of the Commission and some very clear conclusions about them. I should like also to congratulate my noble friend Lord Tordoff for the way in which he introduced this report to us earlier this evening. We have had three reports now from the Select Committee on the regional fund. We debated them in 1977, last year, in 1981, and now we have this third report this evening. As I say, there are in this particular report some very clear conclusions and it is to those conclusions I should like to give general support, as did my noble friend Lord Tordoff.

    In all three reports the committee have been concerned with five main problems: the size of the fund; the vexed question of additionality; the method of allocation; the problem of access to the Community and participation in decisions for regional and local authorities; and the need for a comprehensive and significant overall regional policy. None of these problems is yet solved, of course,but it is veryencouraging, as the noble Lords, Lord Cledwyn and Lord Plowden, said, that the developments suggested by the committee in its report last year, which will undoubtedly contribute to a solution, have in large measure been adopted by the Commission.

    I should like briefly to consider the Commission's proposals for the revised regulation in the context of the five problems which I have mentioned. First, on the size of the fund, the noble Lord, Lord Plowden, in a debate last year, told us that the European Regional Development Fund accounted for 3 per cent. only of Community spending, and he said it was so small that it could hardly scratch the surface of the problem. In his concluding remarks this evening, he has again warned us that that is the case. In the latest report, the committee say, with regret, that there is little chance of more funds being available, but I am glad that the committee support the demand of the Commission and of the European Parliament for greater resources. The committee point out that since 1975 the situation of the poorer regions in the Community has not improved, but has, in relative terms, deteriorated. An increased regional fund is necessary to help deal with that deterioration.

    I repeat my belief that the problem of the British budget contribution will not be permanently solved until the Community budget, which is now only 1 per cent. of the GDP of the Community, is increased through the development of common policies, from which Britain will get more advantage than we do from the common agricultural policy, and in such an increase the Regional Development Fund would clearly play an important part. But if, for the moment, that is not to be, then the Commission's proposals for greater geographical concentration have added importance. But greater concentration will not help, if the funds disbursed do not lead to additional economic activity.

    That brings me to the subject which has been much discussed both last year and in our debate this evening—the question of additionality. In our last debate, we discussed how meaningless to the firm's concerned selection of their project for Community aid was, and we saw that, so far as local authorities were concerned, while the saving in interest and principal repayment was welcomed, no additional development resulted from Community aid. Community aid was not much more than a method of reducing the public sector borrowing requirement or relieving the ratepayers. The Government say that they take into account, in fixing the amount of money which they intend to spend on their regional policy, the amount that they anticipate they will get from the Community and that, therefore, they do spend more. But there can be no proof of this, or, at any rate, no assessment of the actual amount more which they are spending, as was underlined by noble friend Lord Tordoff and by the noble Lord, Lord Plowden, although the latter felt that there was some additionality.

    The Commission are seeking to implement the principle of additionality by increasing the non-quota section, over which they have more control, by moving from financing of individual projects to financing programmes and by writing into the regulation conditions requiring additionality before programmes are approved. I hope that they will be successful by these means in increasing the degree of additionality, because, as the committee say, without additionality the credibility of the Community's regional policy cannot be maintained. I look forward to hearing the answers which are given to the questions put on this subject, to the noble Lord who is to reply to the debate, by the noble Lord, Lord Cledwyn.

    Then there is the method of allocation. I think that there is widespread approval of greater geographical concentration, but there is some argument as to whether the Commission should select countries or regions. In the proposals which they put forward, they choose regions. In our last debate, the noble Lord, Lord Lever of Manchester, suggested that countries should be chosen and that countries should be responsible for all that goes on within their boundaries. That was also the view of some who gave evidence to the committee, when preparing the current report, and it seems to be the view of the Department of Industry. But I do not see the Regional Development Fund as an equalisation fund as between nations. That would be a national assistance fund, rather than a regional development fund.

    The importance of the emergence of the regions, as a counter-balance to an inevitable degree of centralisation in Brussels, cannot be over-emphasised. And, of course, it is interesting, as many noble Lords have said, that many people, in giving evidence to the committee, have said how difficult it is to produce regional development programmes in the United Kingdom, because we have no system of regional government—a point mentioned by many noble Lords, but also by my noble friend Lord Tordoff in his opening remarks. I was interested and glad to see that in their report the committee say that the Government must organise themselves, somehow, so that they are in a position to produce the regional development programmes which are required.

    Coming back to the choice between countries or regions, it is much more difficult to select countries. If we have criteria for regions, some countries are automatically, for the time being, eliminated, and eliminated with less difficulty than if the choice was being made between countries, since these countries know that, if one of their regions should fall within the criteria, it will qualify. It has been pointed out—and there has been some discussion in the debate—that certain areas in the United Kingdom, such as Yorkshire, Humberside and the South-West, are eliminated by the application of the criteria which have been put forward by the Commission. But the noble Lord, Lord Cledwyn, pointed out that if you have 11 regions in the United Kingdom, as opposed to 33 in West Germany, this is likely to happen. I agree with the committee that there is a case for a sub-division, so far as the application of these criteria is concerned.

    So far as the black spots outside the regions to be assisted are concerned, I think that these should be dealt with by the non-quota section of the fund, as the noble Lord, Lord O'Hagan, suggested, and by Governments themselves, as they committee insists. After all, the fund should be an addition to national policies, and while funds are limited national policies have to play a major role. Then there is the question of access for regional bodies. I fully appreciate that, as the noble Lord, Lord O'Hagan, said, there would be great difficulty for the Commission in dealing with 715 local authorities. But I think that they could deal with regional authorities or the various regional development agencies in this country, which were listed by the noble Lord, Lord Kilmarnock. I am glad that in the new proposals of the Commission there will be greater involvment of local authorities, particularly in the preparation of programme contracts, and I hope that this development will be encouraged, in practice, by the British Government.

    Finally, there is the question of building up a comprehensive regional policy. In the last debate which we had, the noble Lord, Lord Plowden, said that the regional fund has no policy of its own. But, in my view, if the Commission's proposals are adopted, it will have one. That regional policy will derive from the implementation of the principle of geographical concentration, the application of the criteria for selection and the increase in the non-quota section. The Commission suggest from 5 per cent. to 20 per cent. which I would welcome, as did my noble friend Lord Tordoff. But how far are the funds to be derived from the regional development fund co-ordinated with the funds from other sources in the Community—from the European Investment Bank, the Social Fund, the Farm Fund, the new Community instrument and the Coal and Steel Funds? We know of experiments in integrated operations in Naples and Belfast. I am glad that the Commission propose that these experiments in integrated operations should be extended, and T support, as the committee do, the principle of the 10 per cent. premium.

    Finally, in our last debate we welcomed the appointment of one commissioner to deal with both the Regional and the Social Funds, but in this debate I think we must say that there is a need for still closer co-ordination. The impact of all Community policies on each region needs to be continuously monitored, the cohesion of these policies needs to be continually assessed and their common purpose needs to be determined. Such adjustments as the attainment of that purpose may require from time to time need to be made. It is a continuous process of co-ordinating all the different activities in this field of aid and assistance to the regions of the Community which needs to be implemented.

    7.11 p.m.

    The Parliamentary Under-Secretary of State, Department of Health and Social Security
    (Lord Trefgarne)

    My Lords, it is particularly appropriate that your Lordships should choose to debate this subject this evening, at the suggestion of the noble Lord, Lord Tordoff. We are passing through an important period in the development of the Community, and decisions which are taken in the near future, in the context of the progress which has been made so far and in the middle of a period of enlargement, will help to shape the future of the Community for very many years to come. I have listened with great interest to what has been said this evening. Perhaps I may now take this opportunity to put the Government's view.

    The four documents listed in the Motion before us this evening are closely linked. Although I shall have some specific points to make regarding the latest Commission proposal, they can all be considered as contributing towards the history of the European Regional Development Fund. Not for the first time your Lordships owe a considerable debt to the European Communities Committee and to its sub-committees, in particular Sub-Committee A under the distinguished chairmanship of the noble Lord, Lord Plowden. I recall that my maiden speech in your Lordships' House, nigh on 20 years ago, was made on a Motion moved by the noble Lord.

    The original fund was set up in 1975 with the stated aim of reducing imbalances between the various regions of the Community. It began in a very modest way with a budget of some ₣125 million allocated in national quotas to the member states and has grown, rather faster than the Community budget as a whole, to some ₣850 million in 1981. The United Kingdom has always been a net beneficiary of the fund. A major change which took place in the operation of the fund during that period was the provision in 1979 for a small part of the fund to be used in a "non-quota" manner and to be applied to counter the effect of certain Community policies. A further amendment was made to the fund in 1980 to provide a national quota for Greece upon her accession to the Community. The Commission have produced a series of annual reports on the operation of the fund, and it is the sixth of these factual accounts about the fund's operation which is referred to in the Motion.

    In January 1981 the Commission produced the first of a planned series of periodic reports on social and economic trends in the Community's regions. These are intended to provide a more wide-ranging view of the fund's operations than the factual annual reports and are bound to be used to provide pointers to ways in which the operation of the fund might be improved in an attempt to achieve its stated aims. The first periodic report revealed that despite considerable economic growth in the Community, regional inequalities in growth, income and employment have widened. The report identified two kinds of regional problem: those resulting from structural under-development and those resulting from sectoral decline or Community policies. The report also noted a general increase in unemployment. In July 1981 the Commission produced their new regional policy guidelines which took these findings into account, and later in 1981 produced their proposals for a new fund regulation based on those guidelines. Perhaps I could now discuss the main points of the proposed regulation in a little detail, because it is the principal matter which has exercised your Lordships this evening.

    First, the Commission have commented many times in their regional policy guidelines and in the preface to their new proposed regulation that regional imbalances have been growing, rather than diminishing, since the Community embarked upon a regional policy. That was very much in the mind of my noble friend Lord O'Hagan. It is sad but true. They conclude from it that the time has come to redefine and strengthen the Community's regional policy instruments, and they have so proposed. I want to make it clear that the Government in general endorse that view and welcome the proposals. I could not say that we believe that the Commission got everything right in their initial proposals, but we do believe their objectives to be very much along the right lines. Our doubts are much more to do with details—such as, for example, the potential staffing burden.

    First and foremost, we believe strongly that the fund should be more concentrated, and that means concentrated on the less prosperous member states. The proposals, as they stand, would result in the United Kingdom's remaining a net beneficiary from the fund. We, of course, welcome that. Where we have serious reservations in this respect is that the Commission propose to exclude some of our assisted areas—the South West, Yorkshire and Humberside and Corby—from eligibility for the quota section of the fund. Much of the data which the Commission used in constructing their index of eligible regions is inevitably now out of date. Nor is it strictly comparable across the Community.

    We have made it clear in Brussels that we are not prepared to accept the proposed exclusions. In our view, once it has been established that member states should qualify for aid from the fund, it is up to those member states to determine which of their regions should be eligible. The United Kingdom regions upon which the Commission's analysis was based are much larger than the Community average. This means that the problems of smaller, but still sizeable and important, areas within them are obscured. We believe it to be fundamental that, at a time when the United Kingdom is concentrating its domestic aid on fewer assisted areas, all those areas should similarly be eligible for aid from the fund. We have also made it clear that the United Kingdom's regional problems, which are essentially those of industrial decline and which are fully represented in the regions I have mentioned, must be given full weight in the distribution of the fund's resources.

    My Lords, if my noble friend has no more to say on the nature of the statistics as opposed to the area which they cover, may I ask him whether I am to understand that his argument rests solely on the view that Her Majesty's Government should retain control within the United Kingdom as to which regions are to be given aid? Does my noble friend consider the statistics method for assessing regional deprivation is good and that we need to retain the right to choose?

    My Lords, later in my speech I was going to say more about the statistics point. Perhaps I could make further reference to it now, since my noble friend has intervened. Our view is that the proposals for determining these areas of eligibility and the nature of the statistics used are not particularly satisfactory. We have considerable doubts, for example, about calculating regional GDPs. Frankly, national GDPs are difficult enough to calculate accurately. If you try to calculate regional GDPs, it is even more difficult, particularly so if one wants the figures to be as up to date as possible. Certainly we accept some of the criticisms which have been made about figures being used which are rather out of date and that is why we have taken the view that we have. We believe that the national authorities themselves are really better qualified to check on the areas within their countries which ought to be eligible for assistance from this fund.

    The Commission have also emphasised, in the proposals, the need to co-ordinate community and national regional aids, as already required by the Council resolution of 6th February 1979. It obviously does not make sense for the efforts of less prosperous member states, and of the fund itself, to be frustrated by excessive support for regions in other member states which already enjoy a higher level of prosperity. How far the Commission itself should assume a role in relation to, for example, the planning of national infrastructure programmes is however a rather different question. On this we shall be urging a more cautious approach, confined to cases of genuine Community interest.

    On the question of expanding the non-quota section of the fund from 5 per cent. to 20 per cent., we share the doubts expressed about the wisdom of such a large increase in an instrument which is as yet largely untried. Our experience so far with the non-quota section is that the programmes required by the Commission to support applications for aid are extremely difficult to prepare and the amount of aid received inevitably small when set against the scale of the problems with which the non-quota section attempts to deal. We would favour, therefore, a more modest growth, although we shall of course be alert to the needs of specific declining United Kingdom industries in urging the Commission to put forward new non-quota measures.

    The difficulties we have found so far in preparing programmes which meet the Commission's requirements are one of the reasons why we have reservations about the proposed change to financing by programmes rather than by projects. Again, the object is an eminently sensible one but it is a question of devising a simple and practical procedure to make the change worthwhile. The present system works efficiently and we do not wish to give it up until it has been shown that the new system will really simplify administration, not just in Brussels but in member states too. That is why we and some other member states want to preserve a choice of method throughout the life of the new regulation.

    We have somewhat similar reservations about the increasing weight being placed on the compilation of regional development programmes, to a common detailed pattern. We fully accept the need for the Commission, and other member states, to see United Kingdom proposals in their context. But our structure of government is not one which allows us to fit easily into the mould of programme prepared by those member states which have a regional system of government. We shall continue therefore to urge for some flexibility in this regard.

    The Commission's proposals lay stress on the need to associate local authorities closely in the working of the fund. Bearing in mind the high proportion of resources devoted to infrastructure projects this is clearly right, though we must remember that the legal relationship is between the commission and the member state on which ultimate responsibility continues to lie. My right honourable friend the Secretary of State for the Environment keeps the local authority associations in touch with the progress of the negotiations. I know he appreciates local authorities' co-operation, in the production of the regional development programmes for example, and we recognise the importance individual local authorities attach to the aid they receive from the fund.

    It is clearly in everybody's interest—the Government's, local authorities, and the Commission's—that the United Kingdom should continue to use its quota allocation to the full. In the past we have had many more projects, especially in the infrastructure field, put to us than we have been able to submit to Brussels. We have concentrated on submitting projects falling fairly and squarely within the criteria and which generate early payments from the fund. In the future, however, given the change in the coverage of United Kingdom assisted areas, this may not be the case. It is clear that, whatever criteria are finally laid down in the regulation, the Commission and other member states will continue to examine projects critically to ensure that they meet them. We ourselves shall therefore endeavour to ensure both that there is a proper measure of flexibility in the application of those criteria and that we exploit the range of eligible projects to the full.

    The Commission's proposals include much more specific references to additionality than does the existing fund regulation. The United Kingdom's position has been made quite clear. We already take receipts from the fund into account when determining the level of expenditure in our regions. Without Community receipts our expenditure would certainly be lower so there is clearly additionality in that sense. There are severe and practical difficulties however in trying to demonstrate additionality at the level of the individual project, difficulties which have been made clear during the negotiations on the new regulations. Projects and programmes alike can take several years to complete and expenditure must be planned ahead. If, for understandable reasons, the fund cannot guarantee its assistance ahead, it is difficult for the member state to commit itself an additionality when its overall receipts from the fund may vary considerably from year to year. We understand that the Commission is giving further thought to this thorny topic. We can appreciate their desire to maximise, and highlight, the real contribution the community is making in the regional field. I hope a practical way can be found of doing so which still makes sense in everyday administration.

    Perhaps I should add that all the monies provided by the fund are provided on a grant basis, whereas money which local authorities, for example, might otherwise use for their projects is generally raised on a loan basis. So that where the money is provided by the fund as an alternative to loan finance, the interest charges—which can be very substantial on a large project—do not have to be met. In that sense too there is an element of additionality.

    I am conscious that in a short debate such as this it has not been possible to deal in depth with every subject that has been raised. However, perhaps I may now turn to some which have been and see if can deal with them. The noble Lord, Lord Tordoff, inquired in his opening speech about the Government's attitude to the proposed exclusion of some assisted areas. I referred to that in my own remarks just now. I shall say again—actually, it is rather an important point and so does bear repetition—that we have made it clear during the negotiations that the United Kingdom cannot accept the proposed exclusions. Indeed, we understand that the Commission is about to announce some revisions of this part of the proposals, which we hope will go a long way to meeting the points we have made.

    The noble Lord, Lord Cledwyn of Penrhos, asked me about the eligibility of mid-Wales. We discussed this matter when I repeated the Statement the other day. Under present regulations and current proposals, only United Kingdom assisted areas would qualify for quota section aid. My right honourable friend the Secretary of State for Wales' new plans for aiding mid-Wales are currently being discussed with the Commission to determine eligibility for non-quota aid and we certainly expect to reach agreement on this.

    The noble Lord, Lord Cledwyn of Penrhos, and at least one other noble Lord drew attention to the need for more and better statistics. This was certainly in the mind of my noble friend Lord O'Hagan, as well. We are currently investigating the possibility of providing more detailed statistics to help the case particularly of the smaller areas—the "black spots", as I believe my noble friend described them. This involves a number of Government departments and will not, I fear, be a quick and easy matter. But, as I said earlier, we are certainly not happy with the present basis.

    The noble Lord, Lord Cledwyn, also asked me about the possibility of increased receipts from the new quota. The change from the present quota to the proposed one would give to the United Kingdom, we calculate, an extra ₣8 million in 1982 and a further ₣8 million or ₣10 million in 1983.

    My noble friend Lord O'Hagan asked me specifically about the position of Devon and Cornwall, which he represents with such distinction in the European Parliament. The suggestion is that new small areas, for example, a Devon and Cornwall unit, should be set up as the present regions like the South-West are rather too large, and, as my noble friend pointed out, tend to disguise the existence of black spots. The difficulty of this approach is that comparable Community-wide statistics for such small areas do not exist. However, as I have said, we are looking at the whole question of statistics in the hope that we can get over this difficulty.

    My noble friend may be interested to know that in the last three years, 1979 to 1981, the Devon and Cornwall area received something like ₣16 million from the fund. My noble friend also asked me about tourism, which doubtless is a matter of particular interest to that part of the world. I understand that the new proposals include a specific reference to aid for tourism in Article 16, which I hope will reassure my noble friend.

    Again my noble friend and one or two other noble Lords—I think the noble Lord, Lord Kilmarnock, raised this point—asked about direct access to the European Community for local authorities. I touched on that question earlier, but perhaps I could add to what I said in this way. I understand that local authorities frequently send deputations to Brussels. Ultimately, the regulation is a document negotiated between the Council and member states; that is to say, the national authorities of the state concerned and not the regional authorities. But my noble friend was right to point out the modest resources, in some respects, of the Commission in this regard, and clearly a long stream of deputations from every local authority in the Community would be a considerable burden upon the Commission's resources. I think the present arrangements, which I know generate some frustration among local authorities, are perhaps the best we can devise for the present.

    In case there are any points that I have failed to deal with, I will study Hansard with care and endeavour to write to noble Lords with some answers.

    In conclusion, let me attempt to sum up the present position. We remain firmly in support of the growth and development of the Regional Fund, both as an instrument of Community solidarity and as a method of recognising the United Kingdom's particular problems. I have set out some of our reservations on the Commission's initial proposals, but we are in a constantly evolving situation. What I have been describing is a proposal which has been made by the Commission to the Council and which is currently being discussed by officials in a Council working group. When the group has finished its discussions—and I must say that at present it is not possible to say precisely when that will be—the amended proposals will be submitted to the Foreign Affairs Council. Until then all the provisions of the existing regulation will be maintained. Further enlargement of the Community will in itself require further changes.

    In the meantime, other member states have made many of the points which have been made here, and have expressed other reservations also. The negotiations on the new regulations are complex, and clearly there will, as in other Community negotiations, have to be some give and take on all sides if we are to make progress. But I have indicated the objective we shall be pursuing on behalf of the United Kingdom and some of the particular points we regard as fundamental. I hope it will not be too long before we shall be able to report further progress. In the meantime, I am very happy to have had this opportunity to put the Government's views before your Lordships.

    7.34 p.m.

    My Lords, I am most grateful to the Minister for that speech. When he was dealing with questions that had been put to him, I felt he was perhaps a little more forthcoming than his basic brief allowed him to be, and I am grateful to him for that. There was a slight tendency, one felt, for the departmental straight bat to show through in his brief. I could see that the noble Lord, Lord O'Hagan, was a little depressed at the answer he received.

    I think we have had a good debate. Originally this Motion was to be debated in the dinner hour on Monday. I am rather glad that we have had the extra time, because I think the contributions have been varied and extensive. I am most grateful to those who have joined in. I thank the noble Lord, Lord Plowden, for his kind words and his indulgence in regard to my putting down this Motion.

    I think one glimmer has come through, which is that, the Government having stated their position quite clearly on the regions in Yorkshire and Humberside and Devon and Cornwall, that gives some hope that the Commission has seen the light and is about to come forward with something that might hold out some promise; and we wait with interest for that. Meanwhile, I thank your Lordships again for your contributions.

    On Question, Motion agreed to.

    Social Science Research Council: Rothschild Report

    7.36 p.m.

    rose to ask Her Majesty's Government what action they propose to take in respect of Lord Rothschild's Report on the Social Science Research Council.

    The noble Lord said: My Lords, I beg leave to ask the Unstarred Question which appears in my name on the Order Paper. I should like to begin by thanking noble Lords who have put their names down to take part in this discussion, and in particular the noble Lord who is going to reply on behalf of the Government, since I fully realise that his response will have to be a tentative one. We understand, indeed it has been officially stated, that consultations between the Secretary of State and various bodies are still continuing, and we would not expect the Government's conclusions until they were complete. On the other hand, this House does not appear to have been one of the bodies to be collectively consulted, and perhaps this evening's debate might be regarded as a substitute.

    I wonder indeed if the noble Lord will be able to tell us what he thinks of The Times Higher Educational Supplement headline of 28th May last, "Report riles Joseph", and whether the Secretary of State is, as that newspaper informed us, very annoyed about the report. I do not know the views of the Secretary of State. I think myself that the report, which is a remarkable document to have been completed in so short a time, has done a good deal to establish at least two points: first, that while the social sciences are a particularly difficult and sensitive area of research because of their political and social connotations, they nevertheless deserve a measure of public support, for the same reason as public support is sought for the natural sciences or for the humanities; that is to say, because there are certain forms of addition to our knowledge, to our treasures of information, which it is right for the state to support.

    The second point, I think made in the Report, is that, while far from perfect, the Social Science Research Council is probably, or could be if reformed, as good a single instrument for supporting such research as it is likely one could devise; and the only alternative, which is not fully considered in the report, would be wider dissemination of public money to universities, to learned societies in the field, and so forth.

    Furthermore, I think that the noble Lord, Lord Rothschild, has shown himself sensitive of the great dangers which are particular to the social sciences— that insufficiently rigorous standards will be applied where the support given by the council may determine the whole direction of research in particular areas of study. Because social science research is partly collective research, because it partly demands institutions or teams rather than individual scholarship, the selection of such teams or places of study may give a particular cast to the bulk of published research in a particular field. This of course has made it difficult to say whether or not the policies followed have been wise, because one cannot do that without picking out particular areas of study, and none of us would claim a comparable range to that which the council itself possesses.

    The point that was perhaps missed by the noble Lord, Lord Rothschild, was the extent to which the Social Science Research Council began under the impulse of its original chairman, Lord Young, to diffuse, as a matter of policy, support for the social sciences and attention to opinions on the social sciences in a very wide range of universities. It was, as it were, a specifically democratic rather than elitist form of sponsorship, different from what is done by academies and that, I believe, in any science—social or natural—is a very dubious policy. Certainly the treatment of the Rothschild Report and of the evidence submitted to it in The Times Higher Education Supplement and elsewhere, suggests extreme sensitivity to criticism, sensitivity which I think your Lordships may wish to ignore in order that light may be cast.

    I should like to ask—in so far as the noble Lord can reply for the Government at this stage—what are the likely comments of the Government on certain particular recommendations. Do the Government, for instance, consider that the changes in the internal organisation of the council which had, in fact, begun under its present chairman, before the report, will be sufficient to give greater assurance to the scholarly community of the intellectual calibre of those who actually make the decisions? What is the Government's view about the desirability—on which the noble Lord, Lord Rothschild, places great emphasis—of improved links with industry and commerce? What is the Government's view of the noble Lord's suggestion that the giving of grants would be fortified if there were greater consultation with recognised experts in the field on the part of the permanent staff? Finally, what would the Government's view be—this is a matter on which I have no particular view myself—of the contention by the noble Lord, Lord Rothschild, that the Social Science Research Council and those groups, organisations and individuals whom it backs, are lacking in powers of presentation so that some of the work done, though valuable itself, does not play a part in forming policy or opinion which is desirable?

    I should like to deal in some detail with one matter upon which the Government needs not give an opinion because the council has already taken steps in response to the report, and that is the question of the research carried on in industrial relations at the University of Warwick. There is to be a very distinguished inquiry headed by Sir Kenneth Berrill into the claim which I put forward in my evidence that that research had, on the whole, suffered from bias towards an exclusively trade union point of view. I dwell on it not—as The Times Higher Education Supplement

    appears to think—because I have any personal axe to grind, but because I think that one of the fields (not the only field) where the whole difficulty of publicly sponsored, publicly paid for, research is made most evident is in the social sciences.

    Let me take your Lordships back to a notable document—or at least notable in its time but it seems to have been largely forgotten now—namely, the Bullock Report on Industrial Democracy. Noble Lords will remember that that was a rather remarkable report because its terms of reference began with the words:

    "Accepting the need for a radical extension of industrial democracy in the control of companies by means of representation on boards of directors, and accepting the essential role of trade union organisations in this process, to consider how such an extension can best be achieved".

    It is perhaps not exactly the same as the Science Research Council sponsoring a project which began by assuming that the moon is made of green cheese. Nevertheless, it does introduce, as it were, the findings of an inquiry into the terms of reference and it was the view of some people that this was an inappropriate form of inquiry for academic participation. I would also remind your Lordships that the three members of that inquiry, who were themselves industrialists of experience, pointed out in their minority report:

    "Whilst the signatories to the Majority Report have not argued their case on the basis of the TUC 'control' proposition, it is clear to us that in many circles control by, and the exercise of much increased power by, the Trade Unions is regarded as a main objective".

    The relation of this to the University of Warwick is that of the two academics on this committee one was the then director of the SSRC Industrial Relations Unit, and the committee expressed their appreciation of the importance of the work done on their behalf by two groups of researchers again at the University of Warwick and at the same unit. So we have a committee in which one of the academic members, who incidentally on all contentious issues voted with the trade union members and against the industrialists, was also commissioning work from his own unit to support the work of the inquiry.

    I would not for a moment say that this is an inappropriate way in which to approach industrial relations. It is perfectly proper that a unit should explore industrial relations from the point of view of the trade union movement. The question is whether it is appropriate for such research to be funded out of the public purse. If the Trades Union Congress wished to investigate the possibilities of greater trade union control of industry, why should they not fund the research themselves?

    There is, of course, other evidence which the noble Lord, Lord Rothschild, himself quotes and which certainly did not come from me. Perhaps of equal interest is the fact that, in its quite long history now, the unit has never examined what many people would think—and in the light of our experience at the moment would certainly think—is one of the most important aspects of British industrial relations—namely, the extent to which, let us say, in the railway industry or the newspaper press there has been a sustained resistance by trade unions to the adoption of more modern methods; that is to say, that surely in 15 years there might have been some attention to a matter as fundamental as this.

    Again, since the noble Lord, Lord McCarthy, produced his book on the closed shop 20 years ago, a great deal has happened in that respect in legislation and in practice in this country and in others, but it has been left to someone from another university—privately financed, or financed in part by his own university—to write a sequel to Lord McCarthy's book. There was—and it shows how difficult the whole of this subject is—a very curious defence made of the unit by the director of the Leverhulme Trust in the columns of The Times Higher Education Supplement, to which the noble Lord, Lord Rothschild, himself made a fairly convincing reply. It was assumed that because the Leverhulme Trust had given money this was, as it were, a certificate of lack of bias in the institution. With all apologies to the noble Lord, Lord Ardwick, who I am delighted will follow me, for those of us who know the world of foundations there are a great many examples where money, which has been accumulated through the exercise of capitalist enterprise has been put for distribution in the hands of Left-inclined intellectuals and used to support projects, units and policies which the donors of that money would perhaps themselves never have thought suitable.

    Of course, industrial relations is by no means the only difficult area for the Social Science Research Council. As I indicated very briefly in my evidence, there is the even more difficult and contentious area of race relations, which one can approach in a variety of ways. My view would be—and I maintain it—that one of the least profitable ways of assisting in the research which we require in order to solve the problems of our ethnic minorities is the view which takes their disabilities, which are real, and their difficulties, as somehow part of a worldwide revolt of the coloured peoples against the former white imperialists. I must say that I find this a very curious notion. Again, the fact that if you have only one unit the spirit which infuses it is likely to be of great importance, suggests yet another example of where there are great difficulties in deciding what is a proper area for expenditure in this field.

    Another might be the field of education. I note that of the two professors of education who are entrusted with important research functions by the Social Science Research Council at the moment, one is Professor Blackstone of the University of London, best known for her unremitting public assaults on selective and independent education. I think that many of us who are concerned in the educational world, who have experience in it, would not regard research by Professor Blackstone as carrying with it the stamp of scholarly impartiality.

    But, of course, it is not only a question of areas of great social or political sensitivity. There is also the question of whether fairly neutral areas are themselves suitable for public support. Perhaps I may remind your Lordships of what, I am afraid, is a very old but, on this occasion, very relevant story in relation to the data archive at the University of Essex into which a good deal of money is put and which largely—but not, of course, exclusively—produces interesting statistics about elections, voting behaviour and other such matters. The story, with which your Lordships will be familiar, is that of the lady at the zoo, looking at a hippopotamus and asking the keeper what was the sex of the hippopotamus. As your Lordships will remember, the keeper's reply was, "That is of interest only to another hippopotamus".

    In my view, the reasons why people support political parties and the statistical apparatus by which one judges the movement of the electorate are of great interest to other political parties. No doubt noble Lords on the Front Bench opposite would very much like to know for their own political purposes what makes people vote for the Alliance, but I do not think that discovering that is a matter on which public money should be spent. It is surely appropriate for political parties, if they require such information, to pay for their own research.

    Therefore, we have from the noble Lord, Lord Rothschild, though going some way towards looking at the problems and some way towards solving them, still, on the whole, one would think a fairly clean bill of health, if I can put it that way, for the council. There is, of course, a good deal to be said for his final view that it ought now to be allowed to put its house in order and that for three years at least no further inquiry should be entered upon. One would again like to ask the noble Lord who is to reply for the Government whether the Government take the view that this is a stage in the development of the council at which it now might be allowed to rest.

    Finally, however, I should like to ask a question which is not mentioned in the report itself but which is the subject of what purports to be a news item in the current issue of The Times Higher Education Supplement, where we are told that Her Majesty's Government are considering a humanities research council, or a council dealing with both the humanities and the social sciences. I hope that this is an occasion when the press has got it wrong.I can think of no more inappropriate way of organising research into the humanities than through a Government-appointed council. As I think the noble Lord, Lord Robbins, will explain to the House with far greater authority than I can, the British Academy uses public money more economically, I would think, than any public body, in order to further such research, and certainly does not need to be engulfed in a more bureaucratic institution.

    Nor, for the reasons that I have given, do I think that the problems of the humanities and the problems of the social sciences are sufficiently akin for a single body to deal with both of them. Indeed, if I had to amalgamate that body with another, I should have thought that one of the natural science research councils would be more appropriate, because what is most lacking in handling the problems of funding research in the social sciences is the kind of judgment which natural scientists can apply. But there, too, there are problems which will readily occur to your Lordships. All I would hope is that this particular rumour can be quashed before this evening is out.

    8 p.m.

    My Lords, we are indebted to the noble Lord, Lord Beloff, for asking this Question and giving us an opportunity to discuss this important report while in parliamentary terms it is almost hot from the press. Also we are grateful to have had an opportunity of listening to an extension of the strongly critical views which the noble Lord contributed to Lord Rothschild's inquiry. Lord Rothschild, as ever, has done an excellent job. The singular clarity of the report and its deft organisation make it a pleasure to read.

    Apart from the noble Lord who is speaking on behalf of the Government, I am the only non-academic taking part in this debate, but a quarter of a century ago I took five years out of journalism to work as assistant director of the Nuffield Foundation. Indeed, it was through Nuffield that I first met the noble Lords, Lord Young and Lord Swann, and although I did not meet the noble Lord, Lord Robbins, I was very much concerned with Dr. Furneaux who contributed some rather valuable evidence for the famous Robbins Report.

    My work was mostly in the field of the social sciences. I had to organise the applications for projects, submit them to the scrutiny of other authorities in the field, and then present them to the trustees. As most of the trustees were eminent in other sciences the projects received from them a keen and sceptical examination which was never unjust, though sometimes I found it salutary and somewhat embarrassing. Reading this report brought back to me my Nuffield days. Moreover, it supported the views I developed from my experience there that though the social sciences have far greater limitation than the layman supposes, they are none the less essential as an aid to an understanding of our manifold social problems.

    Lord Rothschild, himself a biologist, provides in this report the best and the clearest defence of the social sciences that I have ever read; an acknowlegment at once of their shortcomings and a justification of their support. He reminds us that the social sciences suffered from being more comprehensible to the laymen than are the natural sciences, so an investigation which produces results that accord with common sense can seem unnecessary and one which does not accord with common sense can seem incredible; so there is a kind of no-win situation.

    Then it is necessary to distinguish between research and development in the natural sciences and in the social sciences. The object of the first is to find out whether or how something can be done. The purpose of applied social research is to provide material on which to conduct a more informed debate and make better decisions. Lord Rothschild prints at length a most useful and balanced criticism of sociology by the professor in that subject at Washington, Seattle. There is, says Professor Farris, an accumulation of tested knowledge in such parts of the discipline as methodology, ecology, demography, the study of social differentiation and mobility, and research into attitudes, public opinion, and mass communication. But other fields have done less well, and critics have put it down to the appetite of sociologists for jargon, for pseudo-quantification, too much imitation of the methods of natural sciences and too much dependence on data from interviews and questionnaires. I should like to echo that strongly from my own experience. There is a dispute about its main purpose, as indeed there may be in the entire field of science: whether it is to provide an intellectual understanding of the cosmos, or to be an instrument for the immediate improvement of the human lot.

    To this Lord Rothschild adds part of the suspicion which sociology has evoked arises from early claims that it would occupy for the human sciences the position of physics in the other natural sciences. The parallel to social science is not physics, he said, but that part of biology which studies the habits of a particular organism. And in the social sciences, alongside strict scientific methods of research there may be need of historical, linguistic, even literary evidence. Indeed, it may be necessary to make use of fundamental sciences outside the social sciences, such as physiology.

    I suppose that Lord Rothschild felt all this philosophical examination of the nature of the social sciences to be essential because the very basis of the work of the Social Science Research Council is scoffed at by too many natural scientists and too many scholars in the humanities. It is essential to remove the misconceptions of what the social sciences are, the way they operate and the purposes they can serve before a case for their generous endowment by the Exchequer can be made. It is also necessary to identify the consumers of their work.

    Lord Rothschild was asked by Sir Keith Joseph which areas of the council's work should be done at the expense of the "ultimate customer" rather than the Exchequer; which areas supported by the Exchequer could be done as well by other bodies; which areas supported by the Exchequer through other bodies could be better covered by the council. The answer to the first and most important of the Minister's questions is that whereas in the natural sciences the customer is the person who wants it done, the social science customer includes all those who have a part to play in the decision-making process. The decisions to which most of the research sponsored by the council contributes are essentially governmental. But in a democratic society these decisions are not the sole concerns of Ministers or officials. The beneficiaries of this applied research are Members of Parliament, journalists, academics and the public at large. There is no single customer who might take out a contract. So though much research may still be commissioned by such customers as Government departments and private organisations, the public interest requires, Lord Rothschild says, an independent source of funds for research which such customers cannot be expected to undertake.

    There is also a need for independence from Government departments because so much social science research is the very stuff of political debate.
    "It would be too much"—
    says Lord Rothschild,
    "to expect Ministers to glow with enthusiasm for research designed to show that their policies were misconceived. But it seems obvious that in many cases the public interest will be served by such research being undertaken."
    Having had only three months to complete the report, Lord Rothschild has relied largely on the letters he solicited, about 300 of them, expressing the views of a large number of scholars and eminent administrators. On the whole, in spite of its imperfections, they give the council a fairly clean bill, and nobody seems anxious to take over any of its functions.

    Lord Rothschild says:
    "It is hard to accept the rationale for its dismemberment, casting the bits and pieces to a number of institutions, some of whom would be unlikely to want, and some of them unlikely to be able, to digest morsels of this kind."
    But he recommends a number of improvements, while saying firmly that the Government should not liquidate the SSRC any more than they should dismember it. They should not reduce its budget further over the next few years, and they should stop making incessant inquiries into the work of the council. Anybody who has had to work for any rganisations which is subject to continual cuts of grant and continual inquiry knows how devastating that can be on the morale and efficiency of an organisation.

    There is of course one recommmendation of rather sensational interest. The chairman of the council, he said, must cause to be investigated Lord Beloff's accusation that the Council's Industrial Relations Unit at Warwick or the Panel for the Monitoring of Labour Legislation are unfairly biased in favour of the unions. The noble Lord, Lord Rothschild, cannot have made this recommendation without a good deal of thought and, I should have thought, a rather heavy heart. I do not know of any precedent for an inquiry of this kind at a British university, although there may be some. Of course, Lord Rothschild could do no other, when a Member of this House, who occupies aposition of such high esteem in the academic world as the noble Lord, Lord Beloff, does, makes such an allegation in an inquiry set up by the Minister. It cannot then just be noted and left for the council itself. After all, the council is itself under challenge in the matter.

    In any event, as the noble Lord, Lord Beloff, said, the inquiry was set up only yesterday and I suggest that on the whole one should consider the matter to be sub judice and not to go into it. Lord Beloff may be proved right or not wholly right. His evidence is by far the most critically phrased and radical of all that quoted in the report. He is doubtful, indeed, about the desirability of perpetuating the council in anything like its present form, although I thought the noble Lord's views today were a little more moderate than they were in his evidence. He speaks, indeed, of the low quality of the council itself and of many of its committees and panels. I thought that was a rather surprising remark to make about the council—for such a remark to be made by one professor about a body which contains about eight other professors. However, I think the council has been considerably changed since the original list on which he was commenting. Sir Keith has made some important changes in the council.

    I could not help but wonder, as I listened to the noble Lord today, with his demand for impartial scholarship, whether that was not too thick a demand. I am sorry to see him shaking his head.

    My Lords, I did not assume that impartial scholarship was attainable. I said only that where it was likely to be partial, or thought to be partial, the public purse should be not involved.

    My Lords, I should have said that, if it is to be non-partial before the public purse is involved, I do not know where one will find it. I would not expect to find it in the noble Lord himself. One must not expect to find it in individual scholars. If one is dealing with a unit and that unit has one particular political direction, that is a very different matter from suggesting that any particular individual scholar should be impartial in all the investigation he undertakes. I cannot help but feel that Lord Beloff's quite right scholarly fastidiousness about the subject is also fortified by his deep conservatism. It is my experience that people with very strong conservative views have a certain suspicion of the social sciences because they reveal the flaws in society, and the revelation of those flaws creates a demand for radical, and often costly, reform. However, we must await the outcome of the inquiry.

    The noble Lord, Lord Rothschild, said—I am in agreement with the noble Lord, Lord Beloff, on this point—that the most serious weakness of the council is its failure to make known to the general public its own work and that of the social scientists it finances. He regards its efforts as primitive and unprofessional. Indeed, the results of this failure have been serious and have contributed to the establishment of this inquiry; the inquiry itself might not have arisen if the council had been less primitive and less unprofessional in its presentation of the work it is doing.

    There can be no stronger supporter of attempts to suppress jargon in the social sciences than I. He even goes so far as to say that the council should not only put its own house in order, but persuade the people it supports to suppress unnecessary jargon. They would have a hard time doing that, and I speak with some feeling on the subject. I have lately returned from a UNESCO seminar where I had to fight my way through clouds of jargon. In my time I have had the maximum exposure to such language, but at that seminar there were times when I could not tell what they were talking about—and I wondered whether they could tell what they were talking about. A number of poeple who called themselves communicologists seemed to be incapable of communicating with anybody, except with one another. Indeed, I thought it was not so much thought they were uttering as a kind of incantation in which they all joined. We are very fortunate to have had a report of this quality, and I hope the Government will take notice of the recommendations of the noble Lord, Lord Rothschild.

    8.16 p.m.

    My Lords, we are indeed grateful to the noble Lord, Lord Beloff, because he has, with his initiative, done exactly what the Secretary of State wanted done, namely brought about discussion of the report of the noble Lord, Lord Rothschild, in Parliament. I also very much sympathise with what he said about the Secretary of State himself. Some very unpleasant things have been said about Sir Keith Joseph. It is perfectly reasonable for a Secretary of State to ask that something of which he and his friends are suspicious, and think is not working properly, should be looked into. In fact, that is what a change of Government is about.

    I would cite as an example what Mr. Tony Crosland did when he was Secretary of State. He initiated an inquiry—on which the noble Lord, Lord Vaizey, and I sat and suffered for many months—into the public schools. There was, however, this difference—and this is in Sir Keith Joseph's favour—that Mr. Crosland insisted on terms of reference which certainly constricted the committee in the views it was able to express, whereas Sir Keith has given a completely clear run to the noble Lord, Lord Rothschild. It is a very good report. It is brief, decisive and says what needs to be said. I am also glad that it is enlivened by humour. How correct Lord Rothschild was to refer to the importance of, "knowing when some eminent scholar is past it, something that happens at almost any age."

    Although I am not a social scientist, as a member of the Heyworth Committee, which recommended that the SSRC should be set up, I am glad that the noble Lord, Lord Rothschild, endorses that recommendation and dismisses the idea of putting this kind of work under the department itself as being, naturally, open to the imputation of political bias. I am bound to say also that I think he is right when he concludes that the British Academy is not the right body. I remember when the noble Lord, Lord Robbins, and that redoubtable secretary of the Academy, Sir Mortimer Wheeler, came before the Heyworth Committee and said that if the committee was willing to recommend, they would be willing, for the Academy, to deal with the whole business of the allocation of grants. I then asked Sir Mortimer what would happen when there was an application from a sociologist—because at that time there was no single Fellow of the British Academy who was a sociologist—and Sir Mortimer replied, "Perfectly all right. We'll bring in the barbarians". I have no doubt that Sir Mortimer would have been as good as his word, but the question was whether he would have selected the right barbarians to make the decision as to whether or not a particular piece of research was worthy. I see that in its evidence the Academy now thinks that it is better to leave things as they are.

    Why has this inquiry come about? It has come about—

    My Lords, I must put a slight gloss on the noble Lord's account of what went on before the Heyworth Committee. The suggestion which Sir Mortimer Wheeler and I put forward was simply that we should be responsible, as we were in 11 other sections, for the grants to economics and, if necessary, to sociology. We never suggested—and I completely sympathise with the present president of the Academy—that all the other, to my way of thinking, extraneous functions should be conjoined.

    My Lords, I must thank the noble Lord for his excellent, admirable and entirely correct gloss.

    I was asking the question, why it was that the inquiry was set up? What was the origin of the suspicions about the SSRC? I can think of one reason for it. There is a general misconception in public as to what the social sciences can achieve. Nobody ever asks natural scientists to justify the practical results of their researches. One of the greatest of new fields in biology, as the noble Lord, Lord Swann, knows only too well, is that of molecular biology. It is hoped that research into DNA and the reason why cells suddenly get a message to multiply inordinately will lead to the discovery of the causes of certain kinds of cancer. But the kind of research which is now done in laboratories on molecular biology is still a long way from affecting medical treatment of cancer.

    The social sciences are often expected by those not really acquainted with them to produce immediate results; what Sir Karl Popper used to call social engineering.

    It is of course more important that we should have modest expectations of what social science can teach us rather than those vast explanations of the way in which society works, which Karl Marx or Auguste Comte, the founders of sociology in the 19th century, produced in their time. But very often, even though teams are assembled and funded and conduct research, the results in terms of practical application are very limited. I think, for example, of the admirable decision by Rab Butler to set up an institute of criminology at Cambridge. Undoubtedly some practical results have come from that institute, but many of its conclusions amount simply to the point that crime is just one of the ways in which society expresses itself. People who thought that the institute would produce results which would lead to a decrease in crime were over optimistic.

    In fact social scientists themselves are sometimes guilty of over-selling their subject. The trouble is that a very few social scientists, some economists and some social administrators are, I fear, crude and arrogant. I would describe their way of approaching the subject by saying that they produce the syndrome of the four-letter man. What happens is this. They choose an area of social discontent and then they declare that it has been by them "thoroughly researched". They then declare that the remedies that they recommend for the social discontent must immediately be put into effect. When the Minister, official, chief executive, or the managing director in a particular concern does not do so at once, they pillory him. If he says that he requires time for the piece of research that they have done to be discussed, they accuse him of procrastination. If he says that the whole project that they have outlined is too expensive, they declare that the expenditure of a few millions to remedy the discontent is a fraction of the cost of Trident. If he still refuses to take the action that they have recommended, they then call him a four-letter man. That is the syndrome.

    That is one of the reasons why social science research has got a bad name among politicians. That is why for some it is synonymous with arrogance, power without responsibility, and bias. I now ask the question, is it biassed? I shall not go into the affairs of the industrial relations unit at Warwick University, because that matter is now to be the subject of an inquiry under Sir Kenneth Berrill. I would add only that industrial relations is a subject which got under way in the 1930s—Montague Burton, for example, founded a chair in the subject—because it was realised that this was a new, third estate of the realm emerging, about which most people in universities and many people in public life at that time knew very little. That is why industrial relations research has concentrated on the unions themselves, rather than on the management side.

    But when it comes to discussing bias I would say that there can be no value-free social science. If you take history, you will find today that one of the most eminent of social historians is the Marxist historian Professor Hobsbawm. Or you can turn to the past and think of that great Whig historian George Trevelyan. Or you can turn to his great opponent, the Conservative historian, Sir Lewis Namier. Those are men who have written history from a point of view, who have tried to show that they took other people's arguments into account, yet nevertheless maintained their own particular point of view and showed why they made what they considered to be more reasonable inferences than those whom they criticised. But those men won renown not because of political stance, but because of their grasp of the underlying legal, political, social principles and the way that societies change over the years.

    Again if one takes economics, it was in the 1950s common knowledge that there was a great difference between the political outlook of the Faculty of Economics under its great leader the noble Lord, Lord Robbins, at the London School of Economics, and the Faculty of Economics at Cambridge which adopted different principles. Ricardo was quite right when he said that the subject ought to be called political economy, and not just economics.

    If I turn to sociology, I would say that it is simply untrue that all sociologists must be by definition left-wing. Dr. Wilson, a sociologist of religion at All Souls, is certainly a fit companion and adviser of Warden Sparrow. Of course it is natural for someone who examines some part of society, or some social relationship, to stress the diseconomies and discontents which disturb that relationship, or that part of society. But he is just as likely to conclude that to alter any part of that relationship would be to destroy something exceedingly valuable.

    For instance, in America universities are now compelled, under new laws which go by the name of "affirmative action", to institute elaborate procedures to ensure that all candidates for a post get fair and equal treatment and consideration. A sociologist might observe that the price of this extra concern for fairness, which entails that every expression of opinion about a candidate, every letter, every telephone call, has to be logged and open to public inspection, has been the collapse of the system of confidential reports on which previously peer review was based. In other words, the sociologist may well conclude that reform and change has had the very opposite effect from that which the reformers desired to achieve.

    I next ask whether the SSRC has neglected hard-nosed social sciences, such as economics, which require a formidable apparatus of analysis, in favour of vapid studies, such as sociology and anthropology. On anthropology, I think Sir Edmund Leach says in Chapter 10 of the report all that needs to be said. On sociology, I would say this. There are undoubtedly a number of weak departments of sociology and of social studies in British universities today, and the report says so. Why is this? It is not the fault of the subject: it is the fault of dons of Oxford and Cambridge, and to some extent of London, in the 40 years between 1920 and 1960. The bitter enmity by historians and economists to a subject which already had major figures at the turn of the century in Weber and Durkheim, had a disastrous effect.

    There was a good deal of crude academic politics in this. No post in sociology was established at Cambridge until the 1960s, and even later at Oxford. At the London School of Economics and Bedford departments of sociology flourished, but they were small in terms of the numbers of students who came through the departments. That was the reason why, when in the 'sixties there was an overpowering desire at last to expand this subject and to recognise that it was a subject of importance, as had been recognised for years in France and Germany—and in all major American universities—no cadres of young academics existed to fill the new posts.

    But let no one doubt that there are excellent men and women in this subject. If I may cite one who is the son of a Member of your Lordships' House, there is Mr. Runciman, who combines being the managing director of his family shipping business and writing illuminating books on sociology as a Title B Fellow of Trinity which, as a Cambridge man whose affection for Oxford is unassailable, I would describe as being at least equal in distinction to that of a Fellow of All Souls.

    But when the noble Lord, Lord Beloff, criticised Lord Young for his policy as the first chairman of the Social Science Research Council, and for spreading its funds too widely, I would say that Lord Young was responding to a situation which I would not wish to call academic conservatism, because conservatism is an honourable word, but a situation produced by academic pigheadedness over many years, and a refusal to acknowledge what had in fact been recognised as a subject of distinction in other countries. It was for that reason that the SSRC in its early years tried to encourage all sorts of initiatives which sober people would have said were ridiculous.

    I think the SSRC was right to support a struggling subject—a subject which has made important contributions to knowledge. It is sociology and the study of society which has transformed historical research. Historical research is now unrecognisable from what it was before the days of Marc Bloch and the great French school which centred round the periodical Annales in the Sixième Section of the Collège de France.

    You can of course kill the SSRC, not by suppressing it but by refusing to finance it adequately. That is what the chairman of the UGC said in paragraph 9.165 of the report. If you cut its funds still further, then the support that it can give to the multitudinous branches of the social sciences will mean that the overheads of the council become totally disproportionate to what it can achieve in distributing those funds.

    What I think would be deplorable is if there were further criticism, not merely of the council or its present chairman, Dr. Posner. Before the Rothschild inquiry Dr. Posner was overhauling the structure of the SSRC, and it is clear from the report that he had got management consultants in to look at its efficiency. Of course, Lord Rothschild suggests that there are other matters to which he could direct his attention, but the fact is that Dr. Posner had the courage to run counter to the wishes of a lot of his constituents among social scientists in order to see that the country got value for money.

    The only reform that I wish had been recommended in the report is that the council's name should be changed from the Council for Social Science Research to the Council for Social Studies, because "science" is a misleading word in this context. It is true that sociologists, economists and social scientists of all kinds make use of techniques which are very often statistical in their origin, sometimes methodological, but do not themselves constitute a science. I think that if we were to think of this council as supporting social studies we would be!much happier in realising what results can be achieved. So the report seems to me to be a vindication of the value of the work of the SSRC, and I very much hope that the noble Lord, Lord Sandys, will endorse that view when he answers the Question.

    8.38 p.m.

    My Lords, I should like to join with others who have spoken in thanking Lord Beloff for opening this debate tonight, and I should especially like to thank him for the moderate tone he adopted. As the noble Lord, Lord Ardwick, said, the tone he adopted tonight was rather different from the tone he adopted in the evidence which is recorded in this report, and for that I and others here, I think, will be grateful. The noble Lord has never concealed his attitude to the Social Science Research Council; nor, indeed, to much that goes on under the name of social science or social studies, or whatever you might like to call it; but it seems to me— and I am bound to say this— somewhat odd that after this report has been produced he should wish still to pursue the matter, even in the moderate way that he did in opening this debate.

    The Secretary of State was perfectly entitled to ask for advice about what action to take about this council or any other research council. The noble Lord, Lord Annan, said that he had a right to do this, and I agree with him; although to many people it looked, when this particular adviser, a most distinguished natural scientist, was chosen, as though the die was cast for the SSRC and that the kind of report would be produced that could legitimately lead the Secretary of State to dismember the council in a way that some people, at any rate, hoped would happen. As we now know, it has not happened and, contrary to the initial expectation, and coming from a person who cannot be accused of any bias in favour of the social sciences, certainly not previously expressed, it has come as a vindication of the SSRC and generally of the work that it has done, despite the many important criticisms that are made and the recommendations arising out of those criticisms.

    The noble Lord, Lord Beloff, said that in his view the report went some way towards giving the council a clean bill of health; but, judging from the tone of his remarks, the clean bill of health is still not all that clean. One might have hoped (as I hoped) that after this report had been produced the noble Lord, Lord Beloff, like other critics of the SSRC in the last year or two, would accept this individual verdict and do it generously. I have spoken about a certain amount of bias on the one side. I accept that there is a bias in me on the other side of the question. No doubt I am biased in favour of this particular research council because as the noble Lord said when he opened the debate, 1, myself, was the first chairman of the council when it was first set up.

    I am afraid that I did not altogether follow the criticisms that were made of the direction which it is alleged I gave to the council in the early days; but if the charge was that the funds were too widely spread in the earlier years, then I should want to go along with what the noble Lord, Lord Annan, said earlier and say that that was what was right, certainly at that time; and that to have been much more selective and to have picked out what were and are still called centres of excellence for specially favoured criticism would at that time have been wrong. At a time when after the Robbins Report had been produced there was not only rapid expansion in the universities generally but rapid expansion in social science departments in almost all universities, it would have been almost impossible for anyone, even if he wished to do so, to pick the winners out of all the new stables set up in that period in the 1960s. But against any wide spread of funds, if there was any— and we did, with very small resources, attempt to spread the funds— there was also an attempt to set up the new units and programmes of research which would lead to a concentration of funds rather than a dispersal.

    The attitude which the noble Lord, Lord Beloff, has shown tonight, much more moderate than on some previous occasions, is certainly very welcome. The evidence he gave to the noble Lord, Lord Rothschild, is printed among other evidence in this report, and it is, I think, very noticeable and remarkable that, of those whose evidence is printed, the noble Lord, Lord Beloff, is almost alone in his severe attack on this research council. I should like to remind the House of some of the things said by other people and bodies who were invited to give evidence and who did so and whose evidence is printed here. The Advisory Board for Research Councils, for instance, says that the SSRC provides an essential focus for these varied disciplines, particularly in the way it acts as a forum for peer judgment and review. The Confederation of British Industry says that the work sponsored by the SSRC is mainly concerned with fundamental issues which can contribute to teaching and applied research.
    "For this reason in our view it is not susceptible to the customer-contractor principle because of the difficulty of identifying who is the ultimate customer".
    The CBI also says that the SSRC industrial relations research unit at Warwick is important to it and the fact that its work of necessity takes it into politically sensitive areas underlines the need for some independent source of funds.

    Mr. Justice Gibson of the Law Commission refers to the need the Law Commission has for research to support the work that it does, and pays a compliment to the data that it has obtained from the Oxford Centre for Socio-legal Studies which is supported by the SSRC. He says that the withdrawal of financial support for this socio-legal research could have serious consequences for future law reform. The Royal Society speaks in a similar vein and asks that it should be accepted that a body making grants for research in the social science should be politically independent. This is specially important for the SSRC since most of the topics within it are to some degree political.

    Lastly of the bodies whose evidence I will bring to your attention there is the Trades Union Congress which says that direct intrusive or excessive governmental or commercial control over research and publication of social sciences would be generally unacceptable. It follows from the above that there is a strong case for the maintenance of institutions such as the Social Science Research Council, which functions in the important middle ground between academic interests and those of social and public policies and provides a system of allocation of funds which directly involves the academic interests and public policy makers in industry and elsewhere. These are just some of many bodies and individuals who take a very different line from the noble Lord who initiated the debate tonight. The noble Lord, Lord Rothschild, has, as we now know, accepted the great weight of the evidence that has come in in support of this research council and hence the need for social science research and for an independent body to support it, to deal or to help deal with some of the important, baffling and mysterious problems which are itemised in the report.

    Unlike the noble Lord who introduced the debate, I am delighted by this report. Perhaps this could be expected. The final conclusions seem to me exactly right. There is no lack of criticism on detail, and I am sure that the SSRC will take up those criticisms and act on them wherever justified, as they seem to be to me in many cases. The noble Lord, Lord Rothschild, ends up by saying that there is one course of action which could not be easily corrected— which is the dismemberment or liquidation of the SSRC. That would be not only an act of vandalism, but as Professor Supple says, would have damaging consequences for the whole country and be one from which it would take a long time to recover. As he takes that general view— and this is his main advice to the Secretary of State— he says the SSRC should not he dismembered. Its budget should not be reduced in real terms below its 1982 level for a minimum period of three years and there should be no further inquiries into the SSRC for a minimum period of three years. I can only hope that the Secretary of State will pay attention to the report that he commissioned and particularly on the issues that I have just mentioned.

    8.51 p.m.

    My Lords, I think we are all indebted, whatever our respective points of view, to the noble Lord, Lord 13eloff, for having initiated this debate while the reading of this distinguished report is still fresh in our minds. Most of all, our thanks are due to the noble Lord, Lord Rothschild, who in my opinion has grasped, in a field with which he was not in the past, I fancy, so familiar, the peculiar difficulties of reseach in social sciences, the importance of its freedom from political influences and the desirability of sufficient subsidy being forthcoming from the Government quarters, and has insisted that the real value of the Government subsidy, whatever form it may take, should not diminish in the next three years. All these things, and, as the noble Lord, Lord Annan, has mentioned, the purity of his style, his humour and his forceful exposition, make his document enthralling to read. But I confess to some doubts about his administrative recommendations and the present functions of the SSRC.

    Let no one in our restricted numbers think that I am about to propose the liquidation of the SSRC, but, to my way of thinking, I can conceive various improvements which would contribute to its efficiency.

    At the present time the functions of the SSRC can be divided into two parts: first the award of graduate grants and fees for those who wish to pursue a second degree or a third degree in the studies concerned; and secondly, the general subsidisation of worthwhile research in the social sciences. The noble Lord, Lord Rothschild, argues that this combination of the two functions is appropriate. I have some doubts about this. Perhaps at this stage I may reveal my interest. As the noble Lord, Lord Annan, has said, I once was president of the British Academy at the time when it, too, had just received a regular Government subsidy. I was concerned in the reorganisation of the affairs of the Academy so as to spend this subsidy most expeditiously. At the London School of Economics I was for a quarter of a centry chairman of the Graduate School Committee. Thirdly, I have been chairman—I am no longer chairman now—of the international committee assembled by Lord Annan's predecessor at University College which is publishing over the next 30 or 40 years the collective works of Jeremy Bentham. In that respect, I am deeply grateful for the assistance which has been given by the SSRC.

    Contrasting my experiences on the organisation of the British Academy in regard to research with the organisation which has been developed at the SSRC, I detect manifold differences. It may be a contribution to this debate if I elaborate them a little.

    The British Academy has nothing to do with postgraduate awards for those who wish to enter graduate schools to pursue studies in humanistic subjects. In my experience as chairman of the graduate school at LSE, the DES performed very satisfactorily. In the days when economists and others received grants from the DES in all sorts of ways the arrangement worked perfectly satisfactorily. I am not absolutely sure that the quota allocations of the SSRC— at the beginning at any rate— have worked particularly well. To return to the British Academy, its functions therefore were much easier than that of the SSRC as it has developed. It had nothing to do— and I repeat, "it had nothing to do"— with post-graduate awards. Its sole function in this respect was to allocate research money other than those awards, in the various subjects for which it was responsible. At the time when the committee of the noble Lord, Lord Annan, deliberated on these matters, I think there were 12 or 13 sections of the British Academy. Thus nowadays I think it might be said that one of the main functions of the British Academy is the scrutiny of the proposals in research which are put up to it by individuals, by groups of people in universities, and by groups of people collected from different universities. It helps to ensure that the radically inferior grants that the humanities get, in comparison with social studies, go as far as they can.

    The allocation of this money is now one of the main businesses of the entire Academy. The requests come in by a certain date every year: they are sorted out by the secretariat to eliminate obvious madness; they then go up to a grants committee, which is immediately under the Council of the Academy, and the grants committee will allocate to the various sections for exact scrutiny. I only know what is done in a limited number of sections with which I have had particularly intimate relations, but I have no doubt at all that the sections take seriously their job of awarding As, Bs, Cs and Omegas to the various applications. They then come up again to the grants committee, which passes them on to the council. Thus the entire body of the Academy ultimately is concerned with the allocation of this money.

    This means that the business of allocation is much cheaper than it is elsewhere. The Fellows give their services for nothing; and the administrative staff covering all the applications and the other business of the Academy is very small. Since the burden of recommendation rests with the various sections, the members of which have been elected at various times to fellowship of the Academy, there is not likely to be any pronounced bias one way or the other in the recommendations of the sections. That seems to me to be a very superior arrangement—one which I would earnestly commend to the Social Science Research Council to embody in whatever form its establishment may take in the future.

    The noble Lord, Lord Rothschild, argues positively in favour of the combination of the two functions— the general subsidising of superior research and the awards of post-graduate grants and fellowships. The noble Lord, Lord Rothschild, whom one must take very seriously in this matter, says that the quota system involves a certain amount of informal guidance from the centre and influence on the development of graduate schools. With great respect to the noble Lord, I would have thought that, in so far as graduate schools depend upon physical equipment in the case of social sciences, such as libraries, statistical machines, typists and people who can use computers, this certainly fell within the ambit of the University Grants Committee.

    I myself would hope that in the future evolution of the Social Science Research Council it could turn itself into something more on the model of the British Academy and in no position on any of the main committees. I would hope that the Social Science Research Council could hand over to the Department of Education and Science the burdensome and costly business of assessing applications for people who wish to proceed in the respective subjects concerned to the graduate school. I should have thought that the mere mechanical award, given certain rules and testimonials of academic awards, was supremely a subject which was suitable for a rather down-to-earth Government department.

    For the rest, I am bound to say that I have some lingering suspicion of the quota system. I think that, in the sphere of second and third degrees, competition is desirable. The young, would-be graduate should shop around according to the reputation, as he conceives it, of the teaching and advising If he is accepted by the school of his choice, then the DES, acting more or less mechanically, can do the rest. This arrangement seems to me to be conducive to the liberty of both students and universities.

    Incidentally, the financing of second and third degrees is something which, hopefully, would give the people who were so privileged an advantage in income over the rest. Since Professor Prest suggested that amortisation of loans should not commence until a certain minimum income has been reached, I should have thought that this, at least, is a branch of university activity which could be financed by loans à la Prest.

    I have spoken for too long, but I hope I have demonstrated to the noble Lord, Lord Young, whose work I have admired, that, on the whole, I am not hostile to the Social Science Research Council which he founded. But I certainly hope that it will divest itself of its more mechanical duties and so transform itself that it is advised by people of known repute, whose names may be published, in which case I think that some of the misapprehensions about the recent financing of social science, through the committee's instrumentality, would be reduced to a minimum.

    9.12 p.m.

    My Lords, I am grateful to my noble friend Lord Beloff for asking this Question tonight. There seems to be some doubt as to the pronunciation of the noble Lord's title. I can say that it is "Buluff" I have it from the horse's mouth. He is an old and valued colleague in the University of Oxford. I must say that the topic of social science has never been conducive to brevity, and that all too common apothegm applies to your Lordships' debate tonight. Nobody, not even an experienced man like the noble Lord, Lord Robbins, has so far spoken for less than 20 minutes. However, I shall do my best. I have not hitherto spoken for longer than 12 minutes in this House, but it is a subject which tends to rhetoric.

    I read the report by the noble Lord, Lord Rothschild, with great interest and with some knowledge of what he was writing about. It seems to me that there were two fundamental questions, one of which the noble Lord addressed. Other noble Lords, notably, Lord Annan, have spoken about the nature of the social sciences and the great difficulty about the use of the word "science" in this context, since we live in an age when the reputation of the natural sciences is so very great that the word "science used loosely in other contexts, must be very carefully handled. The noble Lord, Lord Rothschild, addressed himself to this on page 17 of his report, at paragraph 4.8, in which he asks whether sociology would take the place of physics in the natural sciences. He says:
    "The great difference between social science and physical science, which is relevant here, is that social science is defined by its distinct subject matter, namely human beings and their behaviour in a social setting. Physical science does not define itself by reference to a single subject matter; but instead aims more than social science at general and comprehensive laws".
    With great respect to the noble Lord, Lord Rothschild, I do not think that goes far enough. I do not think that people who have not worked in the social sciences fully appreciate that social sciences are far more like the humanities than they are like the natural sciences. They are far more like history. They are in great part a continuous dialogue on the great questions which have perplexed humanity since the beginning of recorded time. One of the most important characteristics of those continuous and perplexing questions is that they have no answers or, rather, no answers which are laid down for all time. They lead only to more questions.

    My Lords, would the noble Lord allow me to ask him in what way he thinks the natural sciences are different from the social sciences in the light of what he has just said about this continuing debate and the lack of firm answers? Surely the same thing applies to the natural sciences as to the so-called social sciences.

    My Lords, if the noble Lord would do me the honour of listening to the remainder of my speech, I shall be addressing myself to that very question. I had been speaking, I think, for only two and a half minutes and I was hoping to confine my remarks to 12, but unfortunately I shall have to take a little longer on this question. The particular characteristic of the social sciences to which the noble Lord, Lord Young of Dartington, quite rightly has just drawn attention is that, just like the natural sciences—only, with respect, more so— they have this particular Popperian quality of more often proving a negative than proving a positive. It is not that they are concerned exclusively with humanity compared with the natural sciences It is because they are the kind of question, the kind of theory which is much more open fundamentally to question than has in recent times been the case with the natural sciences.

    This is a relevant point to make, because it brings us to the topic which the noble Lord, Lord Annan, raised of social engineering. It is a fact that the nature of social engineering, or of social technology as it is sometimes called, is a very bad metaphor indeed. While, as a matter of historical fact, the discoveries in the natural sciences have led to artefacts in the mechanical world which have functioned and which can be seen to function— the connection between the discovery in Cambridge of the nature of the atom in the 1930s and the atom bombs dropped on Japan in 1945 is clear and obvious— there is great difficulty in tracing a similar path, a similar connection, between the work of scholars in the so-called social sciences and work in social engineering. It is necessarily, I think, much more tendentious, is necessarily much more political and is shot through with what Lord Rothschild refers to as "value judgments"— not a very happy introduction from the language of logical positives into the debate. Nevertheless, it is true that they are often concerned with questions of value.

    One of the real doubts about the effectiveness of the social sciences must be a doubt as to whether or not their discoveries can truly be applied by policy makers in the way in which policy makers had hoped in the past they could be. I submit that this is a very serious and important question. Kant, the great philisopher, once said that out of the crooked timber of humanity no straight thing was ever made. There is a fundamental argument against social engineering and social technology of all kinds: that it tends in one particular collectivist direction. That is the particular reason why the social sciences, and social engineering which has been built upon the social sciences, have been charged by many people with a particular political bias.That is an inevitable charge.

    To a very great degree, as the noble Lord, Lord Ardwick, in a very informed and most helpful contribution from the Opposition Front Bench said quite clearly, people who take up the study of social problems are likely to come up with answers which require social action to solve those problems. That is a radical stance, and necessarily it is a left-wing stance. There is no point in denying it. If social scientists get up and deny that charge, it seems to me that they are not being true either to themselves or to their tradition.

    I was very glad to listen to the noble Lord, Lord Robbins, talking about the work of the British Academy and the humanities. I am very pleased indeed that there is to be no humanities research council One can just imagine the kind of dim men and the statutory woman who would be put on such an extraordinary body No great contribution would it make either to the work which is done in the universities or, I may say, outside the universities. I claim that the reason for this is that the nature of the humanities and the nature of much of the work of the social sciences is inherently controversial Different people are bound to take different views. Quite often, there is not one answer. I believe that some of the attack levelled at my noble friend Lord Beloff was because he made this very point; that there is no one truth in the social sciences. It is a very real question as to whether public money should go to A or to B on grounds that they are excellent in themselves, rather than because they are likely to lead to what is an acceptable or workable conclusion.

    I too have very grave doubts about much of the work that has been supported by the Social Science Research Council over the years— not because I believe such work should not be supported but because I wonder whether it ought to be supported on quite such a large scale and why it has so consistently shown one particular kind of bias rather than another. It would be very refreshing if one of the people in industrial relations— and I do not refer now to the Montague Burton professors such as Harold Kirkaldy, who used to be the professor at Cambridge, but specifically about the descendants of that very great and distinguished student of industrial relations, Allan Flanders— just one day breathed the faintest hint of criticism of one trade union or another in some respects; perhaps just a footnote to one of their few thousand heavily subsidised pages. That would do more to restore their scholarly reputation than anything that Lord Rothschild might say, or that might be said by the person who has been put in charge of the investigation on behalf of Lord Rothschild.

    I strongly agree with the noble Lord, Lord Robbins, that the recommendations in the Rothschild Report about graduate studentships and the support of graduate work are wholly wrong. It seems to me that these should be awarded on merit and that students should be perfectly free to search out whomever they wish to study under That is a perfectly elementary, mechanical function which used to be done by county councils. In recent years it has been done by the Department of Education and Science I see no reason why this could not be perfectly well done by a higher executive officer just reading off numbers from examination results. I have very grave reservations too about the recommendations in the Rothschild report on the adoption of the American-style PhD programmes This is done in the name of efficiency, because the rates at which people do not complete graduate work in the social sciences has been subject to criticism. But a distinguished man though Lord Rothschild is, who is he to tell different universities how to organise their own graduate programmes? If that is not a matter for university autonomy, what is? When one turns to the subsidisation of research, it seems to me that if we were to be hostile— and I am very far from wishing to be hostile to the work of people who sit on these committees— there has been an element of "You scratch my back and I'll scratch yours". This has been very marked in some of the work of the Social Science Research Council and in some of the things it has supported. I personally believe, now that the pioneering work has been done over the spread of social science faculties in the universities throughout the kingdom, that the time has come when this research money should be directed to the UGC for the UGC to allocate to different universities. I myself think that the SSRC programmes have not been sufficiently distinguished, nor on the whole made a sufficiently great contribution to scholarship to justify what is in fact a substantial bureaucratic empire, something which has become so substantial indeed that less than 20 years after it was set up they had to call in management consultants to see whether or not it could be improved. That is a grave indictment of what is, after all, an extremely small body.

    If there were to be residual functions which needed to be financed from the centre I would be very tempted to hand it over to the most distinguished of the research councils, the Medical Research Council, because, after all, medicine bears some resemblance to the social sciences in that it is concerned to some degree with the fundamental sciences and to some degree with practical application. But, above all, the Medical Research Council's standing in the world of research is beyond question and beyond parallel. I would have thought that at this stage, after this enormous expansion of the social sciences in the past 20 years, the subject could do with a little bit of the rigour which has been applied over the years by the Medical Research Council to the activities of investigators in those particular fields.

    One of the sociological laws I have learnt is that in the bureaucratic world nothing that exists will ever cease to exist So I fear that, whatever Lord Rothschild has said about the Social Science Research Council, its perpetuity could never conceivably be doubted by any realist for one moment.

    9.27 p.m.

    My Lords, I am glad to add my thanks to the noble Lord, Lord Beloff, for this opportunity to develop questions about the future of the Social Science Research Council. I may say it is a pleasure to follow the noble Lord, Lord Vaizey; it is a new experience for me and I rather enjoyed it. I certainly welcome his forthright criticisms of the SSRC and his candid comments about the limitations of economics, or, the noble Lord, Lord Annan, has correctly said, and I prefer, political economy, which we both have spent some large part of our lives studying.

    I want to suggest that we should take more seriously the need to justify the spending of every penny of taxpayers' money, other people's money, on purposes which we may personally greatly favour but which are not always of proven public benefit and which in any event might be financed through voluntary sources. The Rothschild Report tells us that this year £ 460 million will be spent by five research councils And I would say that if all this expenditure is as dubious as I regard the £ 20 million spent by the SSRC, there is splendid room here for large economies.

    We have heard that the author of the Rothschild Report relies on what he calls the "generally favourable evidence" of some 300 academics Yet the samples he quotes, with very few exceptions, are less evidence than straightforward statements of opinion, and there are no asterisks against the names to indicate which witnesses have been paid for their good opinions. Among the economists, sociologists and historians whose names I immediately recognise the vast majority are at least as biased in favour of Government expenditure as have been the leftist succession of chairmen of the SSRC, from the noble Lord, Lord Young, in 1965 to the present incumbent.

    May I, therefore, set an example by declaring my own interests, as general director of the Institute of Economic Affairs From its formation in 1957 the trustees decided, as a matter of deliberate policy, neither to seek nor to accept so-called public money which is, after all, private money taken from people's pockets by Government decision It seems to me that we can learn from the universities which have recently woken up to discover that there can be no true independence so long as you are dependent upon political patronage. Although I shall have few friends for saying so, I think that we should not expect to take public money and run away with it.

    Whatever may be said of the natural sciences, there are special reasons why taxpayers' money should not be conscripted into financing research in the controversial arena of social studies, to adopt the terminology of the noble Lord, Lord Annan. Thus in political economy even such solid sounding concepts as capital equipment, or housing, or money itself, do do not depend on their objective properties but on subjective valuations, beliefs and behaviours. Indeed, I would argue that one of the chief advantages of the open market mechanism is precisely that it enables conflicts of values to he resolved by the widest conceivable consensus of people as consumers, workers and investors. But, so long as many other so-called social scientists take a different view, it follows in my opinion that research and dissemination of ideas in social studies is best conducted by competing organisations supported from widely dispersed private sources of finance.

    By all means let the Government encourage charity by tax concessions, although I would personally favour fewer concessions and much lower rates of tax. But why, for example, should the National Institute of Economic and Social Research draw over 60 per cent. of its income from the SSRC and the Treasury when many economists would join me in holding its resulting influence to blame for a great deal of our inflationary troubles?

    Having at one time put all their money on the NIESR as the chief source of macro-economic forecasting, it is true that the Government and the SSRC now support a half-a-dozen such oracles. I believe that it is an improvement. I think that if you are going to gamble on the economic Grand National, it is better to hedge your bets. But I think that it would be better still to turn academics away from what I regard as the contaminated public feeding trough. They believe that their macro-forecasts are of great value. Very well, let them tap the many sources of pure spring water to fertilise their researches Where they claim their work will yield fruit, let them appeal for support to the voracious fruit-eaters in business, the trade unions and Government departments. If they have more far-fetched projects, there is always the Rowntree Trust.

    On the other hand, where research promises little prospect of fruit or of early fruit, it should take its chance in appealing to the large universe of charities, trusts and private benefactors. An incidental advantage of this market approach would be that more economists might come to see the merits of lower taxation so that money could fructify in the pockets of potential donors.

    Glancing through the endless list of researches financed by the SSRC with other people's money, anyone outside Militant Tendency would find that they are often pretentious or partisan, and some are both Thus £ 36,059 went on a study of:
    "Social and attitudinal characteristics of supporters of right-wing movements in Britain",
    which the author amplifies as:
    "the attitudes of those holding right-wing and racialist viewpoints."
    I could not help wondering as I read it what would be the prospects for a rival research project into the attitudinal similarities between those holding Left-wing and fascist viewpoints. There are many other projects that are on the more harmless, trivial level of studies of rabbits and their habits. Many of them cost a few hundred pounds and could be well afforded from the pockets of any keen researcher.

    One of the troubles is that the very existence of the SSRC has encouraged the art of grantsmanship which diverts attention into fashionable, often highly mathematical, research known to be favoured by the grant-giving establishment. Does anyone really suppose that Adam Smith would have been favoured by a contemporary SSRC?— or Ricardo or Keynes, let alone Hayek or Friedman in their earlier days? Yet all those have made seminal contributions to economic understanding, the like of which the SSRC has nothing to show despite having spent hundreds of millions of taxpayers' pounds Before concluding, I must ask the Minister to tell us how the Government propose to deal with the scandal revealed in postgraduate education on which the SSRC spends nearly half of its budget. Of some 2,370 social science students registering for research degrees in 1973, almost 60 per cent had not completed their Ph.Ds after six years. I suggest that if grants were replaced by student loans, we would have less of this time-wasting nonsense. I welcomed the advocacy of my noble friend Lord Robbins for the reform away from grants towards student loans

    But I want to conclude with the most characteristically protective recommendation of Lord Rothschild's non-radical, conventional though well-written report. He says that there should be no further inquiries into the SSRC for at least three years. I would agree, subject to adding that during that period the council should be wound up. Let no new grants be made and let existing commitments be phased out. To hopeful new applicants I suggest that the SSRC send a plaque for their study walls inscribed with the advice of Rutherford at the Cavendish Laboratory before the war:
    "We haven't got any money so we must use our brains."

    9.38 p.m.

    My Lords, I think we are all agreed that this is a most unusual report It is unusual because it is written by an unusual man, and by him alone It could certainly never have been written by a committee for, after all— and as a biologist I have always relished this— is not a camel a horse designed by a committee? It is only necessary to read the first page of the report and then Chapter 4, where the nature of the social sciences is explained with great elegance, to realise why Governments find them baffling and confusing and, above all, irritating.

    Governments want quick, plausible solutions to the problems of the day. The social sciences, on the other hand, offer conclusions that are uncertain and qualified and which can seldom do more, as the report says, than clarify the options. To make things yet more annoying to society at large and to Governments, they do so in a way that often seems to defy common sense. But the Government and society would do well to ponder the remark of no less a man than Einstein, quoted on the very first page of the report, namely, that,
    "Common sense is a deposit of prejudice laid down in the mind before the age of eighteen".
    As the report makes clear, the natural sciences are not subject to this common sense backlash because for the most part they are just too abstruse. But, of course, it was not always so. One wonders what sort of furore there would have been if Galileo, Darwin or many other great men of the past had been supported on Government money. The Secretary of Education, had there been one, would have been under the most intense pressure to do something drastic about them. The social sciences have a long way to go before they escape such pressures, and, in their very nature, perhaps they never can But none of this means that we do not need the insights that the social sciences can give, uncertain as they may be.

    I myself became acutely aware of this in my time at the BBC because common sense tells many people that violence and sex on the screen rapidly corrupts society. Such research as there is, on the other hand, suggests that things are not at all so simple. More recently I have taken over the chairmanship of a Government committee concerned with the education of ethnic minorities, and, depending on who you are and your political leanings, common sense tells you that the poor performance of some minorities, especially blacks, in contrast to the relatively high achievement of most Asian minorities—not all—is due to racial prejudice and discrimination in the schools, or on the part of employers, or that it is a matter of IQ, or of family influences, or social deprivation, or cultural and social background, or a whole host of other things. In reality the problems almost certainly arise from a complex tangle of many of these factors, but which ones? One is most unlikely to get to the bottom of the matter by listening only to opinions.

    When I came afresh to the task, I hoped and expected that at least some answers would be available from social science research, and indeed they are. But the e is not very much relevant research, and of what the, e is all too little of is of the highest calibre. Some moreover is written in language so jargon laden or, worse still, because jargon is sometimes necessary, in such impenetrable prose as to defy comprehension. It is my unhappy lot to have to read a good deal of this stuff nowadays, and I want to offer you just one quote from a paper by a sociologist of some apparent responsibility in a distinguished British university. I could have given you many more, but one will do at this hour of the night:
    "Not only is this illustrative of the kind of position and explanation associated with a social pathological perspective, but it possesses the effect of opening and legitimating a sub-textual discourse that reinforces a pathological conception and approach towards the study of under achievement".
    What a pity that George Orwell is no longer with us. In his splendid essay on Politics and the English Language, he described just such a piece of prose:
    "A mass of Latin words falls upon the facts like soft snow, blurring the outlines and covering up the details".
    Recommendation 24 of the report should indeed be taken to heart, and not only by the SSRC but by social scientists in general. The poor quality of all too much social science research is a theme that recurs in the report, and especially in the quotations from written evidence in Chapter 9. I am not in fact unduly concerned about this. Any natural scientist, and I am one, talking off the record will admit that the proportion of really good research in his subject is very small, and I believe this is inevitable. One can never predict who will make the major advances, and every subject needs underpinning by lesser men. Second rank research is seldom worthless, and when it is, its perpetrators are gradually squeezed out of the system, not least by the SSRC, which has clearly done a great deal to raise standards.

    The report examines the Government's suggestion that more social science should be funded on a customer-contractor basis, and concludes, quite rightly in my view, that there is little scope for such a change. The customer, in so far as he can be identified, is too often society in general, which means, inevitably, the Government. Who else, I wonder, will really support much research in, for instance, the problems that beset me in my committee on the education of ethnic minorities?

    The report also concludes, rightly again in my view, that the Government, directly, are seldom a desirable funding agent for research that by its very nature almost always carries political overtones. The committee also endorses the system of peer review by committees of experts, even though it thinks there are too many of them. That must be right. It is in general the only way that quality can be assessed and standards raised.

    But it leaves me with an uneasy feeling: committees, by their very nature, express the majority view What happens if the majority are so sure that their view is right that they reject the dissident approach from which, historically, all the great advances have stemmed? I recall the birth of molecular biology in Cambridge when I was a young science don there just after the war, the most significant biological advance, beyond any doubt, of this century. Perutz, Crich and Watson, the Noble prizewinning trio years later, were not swept into the university system as they should have been; they were supported only because one man, Sir Harold Himsworth, then secretary of the Medical Research Council, almost entirely on his own initiative, had a hunch that they were going to revolutionise biology. They survived only because another man, Sir Lawrence Bragg, of the Cavendish Physics Lab., not a biology lab, thought the same and gave them help and house room I believe that any system of supporting research must have a few pots of gold which some wise individuals can use to support young men and women whom they think have real quality, even though the prevailing orthodoxy is uninterested.

    I note that the Heyworth Report of 1956, recommending the establishment of a Social Science Research Council, concluded that the danger of "spurious orthodoxies" was passed, something that the Clapham Committee of 1946 had earlier used as an argument against such a body. I would be less sure, even today. Orthodoxies are part and parcel of intellectual life and research and I do not doubt that there are still plenty about— not spurious perhaps, but certainly dubious.

    I wish to mention the alleged political bias in some social sciences, most notably, perhaps, sociology. It is a matter of no concern, surely, that sociologists should, privately, be left of centre, or indeed right of centre. Before the war, many distinguished natural scientists were decidedly left of centre, but it in no way distorted their research. On the other hand, there must be concern if private political views do distort research, and the report, as others have commented, has actually requested the SSRC to investigate one alleged instance. I know nothing of that particular case, but whether or not it turns out that there is anything in the allegation, I suspect there is cause for concern elsewhere.

    Certainly in my broadcasting days I was dismayed when one university group produced some research on the media (unusual, as a matter of fact), potentially valuable, but ruined it— there is no other word for it— and ruined its reception by broadcasters by the blatant political slant they gave it. Even so, I am not over-worried. These follies tend to be self-correcting, and even the natural sciences are not immune. Much Soviet research, most notably in genetics, was ludicrously distorted for many years by Marxist orthodoxy, but in due course a combination of international ridicule and systematic ignoring by peers produced a change of heart. And so I suggest it will do in the social sciences. Meanwhile I cannot think that a Government who have sent the Argentines packing in the Falklands, and who pride themselves on taking a firm line in a host of other areas, need really be frigh- tened of such a little mouse as periodic political bias in academic sociological research.

    I want to say only one more thing. I believe that the noble Lord, Lord Rothschild, has done us a noteworthy service. He has analysed the weaknesses of the research council, which are not so very numerous, and demonstrated its merits, which are considerable. He leaves me convinced that for the Government to dismantle the Social Science Research Council, or even to diminish it, would be doctrinaire, foolish, and perverse.

    9.51 p.m.

    My Lords, I apologise for not including my name on the list of speakers, but, quite genuinely, I did not know that I was going to speak until I had actually heard the debate. The noble Lord, Lord Ardwick, said that he was the only non-academic to take part in the debate this evening— but here is another one, who, I think, is perhaps a little lower than Lord Ardwick. He, I understand, went to Manchester Grammar School, and in the working-class of Liverpool he would be considered to be an academic. I left an elementary school at 14 and became a plumber. Ultimately I became the leader of Liverpool City Council, and then I was very honoured to become the chairman and the leader of Merseyside County Council. I also became the chairman of the North-West Economic Planning Council, and besides all those posts somebody, somewhere, thought that I should also become a member of the Social Science Research Council. I do not know why. It is an even greater mystery to me why a Minister of the party opposite reappointed me a member of that august body. But I thought that it would be a good lesson in education for myself, and I mixed with many academics.

    The Standing Orders of the House recommend us all not to defend or speak on behalf of a body of which we are a member, and so I have no intention at all of speaking on behalf of the SSRC. I speak, I hope, as a representative of the ultimate customer who is referred to in many parts of the report—

    My Lords, I think that it is the custom for your Lordships to speak on your own behalf.

    Well, my Lords, may I say that I speak as an ultimate customer of the Social Science Research Council, not a representative of it? By "ultimate customer "I mean somebody who has been elected to be responsible for looking at, and trying to solve, some of the problems which concern the Social Science Research Council: crime, poverty, race riots, drug addiction, urban deprivation, unemployment, and the state of the economy. If anyone wants a lesson in trying to gauge the necessary amount of resources to meet those problems, I recommend him to go and live in and try to manage a local authority such as Merseyside. He will then realise that perhaps the problems there are a little greater than those problems that face the academic world. When I came into the Chamber tonight I expected to listen to what was best in the academic world of our nation; instead I have listened academic tearing another another academic to pieces, and to academics ridiculing one another. It was almost personal abuse. I have never believed that that was the best of our academic world. But it has happened; it has happened tonight.

    The report contains the evidence of the noble Lord, Lord Beloff. I make no pretence to being a clever person. I think that I have a little common sense, and that I should be able to judge between the abilities of one person and those of another person, or between one group of persons and another group of persons, all practising in the same field. I wish to say, quite seriously, that the intellectual level that we have achieved here tonight in the Chamber was certainly no better than the intellectual level that I have heard achieved among academics in the Social Science Research Council. So if I were among the academics in this Chamber I should not go too strongly on the idea of condemning other academics and ridiculing them. I may be wrong, of course, and I stand here willing to be contradicted, but I have no doubt that the quotation given by the noble Lord, Lord Swann, came from a person who was trained in our universities.

    Some of the problems that face local politicians in places like Merseyside come from the demolition of blocks of flats which have proved unsatisfactory to some people but are eminently satisfactory in other parts of the country, and even in other parts of the city; and I have no doubt at all that those blocks of flats were designed by people trained in universities. The universities of this land have known about the social problems that I have mentioned, and have lived alongside them— and in Liverpool we have one of the best universities in the land, I am told— but they have made no contribution that I know of (they have certainly made none in my hearing) to the solution of those problems.

    Labourers in the streets of Liverpool knew in the 'thirties that Liverpool was on the down-path towards ultimate depression. They knew that because of what was happening in the economy. I do not ever remember any university coming out with any learned thesis about solutions matching up to that kind of problem; and if anybody has let the nation down in the solution of our social problems, then it is in regard to the economic life of this nation.

    Let me say this about the Social Science Research Council. I believe—I do not profess to know, but I believe— that the fundamental political principle behind the setting up of the Social Science Research Council was a general feeling that following the war, and beginning with the decline in our economic affairs, because of the social problems that were becoming manifest we needed an organisation to look into the subject and to propose solutions along the way.

    I think, quite frankly, that we have not done all that we could do in providing those solutions. Evidently the problems are still there. There must be a reason, and I believe the reason lies inside Parliament. We talk about dismembering the Social Science Research Council, or we talk about putting their responses out to the market forces, or carrying out research where somebody finds a need for research and is willing to pay for it. What happens to the young kid in Liverpool who is now glue sniffing? Who pays for the research into that social problem? That can be applied to every social problem that exists.

    There is no question of applying market forces to the examination of social problems for which the economy is responsible, and for which ultimately the Government are responsible. What happened was that the Government of this day— and I believe it was a Labour Government, but it does not make any difference— set up an organisation which was to study seriously the major social problems arising out of our economic affairs in order to get a solution, and then left it alone.

    The real problem with research is that the research is not carried out to its ultimate, logical conclusion. We need a Social Science Research Council, or, preferably, we need an organisation for social studies, because I mistrust the word "science". Of the notable contributions that science has made to our modern life, most of them have been foolish and most of them have been irrelevant to a decent life. If you really examine the contributions that scientists have made to our affairs you will see that they have not really contributed to a better life on many occasions.

    The difficulty in dealing with social problems is that once a study has been made nobody is strong enough to say, "Relate that to modern problems and let us solve them on the basis of the study". The Social Science Research Council has published the new paper, The Inner City in Context No university ever did that. No university ever carried out a really serious study of the relationship between local and central Government, which will shortly pose tremendous problems for this nation following the collapse of devolution. No university did that. The Social Science Research Council has done it, and what does it want now? If needs, and the nation needs, the Government to sit up and take notice; to get somebody to co-operate with the SSRC and the academics who carried it out and then to translate it into political action If we do not, we will have wasted our resources on the SSRC. You cannot stop now, because one thing that the council has done is to highlight some of the social problems which can be solved. If you dismember or abolish it now, then gone is the chance of solving them.

    Nobody in the debate tonight has mentioned the ultimate consumer. I should not have spoken if the academics had bothered themselves about the fundamental requirements of the social services and the problems to be resolved by research. I should not have bothered at all. But I had to do so because I know what it is like and I know the kind of social problems that there are in Merseyside and the North East and in North East Wales and I know that they will come out of this depression, when the rest of the country is going to boom again, considerably worse off than when they went in.

    That is a major social problem and on the solution of that depends all the other aspects of social life in this country. If we do not get our economic life right, then we shall not get our social life right; and we shall not get the inner cities problem solved. And what are the politicians doing about it? They are having a debate on whether or not we should keep an organisation like the SSRC whose responsibility is to research these problems and to come up with the answers. It will be a crime against the Humanities, against the academic life of this nation, if the academic world in this nation cannot come up with a solution perhaps to reorganise the SSRC into another body, perhaps to rename it, perhaps to give it more resources But to dismember it will be disloyal to the nation's academic profession and, worse still, disloyal to the nation itself.

    1 had the biggest shock of my life when I read the evidence by the noble Lord, Lord Beloff. I do not think that those remarks, talking about the level of membership of the SSRC, were justified, were Christian or in line with what I consider to be the professed ethics of the academic world. It got almost to personal abuse. I have a duty to say this: from my knowledge as an ordinary human being, the people on the Social Science Research Council work hard to achieve their objective— as hard as anybody else. I think that an apology is due to them for the words said about them. I think that it was wrong and does not contribute a jot to the betterment of the academic world of this nation.

    10.3 p.m.

    My Lords, I think we have had a long and vigorous debate this evening. This Unstarred Question, for which we are indebted to my noble friend Lord Beloff, has lasted longer than any of the 2½hour debates and proves again the value of the method of this particular form of debate in this House. My noble friend Lord Beloff has asked what action the Government propose to take in respect of Lord Rothschild's review of the Social Science Research Council and has pressed for a response, as have several other noble Lords, who have spoken this evening. I fear my response tonight will be possibly one of the briefest of the contributions, but perhaps no worse for that. Your Lordships, however, must be aware that when my right honourable friend the Secretary of State for Education and Science announced in a Written Answer in the other place on the 18th May that Lord Rothschild's report would be published the next day, he also stated that he wanted the report's findings and recommendations to be openly and widely discussed. That is precisely what your Lordships have done this evening.

    My right honourable friend has specifically invited various bodies to send their views on the report to his department's science branch. Among those bodies are the University Grants Committee— which was referred to this evening— the National Advisory Body for Local Authority— Higher Education, the Committee of Vice-Chancellors and Principals and the Committee of Directors of Polytechnics. Beyond that, it is open to any interested person or body to submit their views to the department if they wish to do so and such views will all be considered carefully, provided that they are received by 19th July, as this is the date which my right honourable friend has specified as being the closing date for the consultation period.

    I hardly need impress upon your Lordships that my right honourable friend attaches considerable importance to this consultation period, as he undertook at the outset of this exercise that the Government's consideration of Lord Rothschild's findings and recommendations would take place in the light of such public comment as may emerge following the publication of the report. Therefore I hope that the noble Lord, Lord Beloff, will accept that it is still too early for Her Majesty's Government to respond to his Question in any detail. Indeed, I have noted down a large number of his questions this evening, but I regret that it will not be possible for me to give a reply and I hope that in the context of what I have said earlier he will appreciate the reasons.

    The comments received, together with the recommendations, will have an important part in formulating the Government's response at an early date. I recall earlier this afternoon that my noble friend Lord Cockfield, said that the phrase "in the near future", defied definition. I fear I can add nothing to that particular comment except to say this: it is quite apparent from the drafting of the report and the excellent form it takes that there will be early and valuable discussion upon it and that my right honourable friend will consider it in the light of the undertaking that he gives on the very first page. I remind your Lordships of what he says in his closing remarks:
    "My colleagues and I, in considering those recommendations addressed to the Government, will study carefully the comments received".
    I was particularly glad to listen to every one of the major contributions this evening. The note which struck home so warmly was recommendation 24, commented upon by the noble Lord, Lord Ardwick, and almost all your Lordships, including the noble Lord, Lord Swann: the reference to that evergreen volume by Sir Ernest Gowers, Plain Words. I have in the course of the morning been looking at that volume. It is one of the books that I keep ever constantly beside me on my desk. In this particular context, having listened to that remarkable comment by the noble Lord, Lord Swann, and his quotation, we shall find this volume particularly valuable, as indeed the report itself is.

    Epsom And Walton Downs Regulation Bill Hl

    Reported from the Select Committee with amendments and re-committed to an Unopposed Bill Committee; a Special Report was made and ordered to be printed.