Lords Chamber

House Of Lords

Tuesday, 5th October, 1976.

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

Prayers—Read by the Lord Bishop of Blackburn.

Oil Exploitation: International Authority

Lord BROCKWAY
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, in view of the discovery of rich potential oil fields between the Bay of Biscay and Rockall beyond the 200-mile territorial limit, they will urge that the exploitation be conducted by the international authority as the common heritage of mankind.

The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts)
My Lords, it is still far from certain whether potential oil fields exist in the area. In the view of Her Majesty's Government, the exploitation of all seabed resources up to the edge of the Continental margin falls, and should continue to fall, within the jurisdiction of the coastal Sate. The establishment of an international authority and its possible areas and method of operation are being discussed at the Law of the Sea Conference.

Lord BROCKWAY
My Lords, I should like to thank the Minister for that reply. Is it not the case that drilling has taken place 230 miles west of the Hebrides, and there are optimistic reports about that drilling? If this is the case, will Her Majesty's Government seek to use this as a heritage of mankind and not for the profit of private companies?

Lord GORONWY-ROBERTS
My Lords, as my noble friend knows, the Law of the Sea Conference is engaged in constructive discussions precisely on this  point—but not exclusively—about the future management of this area. There are other similar areas in the rest of the world. As to the possibility of finds in the area, which was mentioned in the Question, I repeat that it is impossible to say with certainty at this stage what the chances are of hydrocarbon resources being located in any particular parts of the Continental margin. At the moment our geological advice is that the prospects of commercial resources of hydrocarbons beyond the Continental margin in this areas are somewhat poor.

Lord BROCKWAY
My Lords, will the Government press at the Law of the Sea Conference that where these mineral resources are found they will be used for the benefit of the whole of mankind as the heritage of the oceans, rather than for private companies?

Lord GORONWY-ROBERTS
My Lords, we shall do considerably more than that. We shall engage with the 140 other countries in working out the precise details of a workable system. It is not enough to press; one must plan.

Lord HAILSHAM of SAINT MARYLEBONE
My Lords, will the noble Lord remember that he is representing the interests of this country and that the true dilemma is not, as the noble Lord, Lord Brockway, pretended, between commercial enterprise and the whole of mankind, but the rights of the British Isles?

Lord GORONWY-ROBERTS
Yes—

SEVERAL Noble LORDS
Hear, hear!

Lord GORONWY-ROBERTS
I had not quite finished my sentence, my Lords. Yes, there are the rights of this country with the rights of 142 others, which include among them developing coastal States. We have made absolutely clear the basis of British interests in this matter, and we shall stick to what we have made clear to this Conference. We are also confident that what we have advanced as British interests coincide with the best interests of the great majority of the cointries which are representated at this Conference.

Lord PAGET of NORTHAMPTON
My Lords, would the noble Lord agree  that the problem involved with this kind of proposal is this: Who conducts the international authority? Experience tends to tell us that when 140 nations get together they are more interested in 140 interests than in the common purpose.

Lord GORONWY-ROBERTS
Nevertheless, my Lords, I would be interested in learning from my noble friend how otherwise we can organise an international convention dealing with five-sevenths of the globe.

Lord CARRINGTON
My Lords, is the noble Lord not aware that no agreement has been reached about this matter for some time at the Law of the Sea Conference? If no agreement is reached in the near future, it is very likely that the United States, among others, will go it alone.

Lord GORONWY-ROBERTS
My Lords, that is indeed the danger, the probability. The Conference will reassemble for the sixth time next year in New York where the revised single negotiating text will, we hope, provide the basis for an international convention. I would not for a moment minimise the difficulties which lie ahead in trying to get what is, after all, an international convention covering five-sevenths of the globe, where a great many national, regional and other interests are in conflict.

Lord RITCHIE-CALDER
My Lords, would the noble Lord agree that, in the complex of 140 States, Britain ought to try to define what is meant by "British", because meanwhile we are grabbing, extending and intruding upon the common heritage of mankind. By defining what is supposed to be our legitimate interests, we are creating even greater problems than we are solving. We shall now have every other country, including America, successfully asserting their unilateral claims for areas whose present definition they have devised or contrived. When my friend asked the question about 240 miles, he was talking about the British Continental Shelf, which we have proceeded to redefine in weird ways, because we have taken over Rockall—

Several noble Lords: Order! Order!

Lord RITCHIE-CALDER
Are you aware, my Lords, that we have taken over the Island of Rockall, which takes us some 350 miles into the Atlantic?

Lord GORONWY-ROBERTS
My Lords, I am aware of all these things, but I do not know that I agree with most of them. I do not think we can reasonably say that the British contribution to these very difficult and complex negotiations in five successive sessions of this conference has been exclusively nationalistic. We recognise that a viable international convention must emerge from a general consensus of view and interest, and indeed we are hopeful that if the British view is accepted generally such a convention will prove possible; but, as I have said, the way ahead is very hard and difficult.

European Communities' Budget

2.44 p.m.

Lord BRUCE of DONINGTON
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, in respect of the EEC Decision of 21st April 1970, they anticipate that the budget of the European Communities will be financed as from 1st January 1978 by applying a rate not exceeding 1 per cent. to value added taxes as assessed by individual Member States and what provisional estimates have been made of the United Kingdom contribution in this event either for the year 1978 or for the year in which the provisions are thought likely to come into force.

Lord JACQUES
My Lords, at the meeting of the Joint Finance and Foreign Ministers Council on 5th April there was general agreement that the VAT own resources system should be implemented by 1st January 1978. Measures for the harmonisation of VAT which will be necessary before such a system can be introduced are under consideration within the Council. The harmonised base, on which any VAT contribution would be  calculated, has not yet been agreed and the size of the 1978 Community Budget is not yet known. It is therefore not possible to estimate the United Kingdom contribution to the Communities' budget in 1978 on that basis. The latest estimate of United Kingdom contributions to the Community budget on the present basis was published in Public Expenditure to 1979–80(Cmnd. 6393).

Lord BRUCE of DONINGTON
My Lords, in thanking my noble friend for his reply, may I ask whether he is aware that his Answer means that the finances available to the European Economic Community will be indefinitely constrained within an amount which equals approximately 0·6 per cent. of the gross domestic product of the Community? Is this constriction consistent with the declared intention of Her Majesty's Government of expanding the power and influence of the European Economic Community?

Lord JACQUES
My Lords, I am not aware of the figure which my noble friend has used, but the proposal is that instead of the present system of raising contributions which are related to GNP there shall be an "own resources" system which shall consist of agricultural levies plus the whole of Customs duties and a balancing VAT factor. VAT is simply the balancing factor.

Lord GLADWYN
My Lords, will the noble Lord, on behalf of the Government, undertake to get on quickly with the harmonisation of VAT?

Lord JACQUES
My Lords, there is a meeting on 21st October which will be attended by the Financial Secretary to the Treasury.

Lord BRUCE of DONINGTON
My Lords, in continuing the discussions about the harmonisation of VAT will my noble friend bear in mind that the existing proposals before the Council provide for a series of VAT measures which would be very onerous indeed on practically every small enterprise in the United Kingdom?

Lord JACQUES
My Lords, I am confident that our representatives will uphold the interests of the British Isles.

Baroness ELLES
My Lords, would the Minister, in consideration of hamonising VAT, take account of the differences in direct taxation between our country and other countries in the Community? Might it not lead to a reduction of direct taxes in this country?

Lord JACQUES
My Lords, I do not think it will work like that. What has to be agreed is the base. There is to be no harmonisation of rates but there is to be harmony in regard to the base and structure. When that agreement has been reached there will be, for balancing purposes only, a uniform percentage, which the Commission at the present time estimate at 0·74 per cent.

Lord DAVIES of LEEK
My Lords, is my noble friend aware that those of us who were drawn screaming and kicking into the Common Market see more counterpoint and cacophony than harmony in the Common Agricultural Policy and that the sooner we look to our own mote in this crisis the sooner we shall get out of it?

Lord JACQUES
My Lords, we have been in the Market for such a short time: I am sure that after a while we shall be so pleased that we entered it.

Au Pair Girls And Social Benefits

2.49 p.m.

Baroness HORNSBY-SMITH
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 is their estimate of the number of au pair girls now drawing social benefits.

Lord WELLS-PESTELL
My Lords, I regret that I cannot give precise figures, but we believe that the number at any time is very small. Only isolated instances of short-term payments have come to our notice. Au pair girls customarily, as the noble Baroness will know, receive their keep from the family with whom they are living. They would not receive benefit while this arrangement continues. Any  claim to supplementary benefit from a girl stated to be in difficulties because of sickness or other misfortune would be considered on its merits, taking full account of the terms on which she had been admitted into this country.

Baroness HORNSBY-SM1TH
My Lords, while I am grateful to the noble Lord for that reply, might I ask whether he knows of any record available which would show what proportion of au pair girls do not fulfil their contract and do not return to their country of origin? Further, is the noble Lord satisfied that there is sufficient co-ordination between the Aliens Department and the Departments of Social Security and Employment to ensure that the special provisions relating to au pair girls are not used to circumvent the regulations so that people can obtain work permits by other means, using the procedure of entering as an au pair girl ultimately to find other employment?

Lord WELLS-PESTELL
My Lords, as I said, no figures are available. I cannot answer the first part of the noble Baroness's question. We are very concerned at what is happening in a number of fields at the present moment, not only in relation to au pair girls, and this is part of the special study which we are currently undertaking.

Baroness VICKERS
My Lords, is it not very unfortunate that Her Majesty's Government of the time did not sign the Convention in regard to au pairs, because with no legal contract they can opt out at any time they like? If they do not sign a contract they can return to their own countries. Will the noble Lord reconsider the idea of signing the Convention?

Lord WELLS-PESTELL
My Lords, they can be returned to their own country if it comes to our knowledge that they did not fulfil their contract. Those from the EEC are permitted to come for six months, during which they are entitled to stay and look for work. Those who come from other countries are allowed to remain for 12 months. But if, for any reason, they do not fulfil their contract and become a charge in some way, it is customary to inform the Home Office of the position and it is then up to the Home Office to take action.

Baroness VICKERS
Then, my Lords, will this Government now sign the Convention of the Council of Europe, because that would be a safeguard for everybody?

Lord WELLS-PESTELL
My Lords, with very great respect, I think that that is another question. I would not want to be drawn into that.

The Earl of ONSLOW
My Lords, can the noble Lord opposite give figures for the number of au pair girls who come from EEC countries, from non-EEC European Countries and from Third World countries? Can he also say how many of those stay or do not stay, and what are the regulations vis-à-vis their staying on in work?

Lord WELLS-PESTELL
My Lords, as I said earlier these statistics are not available because they are not kept. It may well be that they ought to be kept, but the position is that we are not aware of the exact number.

Lord AVEBURY
My Lords, is the noble Lord not aware that the number of au pair girls admitted each year is given in the Home Office immigration statistics? Speaking from memory I believe they stated that the largest number in 1975 was admitted from Switzerland, and was I believe 1,610, while the number admitted from the whole of the Commonwealth was three.

Lord WELLS-PESTELL
My Lords, I was asked in relation to those who had not fulfilled their undertaking and, as I said, that figure is not available.

Mr Deevey: Claims On The Social Services

2.53 p.m.

Lord ORR-EWING
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 lessons they have learned as a result of Mr. Deevey's fraudulent abuse of the Social Services.

Lord WELLS-PESTELL
My Lords, I hope that your Lordships will bear with me if my reply is rather longer than we normally give, but this is an extremely important matter. In a Statement issued on Tuesday, 21st September, which received wide publicity, my right honourable friend the Minister of State for Social Security explained that Mr. Deevey had exploited the supplementary benefits scheme—until he was caught and, as your Lordships know, sent to prison for a period of six years—by running a number of false identities over a long period. The main failing was that the visits paid to the purported homes of his fictitious claimants were not made early enough and when made—I want to be perfectly frank about this—were not effective enough. My right honourable friend made clear that staff resources are never likely to be sufficient for visits to be made to all claimants as often as would be desirable—both to look after their welfare and to check against possible fraud—but that particular attention will in future be paid to a selective follow-up of certain types of claim where there is a special risk of deception. Other corrective measures being taken include a tightening up on identity checks.

Lord ORR-EWING
My Lords, is the noble Lord aware that there is widespread resentment among conscientious working people paying taxes on their earnings, because so many people are now able to draw tax-free social benefits which are equal to, or even greater than, other people's net earnings? Consequently will Her Majesty's Government now reconsider the intention of the Beveridge Committee, and the intention of Mr. Attlee's 1945 Government, that, at least, short-term social benefits should now be taxed so that shirkers are no better off than millions of law-abiding taxpaying working people?

Lord WELLS-PESTELL
My Lords, the standard and level of supplementary benefits, as the noble Lord will know, is just sufficient to meet the needs of the individual, and there is no measure which would enable them to pay tax. The noble Lord has made that suggestion, and I should like to take it back and pass it on to my right honourable friend for his comments and observations. But, certainly the present level of benefits  would not bring a person into the taxpaying class.

Lord GISBOROUGH
My Lords, will the noble Lord agree that a married man with one small child earning £40 a week has a net income of some £25, and that if he becomes unemployed—taking into account tax rebates and so on—his net income will be £35?

Lords WELLS-PESTELL
My Lords, the noble Lord has taken one particular case, and I am not in a position at this stage to dispute what he has said. But family income supplements are payable to men who have a wife and family, when it is considered that the money they earn is not sufficient to meet their needs, and there is quite a substantial number of people drawing family income supplements.

Lord HAILSHAM of SAINT MARYLEBONE
My Lords, reverting to my noble friend's suggestion that these short-term payments should be liable to tax, is not income tax levied on the total amount of the year's income? So while accepting that the payments for any one week may be related to absolute need, should not the Government consider whether they ought to form part of the total income for the purposes of tax during a period of 12 months, like everybody else's income?

Lord WELLS-PESTELL
My Lords, I thought that was implied in what the noble Lord said, and that is why I stated that I would certainly pass the suggestion on to my right honourable friend.

Lord HARMAR-NICHOLLS
My Lords, while no one would expect every claimant of social security to be followed up by an investigator, could it not be that anyone receiving more than, say, £35 a week for more than a month ought to be investigated? It is at that point that people are being discouraged from obtaining a job, when they are getting more from social security than they would get from a job.

Lord WELLS-PESTELL
My Lords, I am very grateful to the noble Lord, because that gives me an opportunity of saying that my Department is very concerned about this matter. We do not  have our eyes closed. We suspect that we know what is happening. In the last four years, the number of prosecutions doubled from 7,700 to over 15,000. I am not suggesting that this is a very satisfactory result. We do not know whether we have caught the people who really matter. We have been talking about those who commit small frauds, but we are after the big fish. That is why we have set up a specialist unit consisting of a number of specialists in this field. They have produced 30 projects—I use the word "project", because I cannot think of another one—which they are going to investigate. We want to see that in future the fraud specialists—we have 500 of them at the present moment, although it may well be that we do not have enough—will know exactly what to look for, how to undertake their investigation and how to see the significance of certain things, such as certain types of behaviour. Obviously, among those cases will be those who have been drawing benefit for a considerable time.

Lord BRUCE of DONINGTON
My Lords, when my noble friend's Department carries out this review, will they bear in mind that the vast majority of the people in this country, who from time to time find it necessary to apply for the aids that are under review, are plain, ordinary, honest, decent people?

Lord WELLS-PESTELL
My Lords, I hope that I have not given a different impression. On the contrary, one of the reasons why we have set up this special unit is that we do not want the people who are drawing benefit to feel that we suspect every one of them. We do not. What we want to do is to strike a balance. We would rather have prevention than prosecution. Also, we want to know how best to tackle the problem. I do not say this either lightly or amusingly. I am empowered to say that if any of your Lordships feels that he has positive ideas to offer at this stage he should write to me so that I can pass on the correspondence to my right honourable friend.

The Earl of ONSLOW
My Lords, would not the noble Lord undertake to take into account the recent report of the chairman of the Supplementary Benefits Commission who, I believe, has said that  the system as at present organised is far too complicated, and that not only are several people not receiving the benefits to which they are justly entitled, but also that several people have found it too complicated? Does not this show that there is a great case for simplifying the whole procedure, possibly by introducing a tax credit scheme, as proposed by the last Conservative Government?

Lord WELLS-PESTELL
My Lords, with regard to the latter part of the noble Earl's question I make no comment. All I would say is that one of the projects is designed to consider the early part of what the noble Earl has just said.

Lord BROCKWAY
My Lords, does not the Minister agree that supplementary benefits are not too high but that the wages paid to many workers are far too low?

Lord WELLS-PESTELL
Hence, my Lords, the family income supplement.

Lord ORR-EWING
My Lords, is the noble Lord aware that the whole House appreciates his conscientiousness and the sympathetic manner in which he is dealing with the matter? Is it not a fact that the Fisher Committee found that probably only 1 per cent. of all payments were in any way fraudulent; but is it not also a fact that nowadays 1 per cent. represents £100 million a year? Therefore the sum is not negligible. In the long run, is it not true that the only way to stop this abuse is to raise the level of taxation so that the low income groups are not taxed and people are given the incentive to work conscientiously, which 99·9 per cent. of our population wish to do?

Lord WELLS-PESTELL
My Lords, a succession of Chancellors of the Exchequer have wrestled with this problem. With regard to the first part of the noble Lord's comments and observations about the £100 million a year, I think that we would agree that it is £100 million too much.

Lord SANDYS
My Lords, the noble Lord has been very kind about inviting Members of this House to express a view. In view of the fact that at col. 574 of his reply on 30th September the noble Lord expressed such confidence in the computer, may I ask him whether he can  assure the House that the computer will form part of the investigations so that illicit keying-in will not take place?

Lord WELLS-PESTELL
My Lords, we are exploring the possibility of using a special computer. It is not the one at Reading to which I referred.

Resale Prices Bill Hl

3.4 p.m.

The LORD CHANCELLOR (Lord Elwyn-Jones)
My Lords, I beg to move that the Order of Recommitment be discharged. In so doing, I think that it would be right to draw the attention of the House to the report of the Joint Committee on this Bill since they themselves bring to the notice of Parliament a point of general interest in relation to consolidation. It is a point which caused them to amend to a considerable degree the repeal Schedule to the Bill. The Schedule now identifies separately spent as opposed to replaced provisions. These would not normally fall within the scope of pure consolidation but would form the subject matter of Statute Law revision. The Bill now follows the procedure that was adopted in the Compulsory Purchase Act 1965 and in the Police (Scotland) Act 1967, and shows how consolidation and Statute Law revision may in suitable cases go forward hand in hand. I am sure that this is a procedure which will commend itself to your Lordships. I should like to take this opportunity to thank the Joint Committee and in particular its chairman, the noble and learned Lord, Lord Simon of Glaisdale, for the services which they tirelessly and helpfully rendered to Parliament and to the community in keeping our Statute Law in good order. I beg to move.

Moved, That the Order of Recommitment be discharged.—( The Lord Chancellor.)

On Question, Motion agreed to.

Rent (Agriculture) Bill

3.5 p.m.

The LORD PRIVY SEAL (Lord Peart)
My Lords, I beg to move that the Bill  be now read a second time. May I say, at the beginning, that as a newcomer I recognise that I have much to learn about this House and its ways. I am pleased, therefore, to be able to begin on what is at least partly familiar ground. One of my noble friends thought that I had moved the Second Reading of the debate on this Bill in another place and that therefore I was breaking a record today. I am sorry to say that I am not breaking that record because I did not move the Second Reading. However, I am moving it now. I am, of course, keenly aware of the deep interest which your Lordships' House displays in agricultural matters, an interest born out of wide and practical experience. I shall therefore take very careful note of what is said about the Bill now before us. Although I was fully involved in the preliminary discussions and consultations before it was introduced in another place the agricultural aspects of the debates there were handled by my honourable friend the Parliamentary Secretary. So I hope to approach the Bill, if not with an open mind at least with a fresh one. The purpose of this Bill is to afford security of housing to farmworkers and their families who live in tied accommodation in England and Wales. It abolishes the farmer's automatic right to a possession order against his former worker. In its place it imposes a duty on housing authorities to do their utmost to rehouse former workers where an agricultural need is established. Your Lordships will know that the abolition of the tied cottage system has been part of the platform of the main agricultural workers' union since its inception in 1906. It is highly significant that Joseph Arch of Barford, the founding father of the first truly national farm-workers' union a century ago, did not live in a tied cottage himself and so was able to speak and organise free from inhibition. For over 30 years abolition has been part of Labour party policy. It has been a matter of intense disappointment that the reform sought by the agricultural workers has not reached the Statute Book in earlier Administrations. We were able, however, to give a limited measure of security in the Rent Act 1965 and to extend it in the Agriculture Act 1970. The system therefore remains. Now I do not argue that the existence of an historic campaign of itself justifies the introduction of reforming legislation, but it does illustrate that there is a genuinely felt grievance and I think everyone would acknowledge that the union have conducted their long campaign with restraint and dignity. To those who say that farmworkers are perfectly content with present arrangements, may I recall that the Bill received a unanimous and enthusiastic vote of support at the National Union of Agricultural Workers' biennial conference in May. I attended their conference and heard the discussions. There are others who argue that the substance of the grievance has disappeared and that, whatever may have happened in the past, things have now changed. I must therefore say a word about numbers and the present legal position. We estimate that in England and Wales there are some 70,000 cottages occupied by agricultural workers in consequence of their employment. This is about half the full time workforce. A further 20,000, much to the credit of the farmers, are occupied by retired workers and their widows. There are some 12,000 empty farm cottages, 26,000 let to persons outside agriculture and 7,000 occupied by members of farmers' families. The present legal system is to be found in Sections 32 and 33 of the Rent Act 1965, as amended by the Agriculture Act 1970. As I said, these provisions stem from previous attempts to remedy the injustices of the agricultural tied cottage. If a farmer wishes to regain possession of a tied cottage from an ex-worker, they provide that he must first obtain an order for possession from the county court. The county court must defer execution of the order until six months after employment has ceased, unless certain special conditions are met. The farmer's right to repossession of the tied cottage is absolute. He does not have to give his reasons to the court. It may be that he wants to sell the cottage, perhaps to provide someone with a second home in an attractive part of the country. Whatever the circumstances, the farmer can get vacant possession if he wants to. If he does, the occupier must lose his home. Under this system some 1,200 orders for possession have been granted annually in recent years. Not all lead to forcible eviction. The fact, however, remains that over a thousand people are involved in court proceedings each year, not because they have been bad tenants but merely because they are no longer employed by the farmer. And, following these cases, there is clear evidence that each year evictions in distressing circumstances take place. This has been a running sore in agriculture over the years and I believe it is in the general interest for it to be ended, both from the point of view of the farmer, farmworker and, I think, all those who wish the agriculture industry well. It has been claimed that most of the court cases are put-up jobs, required to satisfy local authorities' rehousing criteria. This may be true in some cases, though certainly not in all or perhaps even in most. And it is hardly an argument in favour of the system to say that it results in collusion of this sort. If T may quote from the British Farmer and Stockbreeder:"Don't let us kid ourselves that the present system for regaining possession of an essential service house is ideal. It is not. It is uncertain, lengthy, unpleasant and costly". That is the view of the Farmer and Stockbreeder. My Lords, it is certainly all of those things. For as well as anxiety for the farmworker and his family the system causes distress to the farmer who is forced to reward a farmworker who has given him years of service, by taking him to court. However he tries to soften the blow, there can be nothing pleasant about the formal procedures of notices to quit, court appearances, orders for possession, warrants for eviction, and so on. The very phrases leave an unpleasant taste in the mouth. The Government believe that the inherent injustices, both actual and implied, of the present system are no less real today than they have always been. The Bill proposes instead a new code which is both more humane and flexible. With cooperation, which I am sure there will be, it will be better for farmworkers, better for farmers and better for housing authorities in the rural areas. I always recognise that on farming matters there is tremendous co-operation in the countryside between farmer and farmworker, and landowner who may be farmer as well. My Lords, we have not brought forward this measure without the most careful study and discussion. Several thousand copies of the Consultative Document were sent to interested bodies and individuals. As a result we received a great deal of thoughtful and helpful comment, though not, I hasten to add, a unanimity of view. My colleagues and I and our officials also held valuable discussions with all the main organisations representing both sides of the industry and the local authorities. In tune with that process of consultation, the Bill proposes a solution which is not doctrinaire, but practical. It gives the farmworkers security but at the same time balances the important interests of the farming industry and local housing authorities. I can assure noble Lords that I would not be concerned or involved with any step which would harm the production of a great industry such as agriculture. That is why, with good will all round, this can be regarded as a step forward in the best sense. Discussions of the Bill in another place centred largely on the question of whether we have got that balance right, in other words on the rehousing provisions in Part IV, to which I will turn later. I will, however, just say this: in the many contacts I had with farmers—and I have had a lot of contacts up and down the country—after the Bill was published I detected no violent hostility to its provisions. On the contrary, I found a recognition, tinged perhaps with surprise, that it contains real and important safeguards. Turning to the Bill itself, I must start by apologising to your Lordships for its length and complexity. This has proved unavoidable because of the need to set out what is basically a Rent Act code adapted to the special circumstances of agriculture. Rather than go through the details of the Bill, I will simply describe its broad structure and then mention its more important aspects. If there are other topics which your Lordships wish to raise my noble friend will seek to deal with some of them later. Others will obviously be important Committee points. Dealing with tests to be satisfied, Part 1 of the Bill defines agriculture and deals with the various tests which have to be passed before the occupier of a tied  cottage can be protected by the Bill. A person occupying the house under a contract (usually a licence rather than a tenancy) is termed a "protected occupier". A person, on the other hand, whose contract has ended and who remains in occupation by virtue of the Bill, is a "statutory tenant". Part I also provides for there to be one statutory successor to a worker protected by the Bill. This is a conscious distinction from the Rent Acts, which provide for two successors. Part II of the Bill deals with the security of tenure which those covered by the Bill are to enjoy. This is essentially the same as the security provided by Part I of the Rent Act 1968. However Case 7 in Schedule 3 to that Act, which allows a landlord to recover possession from an ex-employee in order to house a new one, is omitted from the grounds for possession in the Bill. Part II also sets out the terms on which a statutory tenant will remain in occupation. This is necessary because the original arrangements between employer and tied cottage occupant are often vague and informal. Clauses 12 to 16 in this Part deal with the rent payable by statutory tenants. Part III is concerned with supplementary provisions similar to those found in the Rent Acts. I now come to rehousing in Part IV, which is a very important part. Clause 29 sets out the three conditions which must be met before a farmer's application for rehousing can succeed. These are, first, that the house must be needed for a replacement worker; secondly, that the farmer must have no suitable empty houses available himself; and, thirdly, that the rehousing must be in the interests of efficient agriculture. Clause 30 deals with the duty which falls on the local housing authority when these conditions are met, and Clause 31 with the establishment of independent advisory committees to advise housing authorities on the interests of efficient agriculture. I will return to these aspects in a moment. Parts V and VI of the Bill contain ancillary and supplementary provisions, some of which, no doubt, we shall discuss in Committee. I am certainly going to be asked which workers are covered; I will now turn to that and will consider some of the main aspects of the Bill. First, there is the question of which  workers are covered. Generally, a worker will be protected by the Bill once he has completed two years' whole time work in agriculture with an allowance for 13 weeks in that two years for unemployment, employment outside agriculture, et cetera. This two year test is included to ensure that people do not see a brief spell of work in agriculture as a short cut to housing security. The precise length we adopted was obviously a matter of judgment. The NFU and Country Landowners' Association suggested five years, whereas the National Union of Agriculture and Allied Workers would have preferred no qualifying period at all. My Lords, the Government are satisfied that two years will provide an adequate safeguard. This is the period suggested by the Association of District Councils which represents the majority of the housing authorities which will be responsible for rehousing. Workers disabled through industrial injury or disease will qualify even if they have not completed the two years. The Bill does not, however, seek to protect casual or seasonal workers, who may be housed by farmers for short periods at particular times of the year. It has been suggested that the qualifying period should be linked to work on a particular farm, but I believe that this would have unacceptable implications for job mobility. For example, a worker near the end of such a period might be deterred from accepting a new and better job elsewhere if it meant losing housing security at the same time. If I may now turn to rehousing obligation, this is the second and most important topic I wish to deal with. This is the part of the Bill which has attracted most attention and on which discussion has centred. Clause 30(7) of the Bill provides that, if the housing authority are satisfied that the three conditions in Clause 29 are met, they are to use their best endeavours to provide suitable alternative accommodation. This means that local authorities are required to do their utmost, within the constraints which obviously exist in local authority housing management and which are referred to in the Bill, to secure suitable alternative accommodation in these circumstances. It has been suggested that this duty is inadequate and that only an absolute  duty will suffice. The Government do not accept this. The Bill imposes a real obligation which local authorities will not be able to ignore and which, I am confident, they will act upon. The Association of District Councils themselves have said that the duty in the Bill places upon local authorities a higher obligation to claimants under the Bill than to any other categories of claimants. To make this duty absolute would unacceptably erode the responsibilities of local housing authorities. There are many noble Lords present, like myself, who have served on rural district councils or other local authorities. I am sure they will acknowledge that these are the only bodies equipped to decide on the relative priorities of the various claimants on their resources. If effective decisions were taken out of their hands there could be instances where former agricultural workers were given an automatic priority over more deserving cases of housing need, even though the agricultural need was very slight. Hence we have to balance the important, but to some extent conflicting, interests of farmers and local authorities. I believe that Clause 30 represents a fair and acceptable balance, and that if we were to shift it either way, in response to pressure either from the local authorities or from farmers, we should risk serious difficulties for the other party. My Lords, before I leave the rehousing obligation, I should like to turn briefly to the question of local authority resources. We have said, in the Financial Memorandum to the Bill, that the Bill may—and I would emphasise the word "may"—result in local authorities securing rehousing for a greater number of farm-workers and ex-farmworkers than is the case at present. As an illustration we have said that this might involve £5 million extra expenditure for the first five years or so. This assumes that local authorities will have to deal with some 500 extra cases each year by new house-building. It is very far from certain that the Bill will increase the demands on local authority housing to this extent, but my right honourable friend the Minister for Housing and Construction has already assured the President of the NFU that in administering the control of individual local authorities' housebuilding programmes and other housing expenditure,  his Department will take into account the rehousing duty imposed by the Bill. My Lords, the third aspect of particular interest is the new machinery we have devised to give housing authorities impartial appraisals of the agricultural need and urgency involved in particular cases. I refer to the provision in Clause 31 for the establishment of agricultural dwelling-house advisory committees—ADHACs, as they may well be called; an awful mouthful, I agree. These committees, which will consist of one representative of the employers and one of the employees, sitting under an independent chairman will, at the request of either the farmer, the farm-worker or local authority, study the facts of an application and formulate assessments of the agricultural need and urgency involved. In making plans for ADHACs we are relying heavily on the experience which has been gained over the years by the chairmen of agricultural wages committees, who will have a crucial role to play under the Bill, and whose valuable work is widely respected by both sides of the industry. Finally I must mention the date of operation of the Bill. Clause 1 provides for it to be brought into operation by order, and for its application to full-time forestry workers to be postponed. Since the Bill is basically concerned with security of tenure, it is of course essential that it should not be unduly delayed. We very much hope that the operative date can be 1st January 1977. The Bill's application to full-time forestry workers is postponed while we collect more information about the tied housing situation in forestry. A full survey is being carried out by the Tavistock Institute under the auspices of the Forestry Commission. When the results are available we shall decide on an appropriate implementation date for full-time forestry workers. My Lords, it is my firm belief that the provisions embodied in the Bill, which I have attempted to describe briefly, afford a far more satisfactory system for housing farmworkers than the outdated and unfair arrangements which we have at the moment. It is the Government's view that the Bill not only abolishes the fear of homelessness attached to much farm work, but does so in a way which takes  the fullest possible account of the importance of maintaining and increasing agricultural production. At the same time, it removes the necessity for distressing and time-consuming court proceedings which have generally meant a delay of six months before a farmer can regain possession of a cottage, no matter how urgently he may need it for an incoming worker. This is replaced by a system under which the farming community has direct access to housing authorities, with ADHACs available to put reasoned and authoritative advice on the farming facts to the housing authority. The new statutory duty placed on housing authorities also means that farmers will be able to plan ahead for their manpower needs, for example, by making application for rehousing well in advance of retirement. This will help everyone concerned but it will not disturb the harmonious relationships which in the vast majority of cases exist between farmers and farm workers and which are, to my mind, so important to the success and well-being of this great and vital industry. My Lords, I have spoken at some length. This is, as I said at the beginning, a complex Bill and I appreciate that some of the provisions are not easy to understand. Nevertheless, I believe that the basic approach is a common-sense one which I am convinced will work well in the wider interests of the whole agricultural community. I therefore commend the Bill to the House. I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2a —( Lord Peart.)

3.32 p.m.

Earl FERRERS
My Lords, we are grateful to the noble Lord, Lord Peart, for introducing this Bill and for explaining to us this afternoon how it is going to work. I hope that he will not consider it a gross condescension on my part if I say to the noble Lord that, despite the fact that he is a battle-scarred veteran of another place and knows all the tricks of the trade, we extend to him a warm hand of friendship on the occasion of his introducing a Bill in this House for the first time. I am bound to say that as an ex-Minister of Agriculture he has chosen a rather funny horse to ride as a start, but I hope that nevertheless he will enjoy  it. I am glad that he is going to approach it with a fresh mind and with enthusiasm but I hope he will not be surprised that the enthusiasm which he displayed so clearly this afternoon is not entirely echoed all around the House. The debate will also be enlivened by the maiden speech of my noble friend Lord De La Warr. His father was known and respected by many of us, apart from being himself a distinguished Parliamentary Secretary to the Ministry of Agriculture, and we look forward to the present noble Earl's contribution to this debate, on which I do not think he will be uninformed. I must at the outset declare an interest in that I am a farmer and have some houses which will be affected by the Bill. I hope that does not affect my judgment of the Bill. I would start by agreeing with the noble Lord, Lord Peart, that the Bill is not easy to understand. Nor, I venture to suggest, will it be easy to work in practice. But what is easy to understand is the reasons why those who have campaigned for the abolition of the tied cottage have done so, and I have much natural sympathy for their case. It is human; there have been injustices. The dignity of people is involved and I admit quite openly that I look back in amazement to recall that when I started my life in agriculture in earnest some 25 years ago a farm worker could be given a week's notice by his employer, perhaps just because he did not get on with him, and within that same period of time, in law if not in practice, he could be rendered homeless. Today this would be, quite rightly, both in law and in practice, totally unacceptable. In defence of earlier times, it is only fair to enter the caveat that it is always easier to criticise past generations with the standards of the present. But the sight of people, whether in the past or the present, being turned out of their houses on to the streets with their belongings, whether this is justified or not, is to say the least objectionable and offends against the social conscience. I agree with the noble Lord, Lord Peart, that, rightly or wrongly, the word "eviction" has become emotive and has become a hated word synonymous with oppression. The cry for the abolition  of the tied cottage therefore developed momentum and attracted an aura of respectability and indeed humanity. It was readily understood and after many years the Government have acceded to this cry and produced the present Bill. I happen to accept many of the criticisms and, if you like, the inequities and iniquities and even unattractiveness of the tied cottage system. No system is perfect and where the tied cottage system is imperfect its imperfections are obvious. That does not mean to say that I disapproved of the concept of tied cottages I happen to approve of it. What I do not accept is that this Bill is the right answer, or a just answer, or even a sensible answer to the problem and to the criticisms. Where I find myself at odds with those who oppose the tied cottage system, and therefore with the Government. is that their complete dedication to the abolition of the system has in my view blinded them to the practical realities of what the Government propose. This Bill is not a simple method of relieving what is recognised by all to be a small number of cases of injustice. It puts a virtual torpedo right into the middle of the whole of the housing problem, which is already under stress, and the effects of this will be felt all the way round. It is said by some that it is not just the few cases of injustice which it is sought to cure by this Bill but the whole principle of the tied cottage system. But, if the system as a system is bad, why do the Government seek to remedy only that part of it which relates to agriculture? There are now about a million tied cottages in the country and only some 7 per cent. of those are to be found in agriculture. If there is an injustice in the system, why is it that only the farm workers are to be relieved of it? Why are not the miners, members of the Armed Forces, bank managers, clergymen, nurses, teachers, caretakers, hotel and restaurant staff, policemen, prison officers, railwaymen, to say nothing of the Chancellor of the Exchequer and the Prime Minister? All those professions have examples of the tied cottage, yet no attempt is made to alleviate their problems. Agriculture alone is singled out for this advance in social justice. And if this is such an improvement, why are farm workers in Scotland specifically excluded from the  Bill? I venture to give your Lordships the answer, and it is simple: The Scottish agricultural workers do not want the system abolished. The agricultural branch of the Scottish Transport and General Workers' Union rejected the idea completely because they consider that the advantages they get out of it outweigh the disadvantages. The Government's Consultative Document said that there are 1,500 cases a year of agricultural workers who face eviction and that in 1,000 cases a year the farmer gets a court order for possession, and the inference is that those farm workers thereafter face hardship. In fact, those figures, while interesting, are I venture to suggest wholly misleading. Everyone knows that the Government, for reasons which may be entirely understandable, have so framed the law that at present a farmer can obtain possession of a cottage for a worker only by going to the court and getting a court order for possession. It was the Labour Government's Rent Act of 1965 that said, in effect, "This is what you must do ". Everyone knows that rural housing is in such short supply that local authorities will not rehouse a farm worker unless a court order has been made against him. Therefore farmers, often with the approval and connivance of the employee concerned, go through the ritual dance of obtaining a court order in order to force the local authority to rehouse the man. And, this having been done, this is then chalked up as a statistic against the system. The majority of these cases are, of course, rehoused and very few actually, and quite rightly, reach the distressing point of eviction, largely because owners understandably flinch from doing the obnoxious. But the knowledge of their reluctance to do this gives the unscrupulous virtual security of tenure even now. And for some extraordinary reason the Government do not know the vital figures for evictions. I would be surprised if it was as large as 50 a year, and if it is 50 that is 50 too many. I venture to suggest, therefore, that the number of cases where the present procedure, imperfect though it is, has failed to produce alternative accommodation and has thereby left the worker temporarily homeless is greater than the actual number of evictions but substantially less than the number of court orders for possession, possibly a few hundred a year. It stands to reason that if a similar number of houses were built and earmarked for agriculture to accommodate this number of people, we would have gone some substantial way towards solving the problem. The problem, of course, stems from two conflicting factors. The first is the need for agriculture to have houses to house its workforce, and the second is the shortage of housing in rural areas. This Bill does nothing to alleviate either of those. Worse, it militates against both. In the first place, under this Bill not one extra house will be built. No funds will be available to increase local authority housing, and indeed the Government are going to reduce it, and the private building of farm cottages will now stop, as nobody is going to spend £12,000 building a house to house somebody who is going to work elsewhere. In the second place, the ability of agriculture to house its workforce will be impaired because of the security of tenure given by this Bill to those not working on the farm, and in some cases to those who have no connection with agriculture other than parentage. I would suggest that the concept of "This is our house and here we stay indefinitely" can only, in any degree of justice, be satisfied either by local authority housing or by private ownership, and that means mortgages. Of course, the trouble is that the level of agricultural workers' wages has so far not been high enough to meet building society requirements. Therefore, if agricultural workers were to take advantage of building society offers some element of subsidy would be required. What a real mark of social progress it would be, and what an asset to village life it would be, to see some new freeholding agricultural workers as permanent residents in their villages. But this Bill misses that opportunity. Instead of tackling the problem at its root source, the Government have sought to tinker with the system in an unconstructive manner, and I venture to suggest, in a destructive manner. They have in the process put up the backs of the local authorities, landlords, farmers, the National Farmers' Union and a very large proportion of farm workers who are in favour of the tied cottage system because of the benefits which they consider they have from it. I must say it must be practically unique, even for this Government, to introduce legislation of which  almost all those who are going to be affected by it disapprove. The only reason why this is being done, as the noble Lord, Lord Peart, very genuinely said, is to meet the demands of the National Union of Agricultural and Allied Workers, who have had the abolition of tied cottages as their battle-cry since 1906. But of course, things have changed a lot since then. Who is going to benefit? I suggest three categories of people: first, the most inefficient agricultural worker, who finds it difficult to get another job and therefore finds it difficult to get another house. Secondly, the unscrupulous, who is content to stay in someone else's house and work elsewhere. Thirdly, the devious, the man not employed in agriculture who, for one reason or another, has found difficulty in obtaining housing and who realises that he can now work in agriculture—not even on the same farm—for just two years and then latch on to somebody else's freehold, as a result of provisions in this Bill which were introduced to protect a section of the community of which he was, of his own choice, not a part. The tied cottage is essential in agriculture, both in order for people to be near their job of work and to provide a career structure. Unlike industry, in agriculture the opportunties for promotion within the same business are clearly limited, and often the only way for a farm worker to better himself (and who would object to that?) is to sell his services to someone else, often some way away from his existing home. But he can only do that if there is a house available for him to move into. Jam up the farm cottages with the provisions of this Bill and you freeze the mobility of labour, agricultural efficiency will be depressed, and the first to get penalised are the efficient, ambitious, good agricultural workers who find that they cannot move about. How are dairy herds, intensive pig units, intensive poultry units, which require a 24-hour management service, to be tended if the houses which are earmarked, and often deliberately erected, for that purpose are to be occupied by people working elsewhere? There is hardly anyone, not even the National Union of Agricultural and Allied Workers, who would deny the need for agriculture to provide good  cottages for its workforce, even though only 50 per cent. of those who work in agriculture live in tied cottages. It was the Tavistock Report, which is quoted in the Government's Consultative Document, which said that the cottage stock is worth some £1,800 million, and that 14 per cent. of all tied cottages are occupied by retired farm staff. Not many industries could better that? It also says that only 16 per cent. of farm workers were charged a rent at all and that the average rent for those who were charged was only 60p per week. If the result of that survey were projected throughout the whole country—and there is nothing to suggest that the survey was not representative—the £1,800 million of housing stock would secure an annual cash income of only £6,720. Ask any local authority housing committee to compete or compare with that. The private investment by agriculture in housing is a massive aid to the national housing problem, because it helps to remove the pressure on local authority housing, for a minimal cash return. The tied cottage is appreciated by the workforce. Advertise for a stockman in the local paper and put "No cottage available". See how many answers yon get. The condition of the housing available frequently determines whether the applicant takes the job. The best men require good houses. Not all of them are good, but the fact that the best men require good houses makes good farmers try to provide good houses. Agriculture benefits, the nation benefits, the workforce benefits. Now all this is to be fundamentally changed, for the sake of what is accepted by all to be, nationally, a few awkward cases. Instead we are going to have all the paraphernalia contained in this Bill, the setting up of agricultural dwelling-house advisory committees, the notification to local authorities of their obligations to rehouse, the notification to local authorities of sales of farm cottages, the proliferation of nosey parkers, and the absurd mumbo-jumbo in Schedule 5, where you learn that you can increase the rent by PRL + SE + 1/3rd of [RR —(PRL + SE)] or PRL + SE + SS, whichever is the greater. My Lords, 84 per cent. of occupiers do not pay any rent under the existing system anyhow. Not even the  Ministry of Agriculture, in its least human of moments could have devised a monstrosity such as that. It has all the fusty sniff' of the noble Baroness's Department, the Department of the Environment, about it. The essence of legislation such as this is that it should be readily understood by both sides, even by those who are not advised by representative groups. I will make one forecast. If the situation, where workers have left their employment but continue to occupy their houses, has been a problem to agriculture—and this is the nub of the whole Bill—this Bill, far from solving that problem, is going to make it infinitely worse. All the 64 pages of this Bill, and the labyrinth of devices and regulations contained in it, will be summed up by the farm worker in four words, "Now I can stay". If this is the best that the Government can do to increase social justice and the output from British agriculture, all I can say is, heaven help us! The central core of the successful operation of this Bill, as the noble Lord, Lord Peart, said, centres around the ability of local authorities to rehouse farm workers. That mast is felled "at a stroke" by requiring local authorities only to use "their best endeavours" to rehouse. What happens when the local authority says, "We've used our best endeavours, but sorry, we can't rehouse"? The machine seizes up, and the man can stay on in the agricultural house ad infinitum. This is the whole weakness of the Bill—and I agree with the noble Lord, Lord Peart, it is apparently in the Government's mind central to it. And if the local authority is to give any priority to this category of person—and I agree again with the noble Lord—many people might question, and with reason, why farm workers, who elect to stay on in houses of their previous employment, should be given preferential treatment over other deserving cases in the housing queue. Why should they get preferential treatment over the old, the homeless, those living in slum conditions? My Lords, the tied cottage cannot be looked at in isolation; it is part of the overall national housing problem. The only way to make the Bill even begin to work is to provide local authorities with increased funds to match the increased  responsibilities which the Bill puts upon them. But that is not going to be done. They are to get less. The noble Lord, Lord Peart, said that one of the real purposes of the Bill is not just to rehouse agricultural workers, but to remove from them and from their families the real fear and anxieties caused by the court processes for possession orders. That is a commendable reason, I agree, and would be the first to acknowledge the genuine fear and emotional stress which these processes, court orders, and official documents can give. It is a vivid reality; they give concern. But that fear and anxiety exists not just for the occupants of agricultural tied cottages who are faced with possession orders, but for anyone who is faced with a possession order. Last week the noble Baroness, Lady Birk, told me in a Written Answer to a Parliamentary Question that the number of court orders for possession granted against tenants of agricultural tied cottages in England and Wales during 1975 was 1,268. She went on to tell me that the number of court orders for possession granted against tenants of local authorities, housing associations, and New Town Development Corporations, was not 1,268 but 29,105. If there is anxiety felt by the 1,268, so there is also by the 29,105. And that, to my mind, entirely destroys the Government's whole case for this Bill. If it is humanity that they are after—and I do not deride that one bit—why do they not seek to alleviate the pressures and anxieties in that group of tenants which is 20 times as large as that which is found in agriculture? Because they cannot. They know they cannot. The resources are not available and, what is more, there is no union to lobby for those people. Here, as we have become used to seeing, we see again today in this legislation that this Government have submitted to union pressure. The noble Lord, Lord Peart, said so. They have submitted to union pressure against all other considerations, and it has fallen to the unfortunate lot of the poor noble Lord, Lord Peart, a distinguished Minister of Agriculture, to be in charge of a Bill which, for all its humane endeavours, he must know is going to damage the interests of agriculture. I can only say to the noble Lord, Lord Peart, that the record of this Govern  ment towards agriculture has been staggering by any standards. I do not blame the noble Lord for this, because he has done his best. They have subjected the industry to capital transfer tax to ensure that, if you die or give, farms get smaller; they have subjected it to capital gains tax if you sell, to make available less money for investment; they have subjected it to the Community Land Act to prevent one from building; to the Development Land Tax to prevent one from selling; to the Agriculture (Miscellaneous Provisions) Bill to ensure that there are no new tenant farmers; and now to the Rent (Agriculture) Bill to make sure that no new farm cottages are built, and, at a time of high unemployment, to make it more difficult for farmworkers to get jobs. Then they produce a White Paper saying that they want an increase in output from agriculture. It is not surprising to find that under this Government the output from agriculture has dropped by 14 per cent. I do not blame the noble Lord, Lord Peart, for this—his heart is in the right place; but one cannot fail to detect the urban tread of his Cabinet colleagues, which has left an unsympathetic imprint on the face of agriculture. I conclude by saying that this is a Bill which was conceived from the best of motives, but which is to me utterly unrealistic in its application. It will lessen and not increase the efficiency of agriculture. It will irritate and not ameliorate relationships between employers and employees. It will exacerbate and not relieve the national housing problem. In a world where nothing is perfect this Bill will leave that part of it on which it impinges considerably less perfect than it already is.

3.57 p.m.

Lord SWAYTHLING
My Lords, I am, as a good many of your Lordships must also be, a dairy farmer, and consequently I am one of those most seriously affected by this Bill, which, if I may say so, is one of the most unnecessary and discriminating Bills ever to be laid before this House. When I spoke to your Lordships just under a year ago about this subject I asked why agriculture had been selected by the Labour Party to be put into their Manifesto. But I got no answer on that occasion. Today the noble  Lord the Leader of the House has given us an explanation. The abolition of the agricultural service house, one must realise, is an emotional subject. The belief that the agricultural worker must have security in his house sounds reasonable and, indeed, desirable but if the matter is investigated in depth it then becomes apparent that it is far from being as simple as that. Who will gain if the present situation is altered? First and foremost, the farm worker himself will suffer because he will find that instead of living in a tied cottage he becomes "a tied worker". It will be difficult for him to change the farm at which he works, whatever the reason, because the farm to which he wishes to go will very likely not have a service house in which to house him and his family. Secondly, livestock farmers, and in particular dairy farmers, know that it is essential for the good of their stock to have the workers close at hand, especially at times when the cows are calving or are sick. If this Bill becomes law and some farmers decide they must reduce their commitments, or even close their dairy business, supplies of milk and milk products, will drop, consumers will suffer and furthermore the whole nation will suffer as it will be yet another serious blow to the balance of payments. It may well be that the Government were persuaded to include this matter in their Manifesto by the National Union of Agricultural Workers, but your Lordships must realise that only a small percentage of agricultural workers belong to that union, and I am informed that a large proportion of those who are union members agree with the bulk of the workers who do not belong to the union, that it is greatly to their advantage that the tied agricultural service house system should remain. It is significant that the Scottish union has, as has been mentioned by the noble Earl, Lord Ferrers, pleaded with the Government not to abolish tied service houses, and the result of that is that Scotland has been excluded from the Bill. The National Union of Agricultural Workers' campaign was based on the fact that eviction orders are often granted in order to obtain farm workers' houses for their successors. It is not appreciated, however, that the great majority of such  orders are obtained with the full understanding, and often at the request, of the farm workers themselves or their dependants, so that they in turn can obtain alternative accommodation from their local housing authority. As has already been mentioned, the number of evictions actually carried out each year is very small indeed—a mere handful. Another thing that would be most interesting to know is why the Government have selected the agricultural service house for abolition, when it is a known fact that only about 10 per cent. of the tied homes in this country are agricultural. The same emotional desire, as mentioned by the noble Earl, Lord Ferrers, for abolition must weigh with the miners, the railwaymen, the police, the nurses and many others. In fact, the Government themselves and the State controlled industries continue to administer the tied service house system. I find it is particulaly frustrating that agriculture, the one industry which has never failed the community, has never had a complete withdrawal of labour, and which has been more successful than any other in its response to the Government's regular appeals for increased production at low cost, should now be penalised. I find it hard to accept that the agricultural industry has been selected for this treatment. It has been said that the Bill is more satisfactory than was at first thought it would be because the Bill requires the duty of local housing authorities to find alternative accommodation for the occupants of service houses where the farmer wants and needs possession to continue working his farm; but there is no compulsion whatever for the local authority to provide such alternative accommodation within a fixed time. Local authorities are required only to "use their best endeavours" to do so. The Government's attitude is indeed clearly defined in a letter received by the Royal Association of British Dairy Farmers from an official in the Department of the Environment, from which I quote: "the Bill … will mean that housing authorities are required to do their utmost, within the constraints which obviously exist in local authority housing management, to provide suitable alternative accommodation. We could not make the duty any stronger than this by using a different form of words—housing authorities clearly cannot provide alternative accommodation if they simply do not have any available". This statement clearly underlines the weakness of the Bill. The obligation of local authorities to use their best endeavours to provide alternative accommodation means little, if anything at all, and no time limit is set for the local councils to provide this alternative accommodation. The matter is left completely open and vague and local councils will in many cases regard the re-housing of ex-farm workers and their dependants as being no more pressing and urgent than those of any other employee on local housing lists. This weakness in the drafting of the Bill gives the local authority the perfect alibi for doing nothing. Money to be made available to local housing authorities to provide additional accommodation is £5 million—let us reckon £10,000 a house—and including the provision of essential services, this would enable about 450 houses to be built throughout the whole country. As there are some 600 local housing authorities this will enable each authority to build three-quarters of a house. I suggest that the sum required would be many times the £5 million. In short, there should be a statutory obligation on the local authority to re-house and in order to do so quickly they must be provided with the necessary capital resources. It has been found statistically that 74 per cent. of full-time workers milking cows twice a day live in service houses and in the South-East it is over 90 per cent. The larger the herd size the greater the tendency is to be dependent on workers in service accommodation, and expansion in the industry flows from these larger herds. It is generally regarded in the industry, especially by the Milk Marketing Board and the National Farmers Union, whose view I share, that the legislation should place a statutory obligation on the local authority to re-house where necessary. It is not believed that the qualifying period for protection—two years in the Bill—is sufficient, and the protection should be confined to genuine farm workers who have been employed in agriculture for a minimum of five years after the age of 18, with at least one year's service with their present employer. It must be remembered that all farm workers either have their accommodation for extremely low rents—well below the normal standard of the district—or for no rent at all. I would further ask what the Government propose when planning permission for a house is given provided it is used for an agricultural worker. If it is occupied by a farm worker who has left his employment and is no longer in agriculture, what is his position? I must mention the disease risk to stud farmers and intensive livestock units which would result from non-farm staff occupying the premises on their holding and which would be very real and might result in a catastrophe—particularly so if an ex-employee took up a position in a slaughterhouse, refuse collection centre or even on an adjacent farm, and this risk of disease is particularly applicable to the Milk Marketing Board or private A.I. centres and other cattle breeding units. The Ministry of Agriculture lay down the most stringent regulations covering safety, disease risk, et cetera, and if these centres are not able to obtain immediate possession of one of the houses, in the event of one of their staff leaving, there would be an obvious and immediate contradiction between the Ministry's regulations and the new security of tenure. Why have the Ministry of Agriculture been left out of the Bill and thus discrimination is shown against other A.I. centres? Concerning the advisory committees that are to be set up I should like to refer to Clause 31. This clause states that the committee should consist of three members, an independent chairman, a member representing employers and a member representing workers in agriculture. Subsection (7) says that all three members of the committee must be present at any meeting of the committee and no meeting should be held during a vacancy in the membership. Circumstances might arise that if there was a difference of opinion in the neighbourhood between the National Union of Agricultural Workers and the farming community, instructions might be given that the member representing the workers does not attend a meeting and therefore the committee could not function and the whole matter would be held in abeyance, possibly indefinitely. I should be grateful if the Government would tell the House how such a situation might be overcome. I should also like to draw attention to Clause 10 which deals with the case when  there is a sub-tenancy. This Bill throughout purports to apply to dwellinghouses but the last two lines of page 9 read: "in this subsection 'premises' includes an agricultural holding within the meaning of the Agricultural Holdings Act 1948". Why, may I ask, is an agricultural holding included in Clause 10? The Bill requires that notification to the local authority should be given if a farmer wishes to dispose of a service house. This seems to me an entirely unfair and unnecessary provision. The farmer should have freedom to sell a house which he finds to be no longer necessary for his farming business, as indeed can any other owner of property. However, if the farmer has applied for and obtained re-housing for the occupant of the service house under the terms of the Bill, it would certainly be fair that he would have to notify the local authority, but only in those circumstances. To sum up: Without a guarantee of immediate accommodation on the farm for any incoming employee, many farmers will abandon or reduce the size of their livestock units. This, in turn, will reduce the productivity of British agriculture and will require extra imports with the consequent effect on the balance of payments, and it will increase the price of food. Without freedom of movement the workers themselves, whom this Bill sets out to protect, will have reduced opportunities for advancement. I am convinced that this Bill if passed by Parliament, even with considerable amendment, will in the long term be against the interests of farmers, farm workers, farm pensioners, consumers and the national economy. It may well sow the seeds of discontent within an industry which has been relatively contented, progressive and economically viable and is one of the great assets this country possesses.

4.10 p.m.

Earl DE LA WARR
My Lords, I am grateful to the noble Earl, Lord Ferrers, for the kind things he said about my father and, by that token, I must of course declare my interest as a landlord and farmer. Having said that, I must tell your Lordships that I find myself in some difficulty because I am making a maiden speech which requires—and I greatly  respect this—that I should say nothing contentious on a Bill of which I do not approve at all. However, I will do my best to comply with the convention and in the interests of brevity I will simply say that I agree with everything that the noble Earl said; I agree with his arguments and, by and large, with his conclusions. I suppose it must be common ground between all of us in this House that to a greater and greater extent an efficient agricultural industry is absolutely vital for this country's survival. But when we talk about industry we tend to think of big companies, and it is well to remember what we mean when we talk about the agricultural industry. We mean thousands and thousands of tiny companies employing one man, sometimes five. To employ 10 these days would mean that one was a very large farmer, and there must be few in the country employing more than 20. We are therefore dealing with many little businesses, businesses that are chronically under-capitalised and are, by that token, greatly susceptible to the cold winds of change when they blow too hard on them. I would pick out two aspects in the context of the Bill which I believe to be of fundamental importance for the efficiency of—I will not say agriculture—a farm. First, I believe it to he extremely important that when there is stock on a farm—and farming in this country is not by and large stock farming—it is extremely important that the man responsible should live right on his job and therefore be able to fulfil his responsibilities completely. Secondly, I would instance the need for mobility, which means that when a man wants to change his job—because he does not like it, because he wants to move to another part of the country or because he wants promotion or more pay—he can do so in the certainty that he will find accommodation waiting for him at the other end. It must be added that when a farmer wants to get rid of a man because he is not suitable or because the farmer is changing his way of farming, he must be able to offer the new incumbent a cottage at the earliest moment. Having made these points, I want to tell your Lordships that I have for some time had considerable doubts about certain of the human aspects of the tied cottage. 1 believe it all stems from the fact that  one has a curious dual relationship; there is the employer and the employee and the same two people are landlord and tenant. This can make for distortions and frustrations in the relationship between the two. Very often neither side appreciates this, perhaps because they have been with it for so long. But worse than that I would say is the problem of chronic sickness and, even more, the problem of growing old knowing that one is becoming less and less able to cope and wondering what is going to happen. Very frequently the event turns out to be a non-event, but it is not the event or non-event that counts; it is sometimes the years of anxiety that precede it, and anxiety in itself can be called a real hardship. I believe, therefore, as I have believed for a long time, that there is need for a review of the system, but if it is to be the right sort of review it must look for fairness—and by fair I mean fair to both sides—and it must look to make sure that it retains efficiency in agriculture but, above all, it must be the sort of review that covers the whole spectrum of rural housing and not confine itself to tied cottages alone. Last year the Government put out a Consultative Document in which they asked for submissions from interested parties. Apart from the CLA and the NFU, which properly put up their cases, there were other, perhaps more objective, bodies which made contributions. They were Shelter, the Grubb Institute of Behavioural Affairs, the Royal Institute of Chartered Surveyors and the J. Arthur Rank Centre. Shelter majored on the whole strategy of rural housing. The Grubb Institute produced a rather more novel solution of an agricultural housing association which would have statutory powers to control all agricultural occupancies and power to build agricultural houses in those parts of the country where they were needed. The Royal Institute of Chartered Surveyors said very clearly that they regarded a pool of housing as more important than legislation. The J. Arthur Rank Centre, in a document which was written by somebody well known to noble Lords on both sides of the House, Miss Moira Constable, dealt among many other things with the question of selective licensing and suggested that there should be the selective  licensing of strategic cottages with the rest left to the existing Rent Acts, unamended in the way suggested in the Bill, and if legislation there must be then I would regard that as a sensible suggestion and one worth following. Those people all had something in common; to a greater or lesser extent they were against this particular form of legislation though in sympathy with much that was behind it. They were all to a greater or lesser extent positive and made suggestions, but each and every one of them made the point that there must be a complete review of the rural housing situation in this country before legislation was even contemplated. My Lords, I am driven inexorably to the view that what we are really discussing is a distortion in the operation of the laws of supply and demand, that this distortion is very variable in different parts of the country, whereas it is being dealt with in a blanket situation. I ask, even at this late stage, that the Government should consider a review of the whole rural housing situation before they finally make up their mind to proceed with the Bill in its present form.

4.20 p.m.

Baroness PHILLIPS
My Lords, it is a great honour and privilege to he the first of your Lordships to congratulate the noble Earl, Lord De La Warr, on his very thoughtful and—for a non-controversial speech—very subtle first contribution in this House. He spoke as one who has considered the problem and as one who is concerned as a farmer and a landlord and I am sure that I echo all your Lordships when I say that I hope we shall have the pleasure of further contributions from him very soon. I know that it is tiresome to be reminded of one's father, although it seems to be a custom in this House, but I would say that on one occasion I shared a platform with the noble Earl's distinguished father and that I drove back to London with him. He said to me, "Will you please keep talking to prevent me from going to sleep?" As we were on a journey from Banbury to London that gave me ample scope for something I have never found difficult! I should like also and with some humility to congratulate my noble friend the Leader of the House on the splendid way in which he introduced this complex  Bill. There is no question of his knowledge nor of the affection in which he is held by the people in the farming industry, whether they be employers or employees. It is a great privilege to be the one to say these few words to him. I hope that we shall hear much more of his silver tones: it is a delight to listen to him. Although the Bill is concerned with the agricultural worker, I have cheated a little in interjecting a note on behalf of some other workers. At one stage, I thought that the noble Earl, Lord Ferrers, was going to make my speech for me but, as usual in his delightful speeches—not one word of which I agree with—he appeared at one stage to be embarking on a speech which I suspect might have been reminiscent of when the Truck Acts were introduced and workers were told of the great disadvantage of not having to buy their goods from the employers' shops. We are now in a very different century, as the noble Earl himself acknowledged. My appeal to the Government is that they should appreciate the position of other workers affected by tied accommodation. This is in no way to diminish the case for the Bill before your Lordships' House. I had the privilege of living on a farm among farm workers for six years and I returned with the highest admiration for this group of skilled people who, in my view, are very undervalued and undersung.

A noble Lord: And underpaid, my Lords.

Baroness PHILLIPS
My Lords, I did not mention such an indelicate matter. That is taken for granted. Most workers are underpaid. The figures given to me for the number of tied dwellings are astonishing. Agriculture accounts for 135,000 houses, as we have heard today; hospital staffs total 97,000; the Coal Board has 96,000; the hotel and catering industry, 70,000 and Church of England clergy 13,000. If we add to all these the Armed Forces, the teachers, caretakers, prison officers, firemen and ambulance workers in the public sector, we have a very large section of the community living in tied accommodation. In the private sector—and this was the group which approached me through a trade union—the workers in the licensed trade are heavily involved in tied accommodation. The numbers are very  difficult to estimate, but would appear to be in the region of 5,000. Why should there be tied housing in this section? Indeed, why is there tied housing in any section of the working population? First, because it is a matter of convenience to the employer to have his employee easily on call. It is an advantage which can sometimes be gained by giving such accommodation rather than paying higher wages. There seem to be certain factors that are common to all tied accommodation. Generally speaking, it is tied to lower wage employment, to insecurity of tenure and often to substandard accommodation. The obvious remedy would be the provision of suitable low rent accommodation or cheap housing for purchase. The absence of these attracts the worker to the tied cottage in the first place. It is, of course, easy for those not in this situation to say that the job was taken with full knowledge when the worker entered the commitment. Indeed, this is a favourite expression used by employers when seeking repossession. I feel that it is important to realise that very rarely this kind of employee will wish to take up tied accommodation; he will want to move into other housing quickly. There has been some reference made to the fact that the worker in tied accommodation move for promotion: in that event there would clearly be the same problem as there is with any other workers who moves for promotion. The main reasons for losing jobs are the usual ones—illness, disability, redundancy, retirement or, let us face it, a personality clash between employer and employee. Then follows the whole distressing situation which, certainly, many employers try to mitigate and to which my noble friend the Leader of the House referred in introducing the Bill. There is the notice to quit, the appearance in court for an eviction order and—in the case of a worker outside agriculture, certainly—the notice rarely exceeds a month and failure to move by the end of the period results in a possession order. That is intended to give a breathing space to the unfortunate employee who has to find other accommodation, but we must remember that at this time he will also be looking for a job. What is the advice of the local authorities in such a case? They have to classify these people into  four groups in order to find accommodation; that is, families with children, the elderly, the chronically sick and disabled. That leaves a large section outside. They are recommended for what one might call bed and breakfast accommodation or anything else available. It all comes back to the local authority in the end. It seems to me that if all tied accommodation could be registered and licensed by the local authority we should at least have a starting point to sort out this strange and muddled situation. It would also mean that all the accommodation would have to be in a fit state for the employee to live in and it would be useful to have the duties of the workers linked to this. It would also be useful for the accommodation to be excluded from the Rent Act, so that the worker could therefore be certain of the protection we have seen referred to this afternoon. Finally, anyone living in licensed accommodation who was retired, made redundant or was obliged to leave through illness or injury or who was a widow of the worker would be legally entitled to permanent rehousing by the local authority, as distinct from homeless family temporary rehousing. The suggestion from those outside agriculture has been that they must have been in the employment concerned with the tied housing for a period of five years. May I appeal to the Government to look again, in the next Session, perhaps, at the whole question of some of the other workers who are concerned with tied cottages. In wishing the Bill a speedy passage through your Lordships' House, I would beg the Government to put right the iniquities from which other tied workers have suffered for far too long.

4.30 p.m.

Lord WISE
My Lords, may I first add my congratulations to the noble Earl, Lord De La Warr, on his superb non-controversial maiden speech on a subject on which he feels very strongly. I am sure that we shall all look forward to hearing him again when he can speak in a controversial manner. I also must declare an interest, I suppose, because I am farming, albeit in a modest way compared, I am sure, with many noble Lords. But as I talked to my various farming  friends it is very evident that this Bill as it now stands is causing grave concern and apprehension and I think that these fears are well founded. For I think that the Bill could cause even more problems to the detriment of the industry and consequent loss in food production. Nevertheless, provided it is suitably amended, I am certainly in favour of it. The noble Earl, Lord Ferrers, touched on several points where there are problems and I am sure, in view of the number of speakers in this afternoon's debate, that every point will be adequately discussed. However, as other noble Lords have said, the main weakness is Clause 30 and the wording within that clause. It seems that the wording, the local authorities "shall use their best endeavours to provide suitable alternative accommodation" is so loosely phrased that it must be almost meaningless and places no real obligation upon the local authorities. Who is to decide what are "their best endeavours"? Furthermore, it seems that the application could be placed at the bottom of the housing list and drag on indefinitely. It could also be argued: Why should the local authorities be responsible? I think that agriculture is a special case. By the very nature of things, it is imperative that a stockman lives as near as possible to the animals in his charge. But there is no reason why he should not give up his job if he does not like it or for any other reason and go to work in a local town or wherever he wishes. But surely it must be unrealistic for him to remain living indefinitely near the animals which he has been looking after previously, thereby preventing anyone else from doing his job and looking after them. Such a system must have serious repercussions. I think it unfair that a farmer should be placed in that position to the detriment of his business. If the worker goes to work in a factory, why does not the factory provide housing for him? Why should the farmer have to provide a cottage? Therefore, the local authorities must become responsible; but they must assume an absolute obligation to rehouse within a reasonable period of time. So I think that the clause must be altered. My Lords, I am a little worried as to what happens if a worker should leave  and go to work somewhere else within the area of another authority. Who becomes "the authority"? Is it the authority where he is living, or is it the authority where he goes to work? There will be enormous problems for local authorities but they will be no greater than the problems for the farmers. I hope that the Government will not be forced by our present economic situation to reduce the finance available for new council house building. I agree with the noble Lord, Lord Swaythling, that finance must somehow be made available. But there will still be a movement of workers from farm to farm, inevitably, and consequently houses will be available for them. Even as they are now, there will still be vacant houses on farms because workers will move from place to place. I think that, provided local authorities play their part—and we must make certain that they are under the strictest obligation to do so—the situation will probably be far more easily resolved without the unpleasantness and distress which sometimes take place now. Agriculture has a fine industrial record of which everyone connected with it can be justifiably proud. Labour relations are probably better than in any other industry; but for as long as I can remember the tied cottage controversy has been the one feature which has marred the whole of the relations between employees and employers. Therefore, my Lords, I hope that you will give this Bill a Second Reading in order that we may improve it during the later stages to make it a piece legislation which will maintain this industrial record and which will maintain and improve the wonderful human relationships and good will as workers go into an era of greater security in their homes.

4.36 p.m.

Lord GISBOROUGH
My Lords, I should like to start by adding my congratulations to the noble Earl, Lord De La Warr, on his excellent speech. He approached the Bill from a new direction and steered a fine course for a maiden speech. It is interesting to note that the abolition of the tied house is not wanted by the farm workers in Scotland and judging by the letters in the Press, a large number of farm workers in England do not want it either. They see a system going  whereby they can better themselves by being able to change jobs and walk straight into conveniently situated houses for their future jobs. Instead of free housing, they will soon have to pay rent to the farmer. That is likely to be one of the consequences of this Bill and one worker summed it up like this. He said that he would have to pay £5 for rent, £3 extra for the tax for the extra wages, £5 for commuting to work and £5 will be lost in value to the farmer in not having a man on the spot for 24 hours a day. In addition, to some £18 cost per man to agriculture is the cost to the councils for having to provide extra suitable houses and the cost to the homeless of having farm workers jumping the housing queue in front of them. Farm workers already have greater legal security than other classes of tied cottagers and usually have six months to leave unless a court decides that certain conditions are met to need their earlier departure. This Bill alters the whole system and will almost certainly do far more harm than good. The key factor of this Bill is the phrase, "best endeavour" that councils must use to rehouse all the outgoing farm workers. Some councils may take this to mean top priority, others may take it as a priority subject to the needs of the homeless and the other most deserving cases. There may be some who are not agriculturally minded and who will take it as meaning little more than putting the workers' name on their list of applicants. It might be possible to sue such a council, but the cost and delay of challenging a council's interpretation of the phrase would rule out the procedure. Many councils may wish to help but, with long waiting lists and perhaps a shortage of land, particularly in the green belt, they may be unable to find houses up to the standard of acceptability. The phrase "best endeavours" must be more clearly defined so that it is clear just what priority is to be given to the agricultural worker and, consequently, how much agriculture is to suffer. There may be particular difficulties in a district such as Langborough, where I live. If a farm worker is given notice he may he offered a local authority house but this house could be in the industrial area where the demand  is low compared with the high competition for houses in the areas adjacent to the countryside where he is living at the time. He may well refuse the offer arguing that he wishes to stay in the country area and hoping to win his case with the ad hoc tribunal. If he fails, and has to vacate, the local authority will have been under no obligation to have held the house for him and he may then be classed as homeless and be eligible only for whatever house the local authority may wish to offer, however meagre. He could be worse off than under the present arrangements. Another case may well happen, indeed is likely to happen. A farm worker leaves farming to work in nearby industry and stays on in his tied house. This would be quite possible in my area with industry so close. If an order for possession was applied for, even though he would be earning an industrial wage, the council would appear to be obliged to give this man priority of housing, even over others who might be as much or more in need of a house and far less able to provide for themselves. Indeed, people may do two years in agriculture in order to get a council house. The two years should be increased to five to avoid this danger. There will inevitably be cases where for long periods farms will suffer for lack of a vacant house for a new worker, and it is essential that planning laws should enable farmers to provide caravans on their farms as temporary alternative accommodation. The industry finds it difficult to understand why this Bill applies only to agriculture. This has been raised by more than one speaker in your Lordships' House. If there is hardship to agricultural tied cottagers having to move when they cease working for their employers, then surely there must be equal hardship to all other tied cottagers whether they work for public authorities, the Forestry Commission or whatever; so why does this legislation apply only to the 20 per cent. of tied cottages that are occupied by agricultural workers? This Bill has already reduced plans for the building of new tied houses. The Government are making quite sure that no one will want to build another tied cottage for their workforce, and this is for the sake of stopping evictions now running at the rate of only 20 per year. In the first quarter of 1975, there were  15,502 possession orders made against tied cottagers. Of this, only 329 applied to agricultural tied cottages. Surely a few hard cases do not justify the introduction of such a rigid system to agriculture. Against this, I take the point of the noble Earl, Lord De La Warr, that sonic alteration is required to reduce the worry of tied cottagers about to retire, even though the numbers of hardship in this category are almost certainly very small indeed. Just as many houses are kept empty now because of restrictive legislation, so will many tied houses in future be allowed where possible to remain empty rather than have them occupied by workers who may subsequently prove impossible to remove. The need for a supply of empty houses is exacerbated by the possibility of having to seek possession under Case 1 of Schedule 3. There is a great danger to an industry when there is too much use of the stick and not enough of the carrot. Until recently (we now have CTT and other hindrances) the agricultural industry has been left alone and encouraged by grants and other means, and this has resulted in the development of one of the most efficient and highly productive agricultural industries in the world and certainly the most successful industry in this country. That represents the policy of the carrot which has been most successful. Compare housing where landlords have had the stick, through rent controls, protected tenancies, and so forth, for years. As a result, there has been a continued shortage of houses; many houses are kept empty and scarcity has raised prices. No one now builds houses for renting out, except the local authorities. But local authorites have inadequate resources to build enough. Yet private resources that could build so many are severely discouraged from doing so. If they were encouraged, there might be no housing problem. The Bill now belabours the farmer with the stick of further controls and rules over his own houses. The policy of the stick always requires ever increasing application as those affected find ways round the law, and more controls have to be applied. To sum up, this Bill is neither necessary nor desirable and is altogether irrelevant  to the overwhelming problems of the country. It may—only may—help a few outgoing workers, to the detriment of far more as free tied cottages become more scarce. I fear it will spur a rise in wages without benefit to the recipients who will spend it on rent, travelling and in tax. I fear it will harm agriculture through greater costs, less efficiency and lead to higher food prices, and that it will dry up the supply of new agricultural cottages. It is just more application of the stick. The of the stick. The policy of the carrot would be so much more rewarding.

4.45 p.m.

Lord BALERNO
My Lords, if it is not impertinent, I should like to say how good it is to see the noble Lord, Lord Peart, in this House. He has always been a very good friend to British agriculture. He has done a lot of good, not least in the help he gave to the late Tom Williams in his notable agricultural reform. When 1 returned from the last war, I went to a very sagacious old farmer whose judgment I trusted implicitly. I asked him to what I should give priority in my farm operations, to which I had returned. Without hesitation he said: "Cottages. Build cottages". I asked him what the second priority would be, and he said: "Build more cottages". That was at the time when there was acute national shortage of houses over the whole land. I went away and built the cottages. I sunk the whole of my gratuity and more into building farm cottages. I remember being extremely impatient because it took more than four months to build these cottages, but we erected them successfully. When they were nearing completion I received my first taste of post-war bureaucracy. A large Daimler car—pre-1939 of course—which obviously consumed a great deal of petrol, drove up to the house and three little men came out. One went into each house. They stayed in the houses for about three minutes and then came back into the big car and drove off. Of course they had no complaints, with the local authority inspecting the houses, because these houses were built to a better standard than houses at that time being erected by the local authority. As the years passed, we remodelled those houses and rebuilt them. We brought them more or less completely  Up-to-date. Has the local authority brought the houses that they were building at that time up-to-date? Unless a farmer can provide decent cottages for his workers, he has the greatest of difficulty in getting them. If the farmer does not provide decent cottages, his workers will not stay with him. No farm worker will stay, and no farm worker's wile will allow the worker to stay if the cottage is not right. This is a supreme case of the law of' supply and demand working out as it should. I hate to quarrel with the noble Lord who has made his maiden speech today—a most excellent speech—but I quarrel with him on that point, at any rate in Scotland, when we are celebrating Adam Smith this year and the Wealth of Nations. The law of supply and demand is working out not too badly at all. The big question—and most speakers put their finger on it—is housing the worker who is about to leave. My experience of housing such people who leave as a result of old age—some of them after 20 or 30 years' service with us—is that you should go along in good time to the local authority and ensure that the worker's name is put on the housing list but not brought up to the top of the list until such time as, by reason of age or infirmity, he requires the house. We have had no difficulty about that at all. The noble Earl, Lord De La Warr, spoke of sickness, and there is also the tragic case of a worker who dies or, even more tragic, who is killed at work. I have had expereience of some of those events, and I know of no case which was not treated with the utmost sympathy. In the country one simply cannot get away with being unsympathetic—you would be hounded out yourself if you did not treat those people with the greatest sympathy. Your local authority or the county council would soon be after you. There is certainly one case which could lead to difficulty—the noble Baroness, Lady Phillips put her finger on that—where we talk of personality clashes. I agree there can be major difficulty arising when there is a personality clash, but I do not think it requires all the paraphernalia of this Bill to deal with a simple personality clash. Such things happen every day of the week in industry. This Bill does not, thank God! apply to Scotland. It is completely irrelevant to the problems of today, but I reckon it would be most cowardly of me if I did not speak in support of my noble friend Lord Ferrers. I do congratulate him on the gravity of what he said. I shall not delay your Lordships by going over the points he made, but I should like just to say that there is no other industry in the United Kingdom that has increased production to the extent that agriculture has in the past 30 years or so—and it has done that simultaneously with a massive reduction in manpower. The output of the British farmworker is an example to all other workers, and it has been achieved through all this period of "injustice" of the tied cottage, if I may say so. This Bill will only put difficulties in the way of increasing production. A much better incentive, my Lords, would be the stabilisation of the pound and a narrowing of its gap with the Green Pound.

4.53 p.m.

Lord COLL1SON
My Lords, I should like to congratulate the noble Earl, Lord De La Warr, on his maiden speech. I thought it might have been difficult for me to congratulate someone with whom I might completely disagree, but that has not proved to he the case. It was a thoughtful speech and I hope we shall hear the noble Earl many times in the future. I should like also to say to the noble Lord, Lord Balerno, that it would be a good thing if agricultural workers put their names on the housing list rather early. I also entirely agree that the noble Lord is right when he tells the House that the agricultural worker has done such a magnificent job in increasing food production in the interests of the country. However, these things are a little irrelevant to the debate today. I was quite surprised to hear the sweeping condemnation of the Bill from the noble Earl, Lord Ferrers, and from other noble Lords on the opposite Benches, particularly as the noble Earl in particular sounded quite sympathetic to the idea at the start and then he turned round and swept the whole thing away as a nonsense. It is not as easy as that. There is certainly a problem, and I will deal with it in a moment, if I can. The noble Earl also talked about the situation which  would arise if the tied cottage was abolished, perpetrating that misunderstanding of what is meant by the union and others in talking of the abolition of the tied cottage. Again, I will talk about that in a moment. The other point on which I must take issue is the rather hysterical statement that there will be a complete block on agricultural workers who want to change their jobs as though all the cottages were going to be occupied by workers who were ill or who had lost their jobs and were remaining in cottages which were required for the proper working of the holding. Quite frankly, that is a gross exaggeration. It simply will not be like that. There might be an occasional problem, but one has to balance that against the undoubted injustice that is done to so many agricultural workers who find themselves in danger of eviction at the end of their particular road with their particular employer. Obviously, I do not need to declare an interest: my interest is well known. I welcome the Bill. As my noble friend the Leader of the House said in opening the debate, the abolition of the tied cottage has been the desire of the Agricultural Workers' Union since its foundation in 1909. Again, as you have already heard, the point was taken up much earlier than that by Joseph Arch in 1885. So this is not a new thing and the demands for the matter to be dealt with have been constant and, if I may say so, sincere over all these years. Am I now being told that there is nothing in it? I think that again needs to be looked at very carefully indeed. I must say that I was a little taken back when the noble Lord, Lord Swaythling, said there was a danger that the Agricultural Workers' Union would instruct their representatives not to attend the committees which are to be charged with looking at the urgency of problems arising in the case, for example, of a worker who is in a tied cottage. If I may, I will resent that on behalf of my old union. They would not behave like that and I think it is invidious to suggest that they might. They would certainly want to see the machinery working properly, as I am sure the farmers would also, and they would certainly go along and do their best to see that everything worked properly. It has been argued that the majority of farmworkers want to stay in tied cottages.  They have said they like the system. I will concede that there are farmworkers who say that they like the tied cottage and would like to stay in it, but these views come from farmworkers who have never experienced what can happen to a worker in a tied cottage when he loses his job or wishes to change it. The truth is that the farmworkers who are knowledgeable about these matters—and these are the ones who read the union's journal and see when they read the back page the number of cases which the union defends in court every month—realise just how difficult the problem is. People who really know and understand are opposed almost 100 per cent. to the tied cottage situation. These represent the 50 per cent. of agricultural workers who are in the union. These people are not goaded to this attitude by the union but they know from their own experience and from what they have read about what can happen in certain circumstances. A number of motions which emanate from union branches, and which are discussed at union county conferences and indeed at the national conference, clearly indicate that the view of the agricultural workers is that of course the matter should be dealt with. It has also been argued that the number of evictions—figures have been quoted, but no one really knows—of up to 50 is so small that there is no need for action to be taken. As I have just said, the NUAAW deals with hundreds of cases every year and at the moment 600 are pending. Someone mentioned earlier that 1,200 cases go through the courts each year, and as the NUAAW has 50 per cent. of the membership the figure of 600 is therefore about right. But the problem does not stop at the eviction that takes place. The distress caused to the agricultural worker and his wife and family goes very much deeper. There is the worry about what will happen and whether the union will get an extension of time. Sometimes getting an extension requires a number of visits to the courts. Anyone who is in the position that I had in the past, who knows how farmworkers come and bring with them their wives, who are in tears and worried to death about what may happen, cannot possibly condone a system such as this. It has been pointed out that there is sometimes collusion between the employer  and the worker to go to the court to get an order to ensure that the local authority takes action. We know, and the farmer knows, that this is true. But surely it cannot be right that in order to get something done one must connive at action of that kind. Surely, that is most undesirable. On top of that, there is the threat hanging over a man in terms of his individual freedom of action, if he knows that his employer dislikes something that he wants to do. I want to make it clear before I go on that I know the farmers as well as I know my own people, and I am not suggesting that all of them are little dictators and bullies, who will not allow their men to have minds of their own. But this can be the case, as I know from personal experience, since I suppose I am the only person here who lived in a tied cottage. I come from the farming industry. I was working with a relation at the time of the last depression, and it was impossible for the farm to earn enough to support all of us—my cousin, his wife, myself and two children. So I got a job outside and in that sense I suppose I was on the other side of the industry, associated with employers rather than with workers. My new employer had trouble on his farm. I had specialised in poultry, and his poultry had fowl paralysis. Birds were dying by the dozen every day and he was at his wits' end. I asked him to let me try to do something. I had read as much as I could about the disease, and I thought I knew what was the trouble. So I simply changed the method of feeding from dry mash constantly before the birds to two feeds of wet mash morning and afternoon, and the trouble disappeared like magic. Of course, my employer was very pleased. I was then living in the house of one of his other workers who had four children. I wanted to read, but I found that I could not do so because of the noise all around me. I said, "I cannot go on like this. I need to be quiet". So he converted a stable for me, because he appreciated what I had been doing. Incidentally, I worked all the hours God sent—stupidly, I think now and possibly to the detriment of other colleagues in agriculture. One has to maintain principles about overtime and so on, but I did not know that then. I enjoyed working like that, and I still love poultry and everything connected with the industry. I started a union branch, because one of the youngsters on the farm, who had a cleft palate and was thought to be a little simple, came to me and said, "I am being asked to come back at weekends to build a dry stone wall"—a highly skilled job, as anyone from Gloucestershire knows"—and I am not being paid for it. Don't you think I should be?" I replied that I thought he should be paid and said, "I will talk to the old man about it". I went to him and he said, "This is none of your business", but I thought that if it was not my business then it was somebody else's. It so happened that I had been to school with Ted Fletcher, who was then secretary of the Economics Department of the TUC, and I rang him up and asked what I should do about it, to which he replied, "You want a union." So I got the union along and I started a branch. As I look back, I see that there was humour in the situation. My employer said, "Harold, you are silly doing this union work. You do not get paid for it", and I did not. He said that the Conservative Party in a certain village wanted a secretary who would be paid. He said that I did not know what I had lost. But I replied that I had been brought up as a Christian Socialist and that was not my cup of tea. Two or three weeks later, he came to me and said, "Harold, your work on the farm is deteriorating. You cannot do these two jobs, and you will either have to give up the union work or go". Then I got cross and I told him that what I did in my own spare time was my business and I was going to continue. The trouble blew over, but I was in a tied cottage which he had converted for me from a stable. If I had been married—and I was not—with a wife, and possibly children, knowing my action could mean that I would lose my accommodation, would I have been able to stand up for myself, right though I was? I do not know. So these situations can arise, although I reiterate that I am not implying that all farmers are rogues and bullies, because I know very well that they are not. That brings me to my other reason—and it is a very real one—for welcoming this Bill. We are very fortunate in agriculture. The industrial relations situation in what I still call "my industry" is very good indeed. Somebody has already mentioned the co-operation between the  worker and the farmer, and we could be quoted as an example to industry generally. However, since I served on the Royal Commission on Trade Unions I have come to the conclusion that, to get good industrial relations, communications must be as perfect as possible. In farming we have that situation, because the farm-worker knows exactly what is being done on the farm, and why. If there is a change in the production technique, he and the farmer can discuss it. They are close and they also talk about domestic matters; so in that sense there is a perfect relationship, and it shows. That is not to say that the farmworker and the farmer are better men than others. We are lucky that we happen to have a situation where there is a spontaneous, almost perfect system of communication. This is true, despite the fact that the conditions which farmworkers apparently enjoy compared with what they could enjoy in terms of rewards for their skills in other industries are still questionable. Sometimes it can be unpleasant to work on a farm—go and pick kale in the snow in winter—but despite the conditions we have good industrial relations. I am glad of it, although some people believe that this is because our people are prepared to co-operate and that they are not as militant as they ought to be. I do not go along with that view. I believe that we shall go further by getting right our industrial relations. In that happy situation there is one sore which stands out and causes unhappiness in the industry—one subject about which people speak strongly and sometimes viciously. If your Lordships had seen, as I have, a farmworker and his wife put out on to the roadside with nowhere to go and having to spend the night under a tarpaulin and if your Lordships had also seen farmworkers evicted, which meant the splitting up of families, with the husbands going to one set of relations and the wives to another, they would get a little vicious, too, and angry. I do not care where noble Lords sit in this House; they would be angry about it and would want something to be done about it. The Bill proposes to do something about it. When farmers talk about the abolition of the tied cottage system I feel that there  is great misunderstanding about it. Some people say that it means that tied cottages will be knocked down and that they will disappear from the countryside. Nothing of the kind will happen. The union have made it clear right from the beginning—certainly during my time because I took pains to do so—that by the abolition of the tied cottage we mean to ensure that no farmworker can be evicted unless there is suitable alternative accommodation for him: either another house or, as now proposed, a local authority house. The speeches made against the Bill have been exaggerated and have gone even further than the National Farmers' Union would want to go. The union are worried about one or two points in the Bill. There is the question of the two-year period. I think that this period is about right because a man who has stayed in the industry for two years has shown that he is a bona fide agricultural worker. As farmers see it, there is the problem of the requirement placed upon local authorities to use every endeavour and about it not being strong enough when they are asked to make every endeavour. Were it possible to forget that local authorities have problems, too, and that there are other people who may need housing very badly, then I should go along with your Lordships. It would be so easy and there would be no problem whatever. However, good trade unionism means that you think about other people, too, besides your own sectional interests and I do not mind saying that in the present circumstances trade unions should understand this. One cannot demand that an absolute requirement should be placed on local authorities without considering their responsibilities and the situation which could arise if they had families on their waiting list who required houses even more desperately than farmworkers. There will be the establishment of committees, which your Lordships must not decry, to which either the farmer or the farmworker will go. Local authorities are required to look very carefully at the points made to them by the committees. Why are noble Lords saying that the system will not work? In a place where I know many people and which I admire for its democratic qualities and the courtesy shown to everybody, I feel that on this  occasion the violent opposition to the Bill is born of the desire to hang on to something which some of your Lordships regard as nearly feudal rather than to find a solution which is fair both to the farm-worker and to the farmer. I believe that the Bill has found it and I hope that it will be seen in that light. May I ask noble Lords to have a little faith in the proposed machinery and not to damn it before it starts. Already local authorities are showing willingness to help and I am sure that they will continue to do so. May I therefore ask all of your Lordships to give your support to the Bill and to vote for its Second Reading.

5.16 p.m.

The Earl of ONSLOW
My Lords, the sacking or dismissal of the noble Lord, Lord Collison, from his job in the 1930s would now, I suspect, be illegal. Under those circumstances he would have the right to sue for unfair dismissal. The present tenancy arrangements for agricultural workers are completely different from those in the 1930s. Therefore, with the greatest of respect to the noble Lord I have a suspicion that his experiences then are irrelevant to the problem we are now discussing. I am delighted to see the noble Lord, Lord Peart, in your Lordships' House. We have already witnessed the noble Lord's tactful handling of possibly a marginally stroppy House under difficult circumstances. However, speaking as a farmer I believe that his moving to the Second Chamber is a disaster, not because he is moving it but because from my personal experience I know that he understands agriculture and that in an urban and Treasury dominated Cabinet he has fought hard for an understanding of our problems. I say this because I am a farmer and have tied cottages. I regard it not only as my duty but also as in my own interest to provide as high a standard of farm cottage as possible for the people whom I employ. I do so in order to ensure good accommodation for them during their working lives and also to provide for the day when they or their wives drop down dead. This is not only because I think it is right but because it happens to benefit me. I know that if I do that I shall get out of them the best possible service. I regret to say that I do not have the same faith as has the noble Lord, Lord Peart, in his successor. It is perhaps harsh to judge Mr. Silkin but his track record so far does not fill one with an overwhelming sense of confidence. It has been argued that the Bill which the noble Lord has brought before the House today has the effect of codifying the present practice. Let us be honest about this. Despite all the talk about the abolition of eviction, eviction is still possible under the Bill. Its whole success or failure hinges upon the "best endeavours" clause. If it represents only the codifying of the present practice, then despite the unnecessary expense and the increase in what are now fashionably known as quangos, ADHACs, committees and God knows what else, and extra money being charged to local authorities to run the system, then perhaps we should not argue too strongly against it. I agreed with, and listened with care to everything said by, the noble Earl, Lord Ferrers, but I think his eloquence would have to be disregarded if it put an end to the uncertainty and the discussion and the chat that we have had since 1880 or 1906 on what has happened. But before we go on to dismiss the collusion with agricultural workers in regard to court orders I should like to give two examples. One from my own personal experience was of a man who had served my father for a long time. He lived in a tied cottage and wanted an old people's house in Guildford. I tried my best to help and one of the people on the local authority said to me, unofficially, "You will have to evict him and then we can act". Luckily it did not come to that and he got his local authority house, which was a better house and more convenient to his needs. I know a man well who had a similar experience and he had a letter from the local authority saying, "You will have to evict if this gentleman wants to he re-housed". They went to lunch together, they went to the court together, the man was evicted and this gentleman has sent the local authority a solicitor's bill for the eviction order because he said he was acting on their instructions. So I think the figures for court orders should be taken not with a pinch but with a Siberian quantity of salt. As I have already said and as the noble Lords, Lord Wise and Lord Gisborough, and several others have said, if the best endeavours of the local authorities are not good enough then there will be a logjam in farm labour mobility. The noble Earl, Lord Ferrers, said—absolutely correctly—that it is very difficult for promotion prospects on a one-man or two-man or even a five-man farm because there tends to be long service in agriculture, which is something that I think both employers and employees appreciate. It is probably only too easy for a second man to get promotion by going to another and superior job. If that logjam of inability for people to be moved from one house to another arises that man's promotional prospects will be hindered. And if that happens farmers will suffer, the agricultural workers will suffer, customers will suffer and that means the public will suffer. I hope that the two aspects we shall concentrate on most during the Committee stage are getting the wording "best endeavours" absolutely right, and I hope we can do this not in a situation of Party argument but putting together the considerable wisdom that there is at the disposal of your Lordships' House and getting it absolutely right. The other aspect, as has already been mentioned, is the qualifying period and perhaps when the noble Baroness, Lady Birk, replies to the debate she will comment on the position of a man who leaves to work in another industry and perhaps his house is not essential for agricultural purposes. That house has been built subject to the condition imposed by the planning authority that it shall be used only for agricultural purposes. I believe that so far this has not been mentioned.

Lord GEORGE-BROWN
My Lords, if the noble Earl will permit me to interrupt him, I am afraid I rather missed the point at which I should have arisen. As I understand it, he was arguing that if you keep the tied cottage then the fellow who should be promoted and can only be promoted on another farm is thereby denied promotion. May I just ask the noble Earl this. If he thinks about it, would he not agree that he was arguing himself out of his argument? It seemed to me what he was saying was that the  fellow is not going to be promoted because there is no cottage into which he can go. Therefore, would it not be better to end the tied cottage arrangements so that he could be promoted?

The Earl of ONSLOW
My Lords, the noble Lord, Lord George-Brown, has put his finger exactly on the problem. If there is no cottage for a man to go to he cannot get promotion. If that cottage is not there because the other person, who may—for one reason or another—not have moved, is now possibly being given too much protection by this Bill, then that promotion is blocked. I do not think that is an argument for the abolition of the tied cottage; in my view it is an argument for the retention of the tied cottage.

Lord GEORGE-BROWN
That cannot be so, my Lords.

The Earl of ONSLOW
My Lords, if we do not get this Bill right then the most efficient of all British industries will suffer and the present Government, in spite of the endeavours of the noble Lord, Lord Peart, will deserve condemnation. The noble Earl, Lord Ferrers, has already referred to other things that Her Majesty's Government have done to harm this industry, all of which are true, all of which I suspect that the noble Lord, Lord Peart, acknowledges in his heart of hearts because, as I have already said, he fully understands farming and its problems. Let us remember, as several noble Lords have said, that had the rest of British industry done as well as British agriculture since the war we should have made the Germans, the Swiss and the Swedes look poverty-stricken. Please will Her Majesty's Government learn this lesson and help—and not hinder—British agriculture!

5.28 p.m.

The Earl of CAITHNESS
My Lords, may I join in congratulating my noble friend Lord De La Warr on his very good maiden speech. I think it was the noble Lord the Leader of the House who referred to, "walking a tightrope". My noble friend Lord Onslow has alluded to the point, but has it not occurred to the sponsors of this Bill that what we are led to believe is that their main aims and objectives have largely been more than adequately legislated for already in the  form of the Employment Protection Act of 1975? The case described by the noble Lord, Lord Collison, would certainly have been covered by that Act. Tribunals have the power—and are increasingly exercising that power—of reinstating any employee who in their view has been unfairly dismissed. Thereby such employee's accommodation is also secured if that person occupied tied housing. This Bill therefore appears to be aimed at securing accommodation for those who have been fairly dismissed, and more reasonably for the widows and dependants. So far as the latter are concerned the reports that we have had placed before us show the industry to have a remarkably good record in the housing of those persons, at least comparable to any other major industry's. With a large amount of legislation requiring us to sit until the early hours during this spill-over period I fail to see the necessity of this measure at this stage. None the less, my Lords, we have this legislation before us and I recognise some of the good intentions of the Bill, but I doubt whether this burdensome legislation is the correct vehicle to cater for the problem. It might, however, satisfy the Socialist's dogmatic view that tied cottages are "outmoded, unacceptable and unjust". Besides being difficult to understand, it is obvious that the Bill has been hastily drafted by those who have no experience of the rural housing situation, and that the Government have not allowed enough time for discussion on this matter. The Arthur Rank Centre Survey states: "In the ordinary course of events, much more time would have been allowed for the preparation and publication of this survey." Furthermore, the report was speeded up due to: "…the very short time allowed by the Government for submission of views. It confirms the need for a much more extensive survey at Government level to discover the actual support of bona fide farm workers for the abolition of the tied cottage, also the need for more information on the true housing situation with particular regard to retirement in the next ten to fifteen years." My Lords, we have been told a lot about the size of the problem, and are led to believe that there are only some 20 or 30 cases of actual eviction a year. We do not know what is the actual turnover of agricultural workers, or how the figure of 1,000 court orders is constituted. Where and how are these people housed and, more important, what proportion of  those court cases are collusion cases? In my experience, I would estimate less than 50 per cent., or about 500, contain an element of hardship. These cases cannot be dismissed without due regard, but this legislation magnifies the problem out of all proportion and has caused, and will continue to cause, many more problems than those it resolves. It must be only right for the interest of the few to be balanced against the interest of agriculture nationwide. If precedent is any guide, local authorities will not interrupt their housing list except in the case of court orders, and under this legislation no court orders will be available. It is certainly presumed by the farming community at large that only in a minority of cases will the local authorities re-house. Good domestic accommodation, available when necessary, is the lifeline enabling farmers to become ever increasingly more efficient, and any loss of control of their housing could have disastrous effects on their business. It is interesting to note that the largest and most efficient farms, such as those of the Cooperative Wholesale Society, have the most tied cottages and therefore, their production will suffer the most. Already progressive farmers are indicating that they are not prepared to embark on labour intensive, high productivity farming because of the extreme uncertainties arising from the Bill. It is evident that many schemes for improving agriculture by capital investment will be abandoned altogether if very considerable safeguards in favour of the farmer are not written into the Bill. Difficulties relating to housing will, no doubt, cause many farmers to employ local workers, who might be less qualified but who can house themselves, rather than looking to the open market. The very least that can possibly satisfy the agricultural community is the designation of tied cottages into priority and non-priority housing. The former category would include such housing as dairymen's housing, where any interruption in labour would inevitably have a devastating effect. From the animal husbandry viewpoint, it is essential to maintain the present high standards. This can be done only if the man is on hand rather than five miles away. I am sure the Government would not encourage  nurses in charge of a labour ward in a maternity hospital not to be at hand when on duty. It is inconceivable that even the extreme abolitionists cannot see the necessity of the present system in this context. In the case of priority housing, there must be an absolute obligation on the local authority to rehouse forthwith priority cases, if the Agricultural Dwelling-House Committee determine that in their view the cottage is required, "in the interests of efficient agriculture". In the remaining cases, the local authority should use their best endeavours to rehouse within a time limit, as amended, if necessary, and as specified by the ADHACs. There is no point in setting up a Committee and creating more bureaucracy for the sake of it by not giving the Committee any powers. At the moment, an ADHAC is a toothless tiger whose recommendations need not be implemented by the local authority. Only by incorporating these minimum assurances can irreparable damage be avoided, and a degree of confidence returned to the agricultural community. I realise that in certain circumstances, the imposition of a housing direction could be onerous on the local authority. But this will be no more so than a court order at present and, indeed, it could be largely overcome by increased registration on the council housing list and a better knowledge of the tied cottages in the area. Precautions must be taken to ensure that workers are not rehoused in an area they do not know and in which they have not worked, and that the agriculture industry does not attain a worse reputation as the quick way into council housing. Bearing in mind the stated intention of the Government to abolish all tied housing, with the resulting consequences, it is of vital importance that the housing list of the authority is structured so as not to be unduly disrupted, and that agriculture and similar industries do not suffer as a result. Turning to forestry, what are we to say here? In agriculture, although we had a number of reports and documents, we still do not know the size of the problem before us. We are discussing a Bill which will apply to private forestry, but the Government have not yet published their  report on this subject. It might be that considerable objections will be lodged as a result of the report, and that areas of the Bill will require revision. Without any report, I believe it is wrong to legislate against an industry, particularly one so widespread and unsettled as that of forestry. To me it is obvious from the surveys on the question of the future of tied cottages that the system is not "outmoded, unacceptable and unjust". Indeed, it has contributed to the country's high standard of farming and farm structure, which is the envy of Europe. I hope the Government will take away the Bill for further thoughts on the subject so as to lessen the worries of an already troubled industry. However, if they do not, which I fear will be the case, they must accept reasonably constructive Amendments, put forward in the interests of all concerned to make the Bill more easily understood, more workable, and thus, heal part of the breach they have created by their inflexible attitude to date.

5.37 p.m.

Lord MONK BRETTON
My Lords, if I may pursue the analogy used by my noble friend Lord Ferrers at the beginning, may I say to the noble Lord the Leader of the House that I hope he will not mind my assisting in endeavouring to vet the horse he is riding for the first time here, and that my efforts to do so will not spoil what I believe we will find to be a considerable common interest in agriculture. I would also like to congratulate my noble friend Lord De La Warr on his maiden speech, particularly as I come from the same county as he does, and have known and greatly appreciated his father for many years. I believe this afternoon we saw a sign of that same wisdom and understanding that has come from the family of my noble friend before now. My Lords, the reason I wanted to say a little today is that I farm in the South-East, and I thought it as well to talk a little about our area in the context of the proposals in this Bill. The area in which I farm is a livestock area. The Royal Institution of Chartered Surveyors commented that they felt it right that the Bill should be judged in the context of the worst conditions prevailing. They identified the likely worst conditions as being  where there was a high proportion of tied housing, many competing demands on manpower, and where housing was scarce and expensive. I fear that my area has just those qualities. There are considerable difficulties, I think, in really ascertaining how quickly rehousing is going to be possible supposing this Bill were an Act now. There seem to be problems of interpretation. Does the Bill mean that best endeavours, plus urgency, plus having taken into account competing claims, give the same degree of priority to the person involved as would be in the case of being on a priority homeless list, for example being homeless within 28 days? I am not a local government expert. I believe that this would he H.1 homelessness in the correct phraseology. More precision about these definitions would, I think, help to establish what the local position might turn out to be. I talked to a housing officer who said that he thought that in the case of extreme urgency such as an injured cowman—something of that sort—it would probably be three months processing the application and then a further two months' wait, and that would be the best. It would also be very much dependent upon particular circumstances. I spoke to two housing committee members who said that they thought it would he only prudent in the case of a tractor driver having gone off to work in a local factory to expect that the problem would take three months plus a year, and that one would be optimistic to expect less. So this is fairly disturbing and I think there is considerable gloom in our part of the world. I feel that there is probably a lack of knowledge about the assets and liabilities that this Bill will give local authorities to deal with. It really requires a lot of study. The ages of the people in the houses, probable retirement, the number of dependants they have, the known problems there may be on farms—all those things must be considered. I think there is a disturbing lack of information there and I wonder very much whether the Government can clearly pinpoint where the problem areas are. I very much hope they can, but I do not believe that half as much is known as would be a good thing. To return to this business of the assets and liabilities of what is being taken over,  one of the principal liabilities the local authority is taking over is the problem of housing livestock workers urgently and very near their work. It has a severe location angle to it. Under the present system we have struggled to keep a certain number of houses empty when we have seen danger about to threaten. We have already gathered that there are 8 or 9 per cent. of tied houses empty, not merely for that purpose but for building work and so on, as well. The local authority wants all the time, quite reasonably, to treat all urgent cases equally on their merits whether they be agricultural or not, and the difficulty is going to be that if there are no empty houses available, again bearing in mind the location problem, it may very well not work quickly enough. One thinks of the problem of a man who dies in harness. I have twice had experience of a man becoming ill suddenly, with absolutely no notice at all, and never being able to resume the job again. In this context I should like to speak up particularly for the cowman. I do so with some feeling because I tried my hand at that job as a mud student and I well remember what it was like in the winter when I had to do a stint that lasted for five months without a day off because all the time there were difficulties, or somebody was ill. Things are easier these days, I should hope: they certainly should be. These people are of immense importance to us. They are a rare breed, and little wonder. It is a very exacting and resonsible task that they carry out. They need time off, they need a civilised life. Their hours are long anyway. I think that they are pretty worried about the danger of all this not being so easy if we cannot deal with emergencies quickly enough. If there is going to be a breakdown more frequently, and a return to the seven days a week slog without any relief, with the anxiety about getting ill and there being nobody to fall back upon, the farmer will be worried enough but the herdsman will feel that perhaps the best thing to do is to find a different occupation. We shall lose these people and it could seriously alter the farming map. I would emphasise that I do not believe that morale is very good, because they do see this difficulty. Another thing I would mention particularly is what happens when these people retire. As things are at present we have  usually been able to try to do our best for the long-serving employee. If he wanted to go for a council house, we knew what he should do and we could help him to do it. We knew the procedures. There is that unfortunate business of the court case, which I have never liked as a procedure. But there are many of them who do not want to live in a council house at all—it is the last thing they want—and those are the people to whom I have always felt that priority should be given as regards those houses near the farm, in the country, that we have, and that we can spare for retired people. I feel that in the future it may not be they who get them; it will be the people who come in, change their job, and then hold the cottage that way. That is rather sad because it does not look after the people who really deserve the most looking after. I do not know quite what the solution is at the moment, but I would hope that matter might be borne in mind. I could speak up a lot for the owners, mentioning that not all landowners own broad acres and are enormously wealthy. I should say, I think, that many of them will see this Bill as an extension of local authority housing resources but provided at the expense of the farming industry. From this comes the damage done to the motivation to repair and the motivation to build new houses. I am not sure whether something should be done about this, whether there should be some limit upon the ability of a local authority to go on indefinitely using a very large proportion of a certain farmer's houses in that way. I think the owners are worried also about the appeals procedure that is proposed in the Bill. There is a feeling that this is going to be expensive and that it is somewhat like "taking arms against a sea of trouble" in that it is difficult to prove precisely whether or not the local authority is breaching its duties. One goes on to the general question, how would it work, and my comment would be that it probably would, provided there were adequate resources. I listened with interest to the remarks about provision of approximately 500 houses a year. I am sure that is extremely good news. I would prefer to reflect, but if asked straight away for an opinion on that I would say it is a step in the right direction but probably not enough. The  success of the proposals will require much good will. I believe it will invariably be slower. I am sorry to see the old personal element given a back seat, because I believe, as my noble friend Lord Balerno said, that it is something we have been able to rely upon in the country; there always have been, and will be, very close ties indeed between employer and employee. As I say, I believe it might work, given these conditions, but there are deep anxieties in my mind, and not only in mine. The solution definitely is either that enough money must be made available, or alternatively, which I think is what I would prefer, that the noble Earl, Lord De La Warr, the noble Earl, Lord Ferrers, and possibly myself, have a go at another proposal altogether. I think this Bill is only abolishing the tied cottage in name and it may substitute a not very satisfactory procedure which is not a great deal better than the one we now have. With that thought I will sit down.

5.53 p.m.

Lord JANNER
My Lords, perhaps it might be of interest to some of us to recollect what has been happening in recent years with regard to the protection of tenants of houses and with regard to the general position of others who occupy them. A large number of Acts have been passed which have sought to ensure that people who are occupying a residence and have been occupying it for some time shall not be arbitrarily ejected. Some of us have participated in the debates which have taken place since early Bills were introduced during the last 30 or 40 years. It is not the person who is part and parcel of the general occupants who needs to be protected; it is the exceptions. We have had some very interesting comments. I refer to the interesting remarks of the noble Earl, Lord Ferrers, for example, and I certainly refer to my noble friend Lord Peart's contribution. I have not detected a real alternative to protect those who would otherwise be made homeless unless this Bill's protection is afforded to them. I am a person who deals with exceptions. As your Lordships are aware, I happen to be in the legal profession, and there we get, of course, not the general case but the person who is actually  affected, not in the generality of people who would not have that kind of problem to deal with. Noble Lords of course may have some Amendments to suggest, and I rather gather from what we have heard today that there will be a number of Amendments, some of which possibly will be acceptable. But I think many of the speeches are really dealing not with the principle of the Bill itself but with Amendments which might be introduced at a later stage. I have listened very carefully today. I admit that I have little knowledge of the farming industry. But, after all, we have had a noble Lord speaking here today, the noble Lord, Lord Collison, who would not want to endanger the farmworkers' position and who tells us that his union represents some 50 per cent. of the workers. It could very well be that the other 50 per cent. are contented, that they have splendid relationships with the employer; and I rather gather from what we have heard today from both sides that there is that splendid relationship. But obviously there must be some thing worrying those who are in his particular union. What is that something? It is similar to the kind of worry that the unprotected tenant has had right through the last 40 or 50 years when we have been dealing with the problem. Rent Acts have been passed to protect the tenant, also the Leasehold Reform Act. The whole idea was to see to it that a person who resides in a house—and some have resided there for many years—should feel that it is his home. I am also talking now about the tenancy in the agricultural industry. He should feel that this is his home, that this is a place which he is occupying not only because he happens to work near there but also because it is his home. He has built up that home. I think the average layman really believes that when he has lived in a property for a large number of years, or even not for a very long period, it is his home, he wants to keep it. We considered this problem with the Leasehold Reform Act; that was the nub of the whole proposal, that people wanted to retain their homes and to ensure that their widows and families should be able to continue to live there. Remember, too, that an agricultural worker, in most cases, will have worked  in the industry for years. Not only is, there the question of his employment, but there is also the question of keeping human contacts, the social amenities of a particular district, the friends he has, the neighbours he has. He cannot wrest himself away from all these thing without considerable heartbreak. That is the kind of problem we have to face up to here. It seems to me from what I have heard today, and what I believe to be the case, and judging from the manner in which these matters have been said by employers and also by my noble friend who spoke from behind me, that the relationship between employers and employees is excellent. What have the employers to fear? Do they really think that there is going to be a big rush away from the industry because some of their former employees are protected and because they will know that without good reason they cannot be turned out for reasons which are outlined in the Bill, and which perhaps some noble Lords will consider should he amended? Neverthless, I think that everyone in this House will agree that something has to be done to ensure security for tenants. This is following the kind of policy—I do not want to make a Party issue of this; it is perhaps difficult not to—that existed during and at the end of the first World War. Do your Lordships remember during the first World War in 1915, when the first legislation was introduced to protect wives and families in their homes, against exceptional landlords? Far be it from me to suggest that all landlords are bad. That would be wrong, of course. But there were the exceptional persons who did not treat their tenants properly. I am not talking merely about the farming industry but also in many other directions. The whole object has been to have regard to the human element, which is tremendously important. I emphasise the fact that in any profession you do not get the general cases, but the exceptional case, and from my professional observation I think that this protection is necessary. I should like to congratulate my noble friend Lord Peart on his excellent speech, and I think the whole House would accept that view. Indeed, I should like to congratulate the maiden speaker, Lord De La Warr. He said he spoke  uncontroversially. I have heard many maiden speeches. I would not say that every one of them was uncontroversial. Occasionally one gets an element coming in which could not be described under that heading. However, the noble Earl certainly made a moderate and acceptable speech. I did not agree with all he said, of course. Nevertheless, I am sure every one of us would want to hear him again because he put his case in a modest and I think very acceptable way. I do not want to detain noble Lords for long, but the position is such in my view that we must have this Bill. My noble friend Lady Phillips wants to extend it. All right, but I think step by step we can go far. It has taken many years, from 1915 until today before we have brought it in. I am talking about a time when legislation was pretty active in a similar direction. We had not brought this Bill forward, and yet there has been a need for it, as we have heard. I think the Government are perfectly right in dealing with this problem. I have looked at the terms of the Bill. They are not so hard on the employers. A person has to be in the industry for a couple of years. Even if he has not been in the industry with the same employer, he has got to be in the industry for that time. But if there is this good feeling, as we have been told there is, obviously he will forego possibly even other advantages in order to remain in the industry with the same employer. Therefore, the situation is not as bad as all that.

Lord SANDYS
My Lords, the noble Lord speaks from very long experience of many Rent Acts. Would he not agree, as a professional adviser, that the accumulation, the detritus, which has attracted itself around these many Acts makes for exceeding complications and interpretation which is counterproductive?

Lord JANNER
My Lords, I am terribly sorry but the noble Lord is now really dealing with a Party issue. I entirely disagree. I can tell you that there are hundreds of thousands of tenants in this country who today are blessing the fact that they have been protected by Rent Acts, otherwise they would probably have been homeless themselves; so please do  not run away with an idea that is quite wrong. On going round the country and listening to people who have had to avail themselves of the Acts, I think the noble Lord will find he has come to a wrong conclusion. He does not very often come to wrong conclusions—except on political matters. Apart from that he is very good. I know that from personal experience. I think that the Bill is a good Bill. There are protective measures in it, and I think they are very reasonable. Perhaps we shall be persuaded that in some way there might be all this talk of a council and all the rest. We are told that there are very few cases, and the way in which it is being presented is as though the whole thing was an enormous problem, that councils were being called to give priority to other people. It is not so big a problem as that; but it is essentially a problem of principle, and certainly a problem for the exceptional cases who need it, as has been admitted here. Unless and until we can satisfy ourselves that we are doing the right thing, not only for the majority but for the minority who feel that they are in a difficulty, then I think we are not acting as we should. Consequently, I think we, the employers and employees, should support this Bill wholeheartedly, and that we should see to it that if there is any additional method by which the matter could be made, if you like, more even-handed—personally I do not feel there is any need for that—let us discuss it at Committee stage, but let us pass this Second Reading unanimously as being an essential advance in the buildup of our social reforms.

6.8 p.m.

The Earl of NORTHESK
My Lords, I should like first to add my sincere congratulations to the noble Earl, Lord De La Warr, on his truly excellent speech. I think he spoke with real feeling and understanding of the problems of the country and the problems of country people, and I agree with a great deal of what he said. Since I am a tenant farmer and an owner-occupier, although very shortly I shall no longer be at least in England or Wales, any interest I am obliged to declare at this time will be very short-lived. I am also a working farmer, for want of a better expression; that is, I can not only farm from a Land Rover or  from an office, I can, and sometimes do, as is necessary, all the jobs on a farm which produce milk and beef, lamb and grain. I might add that for many years I was a farm worker. Therefore, I know some—not all, of course—of the purely very practical problems of agriculture; I would suggest that whoever devised this Bill does not. So it is from a very purely practical point of view that I should like briefly to make one or two points. To start with, I believe this Bill is going to make less accommodation available to the farmworker actually on the farm where he works, and I believe it is going to spoil the very satisfactory relationship that exists in agriculture today. Furthermore, the farm that is going to be most affected, whether it is owner-occupied or tenanted, is the smaller farm, the farm that employs, say, fewer than three people. Today, that is the farm that can least afford any extra cost or expenditure, which undoubtedly this Bill will produce, because these are the farms where every worker is a key man. Agriculture is unlike any other industry, for many reasons, but two basic reasons which are interconnected, which we have to contend with, are two elements over which we have no control. I think everyone would agree that we cannot control the weather, but perhaps not everyone would agree that we cannot control life or growth, for in practical terms, although we can plan and hope that a cow will calve or that the grain will he ripe on a certain day, in fact it very rarely does or is, and it is for this reason that it is absolutely necessary for the farm worker to live close to his job in order to be on call for the ills or whims of the animals he is in charge of or to sow or gather the crop, depending on whether it is dry or, under recent conditions, wet enough, and from this results the close community which in turn produces the team spirit, the pride in the job, the possessiveness which is so essential for an efficient agricultural workforce. For many years now the farming community has organised very satisfactorily its own housing requirements. Farmworkers expect a house to be provided for them on the farm. It is part of the job and one of the things the farmer expects to have to provide for the benefit and convenience of both, and because of this a close-knit and compact community  has developed which is on call as required, for emergencies and for the necessary extra work that is often essential due to the vagaries of the weather. In this close-knit community in which we have to live and work, which in itself produces pride in the job and the teamwork required, there develops a certain code of behaviour or way of life. People have respect for each other, so that when difficulties arise, as of course they do from time to time, people help each other and the problem is solved. I believe this completely satisfactory relationship will be spoiled, because I believe this Bill will take the allocation of farm houses out of the control of the farming community, that is, out of the control of those people who know the particular and individual problems, and a great number of farmworkers will find themselves living many miles from their work; the essential compact and close-knit work force will be destroyed. I believe also that a considerable amount of hardship may be caused by moving people out of an environment in which they have lived all their lives. My Lords, what I am trying to suggest is that the farming industry has for a long time managed its housing very satisfactorily. We, and by that I mean both the farmer and the farm-worker, have had the freedom to do what is necessary and expedient in any circumstances. Why, then, must there be more legislation that can only be detrimental? If this Bill is passed and it does what I expect it to do, and what in fact I am quite sure it will do, one wonders whether the extra cost and inconvenience that will undoubtedly arise have been considered. For instance, how is the farmworker going to get to his job, and who is going to pay for it, if he has to travel 10 or 20 miles every day? There is not likely to be any public transport if, as a cowman, he has to be at work at 4 a.m. Even if he has his own transport it will mean extra expense, but in many country areas there is no school bus or bus service, and his wife will often require the car to get the children to school or to do the shopping. Perhaps the farmer will allow his employee to take a farm machine home for breakfast or dinner, or in the evening, all of which entails extra cost, time and inconvenience. But can you imagine the reaction of his neighbours in a housing estate, or of the local district council, to a tractor and muck-spreader or a 14-foot combine  harvester travelling back and forth every day or parked outside his front door? It may be thought that all these trivialities will cause little hardship or concern, but these are practical problems, the sort of problems that the farming community will have to overcome but which the creators of this Bill cannot possibly have considered. Neither can they possibly have considered that the majority of farmers try to arrange that most of their cows calve during the autumn. The price structure for milk makes it economic to do so, and there are other technical factors that make it right, and the good cowman will always want to be on hand when his cows calve and, like most females—or at least the best ones—they invariably turn out to be the most awkward and will calve at the dead of night. If he has 90 cows to calve, he has to have a house within walking distance of his job. To attempt to do it from 10 or 20 miles away is simply not possible. The same could be said of a shepherd who will be lambing 400 to 500 sheep in about six weeks. But that is not the end of the job for a good conscientious stockman. Animals get sick; they have to be looked after at all times of the day and night. They have to be watched when they have a change of diet or move to a new pasture; and, because all animal-based food that we produce depends on reproduction, this has to be seen to be effectively done and recorded. Living close to the job also applies, though to a lesser extent, to the tractor driver, because a lot of the work that he is responsible for depends on the weather and, therefore, it is necessary for him to be available when conditions are right for harvesting or for sowing and planting. In farming now it is a question of conditions being right not on a particular day but at a particular hour. So essential is it for the stockman to be close to his job that if the farmer is going to have to contend with the possibility of not being able to move a man who for some reason or another has left his employ, or if he is going to have to contend with what I understand is the hereditary factor that is built into this Bill, or if he is going to have to rely on a council that already has a critical housing shortage, I can foresee that, in the unlikely event of any of his houses becoming  vacant, he is going to be sorely tempted to allow that house to remain empty to cover any eventual emergency. But more probably what will happen is that in the event of a farmer's requiring to employ a new man he will be unable to obtain the person he wants, or the person who wants to take the job, because he has no house available; or he will be forced to employ a man who will have to travel 10 or 20 miles every day from his existing accommodation, with all the problems and difficulties I have already explained, which can only add extra cost and make agriculture less efficient. One other aspect of the Bill that I object to on, if you like, humanitarian grounds, is that if a farmer requires a new employee to replace one who is retiring, the farmer can—and in fact will have to, for he will no longer have houses over which he has control—apply to the local authority to rehouse the retiring man. Much has been said about the hardship of retiring people, but it is not always acceptable for a 65-year-old man and his wife to be moved from the country community in which they have lived all their lives to a council estate in some completely strange urban area. There have been some heartfelt letters in the agricultural Press about this, one of which concluded: "Justice and democracy are of poor quality when at the end of our working life we are to be passed over to local authorities like refugees from the environment to which we belong ". Surely the fact that 20,000 farm cottages are at present occupied by pensioners indicates that we look after our own satisfactorily. In fact, we have looked after our own for years. We have made our own arrangements for our retired workers, sometimes of course with the aid of local councils under their advanced warning schemes, but usually by being allowed to have sufficient accommodation to move our workers and dependants from house to house as circumstances make that possible. I can see no reason for altering this, unless for some reason it is considered unfair for a part of the community to have some freedom of choice.

Lord JANNER
My Lords, may I ask the noble Lord whether he is not really arguing that, in his own sphere, the only persons who are likely to be affected are  those who have employers who do not come within the reference he has made? Are not they the people who have to be protected?

The Earl of NORTHESK
My Lords, I did not quite follow the noble Lord's question, but perhaps it will be possible to deal with it later. I have stated what I believe will happen as a result of the Bill, and for these reasons I cannot support it. Despite the many problems we in agriculture have to overcome, it is a highly efficient industry and I ask the Government not to add further frustrations and difficulties but leave us a little freedom and let us get on with our job in the best way we know how.

6.23 p.m.

Baroness SHARPLES
My Lords, I wish first to add my congratulations to those which have already been expressed to my noble friend Lord De La Warr. We have known each other for very many years and I listened with great interest to his most positive contribution to the debate. Like many of your Lordships, I am a farmer and, like others, I have always tried to have enough dwellings in which to house my workers and, if possible, to provide for their retirement. At the moment I have several men who live close by in their own cottages. This means that I have to keep some of my houses empty and I want to preserve the right to keep them empty, first to meet the case if one of the men who now has his own house leaves the farm and his replacement needs a cottage and, secondly, because accommodation should be available for those who retire and have no wish to be forced to live in a town—my noble friend Lord Northesk referred to this—away from their lifetime friends. My anxiety is that if a worker living in one of my cottages gets a job elsewhere and refuses to leave, the local authority may be unwilling to help because in its view I have alternative accommodation to offer him for the reasons I have given. Although noble Lords have dealt with other parts of the Bill, I, in dealing with this aspect, need not delay the House further. I share the deep concern which has been expressed by noble Lord about this and other parts of the Bill and, that said, I will not trouble the House further.

6.25 p.m.

Lord CLIFFORD of CHUDLEIGH
My Lords, I suppose that one should declare one's interst. I am a member of the NFU and I think that I qualify for the same description as the noble Earl, Lord Northesk. I am a former chairman and president of the county branch of the CLA and, apropros my first meeting with the noble Lord the Leader of the House, that occurred when he came to the CLA tent at the Devon County Show. That was several years ago and I hope that we entertained him adequately. I recall that as he left an ex-Gunner, a brigadier, who was there and who happened to be president of the English Shorthorn Society remarked, "He's all right; he's wearing a Gunner tie". The Devon branch of the CLA has 2,300 members, practically all of whom are small owner-occupiers, those who fit the description given by Lord Northesk of farmers employing only one or two workers. I would not be speaking today if it had not been for the fact that at our monthly committee meeting yesterday this subject came up and I was left in no doubt but that they expected their views to be expressed. As the present chairman has a niece working in an office in your Lordships' House and as she always sends hime a copy of Hansard if it contains anything in which she knows he is interested, I have to inflict myself on your Lordships, if only briefly. The situation concerning farmworkers and farmworkers' cottages is worrying many small farmers more than is realised by the Government. Like the noble Lord, Lord Balerno, I have been foolish enough to build seven new units of accommodation in the last 10 years, not only for my own farm but for my tenants' farms, and when one considers that of the other cottages I have on the estate some are let at a controlled rent of eight shillings a week, one will agree that it is impossible ever to get a financial return on that investment. What is worrying the type of person about whom I am speaking is a series of events. So far as the Bill is concerned, how can we be certain, they ask, that we will get this accommodation from the local council for a retired worker? They—they as opposed to us—do not realise that there are more things in a small  agricultural community than the urban mind can visualize. To give an example, I have been pestered time and again in the last couple of years by a certain family on my estate who cannot stand their next door neighbours, and it is to poor Joe Soap whom they come to complain. In the bad old days, that was easy. My ancestors had built a cottage in a far wood called Well Cover and if we had anybody who was difficult with the neighbours or whom the neighbours could not stand we moved them there. As your Lordships may imagine, it was known as Siberia. But not everybody can do that and it is the small owner-occupier who is very worried about this position. I am hoping that the brilliant minds which will produce the various Amendments to the Bill in the Committee stage will somehow or other be able to take some of these points into consideration. In my case, I have five pensioners living on the property rent free. The present proposals, if added to the rent restriction legislation, the Community Land Act, the capital transfer tax, the proposed wealth tax and the 101 other things that seem to have come together at this time, make the agricultural community, or that element of it to which I am referring today, ask, "Why the hell pick on us?" If, as suggested by the noble Earl, Lord Ferrers, there had been some overall rural housing scheme which would have made this Bill unnecessary, how much more helpful that would have been! Again, there are various other worries such as the agricultural workers' union passing its resolution to nationalise the land. If that is added to all these other measures and the present Bill, which seems not to consider the real problems of the small farmer, comes on top of them, that makes the section of the farming community to which I am referring today rather anxious, to say the least of it. I hope that something will be done in the later stages of the Bill to lessen some of their worries and to make them less urgent than they seem now.

6.33 p.m.

Lord BURNHAM
My Lords, I declare an interest as a farmer and also  as the owner of other rented housing which I hope will enable me to get away with the worst of the provisions of this Bill if it goes through in its present form, in that I would hope to be able to offer alternative housing myself. I think my noble friend Lord Monk Bretton is the only speaker who has mentioned the timing of the operations envisaged in the Bill. He suggested that it might take three months to get a decision from the housing authority. In my experience, that would be a very quick and efficient authority. I think that it would be four months, if one were lucky. However, it is only when the decision has been given with the benefit of the advice of the ADHAC that the housing authority will start looking for accommodation for a farmworker whose house is required for his replacement, and it is anybody's guess, and will vary enormously from one part of the country to another, how long it will take to provide suitable accommodation. Again, working on my own experience, even when I know that a local housing authority has been doing its very best to produce a house, this is not likely to take less than nine months and, if the family is a particularly large one, the search could take up to three years. So one is expecting a delay before possession can be obtained of somewhere between one and three years. I am sure that the noble Lord, Lord Peart, will recognise that the absence of a key man—and by definition he must be a key man because this is a case where the committee has agreed that possession is necessary for efficient farming—for between one and three years, would be very expensive to the farmer and could at worst be disastrous, depending on the type of enterprise. There has been no suggestion that the farmer should be compensated for the failure of the local authority—presumably through no fault of its own—to provide alternative housing. It could be a very serious matter for the farmer. However, I have a suggestion to make which I believe may commend itself to both sides in this matter. There has been a good deal of discussion about the meaning of the words, "use their best endeavours". I should be very grateful if those words were changed to make it into an absolute duty, but I have the impression that the Government would be unlikely to give way on that. I  therefore suggest amending Schedule 3, Case I—that is, where a committee has agreed that a house is essential. If the farmer can provide an adequate mobile home for the worker who is leaving, that would not relieve the local authority of its duty to use its best endeavours but would enable the farmer to get possession of the house. Before anyone raises his hands and talks about the horror of putting a man out of a house into a caravan, let him remember that someone is going to have to live in a caravan because, if the man who is leaving does not, the man who is coming will have to, for there will be nowhere else for him to live. I believe that something on these lines could make the situation possible for the farmer and would cover the period while the local authority was doing its best to carry out its new statutory duty. I cannot think of any other way of dealing with the matter which would not either be disastrous to efficiency or cause hardship to someone. As so many noble Lords have said, one has sympathy with the farmworker who has no absolute right to his home. The other problem which arises is that of the agricultural dwelling where the committee does not agree that possession by the farmer is essential to efficient farming. I am not quite certain, from reading the Bill, whether there is any appeal against this decision, but it could be said with certainty that the farmer who owns the cottage in question is convinced that it is necessary for efficient farming. If he were not, he would have sold it and spent the money in paying off his overdraft or in buying a new combine for £14,000 or so. So in his mind it is essential and I am not clear whether, if a small committee takes the view that it is not, there is any way out of that. However, the result will of course be that, if the farmer is not allowed possession, he will be subsidising the family of the worker in question for the remainder of his life, and very likely, for the life of his children. I say "subsidised" advisedly because we all know that a "fair rent" is a rent which is fair to the tenant but to no one else. In my experience the average gross return under the regulated rent system is somewhere between 2 per cent. and 3 per cent. and the net return is about 1½ per cent.; so that you are putting a fair burden on that  farmer because had he realised the Committee in their wisdom were right and he did not need the cottage, he could have put it into gilt edged at 15 per cent. or paid off his overdraft and saved even more money. But those points, I believe, could be settled if my first suggestion commended itself, by forgetting the matter of whether the house is essential to efficient agriculture. It is not a matter that can be readily defined; and if a committee makes a mistake only time will show that it had done so by which stage it is far too late to remedy the error because you could have a statutorily tenanted resident who could under no circumstances be moved.

6.41 p.m.

The Marquess of SALISBURY
My Lords, may I first congratulate my noble friend Lord De La Warr on his splendid opening speech with us and express the hope already voiced that he will be taking a further part in our deliberations. Before I say anything more, I must declare an interest in the matter under discussion. I should like briefly to comment on the Bill. So much has been said that I do not propose to go into very much detail, but it seems to me, in spite of what the noble Lord, Lord Peart, said that he is employing a sledgehammer to crack a nut. It seems to me that practically everything covered by this Bill is already met under various other Acts and the remainder could be dealt with by comparatively small amendments. So we have an immensely complicated Bill dealing with something that could have been dealt with in a simple way. This is one of the criticisms of the Bill. In considering dispossession, it is treating all cases as though they were similar. I should have thought that the main problem was in dealing with the retiring farm worker where the farmer has no alternative accommodation to offer him. We know that a number of local authorities allow pre-booking of this, as has been mentioned. If this was made mandatory under the Bill this would surely meet the vast proportion of the problems which this Bill claims to deal with. Most of the others, so far as dispossession is concerned, are surely covered by, I think, the 1965 Act under which no one could be dispossessed without a court order which is supposed to give adequate  protection. Indeed, if a man is dismissed he is covered both by that court order and also by the right of appeal to a tribunal and can claim damages for what he considers wrongful dismissal. So all things considered those two remedies which are open to him, cover most of the requirements dealt with by this immensely complex Bill. It also presupposes that the present situation will continue—and this may be true to the extent that it only deals with the fringe of both the housing problem and the problems of the farm—but, in fact, it seems to cut across the whole of the activities of the farming enterprise in various ways. One that has not been dealt with is the case of an estate which owns a number of properties which are used for housing people working in the general sphere of agriculture. They involve a very substantial outlay of capital and, in my view, can only be justified if they provide either for efficient estate management or aid the farmer in carrying out his business of husbandry. Successive Acts—and this is one of a long range—are making it less and less attractive to hold these houses and their value is being eroded; so that, surely, what is going to happen is that they will no longer be held but will be sold to the highest bidder when they become vacant. They will be no longer available for use in the general sphere of agriculture. This must lead to a shortage and one wonders whether Her Majesty's Government have any plans for compensating for this when the matter arises. There are a number of other factors which have been mentioned which all add up to making one wonder what really is the object of this Bill. One thing that little has been said about this evening is a matter of the animals themselves. Perhaps it is because, unlike some other people who have been more vocal, they are dumb and cannot state their case. It is up to us in the agricultural community to see that their interests are protected. Again I emphasise that what I am going to say is only affecting a small number of animals. So long as you have a regular stockman or herdsman their needs are attended to—and very well because these men are very dedicated to the animals they look after and we are all very indebted to them for the trouble they take. But if we continue with this  Bill in its present form there will be a number of animals bound to suffer. As has been pointed out, it will not be possible to look after animals if the man responsible is living 10 or 15 miles away. He cannot be there at all hours of day or night and the suffering of the animals could be intense. If we make no provision to cope with this, we are condoning the damage and pain to the animals concerned. Is this really what your Lordships wish to do? If one might cite one or two examples, there is the cow that has a difficult calving. It may be in the middle of the night. What happens? It needs help. If there is no one to do it, it will suffer until morning when perhaps the milking starts and the man comes on the spot. All that pain would have been eased possibly by providing a block and tackle to get away the calf. It may be that the calf is half born, with one leg sticking out for the whole night. Are these the things we wish to happen if they can be avoided? Some consideration ought to be given to the position of the animals on the farm. One would have thought that this would have been taken into account when the Bill was drafted; but as it has not been done, then I appeal, even at this late hour, to the Government to make some provision to look after these animals.

6.48 p.m.

Lord SANDYS
My Lords, my first duty is to have the very great pleasure of saying what a particular honour it has been to take part in a debate in which my noble friend Lord De La Warr has made his maiden speech. Many of your Lordships will have known his father well. I remember over the last 15 years his having spoken in debates in this House on a whole variety of subjects because, as your Lordships are only too well aware, in this House we cover a very full range of activities far beyond agriculture. His maiden speech, if I may be permitted to say so, was a model. It was brief, it had a whole range of very constructive proposals to offer to the Government; it was modest and, further, it was non-controversial. I wish that my maiden speech some years ago had been even one-tenth as good as his has been today. It is also a very great pleasure, if I may say so from this side of the House, to  welcome the noble Lord, Lord Peart, to the Dispatch Box opposite. Perhaps I may be allowed to say this: During an event which took place—a very great tragedy—almost ten years ago when the noble Lord, Lord Peart, was Minister of Agriculture, we acquired in the agricultural industry a very high regard for his handling of the situation arising from the outbreak of foot and mouth disease in 1967–68. We may not have been with him on his visits to the stricken areas but we saw him on television. We knew him from Press reports and countless other interviews and recognised at once his high regard for the industry as a whole and, further, his deep concern for livestock and our flourishing British livestock industry. It is a pleasure to see him occupying the seat he occupies as Leader of the House and Lord Privy Seal, and as a worthy successor to the late Lord Williams of Barnburgh who used to occupy a special place of affection and respect in your Lordships' House. I should also like to express gratitude to all those who have prepared the research which has been carried out on the documents we have before us. I take it that the noble Baroness, in replying, will address herself not only to the Consultative Document the Abolition of Tied Cottages in Agriculture, but the much wider issue of homelessness. The fact that this Bill is cast in a narrow context is one of its major defects. It has been pointed out by countless speakers from this side of the House that the Bill as drafted does not measure up to the major problem of rural housing in the United Kingdom today. I should like to name the institutes who have prepared research, the Tavistock Institute, the Grubb Institute, the Arthur Rank Centre and all the policy papers put forward by the National Farmers' Union, the Royal Institute of Chartered Surveyors, the National Union of Agricultural and Allied Workers and the County Landowners' Association. These gave us food for thought both during and before the Summer Recess. The fundamental aspect which we regret on this side of the House, as indeed do the Cross-Benches and those who have addressed attention to this subject with any great depth of study, is that the Government have failed in one substantial respect: they have failed to ruminate before legislating. In this matter we should,  before doing anything else, think once again of the report prepared by Sir David Renton on the preparation of legislation. We are being offered instant legislation. I say that advisedly despite the fact that the noble Lord, Lord Collison, reminded your Lordships that this has been an issue since 1886. The issue concerns housing in the rural areas of the United Kingdom today. The research has been devoted to that end and no other. Therefore we must concern ourselves with the problem as it stands now without too many backward glances. The two basic documents, Abolition of the Tied Cottage System in Agriculture and Homelessness, call to mind one substantial defect. If I may chide the noble Lord, Lord Peart, this relates to the preface. The noble Lord made a great error in jointly signing the preface with his right honourable friend the Secretary of State for the Environment, Mr. Crosland. He put his signature to the following statement: "Thus we are consciously distinguishing agricultural from other tied housing. There is no other industry where the fact that unfurnished accommodation is provided by the employer/ landlord enters so extensively and so controversially into the relationship between employer and employee". Is that true or false in our experience? I leave your Lordships to judge. I have an interest to declare: I am the owner of certain tied cottages but, speaking as we all do from our personal experience, I believe that that is not a fair statement. It is not a fair summary of the industry as a whole. Naturally, it would never have occurred to any of my noble friends to set their hand to such a statement. It is a great mistake when the Secretary of State and the Minister of Agriculture agree upon the particular point because I can see so clearly that the Secretary of State for the Environment has been more particularly concerned with the drafting of this Bill than has the Minister of Agriculture, who has been dragged into it. Having said that, we must concern ourselves most closely with the consultation paper on Homelessness. The noble Baroness will remember a debate which we had on this subject on 25th June last year. It was on an Unstarred Question which her noble friend Lord Soper, had put down. We have debated this subject. It is in the context of the very much wider  problem of homelessness that we must see the Bill as a whole. Only a few days ago the noble Baroness's right honourable friend the Secretary of State gave the following facts about the situation in the country as a whole: "750,000 houses as a whole"— that includes every form of housing in public and private ownership both in agriculture and outside agriculture— "are empty and surplus to requirements." Over 800,000 houses are unfit in that particular designation, which is applied to houses within the categories in the Department's knowledge. A further 1 million in the view of the Secretary of State are at the moment lacking basic amenities. This is one of the first national priorities to get right. It is a great mistake that the Government have settled on a very small factor within this major problem and have decided to legislate about it without regard to the other aspects. We have had a long debate this afternoon and I feel that I shall not be adding to it if I quote in detail from particular speeches, but I must say this: my noble friend Lord Ferrers reflected exactly what we feel when he said that he had much natural sympathy with the aims of the Bill as a whole, but no sympathy whatever with the way in which it was drafted and brought before your Lordships' House. Once again the message is, ruminate before you legislate. I believe that we should refer to what was said in another place, just before the House rose on 20th July. For the Government Mr. Armstrong, the Member for Durham North West, said this at column 1744 of Hansard of another place: "…the long-overdue recognition that farm workers have the same rights to security of tenure as those that most of us have enjoyed for many years—the separation of their rights to a home from their conditions of work—were spelt out in the Labour Party manifesto. We believe that they are in the best interests of our people and we are content to be judged by them." We are content to be judged by that as a fair statement, but when one looks at the policy document on research which has been laid before your Lordships, one sees what an enormous credibility gap there is. In the Arthur Rank Centre statement Miss Moira Constable wrote this: "5·3 per cent. of farm workers want tied cottages abolished and 83 per cent. felt that tied cottages had some advantages to them." If the Member for Durham North-West feels he is content to be judged by the industry as a whole, those are the figures. If there are better figures which the noble Baroness can offer us, we shall naturally listen with enthusiasm. I come now to the centre of the problem: the burden which the Bill lays on local authorities. I agree entirely with the noble Lord, Lord Swaythling. It is a meaningless phrase—"a perfect alibi" is the expression he used—and I endorse most warmly what he said with regard to the risk of disease, because once again the experience of the noble Lord the Leader of the House, Lord Peart, is particularly relevant. The noble Lord will remember that one of the key issues during the foot and mouth outbreak in that very dreadful winter was the risk of the spread of infection by human and animal means by persons or vehicles entering an unaffected area from an infected area. This is a major issue which should not be set aside, and I hope that the Government will open a copy of the Northumberland Report and refer to this particular problem. A large number of my noble friends have concerned themselves with the issue as regards stockkeeping. One must remember that foot and mouth disease affects all hooved animals. This is a real, not a sham, issue. It is something which should be regarded with the greatest care and interest. Knowing full well that one of our greatest assets in the United Kingdom, as an island, is the fact that at the present time we are free of this disease is a particular attraction to stockbreeding in this country and the measure of its success in the world as a whole. If I may I should like to refer to what the noble Lord, Lord Peart, said in regard to the Bill as a whole. He said it was not doctrinaire but practical. I think this is really where the House divides on the issue, because I believe it is the very reverse of practical. We believe that the complications of its implementation are such as to confuse and confound an industry already suffering from many problems. Perhaps I should say here that after our debate concludes this evening we shall be considering two very important agricultural matters in the European Communities. Those are matters which are so vital to the  industry as a whole and which concern the industry within the context of Europe. How fortunate we are, once again, to have the noble Lord, Lord Peart, with us, whose patience in Brussels in negotiating the last Price Review gave the industry a considerable fillip during a period of deep anxiety. I feel the weaknesses of the Bill are very considerable and I was far from happy when listening to the speech of the noble Lord, Lord Collison. I do not wish to cross swords with him across the Chamber, but I feel that his attitude towards the views expressed from this side of the House was far from helpful. I think he said this—and I quote: "Good trade unionism means thinking further than your own sectional interest." May I say that to him, in the nicest possible way, from this side of the House as well! A much broader view is required, and in my opening remarks I attempted to set the matter in the context of housing as a whole. The question of mobility has worried many speakers. It worried my noble friend Lord Onslow and many others, and the question of promotion prospects within the industry as a whole will almost certainly be affected. Here the fact that the Government have drawn up a very rigid system has caused great anxiety to younger members within the farming community. We had the views of young farmers concerning the Agriculture (Miscellaneous Provisions) Bill, and I think they have every right to express their views most forcefully. We shall certainly listen with keen interest from this side of the House to what they have to say on the issue of promotion prospects within the industry as a whole. The question of safeguards for farmers was raised by my noble friend Lord Caithness. He maintained it was wrong to legislate and that what was being done would incresae the worries of an already much divided and concerned industry at the present time. I believe that industry is not divided within itself. I believe that both the National Union of Agricultural Workers and the National Farmers' Union, if given a lead from Her Majesty's Government, setting the problem of tied housing in the right context and given a longer  time scale, can and will work out a far more satisfactory solution. My noble friend Lord Caithness said this—and I should like to thank him particularly for bringing this point to your Lordships' attention: "The Government only permitted a very small amount of time for replies to come in on the Consultative Document." This is absolutely critical. If we are to continue more of this research we must have time to ruminate. I believe that the speech made by the noble Lord, Lord Janner, who has now left us, is not one with which many noble Lords would agree, because he was speaking from the point of view of legislating for the exception. We understand this, because he is a lawyer; but surely the very worst thing that could be done to this industry, or to any other industry in the country, is to legislate for exceptions alone. I believe that one of the most important and worrying aspects of this matter is the fact that at the present moment there are, according to our researched figure—and I will willingly give way to any others that are produced but this is the one we have in front of us and which was mentioned, I believe, by the noble Lord, Lord Peart—12,000 empty tied cottages. That is a reflection of a real concern within the industry of what is going to happen. My noble friend Lady Sharples put her finger on it very well by asking how was she to prepare for a situation where a worker left her employ and how could she rehouse a replacement. It is simply fantastic that a capital asset, worth in all probability between £10,000 and £12,000, must be maintained by the farming community in anticipation of some very one-sided legislation. On a number of farms, if not every farm, a number of tied cottages will have to be kept empty because of the possibility of such an occurrence. This is something which will concern your Lordships when we come to the Committee stage. I believe this is such a deep subject that the Government would be very well advised to say at this stage: "We entirely agree with the speakers in the House today. The moment has come to take a pace backwards, to think about the situation as a whole, and to withdraw the Bill for further consideration."

7.8 p.m.

The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)
My Lords, I find myself in an odd position tonight, because in congratulating the noble Earl, Lord De La Warr, on his delightful maiden speech, I almost feel I am making one myself, because I can honestly say I have never made a speech before in this House connected with agriculture. It has been a fascinating and interesting, though, if I may say so, a rather rum debate. First, there was what I felt was a rather downbeat and depressing feeling about it all, except for the speech of my noble friend the Leader of the House and some noble friends behind me, together with the noble Lord, Lord Wise. I began to remember the quotation from Macbeth, when the porter heard the knock on the door and then said: "Here's a farmer, that hanged himself on the expectation of plenty". That is how I feel.

Lord DAVIES of LEEK
He said other things, too.

Baroness BIRK
That is the quotation which has most relevance to the debate tonight. The others may be relevant to debates later on. The noble Earl, Lord Ferrers, made a very good speech entirely on the wrong side. At the beginning, I felt that with a little urging he might have come down on the side of right and justice. He was obviously concerned about his historic roots, and about the distress that has arisen and continues to arise in this area. But he, with everybody else, having paid a certain amount of what I do not want to call lip service, because it went far deeper than that, did not come up with any alternative. I feel that we are facing a number of people who, in their own right, are good farmers and are therefore judging the rest of the farming community and the industry by themselves. When the noble Lord, Lord Sandys, said that we should take back the Bill and ruminate on it, he was—I hope he will forgive me for saying this, but I mean it in the nicest possible way—talking a hell of a lot of nonsense.

Lord SANDYS
My Lords, may I—

Baroness BIRK
No, my Lords. I shall not give way at the moment, because I have something else to say about the noble Lord. In the last two years, nine reports and surveys have appeared. In fact, there has sometimes been so much talk and consultation that I sometimes feel that one of the dangers of government by any Party is the amount of consultation and talk that takes place when, after a certain point in time, one needs decisions. We know very well that this Bill has been ruminated on and germinated over the last 70 years. The fact that conditions have improved does not in my view, and in the view of my noble friend and friends in the Government, alter the basic principle of the Bill. If I may say so to the noble Lord, Lord Sandys, again in the nicest possible way, I do not think he did his cause much good when he attacked my noble friend Lord Collison, who really knows his stuff from the workers' side, which is what we are talking about. If all farmers were like the noble Lord, Lord Balerno, and were able to keep their cottages in the proper way there might be something to be said for continuing the system. I say "something", because there is still the basic principle which we are dealing with tonight, and from which we cannot escape, that it is wrong that the questions of employment and a roof over one's head should be inextricably bound up. This is what it is all about.

The Earl of ONSLOW
My Lords, if the noble Baroness says that the whole question of employment should not be inextricably bound up with a roof over one's head, why is it that she is legislating only for agriculture and not for all the other industries?

Baroness BIRK
My Lords, if the noble Earl w ill be a little patient, I will get on to that point. I am dealing with the Bill that is in front of us tonight, and I am answering on that. But the fact that, as I accept and know, there are very good relationships between farm workers and farmers and that in many cases the system works perfectly well, does not alter the fact that it is a bad basis on which to run an employment  relationship, and on which people should have to rely for a roof over their heads. Although my noble friend Lord Collison was talking of conditions many years ago, the shadow of losing one's home, particularly if one has a wife and, perhaps, many children, can still play its part. Further, I would say that we have to look to the future. The noble Lord, Lord Sandys, mentioned young farmers, but there are also young farmworkers. We do not want to see a decrease in the number of young skilled people who come into farming and train for it, but who are unlikely to accept an archaic system which is based on a philosophy of dependence. They do not want this. The older farmworker may be used to it, but it is not something that will attract young people into the industry, and the more skilled and technical the industry becomes, the more important it is that we attract young people into it. The question of the 1,200 workers and their families facing court proceedings has been rather brusquely brushed aside. I think that the noble Earl, Lord De La Warr, put his finger on it, when he said that it is an event which turns out to be a non-event. At the end of the day, that may be true factually, but what is important is the fact that there is a shadow over a man and his family; the fact that one is always on the brink of a precipice where something could go wrong. We have heard a lot about good farmers, but it is wrong to rest one's case on them. If a good farmer dies, sells up or retires the whole situation can change with tremendous effect upon a worker's security. The noble Earl, Lord Onslow, and others, have talked about collusion. I agree that it is not something which one wants to see in a difficult housing situation, but attached to that there is the fact that a number of people on both sides certainly do not want to go through that process. I can understand why, particularly in this House, departing from deeply rooted tradition causes such articulate anxiety. But I believe that misconceptions and a reluctance to change are the parents of many fears. A sentimental attachment to the past is not a recipe for modern agriculture. We simply must be realistic. The Bill does not mean the ruin of British farming—

Lord SANDYS
My Lords, does the noble Baroness really believe that this Bill is a recipe for modern agriculture?

Baroness BIRK
My Lords, it is certainly a recipe on which to base a better relationship within the agriculture industry. Furthermore, my noble friend the Leader of the House, who was until recently Minister of Agriculture, would certainly not have gone along with any Bill which he felt was against the interests of British agriculture.

Earl FERRERS
My Lords, can the noble Baroness say why the Bill does not apply to Scotland?

Baroness BIRK
My Lords, if the noble Earl will give me a chance, I will deal with that point when I arrive at the right place, when I want to deal with it. We recognise, with farmers, that some cottages are needed for particular workers if farms are to be run properly. From a lot of what has been said this afternoon—and I have listened to practically every contribution that has been made—one would get the impression that there was no provision in the Bill for the demand that there should be housing on the spot in the interests of the efficiency of agriculture. Obviously, the degrees of urgency differ, but this must include the dairy farmer seeking to replace a cowman, which is just the kind of case we would normally expect to come within these provisions and to be dealt with as speedily as possible. I think that both the noble Lord, Lord Monk Bretton, and the noble Marquess, Lord Salisbury, drew attention to this point. There is nothing in this Bill which will stop husbandry going on in exactly the same way. Some noble Lords said that the two years' qualification would encourage people to go into agriculture in order to get a house. This seems to me to go into the realms of fantasy. Working in agriculture is not a very easy pen-pushing job. If you have to do that in order to get a house, frankly I reckon that if you do a good job you are probably entitled to it at the end of two years, but I cannot see that that is something which is likely to happen. If I may turn to the question of the requirements to be met by the new duty—and I emphasise that it is a duty placed upon local authorities—this is the first time  that in an Act of Parliament, as I hope it will be, a statutory duty has been put upon local authorities to rehouse any group. It is put upon them to rehouse outgoing workers where the farmer genuinely needs the cottage. The noble Earl, Lord Onslow, raised the question of "best endeavours". No doubt we shall deal with this point in even more detail during the Committee stage. It is natural that farmers should press for an absolute obligation, but again this would entail farmworkers automatically heading the local authority housing queues. Local authorities have been very co-operative, but as a one-time member of a local authority housing committee I must say that in the last resort the elected local representatives must be the arbiters of the housing claims. They will take account—and even more so now that this is included in the Bill—of the claims of farmworkers. The Bill ensures that in every case agricultural needs can receive expert consideration through the ADHACs so that they get the right priority. This seems to me to be as far as one can go. At the present time farmers who want a cottage for an incoming worker normally have to reckon upon a delay of six months before they can regain possession. Probably it was not meant, but the impression that was certainly given was that under the present system a farmer could obtain possession either voluntarily or by a court order within a matter of days or hours but that under the Bill the delays would be enormous. It will possibly work out that the situation will be the reverse because at the moment, as we are all aware, local authorities who are usually in such a difficult position so far as housing is concerned, will say to the farmer that they cannot offer anything until the person is homeless. Under the Bill there is the possibility to plan ahead so that the farmer can go to a local authority and say, "So-and-so will be retiring within a year". Therefore there is more opportunity to look at this problem in a planned and proper way without both the difficulty and the horrible indignity and all the other things which result from the collusion which has been mentioned by so many noble Lords. Secondly, local housing authorities now cope with rehousing considerable numbers of farmworkers and ex-workers, so there  is no reason to suppose that the Bill will lead to more cases of farmers seeking possession. Also there is nothing in the Bill to stop the considerate, responsible farmer who is able to do so from continuing to house the retired workers or the widows of his workers. The more extreme fears about the future for farming jump to the unwarranted conclusion that the Bill necessarily increases the problems. It does not. So far as resources are concerned, a question that was raised by several noble Lords, it may be that some local authorities will feel that they need to build new council houses in order to meet their obligations under the Bill. Naturally there has been concern—the noble Lord, Lord Sandys, and others have reflected it—about being able to do so because of the controls which at present affect their housing programmes, But by no means will all the housing investment funds be used up on new housebuilding in the stress areas where there will be some priority and funds will be available for new housebuilding. As my noble friend pointed out, the Minister for Housing has said specifically that allowance will be made in the housing programme for these cases. It has been put forward both here and elsewhere that a rigid time limit should be given to local authorities. First, the Association of District Councils, who will be the local authorities most concerned with the housing side of the matter, are absolutely against this—and quite rightly. They must be allowed flexibility. In any case, if a time is given and they could rehouse within a shorter period, it may well be that that time will become the minimum rather than the maximum. A decision taken by any other body, such as the agricultural advisory committee, would be quite wrong because it is there to advise; then it is for the local authority to decide within the possibilities that it has. We ought to give the legislation a chance to work and then take a look at what is happening. To be so alarmist in advance and so certain, as many noble Lords appear to be, that nothing is going to work seems to me to be not only wrong but quite illogical without giving something a chance which has every prospect of being very much better than the present situation.

Earl FERRERS
My Lords, would the noble Baroness give way for one moment?

Baroness BIRK
My Lords, I am going to turn to Scotland, so perhaps the noble Earl will allow me to finish this point.

Earl FERRERS
My Lords, if the noble Baroness is leaving that point, perhaps she will allow me to ask her a question upon it. Could the noble Baroness explain how the local authorities can take on the increased responsibilities which the Bill gives to them when their resources are going to be decreased?

Baroness BIRK
First, my Lords, in some areas those resources will not be decreased. Secondly, it is a question of local authority planning and allocation of resources. In the past the local authorities will have had to take on people who came to them as a result of possession orders or evictions. Now they will be able to plan, and in some areas they will receive more help. The other point is that when the advisory committees look at this matter they will take into consideration any other empty cottages or houses on the farmer's land which nobody at the moment takes into consideration. To turn to Scotland, and to deal with it quickly because I am well aware that we have a lot of business tonight and that my Chief Whip is sitting behind me, the pledge to end the agricultural tied cottage system applies to Scotland but the timing of the legislation is, in the first instance, a matter for my right honourable friend the Secretary of State for Scotland who has to take into account the relatively recent reorganisation of local government there. Nevertheless the commitment remains. Having said that, at this stage I am not going to delve into Scottish waters and it would be quite wrong for me to do so.

The Earl of ONSLOW
My Lords, I wonder whether the noble Baroness would give way once again? I apologise for taking up her time. Is the noble Baroness saying that it is in no way connected with the views of the Agricultural Workers Union in Scotland that she is not introducing this measure for Scotland and that what they say is totally irrelevant, in the same way as what was said in England is totally irrelevant?

Baroness BIRK
My Lords, I do not intend to comment on anybody's views in Scotland because I am replying to the moving of the Second Reading of a Bill which is concerned with England and Wales. Turning to the point raised by the noble Earl, Lord Ferrers, and my noble friend Lady Phillips—why deal with agriculture on its own?—it is quite true that tied accommodation exists in a wide variety of sectors. There is no intention to penalise farmers, but the Bill deals deliberately with agricultural tied housing because this is where the controversy has concentrated and where it has continued. Last summer the General Council of the TUC endorsed legislation specifically related to agriculture and it was accepted unanimously that it warranted priority. As has been advised by my noble friends, let us go ahead with the Bill. Then there will be time to study and get detailed advice from Ministers and the industries concerned in each of the other categories about what action, if any, is required. Had we delayed the Bill while examining the other sectors, the redress promised to farmworkers would have been unacceptably delayed, and it has been delayed quite long enough. So far as the questions on forestry are concerned, I have nothing to add to what was said by my noble friend Lord Peart when he moved the Second Reading. In conclusion, I would say only that reforms are always greeted with dismay, dispair and distrust by numbers of people and that it would be surprising if there were not a very conservative—with a small as well as a large "c"—reaction today to this measure. Everybody has talked at some point about farmworkers' needs and desires and about the bad old days, but noble Lords have been very reluctant, except for my noble friends and the noble Lord, Lord Wise, to get to the heart of the matter and to be prepared to support a measure that is designed to deal with this problem. We have heard a great deal about the farmers and the agriculture industry but not enough about the farmworkers, who have rights, too. They have a right to security, a right to freedom from fear implicit in a situation where employment and housing are bound together; a right to dignity, as my noble friend so  rightly puts it. A healthy agriculture should not depend on rotten roots and I commend this long overdue humane reform to the House.

Lord SWAYTHLING
My Lords, before the noble Baroness, Lady Birk, sits down, I should like to ask whether she is in a position to answer my question about what happens in the advisory committee when the members are not all present. This is the first time I have ever heard that a quorum is the whole committee. If somebody is ill or cannot be there, or even does not want to be there, which the noble Lord, Lord Collison, objected to, the whole thing cannot function and it means a long delay.

Baroness BIRK
My Lords, I think this is a very small point but I will look into it and will write to the noble Lord.

On Question, Bill read 2a and committed to a Committee of the Whole House.

Retirement Of Teachers (Scotland) Bill H L

7.31 p.m.

Read 3a , an Amendment (privilege) made.

The MINISTER of STATE, SCOTTISH OFFICE (Lord Kirkhill)
My Lords, I beg to move that this Bill do now pass and, if I may, I should like to express my appreciation of the interest which your Lordships have taken in this Bill and the contribution which you have made. I should like especially to thank the noble Lord, Lord Campbell of Croy, for his constructive help and his consideration to me as I guided the Bill through your Lordships' House, and for the very real interest evinced by the noble Lords, Lord Balerno and Lord Drumalbyn. Although the Bill is short it is, nevertheless, an important measure for education and the education profession in Scotland. I am confident that it has the support of your Lordships' House as we refer it to the other place.

Moved, That the Bill do now pass—( Lord Kirkhill.).

Lord SANDYS
My Lords, my noble friend Lord Campbell of Croy, who is  absent due to a prior engagement, has asked me to thank the noble Lord, Lord Kirkhill, for his courtesy in writing in connection with a particular matter and to say that he is in entire agreement with the noble Lord on that matter.

On Question, Bill passed, and sent to the Commons.

Valuation And Rating (Exempted Classes) (Scotland) Bill Hl

7.34 p.m.

Report received.

Clause 1 [ Exclusion from valuation roll of subjects below low water mark]:

Lord KIRKHILL
moved the following Amendment: Page 1, line 15, leave out ("six") and insert ("nine").

The noble Lord said: My Lords, Clause 1(2) provides for the fixing of the effective date of deletion from the valuation roll of subjects which are of a class upon which exemption has, by order, been conferred. The first exercise of the order-making power is intended to exempt types of subjects which are already entered on the valuation roll and have been effectively since 16th May, 1975. The subsection therefore provides for a greater degree of back-dating of exemptions in the first instance than will be necessary thereafter. But to allow this greater back-dating the order must be made within six months of the enactment of the Bill. It is clear that consultation and the drafting of the first order must be completed very quickly, having regard to the time that will be required for scrutiny here and in the other place.

The Government must be sure to allow ample time for the processes of consultation and proper consideration of any private interest which may be affected. For this reason, and as a precaution, the Government desire that the period available for consultation with these interests and the making of the order relating to the year 1975–76 be extended to nine months. I beg to move.

On Question, Amendment agreed to.

Race Relations Bill

7.35 p.m.

The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich)
My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, that the House do again resolve itself into Committee.—( Lord Harris of Greenwich.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ALPORT in the Chair.]

Lord MONSON
Before we come to the first Amendment, may I ask the noble Lord, Lord Harris of Greenwich, whether, in so far as it lies within his power, he can arrange for the Report stage of this very important and controversial Bill, affecting as it does the liberty of the subject in so many ways, to be held at a more civilised time of day, on whatever day or days it is decided to take it?

Lord HARRIS of GREENWICH
I cannot give any undertaking. I take note of what the noble Lord has just said, and I am quite sure that it will be noted by the usual channels. If by any chance it is not noted, I will ensure that it is.

Lord HAILSHAM of SAINT MARYLEBONE
I rather agree with the noble Lord, Lord Monson. One has to take one's Parliamentary duties seriously and one rather wonders whether a discussion of these matters in the early hours of the morning, time after time, really inures to the increase of respect in which Parliament is held. I am not holding the noble Lord personally responsible, but I really do wonder whether we are doing ourselves any good, although we are wearing ourselves out.

Clause 71 [ Local authorities: general statutory duty]:

Lord AVEBURY
moved Amendment number 82D. Page 46, line 32, after ("to") insert ("a").

The noble Lord said: This Amendment and the one following deal with the vast and complex subject of disadvantage and it would have been a great pity if we had  had to tackle this subject at the hour of ten minutes to three in the morning when the noble Lord the Minister was good enough to say that the House might be resumed so that we might take this Amendment first this evening. But it reinforces the points which have been made by the noble Lord, Lord Monson, and the noble and learned Lord, Lord Hailsham of Saint Marylebone, that we are forced to deal with extremely important matters affecting all the subjects of the country at an hour when very few people are there to listen to what we are saying, when hardly anything is reported in the newspapers and when, if I may say so, your Lordships are not best equipped intellectually to address your minds to the argument.

So far as this Amendment, No. 82D, is concerned, at least we are dealing with it at a reasonable hour and I hope it will receive the serious consideration that it deserves. In the Government White Paper published a year ago, in September 1975, it was said, first in paragraph 11, that a fuller strategy to deal with racial disadvantage will have to be deployed than has been attempted so far; and then again in paragraph 26 of that White Paper:
 "the Government recognises that what is here proposed for a further attack on discrimination"
 that is to say the Bill which is now before your Lordships—
 "will need to be supplemented by a more comprehensive strategy for dealing with the related and at least equally important problem of disadvantage".
 Yet when the noble Lord, Lord Wells-Pestell, was asked, in an Amendment which we discussed late yesterday evening, whether he was yet in a position to make a statement to the House concerning the Government's comprehensive strategy for dealing with this disadvantage, he had to confess that no progress at all has been made in the last year. Of course, we do not hold that against the noble Lord, Lord Wells-Pestell, but it is a remarkable indictment of the Government that, having set out quite plainly in their own White Paper the importance of the subject which they say is at least equal to that of discrimination, after 12 months not one single word have they divulged as to what has been going on behind the scenes in the Home Office and the other Government Departments—such as the Department of Employment and the Department of
 
 
 Education and Science—which are so vitally concerned with this problem. I just wonder whether this may not be the result of some disagreement within the Government, when you consider that it is well known that the main areas of conflict between Mr. Alex Lyon and his former colleagues was his insistence that disadvantage should be tackled with a much greater sense of urgency than was apparent in the Home Office at the time. Indeed, he said he thought the question of disadvantage should have come before that of reorganisation of race relations administration, with which we are now concerned.

It is not only within the Labour Party that a greater relative importance is being attached now to the attack on disadvantage compared with the attack on discrimination. We have had a very striking recent speech by Mr. Peter Walker on the problems of the inner city and the constructive approach which I think he has been attempting to develop, and to educate not only Members of the Conservative Party but the community at large in the sort of methods which will have to be adopted for tackling the problem.

It is seen widely that not only in this country but also in the United States of America the problems facing ethnic minorities are not entirely due to discrimination, and what we face is not entirely a matter of an individual or organisation motivated by ill will discriminating against someone because of his racial, ethnic or national origin, but much more the question of systems and procedures which operate to the disadvantage of people in minority groups. We can see from the most cursory examination of the statistics how this works in our own country.

We see that black people are disproportionately concentrated in the deprived inner city areas, and that many of them live in grossly overcrowded conditions. We see they are overrepresented in the privately rented sector. We see that young black people suffer from an exceptionally high degree of unemployment. The other day I was looking at the sheet issued by the Community Relations Commission on this subject, showing striking figures relating to the unemployment of black people. The figures show,  for instance, that between November 1973 and May 1975, while the total number of unemployed people rose by 65 per cent., the number of unemployed black workers rose by 156 per cent.

If the noble and learned Lord, Lord Hailsham of Saint Marylebone, is not interested in the unemployment of black people, perhaps he would kindly moderate the tones in which he is carrying on his conversation with his noble friend, so at least other people can listen to the figures. In May 1976, unemployed black workers amounted to 4·1 per cent. of the total unemployed, compared with 2·6 per cent. in May 1973. Those figures are from the Department of Employment Gazette for September 1975 and July 1976. With regard to young black people, we find 16·2 per cent. of unemployed black workers were aged 16 years to 17 years in February 1976, and no less than 29 per cent. of them were aged between 18 years and 24 years. The number of black male workers aged 16 to 17 years unemployed in January 1976 had actually doubled since February 1975, and increased by nearly 4 times since February 1974. Those are the dimensions of the appalling problem of unemployment that we find in this country so far as black people are concerned, and particularly young black people.

We find also that West Indian mothers with dependant children tend to be working full time because they need the money, and also longer hours than would be the case in the corresponding white families. We find these people do low paid and low status jobs, particularly for the first generation. Low pay and low status, generally speaking, go with poor housing conditions, with overcrowding and with depressed environment. Therefore it feeds on to the next generation. I think it is quite obvious that if job opportunities, educational facilities, housing and environmental conditions are poor, the next generation will grow up even worse equipped to make its way in society. It is also obvious that the dimensions of this problem are far more vast than the dimensions even of the appalling evil of discrimination.

We have tried to tackle this problem through the urban programme and through the Local Government Act 1966. The urban programme was designed to  deal with pockets of severe social deprivtion in a number of cities and towns. It was not expressly designed to assist people in the ethnic minorities. It may well have been of equal value to poor white people in the deprived inner city areas, and is none the worse for that. Obviously it would be quite wrong if the urban programme had been entirely concentrated on the black people of the inner cities, leaving some of the most deprived of the white people in those areas to fend for themselves.

On the other hand, Section 11 is particularly for people who are members of ethnic minorities. I suggest that what we need to do ultimately is to review the effectiveness both of Section 11 and of the urban programme, and perhaps to draft new terms of reference which would bring the two of them together in a new attack on deprivation, a new attack that would fit in with this comprehensive strategy we speak about in the White Paper, which would result in a much more coherent approach based on the experience derived from these programmes so far.

I must say that the criticisms levelled at both Section 11 and the urban programme are very severe indeed. It is claimed by some voluntary organisations, for instance, that local authorities have used this money to finance projects which they ought to have been undertaking anyway. The voluntary organisations dislike the vetting role of the local authorities, which they claim is used frequently to turn down radical projects which compete with their own schemes. Secondly, it is claimed that in some instances the opposite has happened. Critics have said that the insistence of the Government that local authorities should not use these grants to finance work already being undertaken has sometimes led to a desperate last-minute scraping round to find projects which will fit in with the criteria.

Then, we have a more fundamental criticism, that the urban programme has not been the result of any general strategy, but is an ad hoc and immediate response to external events and therefore can only nibble at this problem of urban deprivation. Mr. Michael Meacher took that line in his Fabian pamphlet, Positive Discrimination and Inequality, published in 1974. Another result of this patchwork policy is that areas which do not benefit from the special
 
 projects often arc jealous of those which do, because in their eyes the problems which they face are just as bad as those of their neighbours.

The Department of the Environment's indicators of urban deprivation showed that although there is some concentration of deprived people living in particular census areas there are many more who live outside and that it is not possible to undertake a programme to benefit individual deprived people by concentrating entirely on certain geographical localities which happen to contain a high concentration of such people. There will always be a large number of them outside any enumeration districts that are identified in this way.

Then there is the criticism that there are altogether too many programmes all directed at this question of urban deprivation, that they overlap, that frequently there is confusion between one and another and that very often the Government do not appear to take much notice of the results of one project before going on to set up the next.

Finally, there are fears which have been articulated by many people—and I mentioned this on Second Reading—that the current economic difficulties which we face in this country are going to threaten the amount of resources which the Government are devoting to urban deprivation and to Section 11. The noble Lord, Lord Wells-Pestell, was good enough to reply to a particular point which I put to him on the amount of funds in 1975–76 and 1976–77 respectively which were being allocated to the Section 11 programme. He said that I would be reassured to hear that it is expected that a total of over £16 million will be paid in grants under Section 11 in 1976–77 compared with a total of £13·8 million in 1975–76. Well, I was not reassured at all because when I came to work out the percentage increase as between the two years it was almost dead on 16 per cent., and I wonder therefore whether this does not represent a decline in the real resources being devoted to Section 11.

I should be very interested also to be able to undertake, although perhaps not on this occasion, a more detailed examination of the amounts being spent under the urban programme as well, which are much more difficult to ascertain. So far  as I can make out, the total of capital and current expenditure under the urban programme for 1975–76 was £20·7 million. For 1976–77 it is £24·6 million, which sounds as though it is a reasonable percentage increase compared with Section 11. But you Lordships will notice that if you add these two figures together it is really an absolutely minute, infinitesimal amount in relation to the size of the problem we face in our inner city areas. Therefore I earnestly beg the Government not to contemplate any reduction in these programmes. In fact, I think it would be not only a false economy but utter madness to reduce the funds which are allocated to deprivation.

The amount which I have proposed is an extremely modest one in relation to the size as I have described it. What I am suggesting is that there are ways in which we can get better value for the money we spend, and I suggest two things in these Amendments. The first is, that before any money at all is spent the local authorities should undertake a general survey of the needs of ethnic minorities within their areas. It is astonishing to me that this was not required before ever we embarked on a programmes of tackling urban deprivation. If we do not have a local strategy in which to fit individual items of expenditure, how can we ever expect to build up from it to a national strategy such as is mentioned in the White Paper?

The second thing I have suggested, and I should have thought that this was almost too obvious to need stating at all, is that there should be a statutory responsibility on local authorities in formulating the applications for grants under either Section 11 or the urban programme, to consult such local organisations as they think fit, and particularly such local organisations representing ethnic minorities as are appropriate. Obviously they ought to consult the local CRC, and there is a point of some importance here on which we have touched in earlier Amendments to the Bill, that because we do not wish to fetter the discretion of the Community Relations Executive in deciding how to conduct their relationships with local bodies, they feel at the moment out on a limb and are wondering exactly what their future is and whether there is a role for local voluntary effort at all.

I believe that it would be a tragedy if so much that has been built up under the previous Acts had to be scrapped, and I think that the CRCs have a particular role in being consulted before any money is asked for by local authorities from central Government. If that were written into the Bill—and many local authorities would do it anyway, of course—then it would give them a status which they would not otherwise possess.

It may be thought inappropriate that we should have had a discussion of disadvantage in a Bill which is concerned with discrimination, but it would have been a mistake if we had left this Bill without at least recognising, if we do no more than that, that without the sort of strategy that is mentioned in the White Paper, without the sort of local effort that I have tried to sketch out in this Amendment, any Bill to deal with discrimination is bound to fail. I beg to move.

7.56 p.m.

Lord HARRIS of GREENWICH
Certainly neither I nor any Member of the Government, nor, I suspect, any Member of your Lordships' House, would in any way under-estimate the problem highlighted in the speech to which we have just listened, the problem of disadvantage, which is particularly acute in the inner city areas. The noble Lord touched on the various pieces of machinery which exist to deal with this problem. He referred to Section 11 of the Local Government Act 1966, and of course to the urban programme. So far as the urban programme is concerned I think I should certainly say this at least, that local expenditure on the programme in England and Wales attracting grant—which, as the noble Lord is aware, is at the rate of 75 per cent.—has increased in real terms from the figure of £3·8 million in 1969–70 to an estimated £21·6 million in 1975–76. I would not in any way suggest that these figures indicate that the problem is about to he satisfactorily resolved but, given what the noble Lord has just said, I think it at least appropriate to indicate the seriousness with which the Government recognise this problem and the steps which are being taken to deal with it. But the noble Lord, as he frankly indicated in his speech, is concerned with  the narrower issue of this Bill, and what he is seeking to do is to impose upon local authorities two additional duties on top of that which is specified in Clause 71 as at present drafted. In a moment we shall be coming to the question of Clause 71, but I must make it quite clear that the Government have fairly significant reservations so far as Clause 71 is concerned. As the noble Lord will be aware, the Government were defeated on this matter in another place and the clause as it at present stands is not at all satisfactory. However, I will come to the issue of Clause 71 when the noble and learned Lord, Lord Hailsham of Saint Marylebone, speaks to his Amendment at a later stage in our debate. I now come, therefore, to the narrower issue of the Amendment of the noble Lord, Lord Avebury. The first duty which is incorporated in the noble Lord's Amendment is of course in paragraph (b), which would require local authorities to carry out a general survey of the needs of minorities in their areas. Of course, the Government recognise the importance of local authorities making their decisions on the basis of adequate information. Indeed, the Government take the view that it is already part of the local authorities' overall responsibility in providing the services for which they are responsible to take account of the circumstances of all the communities within their area and to be sensitive to the differences between them. The Government recognise that the role of the local authorities is extremely important, and certainly I have no doubt that the overwhelming majority of local authorities share this awareness. But they cannot take responsibility for all aspects of the racial situation within their area. Their responsibilities are not unlimited. The formulation of the proposed survey suggests that it should fall to local authorities to provide comprehensive information about all aspects of the situation of the minorities in their area. It would extend, for example, to the important matter—and I would not in any way seek to minimise the importance of this issue—of employment needs, in which the local authorities' role is inevitably extremely limited. The Government do not believe it would be right to place a new burden of  considerable proportions on local authorities, especially at a time like the present. I am bound to say this, and I say it in no chiding spirit to the noble Lord, Lord Avebury—as he knows, our views on this matter tend to be fairly similar—but at a time like the present to impose a new statutory duty on local authorities seems to me wholly inappropriate. I must make it clear that, so far as the Government are concerned, it would be quite wrong to impose new duties on local authorities at a time when Ministers, and everybody else in public life, are exhorting members of local authorities to limit their calls so far as public expenditure is concerned. There would be quite significant implications on local authorities, were this Amendment to be written into the Bill. Therefore, although I well understand the reasons which have motivated the noble Lord in putting down this Amendment, I am afraid it would not be acceptable, so far as the Government are concerned. I will, if I may, deal rather more briefly with the second leg of this Amendment, which is the proposed paragraph (c). As I understand the intention here, it is to require local authorities to undertake certain consultations before requesting two of the grants administered by the Home Office. The requirement seems, however, to be made rather diffuse and uncertain by virtue of being a requirement to consult, "such organisations as they think fit", although the Amendment mentions "particularly organisations representing ethnic minorities". Grants under the urban programme are paid on a very wide range of projects dealing with a wide range of forms of social need, by no means exclusively related to the special needs of ethnic minorities. Therefore, whatever the merits of a statutory requirement to consult may be, it does not appear that the requirement in respect of the urban programme could appropriately be related particularly to organisations representing ethnic minorities. The Government have expressed to local authorities in urban programme circulars the hope that voluntary organisations should be encouraged to participate in the urban programme within the context of available resources. We would not wish to seek to impose a statutory requirement to consult since we do not believe that any genuinely  practical benefit would result from binding the local authorities in this way. I have set out the reasons why, so far as both legs of this Amendment are concerned, we have great doubts about the wisdom of the Amendment. We do not believe the Bill would be improved by the insertion of this Amendment. Whatever one might argue in wholly different economic circumstances, addressing myself exclusively to this narrow but extremely important issue, I do not think that at the moment we can contemplate adding to the statutory responsibilities of local authorities when we are faced with such a dangerous economic situation as we are at the moment.

Lord SANDFORD
I would agree with the noble Lord, Lord Harris, that this Amendment would tend to make a bad clause even worse, though I would very much agree with the noble Lord, Lord Avebury, in his strictures on the dilitariness of the Home Office and the relative ineffectiveness of all this money which is going into the urban programme. But I think there are other reasons besides those given by the noble Lord, Lord Harris, why it would be both unreasonable and inappropriate to lay down the open-ended duty that is already prescribed in Clause 71, let alone what would be prescribed if it was amended as Lord Avebury proposes. Those reasons are these; it would be quite unreasonable to ask local authorities to discharge these duties, with no indication of the Government's own policy and strategy, no indication yet of the way in which the Government would like to see race relations administered at local level, no guidelines or indications of guidelines either for the Commission or the local authorities, no indication of the resources which are going to be available to operate this legislation either at central or local government level, and no idea yet of how the various approaches required of the Departments in Whitehall are to be co-ordinated. It is for those five additional reasons that we are more concerned to remove rather than amend this clause, as the Committee will hear in a few moments from my noble and learned friend.

Lord AVEBURY
I am quite prepared to accept the noble Lord's suggestion that it would be impossible for the local  authorities to do the things that are required of them under my Amendment unless they have some idea of what the Government strategy is; that is one of the reasons why I was so insistent that we should have, if possible, some news of the Government's thinking before we take leave of this Bill. As was said yesterday, when we tried to extract some information from the noble Lord, Lord Wells-Pestell, without success, I was assuming that by the time the clause got on to the Statute Book and the local authorities were required to implement it the Government would have told us what is going to be the more comprehensive strategy which they said was needed in the White Paper. As for the criticisms of the noble Lord the Minister, I entirely accept what he says about the width of paragraph (b) and the inappropriateness of asking the local authorities to go beyond their own duties and look at the needs of ethnic minorities, for instance, in relation to employment, a matter over which they would have no control. I would be perfectly happy, if the local authorities are to have statutory duties laid on them, to come back at Report Stage with another Amendment of a more limited nature, requiring them only to carry out a general survey in relation to their own functions. I still think that such a survey is needed, because one must recognise the need for adequate information, and if local authorities have not conducted this survey, at least within the area of their own responsibility, how on earth are they supposed to decide where to put the effort and whether to make applications for grants under either Section 11 or the urban programme? So far as paragraph (c) is concerned, again I am prepared, being reasonable as I always am, to accept the criticisms of the noble Lord the Minister, and I am not wedded to the phraseology of the paragraph as it stands. What I do think is that something has to be written into the Bill requiring, both consultations with the CRC, for the reasons I have given, and consultations with ethnic minorities in areas which are appropriate. If the noble Lord wants to exclude such applications for grant under the urban programme as are not designed to benefit ethnic minorities from the consultations with ethnic minorities, again I  am quite happy to try to think up some words which will take care of that. But the Amendment is bound to be a far more complex one than it is in its present form. I should have much preferred the Minister to say that he accepted the principle of consultation by local authorities both with community relations councils and with the ethnic minorities. In fact, I am sure he does accept that principle, and the only argument between us is whether we should write it into the Bill. Having said that, I do not wish to delay the proceedings. I will have another go at the wording and I will try to bring something back at Report stage. With that, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.12 p.m.

Lord PITT of HAMPSTEAD
moved Amendment No. 82C:

Page 46, line 34, at end insert—
 ("(2) In carrying out their obligation under this section, local authorities should work in close co-operation with the Commission for Racial Equality.")

The noble Lord said: I do not intend to delay the Committee very long. My intention in this Amendment, which I regard as very innocuous, is to tie up a loose end. As drafted, the Bill has imposed on local authorities certain responsibilities which it has also imposed on the Commission. It struck me that that being so the two bodies ought to be invited to co-operate with each other. There is an additional reason in my case. As your Lordships know, I am chairman of the Field Work Committee of the Community Relations Commission and I have been doing that job for the last eight years. I therefore know what the problem is in terms of the community relations councils and their establishment and functions. We have always endeavoured to ensure that community relations councils represent three important elements: the central Government through the Commission; the local authority, and the voluntary organisations. The response from local authorities varies considerably, and that is one of the reasons why I am glad that I spoke to Clause 71; and I am sorry to hear from the noble Lord, Lord Sandford, and was sorry when I saw from the Amendment of the noble and learned Lord that there will be an attempt to remove that particular  clause. My view is that placing very firmly on local authorities the obligation to see that racial discrimination in their areas is dealt with, and in co-operating with other local authorities nearby in combating it, is a very good thing. I am sorry to hear that there is any suggestion that it should not remain in the Bill.

Once in the Bill we are asking two organisations, the local authorities and the CRC, to do the job. I do not think that there is anything wrong with that, except that if they are going to do it they must do it together. Therefore, my Amendment is merely intended to suggest to local authorities that in carrying out this function which has been laid down in the Act they should co-operate closely with the CRC. It will have a lot of consequences, all to the good. For one thing, until now the CRC has had to go to local authorities and try to persuade them that they have a particular role to play. It has not always been easy. The fact that I think we now have 89 community relations councillors is proof of the success we have had in persuading them to come round. But it is worth noting that there are local authorities who contribute as much as £20,000 to this work, and local authorities that give as low as £156 to this work. Therefore, the response has been considerably varied.

The value of the clause is that it will in fact impose the statutory responsibility on them, and if at the same time they are invited to co-operate closely with the CRC I think we are in fact making it possible for the two bodies, using the voluntary elements in that particular locality, to do something really worth while and effective. That is all I need to say. I hope that the Government will accept this Amendment.

Lord HARRIS of GREENWICH
My noble friend's Amendment draws attention to one feature on which the Government spokesman commented when this new clause was first moved in another place. That is, of course, the rather essential one that the clause sets local authorities precisely the same duties as those which Clause 43 sets out as the principal duties of the new Commission. My noble friend, who has substantial experience in local government, is attempting to resolve this duplication by calling  on local authorities to work in close consultation with the new Commission. It is clearly highly desirable that they should do so. The Government hope that they will, but I am not sure that co-operation will be significantly increased by a general provision like that set out in this Amendment. This leads to the wider question of whether a general race relations duty on local authorities has a place in this Bill at all, which we shall be coming to in a moment. As my honourable friend pointed out in another place, this is something on which, as he indicated on that occasion, we have our doubts. Not, of course, that there is any disagreement at all about the important part which local authorities have to play in the context of race relations. There is no disagreement on that. The question is whether a general duty like this clause helps them to fulfil their role, and this is a fundamental question of principle upon which noble Lords will wish to express their views when we come to debate the Amendment in the name of the noble and learned Lord, Lord Hailsham. Therefore, perhaps I might say no more than that the Government do not believe that if the principle is accepted Clause 71, as it stands at the moment, is satisfactory, and we believe that it would require more fundamental amendment than my noble friend's Amendment would achieve.

Lord PITT of HAMPSTEAD
In the circumstances, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 71 shall stand part of the Bill?

8.17 p.m.

Lord HAILSHAM of SAINT MARYLEBONE
In my role as a dry as dust lawyer, which I have sought to maintain throughout this series of debates, I confess that Clause 71 was not a clause which immediately intruded itself on my consciousness since my knowledge of local government law is, although adequate for the purposes that I have needed it, not one of my specialities. But, after some prodding by one of the local government associations which asked me to seek its elimination from the Bill, it occurred to me that I really could not see what the  good of this little clause was. It seems to me to be a sort of cosmetic thing, like a lipstick placed on the Bill without any kind of functional purpose whatever. I suppose that anybody who is responsible for anything in this country ought to work towards the elimination of bad relations between the races. We do not put it in the terms of reference of the British Rail, for instance, or the National Health Service, or other bodies in which race relations obviously play a part. Why do we want to put it here? The fact that the local authorities with whom I have been in some contact do not want it—I do not pretend that that is a universal view, but that is the view they have expressed to me—leads me to think that it ought not to be there at all. What do we add to the state of the law as it would be without the clause?—I think nothing. The earlier words are: "Without prejudice to its obligation to comply with any other provision of this Act,…" That obviously adds nothing. We have now a series of obligations which, in so far as they are relevant to local authority activities, are obviously binding on local authorities. It goes on to specify that the duty of every local authority is to work—exactly what is meant by that verb in this sentence, I do not know—towards the elimination of discrimination and to promote equality of opportunity and good relations between persons of different racial groups. I gather that no money is forthcoming for this work, or promotion. I imagine that in the fields in which they already carry on activity, and they are very diverse, local authorities are already bound to do just that. I am wondering what additional good is thought to be brought about by a clause of this kind. I have already been approached by one local authority association to remove it. Rumours have reached me, not altogether unconfirmed by the remarks which the noble Lord let drop in the last two debates, that Government Departments are not all in favour of the clause. I venture to suggest to this Committee that the old rule which the medaeval philosopher Occam applied to philosophical concepts is best applied also to legislation. He said: "Entia non sunt multiplicanda practerpecessitatem." This clause is an entity. What good does it do? If it is unnecessary, let us  take it out, but I call upon the Government to say what good it does. I hope that the noble Viscount, Lord Amory, who is an expert on local government will be able to add more warmth and colour to the rather jèjeune remarks with which I have now moved this Amendment.

Viscount AMORY
I am afraid I have no colour to add to the discussion, but I would support what my noble and learned friend has said. It is not a question of whether this clause is a good idea or not, but of whether it is necessary, whether there is any point at all. It is no secret that this clause was not initiated by the Home Office. In another place, the Home Office spokesman resisted it. It seems to me that it is a weak clause, vague and unspecific. It outlines the responsibility quite unnecessarily, I think, because that responsibility is well understood already, but with no guidance as to how it shall be carried out. It simply reminds the local authorities of what they are already fully aware. It is typical of the rather weak features which get into so much of our rather badly drafted legislation nowadays. In this case there was no consultation beforehand with the local authority associations. That was understandable in the circumstances in which this clause came into being. Nor have they, since its inclusion in the Bill, been able to find out very much from the Home Office about what, under this clause, would be expected of local authorities. Local authorities today are having to cut their existing responsibilities, for financial reasons, and they are in no position to accept added ones without knowing what they mean and how they are going to be paid for. Everybody today is complaining of the cost of local government. Elected members and officials are finding themselves enormously stretched with the difficulties of finding the time to carry out efficiently their ever-growing responsibilities, and it is a pity when Parliament lays on them extremely vague additional instructions or exhortations all of which actually in effect push up expenditure still further. The noble Lord, Lord Avebury, asked for a general survey. It is a most attractive thing to ask for a survey of some kind, obviously a sensible procedure, but I have known so many general surveys that, when  they have been carried out, have not led to more effective action. Local authorities are sensible bodies and they do not rush into action without making surveys of whatever type appears appropriate in the particular case; but if in an Act there is a mandatory duty to carry out a general survey, then there is a danger of a general survey being carried out in a time-consuming and expensive way for the sake of fulfilling the requirements of the Act. I hope the Committee will decide to eliminate this clause, not because there is anything wrong with it in intention but simply because I think it is an unnecessary and a bumbling clause. I wish to support the noble and learned Lord in everything he has said and in the action he proposes to take.

8.26 p.m.

Lord HARRIS of GREENWICH
Before coming to the speech of the noble and learned Lord and the noble Viscount who has just sat down, I should say to the noble Lord, Lord Sandford, that I am sure he will realise that I am not replying to his description of the policy of the Home Office in relation to the urban programme, which I thought was a slightly overdrawn account, if he will forgive me for saying so, where he spoke harshly about our record. I could take up the time of the Committee in involving ourselves in one of these rather routine exchanges of Party rudenesses, but I think it is more appropriate to get involved in the actual detail of this particular piece of legislation. So far as Clause 71 is concerned, I do not think there is any disagreement about the underlying objectives. I do not think there is any disagreement about that between any noble Lords in any part of the Committee. Certainly, the Government are clear that local authorities have an extremely responsible part to play in promoting racially just and harmonious society. Noble Lords, however, will know, as I indicated on a previous Amendment, that the Government have considerable reservations about this clause. It was inserted into the Bill in another place against Government advice, by what I might describe as a bi-partisan group on the Standing Committee. Clause 71 would impose on local authorities a very general duty. It would  indeed be identical, as I pointed out on the last Amendment, to the duties which Clause 43 sets out as the task of the new Commission. The implications for local authorities are quite uncertain. Whereas the Bill sets out in some detail the powers and procedures through which the new Commission should work towards its objectives, Clause 71 is not complemented by similar provisions. The elimination of discrimination and the promotion of racial equality are matters for which a special approach with specific powers is needed. It is hardly something which local authorities could undertake as a product of their general responsibilities. The local authorities have wide-ranging responsibilities for the people in their area. They must take account, as I pointed out earlier, of the nature of the communities for which they are responsible. Where these include racial minorities the local authorities need to be sensitive to the special needs which these minorities experience and, of course, that is precisely what the overwhelming majority of local authorities do. I doubt very much whether they need to be reminded of what is a very obvious duty. It has been said in another place that it would encourage local authorities, but, frankly, new powers are not needed for any such purpose, and I do not know that we achieve a very great deal by writing provisions of this sort into a piece of legislation of this sort. If, on the other hand, the duty set out here is no more than declaratory, it is not likely to help a great deal and it might turn out—and I think the Committee must face this—to carry unexpected drawbacks with it, in terms of unexpected cost implications or ligitation. They are concerned about the open-ended and uncertain implications of the provision and would prefer to see it omitted. There is here an issue of principle to be decided. The Standing Committee in another place took the view that it was desirable in principle to include in the Bill a general duty on local authorities. The noble Lord's opposition to the clause implies the opposite view. I have suggested reasons why the Government do not believe that the clause should remain in its present form. We must consider carefully the views that have been expressed in this debate and if your  Lordships' conclusion is that the clause should be deleted, so be it. If, however, your Lordships take the view that it is desirable that a general race relations duty should be imposed on local authorities, then we would propose to bring forward an Amendment on Report to correct what we see as deficiencies in the present drafting of the clause. Before I resume my seat, I should perhaps say that all of us in this House have basically free votes, but if a Division takes place on this particular clause the members of the Government will abstain in the Division.

Lord PITT of HAMPSTEAD
I am sorry to note the attitude of the Government on this clause. As I said when moving my Amendment, the insertion of the clause in the Bill is an advance. I know something about local authorities and I know something about race relations, about the Community Relations Commission and the local community relations councils because, as I said earlier, I have been involved with this matter for the last eight years. The truth of the matter is, and everybody knows it, that local authorities vary considerably in the way in which they see their responsibilities and duties. There are now local authorities which one could never fault in their approach to this subject and the contribution they make towards eliminating discrimination in their areas. But there are many local authorities which begin by saying that they have no problem and, when it is demonstrated to them that they have a tremendous problem, they still drag their feet and the consequence is that over the country as a whole we have a mixed bag of provisions. We shall go on having that mixed bag so long as we say that we are not prepared to lay any duty on local authorities. When such a duty is laid on them, those authorities now dragging their feet will have to stop dragging their feet and try to contribute, and that is basically what this is all about. I regret that the Government continue not to see this important point because they know the problems that the Race Relations Commission has had over the years in trying to get local authorities to play their part. It is no use saying that local authorities are willing and are doing this or that. It is true of some but it is not true of many and what we want is a  universal application over the country as a whole because racial discrimination must be combated. We need racial equality throughout the country and local authorities are the people best placed to make sure that that happens. Of course, we have the Race Relations Commission and it can bring the central Government element into it, but most of the work, if we are to eliminate discrimination and create the sort of community we want, must be done locally and local authorities must therefore play a central part. I regret that the Minister said that the Government do not regard this as something which should be included in the Bill and that they are neutral on the subject.

Lord BROCKWAY
I wish to add only a brief comment in support of what my noble friend Lord Pitt of Hampstead said. It is not true that many local authorities are opposed to the clause and I could name local authorities in the London area which would welcome it, and I speak of authorities in areas where the problems of ethnic minorities are very great indeed. I will give only two examples. One is Camden Borough Council, which has a very large ethnic minority community. The other is Haringey, again with a large ethnic minority community. Both those councils are, in very difficult circumstances, doing their utmost to secure the harmonisation of race relations in their areas. They will be deeply disappointed by the attitude of the Government as expressed tonight because they would hope not merely that they would be endorsed in the actions which they take but that their actions might be encouraged in the case of other local authorities. I join Lord Pitt in regretting very much that the Government should have taken the attitude they have taken tonight.

Lord HAILSHAM of SAINT MARYLEBONE
I am grateful to all noble Lords who have taken part in this debate. I am bound to say that the Minister's attitude reinforces the opinion I had to begin with and I am happy that on this, which I think is the second occasion in a matter which has proved controversial, he and I should be on the same side. I am sorry that the noble Lord, Lord Pitt, feels so strongly about this, but I would say to him that those local authorities which want to carry out the duty which I have  fully accepted and which the Government have accepted will not be discouraged from carrying it out because they will have seen that both the Government and I think that they are doing part of their duty; and those who are not believers in the same sense as the noble Lord, Lord Brockway, and his noble friend Lord Pitt, will not be encouraged the other way because there is absolutely no means of forcing them to do so. My consistent view throughout has been that the unenforceable should be eliminated, and this view absolutely coincides with that. In one respect I deeply disagree with what Lord Pitt said. He has had, as he rightly said, wide experience of local government, but I think it is mainly confined to London. London is not the only locality in this country. There are parts of the country where racial problems are either non-existent or quite different from those in London, and to suggest—as he did in words, though on reflection he may think that he went too far—that, say, the Isle of Skye should adopt the same measures as the GLC or the boroughs of Camden or Haringey is to carry enthusiasm to the point of absurdity. I therefore adhere to the view that the clause should be eliminated.

Lord PITT of HAMPSTEAD
Before the Question is put, may I assure the noble and learned Lord, Lord Hailsham of Saint Marylebone, that my knowledge of local authorities is not confined to London—

Lord HAILSHAM of SAINT MARYLEBONE
I said "largely" or "mainly".

Lord PITT of HAMPSTEAD
although it is only in a London local authority that I have served. But as chairman of the field work committee of the Race Relations Commission I have had to deal with all local authorities in this country for the last eight years and I assure the noble and learned Lord that I know what I am talking about. I know the nonsense that is talked by several big and important cities about there not being any problems in their areas but where, in fact, there arc obvious problems. I know that the Government's attitude on this will encourage them to go on saying that they have no problems. I am giving an example which is a good one because they have changed. Our friends in Liverpool began by telling us that they had no problems. They know they have plenty because over the years they have learnt. I choose Liverpool because it is doing its stuff in this field and therefore I can use Liverpool as an example. But they began by telling us that they had no problems, and there are many other local authorities which take that attitude. The value of the clause is that it lays a statutory duty on them to deal with the matter and, if my Amendment had been accepted, they would have been required also to cooperate with the Commission in dealing

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|Avebury, L.           |Mackie of Benshie, L.          |Ritchie-Calder, L.     |
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|Banks, L.             |Maelor, L.                     |Seear, B.              |
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|Blyton, L.            |Milner of Leeds, L.            |Snow, L.               |
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|Brockway, L. [Teller.]|Northfield, L.                 |Stone, L.              |
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|Davies of Leek, L.    |Parry, L.                      |Taylor of Mansfield, L.|
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|Davies of Penrhys, L. |Pitt of Hampstead, L. [Teller.]|Wade, L.               |
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|Jacobson, L.          |Popplewell, L.                 |Wynne-Jones, L.        |
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|Amory, V.                |Hailsham of Saint Marylebone, L.|Platt. L.                     |
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|Auckland, L.             |                                |Redesdale, L.                 |
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|Balerno, L.              |Hives, L.                       |Ruthven of Freeland, Ly.      |
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|Belstead, L.             |Hood, V.                        |Sandford, L.                  |
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|Berkeley, B.             |Hornsby-Smith, B.               |Sandys, L.                    |
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|Cathcart, E.             |Hylton-Foster, B.               |Savile, L.                    |
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|Clifford of Chudleigh, L.|Inglewood, L.                   |Somers, L.                    |
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|Colville of Culross, V.  |Killearn, L.                    |Strathclyde, L.               |
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|Cullen of Ashbourne, L.  |Lucas of Chilworth, L.          |Strathcone and Mount Royal, L.|
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|De La Warr, E.           |Lyell, L.                       |Tranmire, L.                  |
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|Denham, L. [Teller.]     |Masham of Ilton, B.             |Tweedsmuir, L.                |
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|Elles, B.                |Monk Bretton, L.                |Vernon, L.                    |
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|Ferrers, E.              |Monson, L.                      |Vickers, B.                   |
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|Gisborough, L.           |Morris, L.                      |Vivian, L.                    |
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|Gray, L.                 |Mottistone, L.                  |Wardington, L.                |
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|Greenway, L.             |Newall, L. [Teller.]            |Windlesham, L.                |
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|                         |Onslow, E.                      |Wise, L.                      |
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Resolved in the negative, and Clause 71 disagreed to accordingly.

Clause 72 [ Validity and revision of contracts]:

On Question, Whether Clause 72 shall stand part of the Bill?

8.49 p.m.

Lord HAILSHAM of SAINT MARYLEBONE
This is a point on which I hope I shall have the assistance of the noble and learned Lord the Lord Chancellor whom I saw sitting near us in the earlier debate when he was discreetly silent; but we now have not got him. I really put down this Amendment to find out what Clause 72  with the matter. That, to me, is sensible.

Lord HAILSHAM of SAINT MARYLEBONE
I did not mean any offence to the noble Lord, whose knowledge of the problems of race relations is not disputed, but I assure him that there are parts of the country where racial problems do not exist. I cited the Island of Skye. That is perhaps an extreme example but it is not the only example.

On Question, Whether Clause 71 shall stand part of the Bill?

Their Lordships divided: Contents, 21; Not-Contents, 49.

means. It is not exactly obvious to me and, equally, it is not obvious to me what effect the omission of this clause would have. The reason can be stated simply, although if I were to deliver a dissertation on it I probably would take till midnight. But the truth is that anyone recognises that a contract which contains a term which is illegal is something which cannot be enforced. There are various ways in which it cannot be enforced. I am not now talking about the language of the clause.

In the first place, you can drop the term and enforce the rest of the contract. That you can only do if the term is severable from the rest of the contract. If the contract is inherently illegal, the whole of  the contract falls as what is called an illegal contract. There are contracts which are illegal, contracts which are void and contracts which are voidable; and the whole of the common law has arrived at a rather subtle and sophisticated but (by commercial lawyers in particular and by most common law lawyers) a well understood code of practice as to how to deal with terms which conflict with the law. As I read this clause I am quite unable to understand, either, one, how it improves upon the common law or, in some respects at least, how it differs from common law. I should like to hear from someone who is competent to expound—and the noble Lord, Lord Harris, has got both the knowledge and the ability to expound it; although I should have hoped that it would come from the even more venerable lips of the noble and learned Lord the Lord Chancellor—exactly what the Government think they are about by introducing a new way of dealing with unlawful contracts other than that which the law already provides. How does it differ from the law and why is it superior?

Lord WADE
I wonder whether the noble Lord before replying could deal with the point about "void" which the noble and learned Lord has just mentioned. In this Bill, is "void" used in the sense in which it is normally used in common law or is there some particular meaning attached to the word "void" in this Bill? If so, is there anywhere in the definition clause in which we can find anything to throw light on the word "void".

Lord HARRIS of GREENWICH
It may be helpful if I were to begin by explaining the problem with which Clause 72 is designed to deal and, indeed, Section 23 of the 1968 Act has a direct bearing on this matter, too. The situation is that without a contracts clause, the position of discriminatory terms in contracts would be that they would be void for illegality and unenforceable by either party to the contract. In some cases, where the discriminatory term was not "severable", the contract as a whole would be void and unenforceable. This is of no special consequence in the case of terms which embody an agreement between the parties to discriminate against a third party. We might for convenience describe these as  "externally discriminatory terms": such terms ought to be left to be dealt with according to the existing law of contracts. They should be void and unenforceable by either party. By contrast, it would be patently undesirable to render void and unenforceable terms in contracts which involve discrimination against one of the parties to the contract. For the purpose of the debate I shall call these "internally discriminatory terms"—where "A" agrees with "B" to provide "B" with some benefit or other in a way which amounts to unlawful discrimination by "A" against "B". In insurance, for example, a black person might find that after paying premiums for a number of years he could not, because the contract contained a discriminatory term, recover anything if his house burnt down. However, it would be unsatisfactory wholly to preserve "internally discriminatory terms" because, on the one hand, compliance with them could give rise to proceedings for unlawful discrimination while, on the other, non-compliance might give rise to an action for breach of contract. This, then, is the problem. I might mention that it was the noble and learned Lord, Lord Hailsham, when he was a member of the Standing Committee in another place, who drew attention to this and identified the issue of discriminatory contracts. Section 23 of the 1968 Act was subsequently introduced in your Lordships' House by the then Lord Chancellor in an attempt to deal with it. Clause 72 is a modified version of Section 23.

Lord HALSHAM of SAINT MARYLEBONE
It is a wise father who recognises his own child, but on this occasion I must say that my offspring was not immediately recognised by its putative father.

The LORD CHANCELLOR
This is why I was worried when I got the message that my presence would be welcomed. I thought that the father would hail this with acclamation.

Lord HAILSHAM of SAINT MARYLEBONE
I am delighted that my message has produced the welcome presence of the noble and learned Lord the Lord Chancellor to see my confusion  on this occasion but, as the noble Lord, Lord Harris, has rightly divined, I have always been interested in this problem of illegal terms and contracts and it is a matter of extreme practical difficulty. I was interested to hear what the noble Lord, Lord Harris, had to say and it did shed a certain amount of light on the dark places of my mind. I am not going to divide the Committee on this issue. My only regret is that, having regard to the exchange which took place the other night at some late hour between the noble and learned Lord, Lord Simon of Glaisdale, and the noble and learned Lord the Lord Chancellor, no court will be able to react what the noble Lord, Lord Harris, has said except when they go to bed at night.

Clause 72 agreed to.

Lord BROCKWAY
moved Amendment No. 82A: After Clause 72 insert the following new clause:

Obligation to observe equality of opportunity in certain contracts.

A term shall be expressly included in writing in every contract entered into by—
 (a) a Minister of the Crown or Government Department, or(b) a statutory body or a person holding a statutory office,
 whereby the contractual parties undertake to observe equality of opportunity.

The noble Lord said: I am moving an Amendment which would require the Government or a statutory body to include in their contracts and undertakings to observe equality of opportunity. This is an enormous Bill. It runs to 64 pages. It has been discussed for hours in another place and in this Chamber with late sittings. I believe, despite the mutilations it has suffered in this Committee—which I am sure will be corrected in another place—that this Bill is tremendously important. But I want to say this. I believe action by the Government themselves will have more effect on race relations than all the clauses in this measure. It will depend upon the Government, their will and their application of determination against racial discrimination as to what the response will be in the country.

The need is for the Government themselves to lead in their executive capacity to promote equality of opportunity. The  steps which the Government could take were pointed out by Sir Geoffrey Wilson, the chairman of the Race Relations Board, in his speech in April last year to the annual conference of the United Kingdom Immigration Advisory Service, of which the noble Lord, Lord Foot, is the chairman. He asked that the Secretary of State for Employment should make it clear that the Department stands four square behind the new Commission and its objectives; that the Department will support the Commission in the vigorous use of its powers and will accept the Commission as the Government's instrument of the promotion of equality of opportunity. He asked specifically that the Government should use their control in the vast areas of national life where it has influence and power.

Three years ago the Civil Service gave a good precedent in this matter. But there are other wide areas of overt action where the Government could act. Why could not the Government, as proposed in my Amendment, insist by making it a condition of Government contracts, that equality of opportunity should be observed? There are the nationalised industries. There is the wide scope of the National Enterprise Board and of the Royal Ordnance Factories owned by the Government. The Government themselves can practise against racial discrimination over a very large part of the life of our nation. These are all areas where equality of opportunity could be directly enforced. I beg to move the adoption of the new clause to make sure legislatively that this will be done by the Government and their will and sincerity against racial discrimination proved.

9.4 p.m.

Lord HAILSHAM of SAINT MARYLEBONE
I am afraid I am going to upset the noble Lord, Lord Brockway, and possibly even the noble Lord, Lord Pitt of Hampstead, again. So hold on to your seats; I am not quite as bad as I sound! But I wonder whether they really mean what they say. Every human being in this country—and I think every Government Department is already bound, broadly speaking by the terms of this Bill not to break its provisions—and equally every business transaction I know of involves a contract. If, for instance, I walk into the shop run by Her Majesty's  Stationery Office (which used to be in Kingsway) and buy the excellent book issued by the Stationery Office on edible fungii (which I have done before now) then I am entering into a contract with the Stationery Office. The noble Lord is now providing that when I buy my book on edible fungii, "a term shall be expressly included in writing" which will bind both the Stationery Office and me to observe equality of opportunity. This is really what it means. If I go into a railway station and buy an old man's railway ticket (which I did the other day) that is a contract. Indeed, if you look at the ticket closely you will see: "For conditions, see various regulations of the company". This means that instead of buying my old man's railway ticket, I have to put in an express clause in writing that I shall observe racial equality and that the railway board shall do the same. If I pay my electricity bill, get my home connected with the water supply, or if I sell my old Hansards to the Law Commission—which I once did—then inserted into the contract, both by the Law Commission and by me, has to be the clause that I observe racial equality. Exactly where are we getting?

Lord WADE
I apologise for interrupting but the noble and learned Lord refers to "racial equality". The words in this Amendment, as I understand them—and I am not expressing an opinion on the Amendment—refer to "equality of opportunity ".

Lord HAILSHAM of SAINT MARYLEBONE
I am very much obliged to the noble Lord, Lord Wade, for the correction, because that makes it even more absurd. That means that I am under an obligation not only to observe the terms of this Bill, but any other Act or any other rule of law which might tend towards equal opportunity. We all of us say on the platform—and we say with every appearance of sincerity—that we believe in equal opportunity. Sometimes Conservatives contrast it with equality of reward or equality of something else which we say the other Party wants to observe. In all the circumstances which I have enumerated, there is a contract and therefore presumably, in every set of circumstances where either a statutory body or a Minister is concerned, there has to be a  written clause to say that we shall observe equality of opportunity. I am very much obliged to the noble Lord, Lord Wade, for making my point even stronger and for correcting what was really an unpardonable error.

Lord BROCKWAY
I am always amused by the speeches of the noble and learned Lord, but I have never heard from him a sillier speech than the one he has just delivered. It is perfectly clear in this Amendment that we are thinking of contracts between the Government and those who are fulfilling obligations to them, that there should be a clause which would prevent discrimination by those companies which are fulfilling that contract. He wants to dismiss this obvious and clear proposal by the pettifogging argument that when he goes to buy a ticket he has to have a contract. Did ever silliness from a noble and learned Member of this Chamber go further?

Lord HAILSHAM of SAINT MARYLEBONE
I told the noble Lord that he would get upset. Unfortunately, what I said is the literal truth. I cannot tell what the noble Lord is thinking about but I can tell what he said, and I know that what the courts would have to go by is what he said and not what he thinks is so obvious, that he thinks about it without saying it.

Lord JACQUES
Government contractors are, of course, subject to the 1968 Act, and will be subject to this Bill when it becomes law, much as are other traders. The Government feel they should go somewhat further and take steps to eliminate discrimination in employment for which they have direct responsibility. The Government amended the standard conditions of Government contracts to require contractors to conform to the employment provisions of the Act following the 1968 Act. The Government intend on this occasion to go somewhat further, and I will quote from the White Paper: "It would be the intention of the Government, when new legislation about racial discrimination is enacted, to require a similar undertaking to comply with its conditions as a standard condition of Government contracts." The White Paper went on: "The Government cannot assume that a form of condition in a contract is all that is required." It further went on to say this: "It would be a standard condition of Government contracts that the contractor will provide on request specific information about its employment policies and practices". The Government will be discussing with the TUC, the CBI and other interested bodies how the White Paper proposals can best be implemented. Detailed proposals such as the redrafting of the nondiscriminatory contractual clause must wait until the Bill has been passed. In the meantime, I should advise the Committee that it is the Government's intention to set up a standing advisory council under the chairmanship of my right honourable friend the Home Secretary. Its purpose will be to advise on the development and implementation of race relations policies. Consultation on the membership of the Council is now in progress. Although these discussions are not yet completed, it is envisaged that the members will be drawn from other Government Departments, the CBI, the TUC, local authority organisations, the chairmen of the Race Relations Board and the Community Relations Commission and the newly appointed chairman of the Commission for Racial Equality and members of ethnic minority communities. Discussions in the Council and the work of the Commission for Racial Equality will give practical guidance as to how the spirit as well as the letter of the law can be applied. I believe these discussions, rather than statutory provisions, will be the best way of achieving the goal which we share. I hope the noble Lord will see that we agree on ends and that the only difference is on means.

Lord O'HAGAN
Before the noble Lord, Lord Brockway, replies, I wonder whether the noble Lord, Lord Jacques, could explain what this new body he has mentioned is meant to do. Is it meant to help the Government to work out their comprehensive strategy for combating racial disadvantage or discrimination? If it is not, what is it to do? If it is, why was it not mentioned during various debates we have had when trying to find out what the comprehensive strategy was? I may have missed what the noble Lord, Lord Jacques, has said. Therefore, could he perhaps repeat now what the new advisory body is meant to do?

Lord JACQUES
As I stated, this advisory body, is to advise on the development and implementation of race relations policies.

Lord O'HAGAN
Is that to do with the Government's comprehensive strategy? If not, who is to deal with the comprehensive strategy?

Lord JACQUES
This, of course, touches upon the Government's overall strategy, but this is simply an advisory council whose advice the Government will take into account.

Lord BROCKWAY
I am delighted by the very important statement which has been made from the Government Front Bench in such contrast with the flippant attitude of the spokesman for the Opposition. I ask leave to withdraw the Amendment.

Lord SANDFORD
I wonder whether we can be clear before the noble Lord does that. The statement would be very important if it was announcing something new in the sense that we did not know about it before, but the words which the noble Lord used were exactly the same as are in the White Paper. This is the council which was announced over a year ago and of which we have heard no more since. Is that not so?

Lord JACQUES
We shall have to wait until the Bill is passed before we can proceed with the council.

Baroness ELLES
Can the noble Lord kindly explain the composition of the council, because I thought he said that the chairmen of the Race Relations Board and of the Community Relations Commission would be on it. I understood that the purpose of this Bill was to abolish those two bodies and make a new one.

Lord JACQUES
I can only say that what I said originally was my advice, which was that the chairmen of each of the three commissions would be represented. I imagine that the chairmen of the older commissions will be invited in their personal capacities.

Lord PITT of HAMPSTEAD
May I help the Minister? The point is that it was envisaged—I do not know whether it will  happen now—that this advisory council would be functioning before the new Commission for Racial Equality. In that case, there would be a chairman of the Community Relations Commission and a chairman of the Race Relations Board in existence, and therefore they would have to be members of it.

Lord SANDFORD
All this bears out the fact that we really must try to make some progress from the proposals set out in the White Paper. There was talk about strategies and a co-ordinated programme. The Minister's advice would have been correct if he had been speaking a year ago, but, as the noble Lord, Lord Pitt, has said, views have changed since then and we are still left very much in the dark as to how the Government will organise and administer all these arrangements.

Lord JACQUES
I think that the noble Lord is picking the wrong clause on which to raise this issue. This is an entirely new proposed clause to deal with contracts, and I raised the question of the advisory council because I felt that it could be helpful in the field of contracts.

Baroness ELLES
I wonder whether I may put this to the Minister. Paragraph 21 of the White Paper on Racial Discrimination refers to the standing advisory council to which the noble Lord has referred. It states: "Membership would include Ministers of the other Government Departments concerned, the Chairmen of the Community Relations Commission and the Race Relations Board (and subsequently the Chairman of the proposed Race Relations Commission)." I want to know whether it will be the individuals who are the present chairmen of the two existing bodies, who will sit in their personal capacities. I do not want an immediate answer and perhaps I can have a letter from the noble Lord. But if there is to be this body advising the Minister on policy, it is very important to know who will be on it.

Lord JACQUES
I will certainly write to the noble Baroness on that point, but I was not dealing with the standing advisory council. I was simply citing it in relation to contracts.

Lord BROCKWAY
I just want to say that, of course, I have read the anticipations which were in the White Paper. I  regard the statement made from the Front Bench this evening to be so important, because it is definitive and gives the outline of the action which will be taken by the Government. It is because of that that I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 73 [ Power to amend certain provisions of Act]:

9.18 p.m.

Lord MONSON
moved Amendment No. 83: Page 47, line 27, leave out paragraph (a).

The noble Lord said: It may be to the convenience of the Committee if 1 speak at the same time to my Amendment No. 84. Clause 73 is a very important and potentially very dangerous clause. It gives the Secretary of State powers, subject only to the Affirmative Resolution procedure, to decree, for instance, that the employment of domestic servants, au pair girls et cetera shall come within the scope of the Act; that restaurants, whatever their special ambience, style or setting, can no longer choose staff of suitable appearance; that theatrical producers can be forced to employ black Hamlets or white Othellos; that small boarding houses, perhaps with as few as two rooms, shall be brought within the scope of the Act; likewise foster parents, clubs like the London Welsh Club, and other clubs with perhaps as few as five members, partnerships, with perhaps as few as two partners, and so on.

So that all the limitations which we and the other place have fought so hard to maintain by way of safeguard, and which were surely intended to reconcile public opinion to the coercive features of this Bill, can be swept away at a stroke. Given the perennially crowded Parliamentary timetable, and reflecting upon the times of day and night when we have been obliged to consider the Bill, one can just imagine the kind of occasion when we might be asked to scrutinise such an order, such as late on a Friday night, perhaps, or on the last Sitting day before the Christmas Recess when very few noble Lords can be present to give proper attention to such an order. I have done nothing about moving an Amendment to delete paragraph ( b) of subsection (1) which deals with shipping
 
 
 because I do not know very much about the subject. To be consistent, perhaps I should have included it.

I have deliberately not tabled an Amendment to delete paragraph ( c) because it is permissive, not restrictive; it is a liberalising paragraph and I am only too delighted that it should be left in the clause. However, I believe that if paragraphs ( a) and ( d) were left in the Bill Parliament would be breaking faith with the public who are already being asked to swallow a great deal so far as this Bill is concerned. In this connection I am very pleased to see that the Asian delegates at the Conservative Party Conference who spoke this afternoon in the immigration debate appeared to be critical of excessive race relations legislation.

It may be that the Committee would prefer the noble and learned Lord, Lord Hailsham of Saint Marylebone, to deal with the question of whether Clause 73 shall stand part. If that appears to be the general will of the Committee, I shall gladly withdraw my Amendments—but not otherwise. In the meantime, I beg to move Amendment No. 83.

9.21p.m.

Lord HAILSHAM of SAINT MARYLEBONE
I think that the real question here arises rather conveniently on whether Clause 73 shall stand part. I was always in two minds as to whether or not to divide upon it at this stage because we are making slow progress. I was not at all sure whether the right course was to raise the points I wanted to raise and to reflect upon the Minister's answer before we reached the Report stage. I do not think that this is absolutely so easy as some of the matters we have tackled. On the other hand, I believe that a very substantial constitutional question has arisen in relation to the clause and I should like to deploy it now rather than later so that I may hear the Minister's reply. Laws are made by Acts of Parliament. So long ago as the end of the 17th century it was considered unconstitutional for Ministers of the Crown, or the Crown itself, to dispense people from an Act of Parliament or to legislate itself so as to alter the laws of this country. Of course, with the complication, mass and range of  the legislation which we now have a practice has grown up whereby one could probably find dozens of precedents where, in complicated legislation, Ministers have been given the power either to repeal portions of an Act if it becomes spent or obsolete or to amend it if it proves in some degrees to be unenforceable, ineffective or for some reason bad. That is something which Parliament has allowed and, I suppose, will continue to allow with a good deal of hesitation and sometimes with a certain amount of grumbling, which I am now doing. But there must come a limit to this in some kind of way and I am wondering whether or not this clause exceeds that limit. The right of a Minister, even with the affirmative procedure, to repeal bits of an Act of Parliament has definite limitations and disadvantages, some of which were mentioned a moment ago by the noble Lord, Lord Monson. First, you get the inability to amend the Minister's draft. You have either to take it or leave it, and usually both alternatives are unattractive. You cannot amend the Minister's draft. Secondly, there is the problem about time which we can probably get over. Thirdly, the total effect of Ministerial amendments may be completely to alter the character of a piece of legislation. I am not in the least suggesting either that this Minister or any other Minister we are likely to have would think of deliberately frustrating the will of Parliament, but there cannot be any doubt, whatever view one takes about this particular Bill, that here is a clause which would entitle the Minister, with two or three amending orders—and perhaps with only one—completely to remodel the Act which the Commons spent an enormous time on amending in detail in Committee and we have spent a certain amount of time on amending in Committee. The noble Lord gave a number of instances, more or less amusing, but under Section 4(3) he could take away the exception which has been deliberately inserted by Parliament, providing an exception to employment in the private household. That is in the employment field. In Section 5 he can get rid of all the exceptional qualifications, as the noble Lord said, such as the Italian waiter and the Chinese cook and the other people we have spoken about in these  Bills for a very long time. In Section 6 he can get rid of the training section. In Section 22 he can get rid of the exception for small dwellings so that a person would be bound to accept people unacceptable to him or her into his or her own household as tenants or lodgers. In Section 23(2) we are dealing with further exceptions, this time for family, children and elderly persons or persons requiring a special degree of care and attention as counting as parts of the household. In Section 24(2) we are dealing with the meaning of "small premises" for the purposes of that section, on assignment and underletting. In Section 26 we are dealing with the exception to the clubs provision, which in the end we passed. In Section 29(2) we are altering the advertisement section, and so with Section 29(3). In Sections 34 to 39 we are dealing with charities, which is a very highly complicated piece of law which we have not discussed in any great degree of detail. They can amend Section 10 so as to alter the number of partners, presumably either up or down, and we remember how controversial that proved a few nights ago; and Section 25(1)(a) alters the ceiling or limits in clubs, either up or down. At the end of the day there is no doubt at all that under this clause, by one or more unamendable Orders in Council, subject to the Affirmative Resolution procedure which has the limitations, we could be faced with an Act of Parliament which is totally different from that which we will have passed when this one actually receives the Royal Assent. I am really wondering whether the Minister is happy that his Secretary of State proposes to take powers. We have spent hours and hours in this House and, so far as I can gather (because I could not wade through the mass of Hansards of that Standing Committee and Report stage) the House of Commons must have taken four or five times as long as we have, probably more, discussing the details of this Bill, and now we are told that at a stroke of the pen and subject to the Affirmative Resolution procedure the whole thing goes for nothing if the Secretary of State so wills. I do not feel that that is constitutionally desirable. As I say, this is too important to deal with at Committee stage at the end of a long and tiring experience. I want the  Minister just to think about it, tell us what his thoughts are and perhaps on Report stage either he or we can put in a much less constitutionally offensive provision giving the Minister the powers he really needs, but not powers to substitute what is virtually a new Bill for that which we have passed after so much labour.

9.31 p.m.

Lord HARRIS of GREENWICH
The noble and learned Lord, Lord Hailsham of Saint Marylebone, has referred to some precedents and will not be astonished to learn that one of them relates to the Sex Discrimination Act. But I would certainly agree with the noble and learned Lord that the Bill before us represents a considerable extension of the scope of the law, partly because of the inclusion of nationality in the definition of discrimination, but mainly because of the extension to cover indirect discrimination. There are two reasons why we think that the power to amend certain, but only certain, provisions is necessary. First, it is possible that experience will show that we have drawn some exceptions too widely or, indeed, for that matter, too narrowly. With a Bill as wide-ranging as this, it is not impossible that we have omitted to except something which we ought to have excepted and, obviously, for that reason, I cannot give any precise examples at present. Secondly, as time passes, some of the exceptions which are exceptable may cease to he exceptable. As an example of this, I would cite the shipping provision. Indeed, my noble friend Lord Jacques has already explained that it is our intention to move the exception in Clause 9 in due course. Leaving aside the sexual discrimination precedent, where it would be right to say in passing that the power to amend was even more necessary because it was the first time we legislated against discrimination on the grounds of sex and marriage, I entirely accept that Clause 73 is a novel provision, in that it covers most of the substantive provisions of the Bill; but I would not accept that this is not a justifiable innovation. In discussing Clause 73, I think it right to use this particular opportunity to draw attention to the various important limitations which it contains. In the first place, Clause 73 is far from being a blanket power to amend. Subsection (1)(a) enables only certain exceptions to be  amended; for example, the fostering exception in Clause 23(2), the special needs exception in Clause 35, and the sport exception in Clause 39. As I have already indicated, there is also the shipping exception. Subsection (1)(c) contains the other wide-ranging power to permit amendment only in the direction of making lawful something which would otherwise be unlawful, and the power to amend is, indeed, rather more limited than once or twice during the speech of the noble and learned Lord may have appeared to be the case. The second limitation to which I would draw attention is that in order to amend the Bill, such proposals cannot be presented to Parliament unless the Commission has first been consulted about its contents. Almost certainly, therefore, there would be a very substantial debate on the proposals of the Government, which brings me to the last point which, if the noble Lord, Lord Monson, will forgive me saying so, is the conspiracy theory, that is, that these major Amendments to the law would be slipped through late on a Friday afternoon, or something of that sort. With great respect, I do not believe that to be a well-justified fear. I think that the procedures which would be necessary in order to bring this before Parliament would be of a fairly significant character. Parliamentary business in both Houses is arranged by agreement between the usual channels. I do not believe that the fear which the noble Lord, Lord Monson, expressed is well justified. But I certainly welcome what the noble and learned Lord, Lord Hailsham, said about his attitude to this clause, not in terms of the grave doubts he expressed about it, but he indicated he would like to reflect on the matter. I repeat that I think that some substantial additional powers are conferred in this Bill. I would in no way seek to minimise that. I think that, as the noble and learned Lord has said, it is perfectly right for the Committee to consider this clause carefully, and if he would like to come back to it on Report we would, of course, be glad to consider any suggestions he might wish then to make. But in our view the clause, as drafted, is reasonable.

9.36 p.m.

Lord HAILSHAM of SAINT MARYLEBONE
I wonder whether, before the noble Lord, Lord Monson, declares what he will do, I could comment on that. I give the noble Lord the seamen, of course. This has long been a contentious matter, but the Government have declared that it is their intention to taper this exception away, and I do not consider it unreasonable on the lines of what modern legislation does that they should obtain the right to amend the Bill, possibly by stages or possibly in one gulp. I also give them the permissive clause which entitles them to enlarge exceptions made by the Bill, because that is in the direction of liberty. But in almost all the other cases what is being removed from the Bill in theory is safeguards. They are safeguards which will have been hammered out after a long and painful process of Committee and Report stages in both Houses of Parliament. I have never adopted the conspiracy theory in all this. I think that isolated cases of conspiracy do occur, particularly in another place, and that Governments of both persuasions have been occasionally guilty of them—either of doing things in the middle of the Long Vacation which they know would cause a row in Parliament if they were done when the House of Commons was sitting, although we are always too polite to make a row, or by slipping them through at dead of night. I am not quite so starry-eyed as the noble Lord, Lord Harris, was about it in his reply because et ego in Arcadia vixi—I am feeling very Latinate today. I have been in the House of Commons, but I forget whether he has.

Lord HARRIS of GREENWICH
Indeed I have not, but I was endeavouring to point out to the Committee that the Affirmative Resolution procedure is a little different from carefully timed Recess announcements, to which, I am well aware, as the noble and learned Lord is, Governments periodically resort. I was trying to point out that I think that the fears which the noble Lord set out in his speech so far as the Affirmative Resolution procedure is concerned were rather farfetched.

Lord HAILSHAM of SAINT MARYLEBONE
I am not altogether accepting  this. Having been in the House of Commons I recognise that the noble Lord, not having been there, is almost devoid of original sin. If one has spent half or a quarter of one's public life in the House of Commons, original sin is very well developed in one, and one does not believe the assurances of Ministers, possibly because one has given so many oneself—always, of course, in the best of faith. In fact, when you are giving those assurances you believe them; then sooner or later some wicked colleague slips through a Government Committee something which is directly contrary to them, and you feel very shamefaced when somebody points this out. So I do not think what the noble Lord, Lord Monson, was saying was altogether far-fetched. What I was really coming to was that it is the unamendability of the Order in Council that I am more afraid of because although, as I have said, I have reservations about rejecting the conspiracy theory, I do not think it is as important as some people sometimes make out in Parliamentary debate or outside Parliament, because on the whole Governments are honest, on the whole Ministers are honest, on the whole Oppositions are honest and on the whole Whips are pretty efficient. But there is no doubt about it that subordinate legislation cannot be amended whichever procedure you adopt, and it is a terrrible business to throw out a whole Order in Council because you do not like one paragraph in it. It is always misrepresented and it sometimes causes chaos if you try to do it. So, at the end of the day, I do not like this model clause at all and, as I told the Committee on more than one occasion, I am increasingly irritated by references to the Sex Discrimination Act. I was at that time sitting judicially fairly extensively, but I now begin to think that I ought to have been in charge of that measure from this side, and I can assure the Government that they would have had a much rougher ride than they did have. I would think that perhaps we had better resume this debate on Report. I do not know that it is much good dividing on it now.

Lord MONSON
Not having been in the House of Commons, I can assure the noble Lord, Lord Harris of Greenwich,  that I was not imputing ignoble motives to the Government (justifiably or otherwise) but merely suggesting that pressure of business might force a situation where such an Affirmative Resolution was dealt with late in the evening, and being realistic about your Lordships' commitments, and commitments of honourable Members in another place. We are all very busy people and do not tend to turn up for orders as we do for Bills. I feel that siren voices are tempting me to withdraw. I am sure there will be many Amendments put down at Report stage, and there is no guarantee that on Report stage we shall reach Clause 73 as early as twenty minutes to ten; it may well be a good deal later, and there may well be pressure at that stage to skip through it quickly. I am, therefore, tempted to test the opinion of the Committee now.

On Question, Amendment negatived.

On Question, Whether Clause 73 shall stand part of the Bill?

9.42 p.m.

Lord HAILSHAM of SAINT MARYLEBONE
I am not going to say anything extra about this, except to say that we shall meet this problem again on Report.

Clause 73 agreed to.

Clauses 74 to 77 agreed to.

Clause 78 [ General interpretation provisions.]:

Baroness VICKERS
moved Amendment No. 86: Page 51, line 8, leave out ("Commission for Racial Equality") and insert ("Community Relations Commission")

On Question, Amendment agreed to.

Clause 78 agreed to.

Clause 79 agreed to.

Clause 80 [ Short title and extent.]:

9.44 p.m.

Baroness VICKERS
moved Amendment No. 87B: Page 54, line 24, leave out ("Race") and insert ("Community")

On Question, Amendment agreed to.

Clause 80, as amended, agreed to.

Schedule 1 [ The Commission for Racial Equality.]:

Baroness VICKERS
moved Amendment No. 89: Page 55, line 3, leave out ("COMMISSION FOR RACIAL EQUALITY") and insert ("COMMUNITY RELATIONS COMMISSION")

The noble Baroness said: I beg to move. It is consolidation.

On Question, Amendment agreed to.

Lord HARRIS of GREENWICH
moved Amendment No. 90: Page 55, line 7, leave out ("with perpetual succession and a common seal")

The noble Lord said: This is a drafting Amendment. I beg to move.

On Question, Amendment agreed to.

9.46 p.m.

Baroness ELLES
moved Amendment No. 90A: Page 56, line 9, at end insert ("except that he shall pay, or make payments towards the provision of, remuneration, pensions, allowances or gratuities to or in respect of the chairman and each deputy chairman equal to those that he may determine under paragraph 5 of Schedule 3 of the Sex Discrimination Act 1975 in respect of the chairman and each deputy chairman of the Equal Opportunities Commission.")

The noble Baroness said: ft gives me enormous pleasure on this side of the Committee to draw attention to the fact that I should like something put in which really equates this Bill with the Sex Discrimination Act. I can do it slightly more easily because my noble and learned friend has retired. The salary of the chairman of the Equal Opportunities Commission is £10,600 a year full time, and when I saw the announcement of the new chairman of the Race Relations Commission it was £12,500 a year. That seemed to me as clear an example of sex discrimination as anybody would wish to see.

Perhaps I should declare that I have known the new chairman of the Race Relations Commission very well for many years and I have no wish to have any effect on the little money he will take home at the end of the day. I also happen to know extremely well the deputy chairman of the Equal Opportunities Commission, so perhaps I should declare these acquaintances, but I do not happen  to know the chairman of the Equal Opportunities Commission.

In view of the kind of work that she has to do, and that she has to deal with at least 9 million women in employment, and, as I understand it, there are not 9 million members of the ethnic minorities in this country, I should have thought that if you do it on a per capita basis she should get more rather than less. It is not for me, with the policy of our Party, to encourage any increase in public expenditure, so perhaps the Minister would like to give me some satisfactory solution as to the salaries of the chairmen of these two bodies.

Lord WELLS-PESTELL
I apologise to the noble Baroness for not having been here when she got up. I think I can honestly say that I heard the substance of her observations. If I understood her correctly, she argued that the salaries of the chairmen of the two commissions dealing with discrimination should be linked on the basis that their responsibilities and functions are closely comparable. I think her Amendment would place a statutory obligation on the Secretary of State to ensure that the salaries in fact were the same. We feel that this would be wrong, and I hope I can satisfy her that it is wrong. There are differences now in the responsibilities of the two organisations, mainly in that the Commission for Racial Equality will be responsible for field work in addition to the enforcement and promotional work similar to that of the Equal Opportunities Commission. We do not feel that there is a comparable responsibility falling on the Equal Opportunities Commission. It has seemed right to recognise that there is this difference in setting the salaries of the two bodies. But like other salaries they can always be reviewed in the light of changed circumstances, subject of course to whatever economic and incomes policies might be in force at the time. As it stands, the Bill allows the Secretary of State flexibility to take into account the circumstances of each case at any particular time and to make wider comparisons than the Amendment envisages if this seems appropriate. Such flexibility is, in the Government view, essential and, as I said, we do not think that the two, the Equal Opportunities  Commission and the Commission for Racial Equality, can be compared as like with like; there is a difference in their function and scope and the Government feel that the Commission for Racial Equality is such that it justifies this difference in the salary.

Baroness SEEAR
I must support what was said by the noble Baroness, Lady Elles, and protest against the Minister's blatant piece of special pleading if ever there was one. In terms of the Equal Pay Act which was passed by the previous Labour Government, if these two jobs are not the same, then they are emphatically broadly similar. Indeed, I cannot think of any two jobs which could be more accurately described as "broadly similar". If there is a bias in any direction, I support Lady Elles in saying that it is in favour of the Equal Opportunities Commission under the Sex Discrimination Act and the Equal Pay Act. The Equal Opportunities Board has the complexity of the Equal Pay Act to deal with and that involves some of the most intricate questions which have to be argued out with industry, embracing a range of decisions and a scope which does not appear in this Bill, which will present other problems. The complexity, scale and scope covered by the work of the Equal Opportunities Commission in the area of pay and opportunity are surely in every sense as weighty as anything that will be done under this Bill. I am bound to say that if it had not been that the Equal Opportunities Commission was dealing with problems of women, it would never have entered the heads of noble Lords opposite that there should be no discrimination in the pay of these two jobs.

Baroness ELLES
I am grateful for that intervention by the noble Baroness, Lady Seear, and I can only suggest that the Minister's answer provides the reason why so few cases ever seem to succeed at the industrial tribunal. He gave all the answers that only a man could give when women are asking for equality, justice and fairness. The salary of the chairman of the Community Relations Commission at £10,600 a year and the salary of the chairman of the Race Relations Board, also at £10,600 a year, are precisely the same as for the chairman  of the Equal Opportunities Commission, so I do not see how the noble Lord's argument holds water. As Lady Seear pointed out, not only is the scope very similar to that of the new Commission that is being set up, but the chairman of the Equal Opportunities Commission is directly responsible for the absorption into industry of 9 million women on an equal and fair basis; itdoes not apply only to equal pay but to the whole range of opportunities which should be equal—training, apprenticeships and everything else. I feel that the Government are doing a gross injustice by not giving these two important figureheads equality and justice in our community. It is regrettable that from the beginning they should not have the same pay. It will be a real political disgrace if the Government cannot put this matter right.

Lord WELLS-PESTELL
I am sorry that the two noble Baronesses feel that the Government are deliberately embarking on a spot of discrimination.

Baroness ELLES
They are.

Lord WELLS-PESTELL
I gathered that.

Baroness SEEAR
We are not personally accusing the noble Lord, Lord Wells-Pestell of being what is vulgarly called a male chauvinist pig.

Lord WELLS-PESTELL
I am glad that I shall have that in writing or in print in Hansard tomorrow and I am eternally grateful to the noble Baroness for saying that. I know that I shall not be able to convince the noble Baronesses but this really is not a question of discrimination. It is a question of judgment and the Government may well be wrong in their judgment. However, the judgment is that the task of the chairman of the Commission for Racial Equality is more onerous. That is not a very good word but it is the only one I can think of. It is on that basis that we get this difference in salary. Having said that, I would remind your Lordships that it is a very flexible matter. I suppose that representations can be made in the appropriate quarter with regard to this matter, but I ask the noble Baroness to accept that this is the perfectly genuine view of the  Government without any question of discrimination.

Baroness ELLES
I am very grateful to the noble Lord for his explanation and I, of course, join with the noble Baroness, Lady Seear, in reassuring the noble Lord, Lord Wells-Pestell, that outside this Chamber we shall, I hope, always remain the greatest of friends. Nevertheless, I believe that the Government are making a very bad decision. I should like to know—and possibly the noble Lord can tell me—to what body the chairman of the Equal Opportunities Commission should apply if she feels she is being discriminated against on grounds of salary? I feel that she would be justified in bringing a complaint. Before I withdraw the Amendment I should like to know to whom she should apply so that we may at least have an answer from the Government.

Lord O'HAGAN
While the noble Lord is thinking about that, can he find out from his colleagues why whenever during this Bill the Government have not wanted to say anything at all he has been given the job of saying nothing? He is so charming, kind, friendly and patient that we know as soon as he gets up that the answer will be nothing, or nothing squared or nothing to the power of three. Perhaps in order to save the effort which I know he puts into preparing what he says, he could produce a banner that says "No" on it and wave it every time he gets up.

Lord WELLS-PESTELL
I am sure that the noble Lord means that very kindly, but I think that I may be being damned not with faint praise but with none at all. In answer to the noble Baroness, I suppose that the chairman of the Equal Opportunities Commission could refer the matter to the chairman of the Equal Opportunities Commission.

Baroness ELLES
I think that the noble Lord's answer has shown how very unsatisfactory the position is. When the noble Lord referred to the onerous task of the chairman of the Racial Equality Commission being heavier than that of the chairman of the Equal Opportunities Commission he bore out what every woman has felt over the past 20 years; that is, if you were black and a member  of an ethnic minority, you were given special treatment and helped along but if, regardless of race or colour, you were just an ordinary woman you were invariably discriminated against. I think we have had the proof of that here tonight. I am very sorry that the Government should take this line and I hope that the noble Lord, Lord Wells-Pestell, will try to convince his colleagues that they are completely wrong on this and will try to see that these salaries are made equal. On that basis, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Baroness VICKERS
moved Amendment No. 92: Page 57, line 10, leave out (""Commission for Racial Equality"") and insert (""Community Relations Commission"").

Question, Amendment agreed to.

Baroness VICKERS
moved Amendment No. 95: Page 58, line 30, leave out ("Commission for Racial Equality" and insert ("Community Relations Commission").

On Question, Amendment agreed to.

Baroness VICKERS
moved Amendment No. 97: Page 58, line 34, leave out ("Commission for Racial Equality") and insert ("Community Relations Commission").

On Question, Amendment agreed to.

Schedule 1, as amended, agreed to.

Schedule 2 [ Transitional provisions.]:

10 p.m.

Baroness VICKERS
moved Amendment No. 98: Page 60, line 48, leave out from ("Commission") to ("by") in line 49 and insert ("established by section 25 of the Race Relations Act 1968 shall vest in the Community Relations Commission")

The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Baroness Tweedsmuir of Belhelvie)
If this Amendment is agreed to, I cannot call Amendment No. 99.

On Question, Amendment agreed to.

Baroness VICKERS
moved Amendment No. 101: Page 61, line 4, leave out ("Commission for Racial Equality") and insert ("Community Relations Commission")

On Question, Amendment agreed to.

Baroness VICKERS
moved Amendment No. 102: Page 61, line 11, at end insert ("established by section 25 of the Race Relations Act 1968")

On Question, Amendment agreed to.

Lord HARRIS of GREENWICH
moved Amendment No. 103: Page 61, line 18, leave out ("did not accept") and insert ("unreasonably refused")

The noble Lord said: Amendments Nos. 103 and 109 improve the arrangements made in Schedule 2 to safeguard the position of staff of the Race Relations Board and the Community Relations Commission. I beg to move.

On Question, Amendment agreed to.

Baroness VICKERS
moved Amendment No.104: Page 61, line 24, after ("Commission") insert ("established by section 25 of the Race Relations Act 1968")

On Question, Amendment agreed to.

Baroness VICKERS
moved Amendment No.105: Page 61, line 35, after ("Commission") insert ("established by section 25 01 the Race Relations Act 1968")

On Question, Amendment agreed to.

Baroness VICKERS
moved Amendment No. 106: Page 61, line 40, at end insert ("established by section 25 of the Race Relations Act, 1968")

On Question, Amendment agreed to.

Baroness VICKERS
moved Amendment No. 108: Page 61, line 41, leave out ("Commission for Racial Equality") and insert ("Community Relations Commission")

On Question, Amendment agreed to.

Lord HARRIS of GREENWICH
moved Amendment No. 109: Page 62, leave out lines 2 to 6 and insert— ("(a) the terms of employment offered to a person are, taken as a whole, less favourable than those on which he was employed  at the time when an offer of employment with the Commission was made to him; or(b) a person's refusal of an offer of employment with the Commission was unreasonable, shall be referred to and determined by an industrial tribunal.").

On Question, Amendment agreed to.

Schedule 2, as amended, agreed to.

Schedule 3 agreed to.

Schedule 4 [ Amendments of Sex Discrimination Act 1975.]:

Lord JACQUES
moved Amendment No. 110:

Page 63, line 13, at end insert—
 "1. After section 56 insert the cross heading "Codes of Practice" and, below it, insert as section 56A a section in terms identical with those of section 47 of this Act except for the following adaptations, namely— (a) in subsection (1), for "persons of different racial groups" substitute "men and women";(b) in subsection (7), for "section 74(3)" substitute "section 81(4)" ."

The noble Lord said: Amendment No. 110 is concerned with codes of practice. It is the Government's intention, expressed in the White Paper on Racial Discrimination, that, except for good reasons, the Race Relations Bill and Sex Discrimination Act and the proceedings for their administration and enforcement should be framed in similar terms. As introduced, the administration and enforcement provisions of the Bill were as similar as they could be to those in the Act, but Amendments to the Bill which were agreed in another place have resulted in three differences, and consequently the Government have put forward three Amendments. This is the first of those.

In another place, there were long discussions on the desirability of a code of practice. Eventually, there was an Amendment to the Bill that there should be a code of practice. That Amendment is Clause 47 of the Bill. At the time it was made clear that if this Amendment was adopted in the other place, then it was the Government's intention that there would be a corresponding Amendment to the Sex Discrimination Act so that the two Acts were kept in line. By this Amendment, which I am now moving, provision  is made for a code of conduct in relation to sex discrimination in much the same way as Clause 47 in the Bill provides for a code of conduct in relation to racial discrimination. I beg to move.

On Question, Amendment agreed to.

Lord JACQUES
moved Amendment No. 111:

Page 63, line 27, at end insert—
 (" 2. In section 65(3)(a), after "may" insert "(subject to the limit in subsection (2))".")

The noble Lord said: This Amendment would bring Section 65(3) of the Sex Discrimination Act into line with Clause 56(4) of this Bill. That clause was amended by Government Amendment in Committee in another place. To make it clear that, as was always the intention, the limit on the amount of compensation which can be awarded by an industrial tribunal—currently £5,200—may not be exceeded when the tribunal increases an award on account of non-compliance with a recommendation it has made. This Amendment brings the Bill into line with the Act.

On Question, Amendment agreed to.

10.8 p.m.

Lord WELLS-PESTELL
moved Amendment No. 112:

Page 63, line 29, at end insert—
 " (2) After section 66(5) insert: " (5A) In Scotland, when any proceedings are brought under this section, in addition to the service on the defender of a copy of the summons or initial writ initiating the  action a copy thereof shall be sent as soon as practicable to the Commission in a manner to be prescribed by Act of Sederunt."."

The noble Lord said: Under Amendment No. 70 I moved on behalf of my noble friend Lord Harris the condition required by the Act of Sederunt. This also applies to Amendment No. 112. I have already been into this matter and as Amendment No. 70 was accepted I therefore formally move Amendment No. 112.

On Question, Amendment agreed to.

Lord HARRIS of GREENWICH
moved Amendment No. 113:

Page 63, line 31, at end insert—
 (" In section 75(2), after paragraph (d) insert— "(e) any other form of assistance which the Commission may consider appropriate,".")

The noble Lord said: Clause 66(2) of the Bill was amended in Committee in another place so as to make it clear that the list it contained of the kinds of assistance it is to be open to the Commission to give is not an exhaustive but merely an illustrative list. Despite the words "may include" at the beginning of Clause 66(2), it was felt that the clause might be interpreted too narrowly. The corresponding provisions, which was contained in Clause 75 of the Sex Discrimination Act, will also be amended.

On Question, Amendment agreed to.

Schedule 4, as amended, agreed to.

Schedule 5 agreed to.

House resumed: Bill reported, with the Amendments.

10.11 p.m.

Dairy Sector: Eec Report

Lord RAGLAN
rose to move, That this House takes note of the recent proposals of the European Commission for the Dairy Sector (R/1734/76 and R/1742/76), and of the Fifty-sixth Report of the European Communities Committee on those proposals. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. First of all, I should like to present my great regret to be standing here in the place of my noble friend Lord Walston, who was to have initiated this debate. He cannot be here since he has to be at home with his wife who, sadly, is ill. My noble friend asked me to take his place and I shall try to do so, but I simply cannot be an adequate substitute, in spite of the fact that I was the chairman of the Sub-Committee which produced the report we are now going to debate. My noble friend has a very comprehensive knowledge of the milk production industry, in which he has engaged very successfully over many years; and although we talked it over and he gave me his notes and I shall try to convey to your Lordships the sense of them as best I can—and I can read nearly all of them—of course I shall not be able to put over the points of my noble friend as he would have done, and my remarks will come out as an amalgam of his opinions and mine, about which I hope we shall not disagree.

To my noble friend on the Front Bench—and may I say how glad I am to see him there—I should like to say how very much I personally welcome him here. It is most valuable to all of us that he has had such wide and long experience of agriculture and its problems and, in addition, has a practical acquaintance with EEC matters which probably cannot be rivalled in either House. He may be ruminating—that is the right word in this context—that had it not been for a stroke of fate, instead of taking part in this debate on the milk surplus he would have been sitting up late working out how to get more money for British pig producers without devaluing the Green Pound. Perhaps my noble friend will tell us which of those alternatives he might prefer.

However, I must resist talking about the Green Pound and turn now to the report. I regret that it is perhaps not quite so helpful as it might have been, because we produced it with such speed that there really was not time for second thoughts. I should like to thank our special adviser for his comprehensive drafting and also to thank the printers who did a specially quick job for us. We have not time for proof-reading, and there is one glorious misprint which appears in the Opinion of the Committee where "butter promotion" is referred to, whereas it should have read "better promotion". When one added "raw milk" and "dried skimmed milk", it would fit very well. The Committee meant to infer, of course, that in the rest of the EEC very little effort is made in the promotion of the sale of milk to compare with what is done by the Milk Marketing Board in this country.

My Lords, the Commission say that there is an overall 10 per cent. overproduction of milk in the Community. That is the problem. It has been building up for a very long time, since it is a very difficult one to tackle, economically and therefore politically, because the way of life of so many people depends on milk production. The Commission are at last putting forward some practical ideas of a kind which they hope will be politically acceptable.

In broad terms their thinking appears to be that since about 25 per cent. of milk production comes from herds of 10 cows or less, if they got rid of half of those herds the supply would be about in balance—am I having the attention of my noble friend? Is he listening?

Lord WINTERBOTTOM
Yes, my Lords: I am listening.

Lord RAGLAN
The supply would be in balance provided that they can prevent increased production coming from other herds. To achieve this they propose some fairly complex measures which your Lordships will be glad to hear I shall not enumerate. They arc in the Commission's document and they are outlined in the Sub-Committee's report. The money they propose to raise by means of a levy on  milk production and they call it a co-responsibility levy, which means that the producers must share with the Commission the effects of their over-production. This is a good idea but, like most good ideas, it depends upon how well it is presented and put into practice, and in my view the Commission made the mistake in their presentation by proposing to tax vegetable oils in the interest of what they see as fair competition. Besides our Committee condemning this proposed tax because it will put up prices at home and invite retaliation abroad, I think the milk levy itself could become synonymous in farmers' minds with a form of taxation. It is important that the levy is not seen as a form of taxation. But the levy must not be seen as an arbitrary tax. It must be seen as contributing towards costs incurred by over-production. It should bear a direct relationship to the amount of overproduction; that is, the cost of storage and the disposal of the surplus. The levy would have the effect, of course, of cutting the price to the producer and, that being so, one must consider how sensitive in practice the production and sale of milk is to its price. In the report I think we may have laid rather too much emphasis on the effectiveness of price manipulation in affecting demand and supply, because other factors may be equally, or more, influential upon the producers and consumers. A reduction in the producer price of milk could well have the opposite effect to that intended, as farmers would be likely to increase their herds to make good their income. With consumers, we all know that the availability of production is crucial. If you cannot get the milk where and when you want it, you do not buy it. That is where our Milk Marketing Board does so well and the French, for example, do so badly. It is difficult to know where to get half a litre of milk in France. You might find it in the ironmonger's, perhaps. Then there is fashionableness, and other forms of subjective desirability of a product, such as good promotion, and shortage. Shortage puts an increased value on a product, and I am not being cynical in suggesting that if it were rumoured that there was going to be a shortage of  butter this winter the whole of the EEC butter mountain would disappear into private deep-freezes in a week, because that is human nature—we tend to want the things that are in short supply, whether we need them or not. That is one reason why, in my belief, it is in the interest of the consumer as much as, if not more than, in the interest of the producer to keep the Community in surplus in agricultural produce, because surpluses always keep prices low, sometimes to vanishing point. I have dwelt upon the significance of price at a little length, because price has a part to play in its effect on production and consumption. But it is only a part, and there is no simple correlation. If the price of milk to farmers is reduced, it will no doubt have the effect of reducing supply in the long-term, but in the short and medium-term it might, as I said earlier, increase production unless other measures are taken, and that is the difficulty. So will it work, paying people to go out of production? Will people accept redundancy pay? Farmers usually abandon an activity only if they can find another one that is equally remunerative. Beef does not pay as well as milk, arable may not be suitable, non-farming occupations are very frequently not available and the most significant inhibition, anyway, is that farmers are likely to be as dogged as, say, skilled workers or miners in wishing to stick to the job they know and the way of life they were born to. So it is not as easy to bribe someone out of his occupation as it may seem. So whatever virtues the Commission's proposals may appear to have, we can be sure that they will not bring about change very quickly, and one of the criticisms we make in the Report is that they do not appear to have produced much evidence to show why they think that their proposals will be effective. We only hope that they will be. What one surely must do, though, is to restrict the liability of the taxpayer for financing a continuing surplus and the question is how. The idea of my noble friend Lord Walston is that, instead of expecting lower prices to do the trick which they probably will not, anyway, in the short term, or introducing quotas which are very difficult  to organise and administer, the Commission should organise a standard quantity to which intervention applies, preferably, he suggests, 5 per cent. below the present level of supply into intervention—initially, anyway. If possible, this quantity should apply only to those who rely on intervention, and not to those who can sell 100 per cent. liquid, or who can turn it into high quality cheese which sells at a profitable price. I also agree with him when he says that the problem of agriculture as a whole, and milk production in particular, is not a simple one of too many cows and too much milk, but of too many people. Their standard of living can be improved—and this is what the CAP sets out to do—only by either their receiving higher prices, which is bad for the consumer, or producing more, but there is already too much, or having fewer producers so that each gets a larger share of the total. So it is a social problem. Therefore, the Commission's policy must be directed towards providing alternative jobs, such as by rural industrialisation, employment in tourism and conservation, and retraining generally for a different kind of life. I know that my last remarks rather impinge upon the subject of the next debate, and these recommendations come under regional rather than agricultural policy, so that the CAP and regional policies must be co-ordinated accordingly. Although I am trespassing on the subject of the next debate, the Committee decided—rightly, in my view—that the two subjects, one specific and the other more general, should be debated separately and I hope I have not spoken for too long for this time of the night and that I have left much more for other noble Lords to say. I beg to move.

Moved, That this House takes note of the recent proposals of the European Commission for the Dairy Sector (R/1734/76 and R/1742/76), and of the Fifty-sixth Report of the European Communities Committee on those proposals.—( Lord Raglan.)

10.25 p.m.

Baroness ELLES
My Lords, we are most grateful to the noble Lord, Lord Raglan, for having presented the Fifty-  sixth Report on behalf of the noble Lord, Lord Walston. It is a very complicated matter and I think that the noble Lord has dealt with it extremely clearly. The report has been most helpful in providing a basis for what I am sure we all hope will be a very brief debate at this time of night. From this side of the House may I say how very delighted we are to have among us the noble Lord, Lord Peart, with his great experience and knowledge of these matters. Although we may not always have agreed on policy, we on this side of the House are very well aware of the great contribution that he has made over the last two years to linking United Kingdom agriculture with Community policies. It has obviously not been an easy task and I know that he will have fulfilled that task to the best of his ability and with the best intentions regarding the good of British agriculture. Again I should like to say how very pleased we are to have the noble Lord in this House. I should also mention how very frightened I am to have to speak on this subject before such an expert. May I also congratulate the noble Lord, Lord Raglan, on the report that was produced by his Committee. I appreciate that it was produced at very short notice. We ourselves have hardly had time to read it, so what is left out of my speech will be simply because we have not had time to go deeply enough into the matter. When we look at the report and the Commission documents we are only too well aware of how very complicated a matter it is to try to solve problems concerning dairy production in the nine Member States and the European Commission's proposals to make the industry more efficient and less costly to Member States. To be of benefit both to the farmer and to the consumer they seem to be trying to unite four completely separate and almost impossible matters into one solution. In fact, it seems to be an almost impossible task for two main reasons. The first is that the facts do not seem to me to be all that clear. It may be because I have read the documents very quickly, but nowhere can I find au exact definition of what the 10 per cent. surplus over the production figure which is needed  to meet the demands of the population in the Community really means. The second reason why I think it is very difficult for the Commission now to come to satisfactory proposals is that in recent years it has been spending about 1,000 mugs in order to increase dairy production by efficient schemes; so they have obviously got to take very bold decisions at this stage to stop what they have been doing—in certain directions, anyway—over the last few years and go either into reverse or in a completely different direction. That requires courage and powers of analysis. Also, it requires a certain foresight and sense of prophecy which I do not think anybody could ascribe even to the members of the Commission. When one looks at the projections for future years I must say that I view them with grave misgivings because any projection, particularly a projection relating to the dairy industry, mutt have many imponderables. There is the very obvious one of the climate and also the world price of fertilisers and fluctuations in the exchange rate, to say nothing of more closely related effects such as the increased efficiency of farmers, the improvement in herds, the consequent increase in yields and at the same time an apparent decline in consumer demand for milk products. This may be due to a variety of factors. It may be due to poor public relations, or to price resistance, or, indeed, to a whole concatenation of factors. It may even be that children in the Community do not like ice cream any more. It could be for all sorts of reasons which do not appear obvious on the face of them. It sounds a very stupid reason, but I do not know of any children nowadays who particularly like ice cream. They all seem to like sausages on sticks, in which case of course the consumption of ice cream goes down and consequently the demand for milk products in ice cream factories. I give this only as the kind of example which you have to take into account when you are trying to assess the future demand of the public. The Commission propose to deal with the problem of surplus by a whole package deal. How far will the elements of this package go towards producing a solution and how many problems do we think will arise out of that solution or the solutions,  and what effects will these packages have on the dairy industry? Only to mention the obvious again, the diversity in the size of farms and capital investment and in climate and in the pattern of local consumption have to be taken into account. It must be said again and again—and I think we allow the Press to get away too readily with the question of "mountains" and "lakes"—a surplus per se is no disadvantage. Who would not rather live in an area of high yield than in an area of scarcity? Who would not rather be able to buy high quality and to have plenty of choice than to have no choice and no food? I have always thought that the question of "mountains" has been grossly over-played and has done no service, either to the workers in the Community or to our own farmers. In fact, if you analyse what the surplus means you probably find it means about one cup per week of milk per head of population, if that. It is only because it is calculated on the basis of 250 million people that it seems a large figure. If it was divided among the whole of the Community, I understand that it never meant more than about 10 days' stock for the whole of the Community. Possibly the noble Lord might like to confirm that. I have not got the exact figures, but I think that is roughly the kind of figure it is. I say again that the Press has done no service, either to the Government or to the Community, or to the former Government, on this particular aspect. One of the facts that we are gradually coming to live with—and I think this is again part of the problem—is that in a shortage prices go up. I think this was a sort of Keynesian theory but the other leg of the theory never seems to happen nowadays, and when there is a surplus prices do not seem to go down. In fact, the law of gravity in relation to prices no longer operates. So how do we reconcile the security of the dairy farmer, encourage him to produce sufficient and at the same time ensure him a fair return and reasonable and realistic prices to the consumer? This is the problem that the Commission are now faced with, and how far do the proposals of the Commission meet these criteria and go some way towards finding solutions? As the noble Lord, Lord Raglan, has so rightly pointed out, there is a whole  list of proposals in the action programme for the milk industry produced by the Commission and mentioned in the 1956 report. They show the results of increased efficiency and at the same time in the following paragraphs there is also seen to be a decline in demand. It is said that the Commission believe that butter consumption has declined because of unfavourable prices—the price ratio of butter to margarine. Is that really correct? I do not believe that the answer is so simple. It is due to a variety of factors, some of which I have already outlined, and I do not believe that the solution by the Commission, to put a tax on vegetable oils in order to raise the price of margarine and lower the ratio of the price difference, will in fact be successful. On the contrary, I think it will be detrimental to the general price of food throughout the country. In my opinion it would also have a deleterious effect on the trading arrangements which we have with third countries who export oils to the Community. Another point which I think has not been dealt with sufficiently in any of the reports that I have seen on the question of dairy products has been the question of the effect of fats on health. I must say I was somewhat surprised in what one can only take to be a "plug" for a very famous firm which produces margarine, to read that from the vitamin point of view, margarine is certainly a more nutritious food than butter. All these conclusions on page xiv of the report are dubious conclusions, very much open to doubt. I personally would have rather not seen them contained in an official report. It may be because, again, I have read them rather quickly, but I am not quite sure who is responsible for the particular answers on margarine and butter in xiv. Perhaps when the noble Lord winds up, he will say where these figures come from, because I was reading Which?, known, I am sure, to all noble Lords, which goes into the question of the benefits of foods which contain fat. The September 1976 copy of Which?, says that the foods we need not worry about include skimmed milk, cottage cheese and low-fat yoghurt, hut the foods of which we should be careful include hard margarine as well as butter and cream. Therefore I think the appendix may be somewhat misleading on this. I do not pretend in any way to be a dietician, but it is obvious from the report of Which? that this is a controversial matter and is not one on which any definite factual statement can be upheld. Obviously people have opinions, and there can be certain scientific facts connected with margarine and butter, but I do not think the value of these foods to a human being can be so categorically stated as in the report. My Lords, the other matters I should like to touch on are the further proposals that the Commission has made. I particularly want to mention the question of the non-marketing of milk and the conversion premium. With regard to that question, I think this is a very good answer. The only point I should like to make—and I hope the Government will take this up and support other Member States who may feel the same way—is that the conversion premium should not be denied to small farmers. Again, I admit that read the document very quickly, but as I read it I understood the conversion premium was to be given only to farmers who had a minimum number of cows, whereas the non-marketing premium would be given to a farmer with any size of herd. Many small farmers rely on natural fertiliser for their farms. They also would have the problem of haymaking and disposal of hay if they were forced to sell or slaughter their cows. It is an unreasonable condition to expect a very small farmer to slaughter his cows and not be able to have a premium to convert his cattle for beef during his own period of farming. While I think it would last for a very short time, I think it is an unreasonable request or condition to impose on small farmers. I say this with particular knowledge, and perhaps I should declare an interest, in that although I do not keep cows I have a small farm in Italy. My next-door neighbours keep cows; each farmer has three cows. They rely on their cows to provide natural fertiliser for their vines. If they were made to sell these cows, they would have to buy chemical fertiliser, which is expensive. They run on a low margin of profit. They would have to try to dispose of their hay as best they could, probably burn it, and I think it would  upset the whole balance of the way these small farms are run. I agree with the general principle that these farms should probably in the end be amalgamated so that there is a much larger farm using chemical fertilisers; but I ask that some consideration be given to the existing small farmer that his whole way of life, the whole process of family working, with the wife cutting grass, feeding cows, and so on, should not be disrupted at this stage, because I think it would have considerable effects on the social as well as the economic life of the small farm. I have dealt also with the question of the tax on oils, which we do not consider would be helpful. We would very much rather see the price of butter go down than the price of margarine rise. I have kept your Lordships rather a long time, but there is just one point I should like to make because I have not heard the noble Lord mention it, and I think it is absolutely vital to this question of skimmed milk powder. I have not seen anything about food aid and I think this is a very important aspect of the way the surplus of skimmed milk powder is to be dealt with. I very seldom look at television, but there was a very good television documentary recently about a sort of bidonville outside Lima, in Peru. The only thing they needed was skimmed milk powder and I wondered, knowing of the mountain in Brussels, how it was that the two had never been connected. When I made inquiries I was told that skimmed milk powder was of course available to anybody, but they had to ask for it. It seems to me this is something the Government could do to ensure that the Embassies of the nine Member States of the European Community, wherever they may be and particularly in LDCs, should have the task of informing Ministries of Agriculture or their equivalent in some of these countries that the skimmed milk powder is available not only for human consumption but to be used for animal feeding stuffs in order to develop local agriculture. This. I am sure, all sides of the House will agree is one of the best policies in order to raise the standard of living of the lesss developed countries. This, I think, is a point which should be made, particularly with regard to the skimmed milk powder. The final point I should like to make—and I very much hope the Government will insist on this—is that before the surplus is disposed of in the most casual way it should be ensured that it goes at the lowest price to old-age pensioners, people on supplementary benefits, schools and hospitals. If there is a surplus I am quite certain that if the Commission use energy and imagination they can find the people who can use that surplus with benefit to their health and also to keeping and safeguarding the position of the farmer.

10.43 p.m.

Lord MACKIE of BENSHIE
My Lords, I, too, should very much like to welcome the noble Lord, Lord Peart, and say what a pleasure it is to be able to look at someone on the Front Bench opposite who knows a good deal about agriculture, because if I may say so the expertise is slightly weighted on this side. The question before us is really the EEC's attitude to dairying and its effect on this country. I should like to start by restating the obvious case that this country should produce a great deal more milk and the Continent should produce a great deal less, because we milk raise properly, we need it, we import large quantities and we do it efficiently. I think we have the best climate for it. We can grow grass better than most places in Europe and, apart from the Dutch, I think we have more expertise than anyone else, including the Danes, whose farming I admire. So when we look at the original aim of the EEC of producing the goods needed in the right place and by the people who are best at it, this country is the ideal place for supplying certainly the major part of our own needs and those of Europe. One can see this quite clearly from the price. So far as we can tell at the moment, milk is about 39p a gallon in the United Kingdom, while in France, Holland and Denmark it is 45p a gallon, in Germany it is 50p a gallon and in Italy it is 60p a gallon. The discrepancy is widening, and still we have not got a big squeal coming from the dairy farmers in this country, which normally means they are doing moderately well. I think this is the first point that we must look at when considering the proposals. I think on the whole the proposals make the best of a bad job, and 1 think that is all you can say about them. To have a co-responsibility payment is just rubbish. The price must come down. To go about it round the back door because of the foolish attitude of some countries is a grave disservice to farmers in the long run. The one thing that is sure about any price guarantee—and steadying the price is essential for efficient farming—is that you cannot depart too far from supply and demand. I do not think the farmers of Europe really want high prices; they want to know where they are, and if prices have to be reduced because of over-supply they should know that they will be reduced only gradually, or not rise according to inflation. To put prices up to the farmers of Europe in a period of gross over-production is really enormously stupid, and certainly will do the farmers no good at the end of the day. I entirely agree with the noble Baroness that the mountains are not mountains at all; they are molehills really. But any stupidity such as going on producing extra food when it is already in surplus over the amount you need for a carry-over and safety valve does reflect in the papers, quite rightly, and does turn the public against guaranteed prices for farmers and makes the system look silly. Other measures are quite reasonable. Suspension of aid to dairies is, of course, quite sensible in a condition of over-production. I think the point Lord Raglan made about a price reduction sometimes leading to increase in production of milk is perfectly true, because the farmer simply adds two or three cows in order to keep up his gross income. But combined with the measures to bribe or force farmers, whichever way you care to put it, out of milk and into something else, I think it is effective. We say in the report, and I think it is true, that the payment for getting out of milk was very effective in the wrong way in this country in forcing British farmers out of dairying and into beef. You must reduce the price in time of over-production, but you must also give incentives to get out of milk and into something else. In that way I think the policy could be very effective. There are a number of ludicrous situations particularly the one of taking skimmed milk and drying it on very expensive machines, having taken it into the  dairy to separate it, and then being unable to sell it. We had very sensible schemes in this country of encouraging the sale of skimmed milk in liquid form to pig farmers and other farmers, to feed to pig farmers and other farmers, to feed calves and so on; and it appears to me that if we were to give grants for separators on farms, keep the milk on the farm, or send it direct to another farm, it would be infinitely more sensible than using precious fuel drying it and making it into skimmed powder which you cannot sell. I think this is a system we should return to and encourage by means of grants. There is no question at all that we must put a lot of propaganda over in Europe about the effectiveness of our milk marketing. Our sales in this country are high and rise from time to time, and they are based on service. There is no question also that our daily delivery service in this country is one of the ways we keep up supply and sale of milk, and I hope we shall never stop it. I hope they will adopt it in Europe and spend some money to promote the sale of liquid milk. The requirement to put expensive skimmed milk powder into animal foods is, again, daft. What is the point of putting up the price of other animal foods and simply robbing Peter to pay Paul? There should be a direct reduction in the price so that manufacturers will want to put the stuff into other animal foods instead of soya bean meal, or whatever they are doing at the present time. The more you resort to artificial means and force the further you get from supply and demand, and the more trouble you get into. I do not want to say much more. I think the report and the Committee's intentions will go some way to alleviate the problem. I think that the noble Lord, Lord Peart, as Minister of Agriculture, did a tremendous amount to try to force common sense on the Commission in some of their proposals. We have big problems here with inflation, so that we have to try to keep the price down to the consumer. But I think that the noble Lord's successor would appear to have even more work to do, because the Commission appears to be putting forward plans which will lead to more bureacracy and get away from common sense and the law of supply and demand. I trust that the new Minister will put the same energy into the into it as did his predecessor.

10.52 p.m.

Lord SAINSBURY
My Lords, there can scarcely be a more complex, one might almost say more intractable topic than the Common Agricultural Policy. It is easy to criticise it; it is tar more difficult to construct a sensible alternative. The basic problem is how to integrate essentially different agricultural structures. Thus, to take one example, the average size of a dairy herd in Italy is five; at the other extreme the average size of a dairy herd in Scotland is 70. The average milk yield varies in the same way, with Holland at the top of the table, Eire at the bottom, and the United Kingdom coming third. One of the clearest examples of this problem can be seen in connection with the proposed measures we are discussing this evening. This country is one of the Community's most successful milk producers, and it is the policy of Her Majesty's Government, as set out in the White Paper, to increase milk production within these shores. Indeed, we do not supply, as your Lordships know, all our own requirements for dairy products. But, what is more, we are the biggest outlet for the cheese and butter exports of the rest of the Community. Yet the Community has a large surplus of milk and we are part of the Community. With his long experience as a very successful Minister of Agriculture, I hope that my noble friend the Leader of the House will be able to reconcile this apparent conflict in the national and Community policies when he replies. As my noble friend Lord Raglan explained, this package is designed to remedy the serious and persistent imbalance in the milk market. Like CAP as a whole, it is good in parts, though in my opinion the bad parts of the package undoubtedly outweigh the good. The most obvious is the fact that it has been put together without apparently taking any notice of consumer interest. The Commission seems to have been concerned only with the reduction of surplus dairy produce and to have been unduly influenced by the farming lobby. If the problem had been looked at from the consumer's point of view as well as that of the farmer, I am sure that a totally unacceptable tax on vegetable and marine oils and fats would never have been put forward. There seems to be some doubt as to the size of the proposed levy. If, as some have suggested, it will be so small as to make no difference to the retail price of margarine, why impose the tax at all? Should the levy be so large as to have a noticeable effect on price levels, then I suggest that that runs directly contrary to the interests of the consumer, especially the lower-paid consumer. There is, in my opinion, no reason why the price differential between margarine and butter should be artificially distorted in this way. On the basis of long experience as a retailer, I will explain it simply. Foods compete with each other, especially butter and margarine. If the margin between the two decreases, more butter is sold. If it increases, more margarine is sold. By imposing this levy, the Commission hopes to increase the price of margarine and thus increase the consumption of butter. It is known that there is a correlation between the amount of fat consumed and the incidence of coronary heart disease. What is not certain, however, is the effect of animal fats which in butter and hard margarine are rich. Nevertheless, many people believe that soft margarine, which contains up to 50 per cent. polyunsaturated fats, is better for them. There can be no justification, I suggest, for this belief being penalised by artificially increasing the price of margarine. Let us ask Brussels to face up to reality. The price of milk in the rest of the Community is too high. The noble Lord, Lord Mackie of Benshie, quoted some figures; mine are slightly different at the retail level. In January of this year a pint of milk cost 11·1p in Germany, 10·5p in Denmark, lop in France and only 8·5p in this country.

Baroness ELLES
My Lords, would it not depend on which day the calculation was made, according to the exchange rate on the day?

Lord SAINSBURY
It would indeed, my Lords. Speaking from memory, I think the exchange rate was higher in January than today, but those were the only figures available. I think, making all allowances for that, that there is a wide differential which is borne out by the figures of the noble Lord, Lord Mackie.  Yet, faced with this disparity, the Commission has not taken the obvious course of reducing the price to the consumer. Instead, it has chosen a weird alternative, the—in the language of Brussels—so called "co-responsibility" levy. In effect, this is a price cut to the producer which does not benefit the consumer. The Commission has not produced any evidence to show what effect this roundabout measure will have. Indeed, as the Committee report states, if it is set between 2 per cent. and 5 per cent., it may have very little effect, as has already been stated by several speakers. Many farmers may simply increase their herds and thus their production in order to compensate for the lower price they will receive for their milk. Far more sensible, though admittedly more complicated from an administrative point of view, would be a guarantee to producers of a given price for only a certain amount of milk. If they produced more, a lower price would be paid on the excess. That, I understand, is the suggestion of my noble friend Lord Walston, the cause of whose absence from the debate tonight we all regret. The best solution to this very real problem would be to increase liquid milk consumption in the rest of the market, both by lowering the retail price and by taking active steps to promote the consumption of the product in its liquid form. The success and efficiency of the British dairy industry is based on the high liquid consumption of milk in this country. Some 60 per cent. of all the milk produced here goes for liquid consumption.

Lord RAGLAN
My Lords, if I may correct my noble friend, it is 40 per cent.

Lord SAINSBURY
My Lords, I stand corrected by my chairman. I had thought that the figure was higher, but the figure for the rest of the Community as a whole—and I hope that this is right—is a mere 15 per cent. Much credit for the level here must be given to the excellent promotional work undertaken by the Milk Marketing Board, which is financed, as many of your Lordships will know, by a levy on distributors as well as producers. It is this pattern that we must encourage in the rest of Europe. There has been a full programme of debates today and I do not want to take up too much time outlining those of the Commission's proposals that are designed to encourage farmers to stop marketing milk or to convert to beef production. I only wish to say that there has been no estimate of their total effect. I wonder whether the reduced production that will result from this measure will not be more than offset by the trend which is apparent throughout the Community towards greater efficiency and a higher milk yield per cow. In conclusion, I doubt the effectiveness of these measures. Some require time before we can judge how successful they will be. Others—in particular the levy on vegetable and marine oils and fat—should be firmly resisted. Most important of all, I hope that our new Minister will go to Brussels to propose and fight for a far simpler remedy than that which the Commission has put forward; namely, a reduction in consumer prices and large-scale promotion, by every means possible, of the consumption of liquid milk.

11.5 p.m.

Lord INGLEWOOD
My Lords, I think that this debate has shown that there is nothing like milk for throwing any Minister of Agriculture into a panic. That is what has happened over the greater part of the EEC. I am glad to say that I think this country—and all credit to the last Minister of Agriculture—is an exception. This so-called surplus of skimmed milk powder has rushed the Commission into making very strange proposals described as the "introduction of a premium system for the non-marketing of milk and milk products and for the conversion of dairy cow herds ". What extraordinary jargon! Taking it out of the small producer is the line they propose to follow—and little advantage to the consumer, as the noble Lord, Lord Sainsbury, has pointed out. The noble Lord, Lord Raglan, suggested—and I do not want to do him an injustice—at the beginning of his speech that herds of 10 cows or fewer produced something like 25 per cent. of the milk in the Community. I checked that figure from such papers as I have with me and it seems that of the total cows in the Community in herds of under 10 are only 7·7 per cent. of the total. Therefore, if those figures  are correct, I cannot see that the production from 7·7 per cent. of the total cows in the Community should be held to be such a great threat to the stability of the market. My Lords, the proposals that the Commission make reveal the odd and changing attitude of politicians towards small farmers over the years. Sometimes, they all press for heavy subsidies for small farmers and new settlement schemes—and 19th century Germany is the prime example of where that policy was followed for decades—then the pendulum swings and the politicians and their advisers say that small farmers are inefficient and are too numerous and that it ought to be a main purpose of it all to see their numbers are reduced and: "Let us get rid of them because the level of support for agriculture, if it has to take account of the costs of the small as well as the big, is so heavy. Let us see, therefore, this large number of small farmers reduced." There is never any certain agreement about the reaction of small farmers to price changes—and, in particular, for milk. Some may say that the reduction in the price of milk encourages the small man to go out of milk. Others say that he at once seeks to buy another cow or two in order to maintain his income. Probably some react in one way and others in the opposite way, and there is hence no certainty as to what the general effect would be. But, in any case, the number of small farmers in all countries is going down because it is, understandably, within the spirit of the times that people should dislike the burden of milking cows twice a day for seven days a week. The older generation accepted that; the younger generation accept it much less readily. What do the Commission propose? I only want to speak about one of their proposals because I do not want to take up much time. I want to speak about the imposition of a co-responsibility levy on all milk production. That is a strange way of getting round the political difficulties associated with a straight price decrease. I would ask noble Lords to note that an increase in milk production in any country today is most likely to come from the bigger farmers, and is not likely to come from the smaller man whose numbers are decreasing and who has not  the capital to achieve the same expansion as many bigger men. I must declare my interest here: I am at the larger end of milk producers but I am not somebody who would find it easy to double his numbers, although there are many who could do it. Further, putting this pressure on the small farmers, which the Commission propose to do, is not attractive politics to me; nor do I think it is wise socially to harass these men and so drive them to live in the towns. The noble Lord, Lord Raglan, assumed rather too easily that alternative employment would be found in rural surroundings. In my experience, when small farmers leave their holdings, for whatever reason, they are much more likely to drift into the towns. Various possibilities and various ways have been considered by the Commission. to deal with the surplus. I should like to suggest a simpler way, a cheaper way, a fairer way socially and perhaps a more effective way of operating the co-responsibility levy would be to start it at the production in excess of the estimated yield of, say, 10 cows, say, in round figures, 10,000 gallons. That would apply to all producers, large as well as small. This would be something like the personal allowances under our present income tax code. If on all milk above that certain figure there were charged the levy, there would then be the price reduction and a check at the end of the scale where the expansion was most likely to come. If you wanted to make it bite even harder, you could calculate that levy at a higher rate still the top end of the scale. I submit that would be a great simplification in administration. To complete the picture, I hope that our Minister of Agriculture will impress on his colleagues in Brussels that sales promotion, on the same lines as has been seen in this country, is essential. Our Milk Marketing Board has achieved great success in this field over the years and has gained experience which others could well copy. It is not always that we can say today that Britain sets an example which we can urge on other countries to copy. But so far as the promotion of the sale of liquid milk is concerned, we have set  an example in this country which none can rival, and from this House I am sure we can ask the Minister to press on his colleagues that others should not only note what we have done, but follow the example and follow it quickly.

11.15 p.m.

Lord COLLISON
My Lords, my noble friend on the Front Bench, Lord Peart, will be conscious now of the feelings of the whole House towards him. I simply want to add my words of welcome and of thanks to him for the great services he has paid to agriculture in the past. They are greatly appreciated. It has been an arduous task; I only hope that his job in this House will prove less exacting, if that is possible. I have discarded the speech I was going to make because of the lateness of the hour. I am very conscious of the fact that this is the second time I have addressed your Lordships today and I do not want to outstay my welcome, but I must thank my noble friend Lord Raglan for presenting this report and explaining it so clearly. I shall merely mention one or two points where I have reservations about the Commission's proposals. At the outset, may I say that while one appreciates the Commission's problems relating to the over-production of milk on the Continent, the fact remains, as the report says in paragraph 7: " … the proposals raise a classic dilemma in that on the one hand it is broadly in the national interest that 'surplus' milk production in the Community should be reduced and the CAP costs lowered, while on the other hand the Government have at present an extension plan for the British dairy industry". Those two concepts seem to be incompatible. I would say, however, that the production of milk in this country is in balance, and I am a little concerned about the effect of the proposals on the possibility of a milk shortage occurring during the winter months. If one is to ensure an adequate supply in the winter, one must accept that there has to be a surplus in the summer. I can only express appreciation of the work done by the Milk Marketing Board, not only in dealing with the balance properly, but in the propaganda work they have done to increase our milk  sales. I agree, as has been said, that the Commission might well take inspiration from our own Milk Marketing Board, because they have been successful, as their team of experts who came here a short time ago know for themselves after visiting the Board. I do not propose to reiterate the proposals regarding incentives for farmers to get out of milk production by way of the non-delivery premiums and the conversion premiums. My reservation is that it is very difficult to assess what the take-up will mean and, in particular, what it will mean in this country. For best or worst, whichever way you look at it, it could result in a quite substantial drop. In his evidence to the Committee, Mr. Roland Williams, chief economist to the Milk Marketing Board, said—and I will paraphrase to save time—that we have in this country just over 50 per cent. of milk producers in the category which would benefit from a non-marketing premium. He also said that those 50 per cent. of producers have something like 20 per cent. of the cow population. He added that the conversion premium would cover about 40 per cent. of the producers, and they supply about 18 per cent. of the milk supply of this country. He added: "We do believe that these premium schemes would give a very substantial incentive to producers in these categories at least to give up milk production." As I have just mentioned, what worries me is that although it is expected that because of increased efficiency in the industry the increase in milk yield will continue, and while we accept that in the long term the remaining larger farmers will increase the size of their herds, there is bound to be a time lag before this takes place. In connection with the possibility of a milk shortage in the winter, I personally put a question to Mr. Roland Williams, because I wanted an answer to a specific question. I asked him whether we would have difficulty in meeting our winter milk supply, and he replied; "I think we would have had difficulty in the last year or so with milk supplies in the winter, having regard to this enormous reduction in the cow population, had it not coincided in the last two years with an enormous surge in yield improvement. We have never experienced a yield improvement of the order of last year and the beginning of this summer, and had that not happened at the same time as the cow population was decreasing we would have had difficulty." There is the added point that the changeover to more beef production on the Continent could add to that beef mountain about which we hear so much. That is my first worry, and my first point. Secondly, I must confess that I am astonished at the proposal of the Commission, which apparently accepts that because the price of butter is likely to rise the price of margarine should be allowed to increase, too, and indeed should be forced up. It seems to me that this is contrary to the interests of the producer, and is also contrary to the natural operation of the law of supply and demand. It is odd, to my way of thinking, because the consumer will have to fork out more in a situation where in this country, and in the rest of Europe, inflation is already a major preoccupation. I also find it difficult to accept the proposal that developing countries should have their oil exports to us taxed. It seems to me, despite the proposal that the proceeds from the tax should be put towards increasing international aid, that one must accept that the developing countries, much as they require aid, require trade much more, and I am quite sure that to limit their trading possibilities in this connection is wrong. Finally, I should like to repeat what has already been said, that the co-responsibility levy is simply an attempt to introduce an indirect price cut, because, as has been made clear by the Commission, the Council of Ministers will not accept reductions in milk prices. One can understand the problem, but the direct way is not possible and this indirect way in no way benefits the consumer. That is a point which I thought should be made clear. The temptation offered to farmers to get out of milk production by a levy of between 2 per cent. and 5 per cent. would not have any significant effect on milk production, and I feel that such a disguised price cut can in no way be recommended, because anything that is disguised is wrong and the consumer cannot benefit. Therefore, it is clear that I personally concur with the general opinion of your Lordships' Committee that they, "… fear that the Commission's proposals would not be adequate for their intended purpose, and … that to tax imported oils and fats would be the wrong approach". I think it is a very wrong approach. In conclusion, I regret that nothing was said in our report—and I should have mentioned this myself—about the suggestion by the Commission that some of the surplus milk could be taken up by developing a school milk scheme. This valuable and nutritious liquid could be passed on to children who might need it. Also I concur with what the noble Baroness opposite said, that consideration should be given to the disposal of this mountain of skimmed milk to those parts of the world where there is great need, where starvation is rife and where the delivery of quantities of this product, which is simply lying around doing nothing, would be of great help. I have disposed of my original speech because of the late hour. I wanted, however, to join those who have already commented on this report, and I think it is quite clear that I concur with practically everything that has been said.

11.26 p.m.

Lord VERNON
My Lords, this debate has shown that there were varying views in our Committee about these proposals. My own attitude is governed by my support for the Government White Paper, entitled Food from Our Own Resources, the general objective of which I believe to be correct. It is that since at the present time the cost of importing dairy products is running at the rate of something in the region of £500 million a year, mainly on butter and cheese, we should expand our own milk production to help to make good at least part of this deficit. Nobody was more forceful in advocating this policy up and down the country than the noble Lord, Lord Peart, in his capacity as Minister and I believe he was quite right to do so.

Baroness ELLES
The noble Lord will, of course, agree that we ought to continue to import butter from New Zealand, since this is an import which was arranged under the terms of the Treaty of Accession?

Lord VERNON
I am not against some imports. All I was suggesting was that we should not be so wholly dependent upon imports as we are at present. The other reason is that given by the noble Lord, Lord Mackie of Benshie, the  basis of which is that we in this country are better suited to producing milk and milk products than many other countries in the Community, just as they are better suited to producing certain other products, perhaps sugar beet or potatoes, than are we. The trouble with the Brussels proposal for reducing the milk surplus in the Community as a whole is that, on the face of it, it runs counter to our own desire for self-sufficiency, but this contradiction is more apparent than real if the Government are prepared to take the necessary measures which I will come to later. It has been suggested that it would have been simpler if the Commission had reduced the price of milk instead of coming up with such a complicated package. I am not sure that this is right. There is hound to be a great deal of guesswork here, but a straight cut in the price of milk could, as has been suggested, have encouraged producers to maintain their incomes by keeping additional cows, and if it did that it would be self-defeating. Certainly in their evidence to us the Milk Marketing Board were emphatic that it would have the effect of reducing the number of milk producers. After all, that is what is required, looking at it from a Community point of view. What, then, of our own position? My own feelings are somewhat mixed. I do not quarrel with the co-responsibility levy, provided that the Commission make proper use of the proceeds to increase the consumption of milk and milk products. A number of speakers have already made that point, so I will not go on with it. But, certainly, they have a lot to learn from our own Milk Marketing Board, and I hope they will learn. We must certainly go on pressing them in Brussels to say exactly what they are going to do in this respect. I am slightly dubious about the beef conversion scheme and the possible overproduction of beef. I hesitate to use the word "mountain" after the strictures of the noble Baroness, Lady Elles, but I think there might be over-production of beef as there has been in the past. Likewise I am uneasy about the cessation of capital grants. This is an aspect which I do not think has been mentioned so far. The cost of modernising buildings and  equipment in the dairy sector is becoming truly prohibitive in the inflationary era in which we live, and I do not see how any expansion can take place—and I personally believe that we need to expand in this country—without Government assistance. One encouraging feature which should be noted by noble Lords is that grants will still be available to the non-intensive producer; that is, the producer who produces 80 per cent. of his fodder and does not keep more than one cow per 1·3 hectares. This applies even if that producer is not in a less favoured area. There are many mixed farms in this country which come in this category and which should continue to benefit from grant aid, and from the point of view of the structural reform of the CAP, which of course is the subject of the next debate, I believe that this encouragement of farm self-sufficiency in the Community is a step in the right direction. Where I am afraid the cut will bite most is in investment in milk processing factories, but this is something which we may have to accept. I return finally to the question of the dilemma posed in paragraph 7 of the report and the possible contradiction which I mentioned earlier. These measures, if they are implemented, will obviously have a very serious effect on the dairy industry in this country; but I believe these adverse effects on the British farmer, especially the effect of the non-delivery and conversion premium and the co-responsibility levy, can be largely, if not wholly, counteracted by a Government decision at least partially to devalue the Green Pound. This is, after all, an option which is not open to the other countries of the Nine, and in a sense we get the best of both worlds, because we can maintain the support for our dairy industry at its present level, whereas on the Continent the price of milk will be reduced, and thus we should become more in balance. The decision to devalue the Green Pound is in any case overdue if our farmers are to be allowed to compete on equal terms with the farmers in the Community, and yet that surely is the objective of the CAP, and I believe it is high time that it was the Government's objective, also. If this package is introduced without an adjustment of this kind, then the outlook for the British dairy industry will be bleak indeed.

11.35 p.m.

Lord PEART
My Lords, may I say how glad I am that so soon after joining this House I should have the privilege of replying for the Government to a debate on certain aspects of a subject, agriculture, with which I have had more than a passing acquaintance in another place. May I say how kind noble Lords and Baronesses have been to me, and may I thank them for what they have said. I am sure we are all indebted to the noble Lord, Lord Raglan, for the Motion which has enabled us to have such an interesting debate. I know it is late at night, and I pay tribute to the endurance and, indeed, the interest and enthusiasm of noble Lords and noble Baronesses on a very important matter which, in the circumstances, I wish had been debated at an earlier hour. On looking at the clock, it is almost like going to the European Commission again. I hope we shall finish a little earlier than they do on many occasions. My Lords, we thank the noble Lord, Lord Raglan, for the Motion and I pay tribute to the way he has moved it. It is only right we should go back one further step in the chain of events and pay tribute to the European Communities Committee of the House, whose work and vigilance have been a means by which these proposals from the Commission of the EEC have been brought to our notice as needing further consideration by the House. In the other place, I used to go to the Scrutiny Committee quite often on matters affecting the Community and agricultural policy. I never regretted being cross-examined by my colleagues. I think it is right that this tradition should hold here in your Lordships' House, and in the Committee concerned. Therefore, we are indebted to the Committee for their interesting and thorough report, their Fifty-Sixth, on the dairy proposals of the Commission, just published. My Lords, your Lordships have raised a number of points. I intended first to outline the views of the Government, but I should refer to some of the important points not covered specifically by the report. May I say to the noble Baroness, Lady Elles, that I agree with her so much about the issue of surplus and scarcity. In another place when I have been attacked by Left-Wing critics of the  Community—and I used to be a critic myself, although never a Left-Wing critic—and when I have dealt with some of their arguments, I have always said they should turn their attention to some authoritarian régimes who have tried to develop their agriculture and failed, and have had to be assisted by the Western World, including the United States. The noble Baroness is quite right to put this in its proper perspective. I would rather deal with surpluses than scarcity. I am glad she stressed that. I was interested in the remarks of the noble Baroness with regard to Italy. I once did a special survey many years ago, as chairman of the Commission, which examined Italian agriculture and farm structure. Mistakes were made in the régime after the war by destroying some of the larger estates; there was too much fragmentation. That is why I later became a supporter of amalgamation. I was going to refer to this on a later occasion. I found the remarks of the noble Baroness most interesting. The noble Lord, Lord Mackie of Benshie, quite rightly talked about the importance of the law of supply and demand. Obviously, as a Liberal, and I assume a disciple of Adam Smith, and economists of that ilk, it was only natural he should state this, and I think he is right. It is odd that I should say so, but I think he had a point here. He said, quite rightly, that we must produce more, and that the other countries on the Continent and the Community should produce less. The noble Lord paid a tribute to the efficiency of our industry and also made a reference to the importance of our Milk Marketing Board, and I agree with him here. Not so long ago at the Dairy Trade Federation Conferences at Stratfordon-Avon I made a statement on that, that we must keep our essential powers in our marketing boards. They have been successful and I believe they should be adopted in Europe. Here, no doubt, is a matter of controversy which does not come in the report we are dealing with tonight, but I am glad he raised it. Again, the noble Lord, Lord Sainsbury, also referred to many matters and I will deal with some of them when I discuss the report. He was quite right to highlight our liquid consumption, the success  of our dairy industry, and of course he mentioned farm structure. If I may give one figure, sonic 63 per cent. of dairy herds in the Nine are herds of nine cows or less. So there is a different problem from that which we face in our own country. He was quite right to highlight the role there of the small farmer and the differences, and also the importance of the consumer. We must never forget this. Naturally I am anxious to stimulate production, but we must consume and if we do not have a proper balance both suffer. The noble Lord, Lord Collison, also defended the Milk Marketing Board. I am glad that he stressed this because he, too, has had long experience in the industry. I am glad the noble Lord, Lord Vernon, mentioned the Government White Paper Food from our own Resources. I have often been criticised about this but I believe the strategy it outlines is right. I know we have had setbacks. I know that at one period we had retrenchment in our own industry. I know that the drought also has considerably affected our industry. But I believe the policy is right, and right from the point of view of the balance of payments as well. I was glad also that the noble Baroness, Lady Elles, interrupted and stressed the point that we also import from New Zealand. As the noble Baroness will know, I achieved a success here and I am glad that it is not in any way incompatible with the need to push ahead with our own production. There will inevitably be imports from other countries, particularly from our traditional suppliers like New Zealand. I should like to outline very quickly the Government's views on the Commission proposals which are the subject of our debate. I could have been sidetracked on many of the issues that have been raised earlier, and I mentioned some of them. The Commission has presented us with its analysis of the problems in the milk sector, and has put forward a series of proposals to deal with them. Essentially, the Commission assesses that the trend is for the Community to produce 10 per cent. more milk than is required. Already the cost of financing surplus disposal is very great and, without action to overcome these problems, the situation could  deteriorate. We are convinced that if these problems are to be overcome the fundamental cause will have to be faced squarely. This is that prices—and the noble Lord, Lord Mackie mentioned this directly—have for far too long been set at levels which have generated a volume of production which consumers will not purchase at the prices laid down. Therefore it must be accepted that the only effective solution is restraint on the intervention prices which are fixed each year. We accept, however, that to deal with the problems facing us now a combination of measures is necessary. But unless such measures are applied in the context of a firm prices policy they will have only a temporary effect and will not succeed in overcoming the underlying cause of the problem. I am sure the House would wish to hear in a little more detail the Government's views on the individual proposals that go to make up the Commission's package for the dairy sector. On non-delivery premia, we take the view that a case can be made out for a scheme which provides some assistance to producers to give up milk production. I am thinking now of the Community as a whole. There are, however, two points I should like to make. First, it is important that this scheme should not be seen as a substitute for effective action on producers' returns. On the contrary, we believe this type of scheme should be supplementary to a firm policy in relation to producers' returns. In any other context, it would at best only produce a temporary dip in the upward trend of milk production. Secondly, we need to look very carefully at the scope of the scheme. If its scope is too wide, there could be a very serious risk of dissipating the Community Fund and Member States' funds. Our effort should, surely, be concentrated on providing assistance to the smallest milk producers, since it is these who might be most affected by firm action on intervention on prices. We therefore take the view that the upper limit of 150,000 kg, which is really up to a 35-cow herd, proposed by the Commission is very much too high, and in the discussions that have been taking place in Brussels we have made it clear that we should like to see this reduced,  As regards conversion to beef, we see dangers in giving additional stimulus to beef production; the institutional prices in the beef sector are already more than sufficient to bring forward the beef we need. Turning to the proposed ban on investment aids, the House will not be surprised to learn that the Government do not support a blanket ban of the kind suggested. I believe it makes no economic sense to argue that, because there is a milk surplus in the Community, aids which are specifically aimed at improving the efficiency of milk production should be ended. I have said this in another place; I have said it at meetings outside; I have said it in the Community. On the contrary, it is surely particularly important now to ensure that we are doing everything possible to encourage greater efficiency on viable dairy farms, so as to reduce the social problems which confront us. The proposed co-responsibility levy has attracted a good deal of attention and debate in the farming and dairy industries. In a previous capacity, when I was Minister, I made it clear that I was strongly in favour of arrangements to ensure that milk producers shared the financial responsibility for the milk surplus, and my right honourable friend the Minister of Agriculture takes the same view. This responsibility would, of course, be borne if the Community were to accept restraint on intervention prices, and while the present proposal may also achieve this, it does not directly benefit consumers. Therefore, it will need to be considered very carefully. We need to be sure that Member States accept that a co-responsibility levy would not be eroded by subsequent action on intervention prices. In other words, we need to be sure that these arrangements would contribute effectively to the overriding need to secure a better balance in the market; the most pressing requirement being to reduce the incentive to dairy farmers in the Community to produce milk. The Commission has come forward with a number of proposals aimed at enlarging the market for milk and milk products. We are not opposed to the  principle of assisting the dairy sector's efforts in the area of market research and product development. Nor would we be opposed in principle to assisting programmes to encourage milk consumption in schools, or to facilitating increased use of liquid skimmed milk in stock feeding. But in all these cases it will be very important to ensure that the details of the arrangements are as cost effective as possible. However, the revival of the proposal for the exclusive use of milk products in certain foods falls into a very different category. This proposal would limit consumers' choice in a quite unacceptable way. It would also add to manufacturers costs, could cause redundancies and put investments at risk in certain areas, and could reduce sales of certain types of product which are at present made from a combination of milk and non-milk fats and proteins. This proposal has caused great difficulty in the past, and, in the Government's view, it would be wiser not to proceed with it. Finally, a word about what is, perhaps, the most controversial of all the measures in the Commission's package—the proposed levy on vegetable and marine oils and fats. This proposal presents enormous problems. It has of course already provoked a very strong reaction from the United States and other producing countries. The less developed countries are naturally extremely perturbed by the proposal, and they will in no way be appeased. I know noble Lords have referred to this. Again, the less developed countries are perturbed, but so are we all here, and I believe that this is something which we have to really criticise and attack. In any case, we do not see any logic in the Commission's argument for this proposal, and it would, in our view, have undesirable effects within the Community by raising food prices and also prices of certain industrial products which use vegetable oils. When the Commission's package was discussed in the Council at the end of July, I made it clear in my previous capacity that the Government are totally opposed to the suggested tax as part of any package of measures to deal with Community milk surpluses. My Lords, we have had a very interesting and worthwhile debate this evening on the  Commission's proposals for correcting the imbalance in the dairy sector. At the present time specific proposals in the form of draft regulations on the various elements of the Action Programme have not been put to the Council of Ministers by the Commission. The one exception is the proposed non-marketing and conversion premium, for which a draft regulation has appeared and been studied by the European Communities Committee of this House (the Scrutiny Committee). Discussion of the Action Programme will continue in the Council, and therefore it has been helpful to the Government to have had the benefit of the views of noble Lords, with their wide experience of agricultural matters, who have spoken in this debate. May I say to my noble friend Lord Inglewood—I say "my friend" because, as I said at an earlier Question period, he is my neighbour and was in the Ministry of Agriculture—I agree with so much of what he said about the jargon in Brussels. On the other hand, we have to learn that jargon. We have to play our part there. He dealt specifically with surpluses. He, too, argued about not panicking, and I think his views are endorsed by the noble Lord, Lord Vernon. I think he is quite right when he talks about the inefficiency of small farmers. On the other hand, he recognised their place. But I have believed always that inevitably there may have to be some measure of amalgamation, and indeed in my own Act of Parliament we had an amalgamation scheme which was not attacked by the Opposition.

Lord INGLEWOOD
My Lords, would the noble Lord allow me just to make the point clear? I never said that small farmers were inefficient; I said they were frequently represented as being inefficient. But, like small and large, some are efficient and some are not.

Lord PEART
My Lords, I am not talking about British farming now, I am talking about what I have seen in the Community. I think some of them are inefficient, and this is one of the great problems. Indeed, this has always been a problem with the price fixing—having common standards, and the need to relate prices to the efficient farm. However, I will not elaborate too much on that. I thought it might be helpful and useful to the House if I said a little about the  drought, because there has been an announcement in Luxembourg which has a bearing on this. I mentioned it to the noble Lord, Lord Raglan, so I hope I shall be forgiven, but I felt that I ought to put it on the record, and I thought that noble Lords and noble Baronesses would like to hear about it. I have referred to the effects recently of the drought on the farming industry. The drought has, I know, come as a severe blow to the industry. Noble Lords may recall that, in the earlier stages of the drought, I went for myself to look at its impact on farming in different parts of the country. Yields of all the main arable crops have been seriously reduced because of the drought and there was virtually no grass growth from midsummer until September over most of England and Wales and in some parts of Scotland and Northern Ireland. Rain in the last few weeks has helped some sectors but came too late to be of general benefit. Noble Lords may also remember that on 27th August I announced two modifications to the brucellosis eradication arrangements designed to be of help to farmers in some drought-affected areas. My right honourable friend the Minister of Agriculture, Fisheries and Food and his advisers have of course been in very close touch with all those concerned in the industry about the problems and a wide range of proposals that have been put forward have all been most carefully and thoroughly considered. Earlier today, in Luxembourg, my right honourable friend announced new measures of assistance for farming. He explained that milk is the sector of prime importance—which is why I relate it to this debate—partly because it is central to the expansion policy and partly because of its dependence on grassland, which has been hard hit in the drought. The most serious effect of the drought has been the loss of grass and fodder crops, which will greatly increase the dairy industry's feed costs. The Government are concerned to avoid a reduction in the dairy herd, which could set back the basis for further expansion next year, and have therefore decided to increase the guaranteed price for milk by 1p per gallon for the 1976–77 milk year. This will enable the boards to increase by about 2p per gallon the price received  by producers for the coming winter months, at a cost of some £30 million. The additional 2p per gallon for producers reflects the exceptional circumstances of the drought; this increase results in a revised guaranteed price of 44p per gallon applying to the 1976–77 marketing year as a whole and covering the period up to the end of March. To finance this increase, while containing food subsidies expenditure within the agreed provision, it will be necessary to bring forward an increase in the retail price of milk, which will now be raised by 1p per pint at the beginning of January. The other area of the livestock sector that is particularly vulnerable because of its dependence on grass and fodder crops during the winter is sheep. For sheep, as for cattle, market prices are likely to be firm next year. In order to underline these prospects, it has been decided to increase the guaranteed price for fat sheep for the first three months of 1977 by 3p per lb. The third decision announced by my right honourable friend concerns the Beef Cow Scheme. Because the drought may have caused some farmers to draw on their winter feed stocks earlier than usual, it is proposed, subject to Parliamentary approval, not to make it a condition of the 1977 beef cow payment that the animals should be maintained throughout that year, but to make a final payment of this subsidy on the number of eligible animals in beef cow herds on 1st January 1977. Finally, my right honourable friend has announced a measure affecting farm water storage. The drought has underlined the advantages which can accrue from farm water storage. The industry's resources for capital investment have, however, been depleted because of the drought. It has therefore been decided temporarily to increase the rates of grant aid available for the installation of water storage on farms and horticultural holdings. Subject to the approval of Parliament and consultation with our EEC partners, it is the Government's intention to increase the rates of grant under the Farm Capital Grant Scheme and the Farm and Horticulture Development Scheme by an extra 20 per cent. of the  cost, in respect of applications made during a I2-month period. The Government believe that all these measures will enable the industry to overcome some of the worst effects of the drought and maintain the basis for further expansion in the future. I apologise to noble Lords for adding this on, but I thought it right and proper at the first opportunity to inform the House.

11.59 p.m.

Lord RAGLAN
My Lords, I thank my noble friend for that last statement, which we will read with great interest and wish to study before asking questions about it. I also thank him for his authoritative exposition of the Government's opinion of the Commission's proposals. I listened to his remarks with interest and I am glad to say that I did not detect a great deal of difference between the Government's opinion of the proposals and that of our Committee. Of course he is very right to emphasise that there must be restraint on the intervention prices set each year; otherwise, it will negate the whole of the Commission's policy. There are one or two points that were made during the debate that I should like to pick up. The noble Baroness, Lady Elles, said that she did not know where the figure of a 10 per cent. surplus came from. I do not know either, and my own personal calculation was that was probably nearer 5 per cent. However, we have been given that figure and I shall try to dig out the figures on which the Commission are basing the percentage. The noble Baroness also tore us off a bit of a strip for having included in the report an opinion on the differences between margarine and butter. This came from the DHSS. We on this side of the House think that everything the Government say and do is absolutely right, but the noble Baroness may take the opposite view. However, that is where the information came from.

Baroness ELLES
My Lords, I am grateful to the noble Lord for that explanation. I think that the difficulty may be in the way this is set out in the appendix. If at any time there were a reprint or revision, it might be made clear that the statement on margarine and butter was all part of the reply given by the  DHSS. I feel that the casual reader might not necessarily conclude that.

Lord RAGLAN
My Lords, I accept the criticism of the noble Baroness and, indeed, I was confused by this myself and had to check up. I think that her point is a very good one. The noble Baroness also said that we had made no mention of food aid through skimmed milk powder. This is already in the Common Agricultural Policy and it is not included in the package of proposals, though I accept the noble Baroness's point that there should be more active selling of the skimmed milk powder policy. My noble friends Lord Sainsbury, Lord Collison and Lord Peart also said that in the imposition of this levy there was no consideration given to the consumer. I do not think that I can accept that. The whole point of the levy is to contribute towards reducing the amount of milk that is being produced, and that will eventually be to the benefit of the consumer as taxpayer. One cannot have it both ways. One must try to work out a way of reducing the surplus and, to do that, one must start with the producer.

Lord COLLISON
My Lords, what we were saying was that this is a hidden price cut, but that that price cut does not pass on to the consumer. It is as simple as that.

Lord RAGLAN
My Lords, I accept that. It does not immediately pass on to the consumer, but it is something that is being done to reduce the surplus and therefore, we hope, the price of milk in the long term. It does not do anything immediately. I think that that is all want to say. I should like to thank all noble Lords who have spoken, and also to pay tribute to the Committee for its thoroughness and assiduity in its task.

On Question, Motion agreed to.

Structural Reform In The Cap: Eec Report

12.4 a.m.

LORD O'HAGAN
rose to move, That this House takes note of the Forty-sixth Report of the European Communities Committee of this Session on Structural Reform  in the C.A.P. (R/717/76 and R/1234/76). The noble Lord said: My Lords, there is a sentence in the Book of Ecclesiastes which runs: "To everything there is a season and a time to every purpose under heaven." Whatever the noble Lord, Lord Strabolgi, and I may differ on—and I hope that it will not be very much—I hope that we can agree that five minutes past twelve is neither the time nor the season to begin a debate on the Common Agricultural Policy and its structural Directives. If I were kind, I should withdraw my Motion, but I must persist after all the efforts of my colleagues on the Agricultural Sub-Committee, not to mention the clerk and the specialist adviser. I therefore beg to move that this House takes note of our Report on Structural Reform in the CAP; the Common Agricultural Policy.

My Lords, why is the Common Agricultural Policy important? Why should we be interested in it? It is unpopular, ungainly and apparently wholly unreformable. Nevertheless, it is the Community's most developed and most coherent common policy. Without it, the EEC might easily disintegrate altogether, and it still absorbs an overwhelming though gradually decreasing proportion of the Community Budget. It is a central pillar of the structure of the Community.

We may have different views about the price support system which is the device of using the price to the producer as the main tool of an agricultural policy. That is the keystone of the Common Market's Common Agricultural Policy. But whatever our views of the price mechanism itself, we must all surely share the longer-term objectives which are furthered by the structural Directives which are the subject of the report that I am presenting to your Lordships tonight; because the objective of these directives is a more rational, up-to-date and efficient farm structure which should, in the end, benefit both the producer and the consumer.

My Lords, you cannot consider farm structure in isolation from farming and people. Farm structure is not an antiseptic or metaphysical concept or just an economic jargon term. Decisions about the structure of farming in the EEC affect the lives of millions of people who work in agriculture. They also affect the pattern  of life and the day-to-day existence of thousands of small communities—and we have heard about that in the previous debate. In the sphere of agricultural reform every apparently or superficially straightforward objective has enormous social consequences. The Common Agricultural Policy is an agricultural policy but, as we heard in the previous debate, unless it is to founder it must be part of an overall regional social and perhaps eventually monetary Community in which the CAP takes its proper place.

It is common knowledge that the CAP has spurred on those changes which have resulted in cutting the Community's agricultural workforce in half. That sounds fine. But what is the human cost? And when looking at these Directives, which look clean-cut and clear, we must always think of the human consequences. The future of the small and uneconomic farmer presented your Sub-Committee with serious problems. We could not agree. It is the logic of the directives which I am asking the House to consider that we wind up the tiny, unproductive farm—and the noble Lord, Lord Raglan, mentioned this in the earlier debate. I wish that the debates had been taken together; for it would have been a better evening for your Lordships.

Therefore, the question that I wish to put is this: what message does the EEC have for, let us say, people in North Wales, where unemployment is already at 10 per cent., and where the traditional industries like slate mining and coal mining are being wound down and where the small farmers preserve traditions and communities and keep mountains from being submerged in bracken and thereby attract tourists?

My Lords, it is the interlocking of the human and the economic that these structural Directives really make us face when we are looking at the future of the Common Agricultural Policy. I have tried to paint the background. I should like to look at the Directives one by one.

I should like to begin by forgetting that I spent some time in Strasbourg; I should like to begin by being purely British. Do the grants these Directives allow serve British interests? Do they suit British needs? Do they fit in with the
 
 policies outlined in Food from our Own Resources? Do they form part of the best possible farming future for Britain inside the Community?

The first Directive that we considered was No. 72/159. This is a system which is gradually absorbing if not overtaking and replacing our traditional farm and capital grants scheme which is well-tried, simple, easy to understand and something to which farmers are accustomed. The first serious question that I must put to the noble Lord, Lord Strabolgi, is this: is the new Community grant, the farm horticulture development scheme fully adapted to British requirements? We heard tales in evidence given to us—and there were figures in the Community's document—that the take up in the United Kingdom had been pitifully low. The Community scheme demands a five-year plan of investment, a forecast of increases in production, something British farmers have never had to do before when filling in applications for our own scheme.

Are the Government satisfied that even their latest version of the Community scheme has made it worth while for the British farmer to apply? Can the Government give any rates with regard to the figures for applications which have been made? If there is anything the noble Lord can say about altering the base rate at which pig producers can apply, I am sure they would be very grateful to hear it.

That Directive is the one which affects farmers most significantly; but there were others that we had to consider. They mostly fell into the category of things which did not suit the United Kingdom well at all. They were in train before we joined the Community, so it is not completely surprising. The second Directive that your Lordships' Agriculture Sub-Committee examined is 72/160, which provides for an annuity or premium to farmers who stop farming because they are too small, and hence make land available for other larger units. It was interesting to hear the noble Lord, Lord Peart, reflect on the importance of amalgamations and increased farm sizes in the previous debate.

This Community grant is available only if the land given up by those who qualify under it is handed over to somebody else who has already qualified for the first  grant that I mentioned. Therefore the take up has been fairly low, even remembering that British farm sizes are 2½ times as large as the average size in the Community. I should like to ask the noble Lord, Lord Strabolgi, about this Directive, 72/160. Is it really suitable for the United Kingdom? Does he feel that there are any improvements which the Government should strive to make to make it more attractive to people in this country who might be feeling the need to pass on to something else?

The other Directive that we took evidence on was 72/161. This has two sub-divisions. The first title is concerned with socio-economic advisers, a term to which the noble Lord, Lord Mackie of Benshie, took exception in our deliberations. I must say that anybody who dared to call himself a socio-economic adviser when going into a farmyard would be a very brave man. But it enables us to apply for grants from Community funds for our own ADAS services and their equivalents in Scotland and Northern Ireland.

Has the sum of money which we noted in our report for 1974 and 1975 as being promised, yet been received, or is it still something that is just a glint in the eyes of the recipients and for which the cheque has not yet been signed in Brussels?

The second part of Directive 161 concerns vocational training for farmers. There were some grounds for thinking that this again, while useful, had not been fully adapted to British requirements. I wonder whether the noble Lord, Lord Strabolgi, has anything to say about the comments of the Agricultural Training Board on this particular Directive.

I want to finish soon. I should have spent longer on the details had it not been so late, but I hope I have said enough to give the noble Lord, Lord Strabolgi, a platform for commenting on the usefulness of these Directives to the British agricultural industry. These Directives form a part, though only a small part, of the EEC agricultural budget. We must look at the other part when considering the Directives on which your Committee reported.

This Common Agricultural Policy has two aspects: one concerns the positive measures and grants under the Directives we have been examining under the  "Guidance" section, and these make a small but worthwhile contribution towards the solution of the Community's underlying agricultural difficulties. The other part is the increasingly costly price support activities. To me, it seems almost incredible that while the Common Agricultural Policy has been creaking and groaning under the weight of currency fluctuations and under the stresses and strains in the agricultural scene, the Council have not raised the absolute limit on the "Guidance" section of the CAP which seeks to improve agricultural structures. Even worse, because the grants are not pitched sufficiently high for Member States to find them sufficiently attractive, there were surplus allocations for one year set aside for the "Guidance" fund, and these were merely transferred forward to future years instead of being used to make the grants more attractive.

I want to conclude by asking the Government whether they can give us any idea about their intentions for the reform of the Common Agricultural Policy. I shall not comment on the Green Pound: that has been dealt with today in Luxembourg and we shall read about it in the papers. But whatever is said in Luxembourg, the Green Pound at its present level cannot persist. By the beginning of 1978—which is not very far away—we as a country are committed to phasing out some of the agricultural subsidies. At the moment we are 30 per cent. below price levels in the Community.

We need to begin to form a view on what the new direction of the CAP should be, because our partners in the Community will not tolerate the level of subsidies they have been prepared to tolerate up to now. At the beginning of next year, the Government have a chance to begin to prepare the country for the changeover when the transitional period of our entry into the full CAP starts at the beginning of 1978. We take the Chair in the Council of Ministers; Roy Jenkins is going to Brussels. There is a moment in the Community's history when profound re-thinking is not only necessary but perhaps something that can be put into practice.

The noble Lord, Lord Peart, mentioned the drought, and some of us feared that this might be used as an excuse for not reforming the CAP. I hope that the noble Lord, Lord Strabolgi, can give us  some idea of the kind of changes the Government would like to see in the nature and application of these structural Directives, and if he can give us a hint of the Government's views on these grants as part of a strategy for agriculture, part of a strategy for a successful and prosperous British agricultural industry playing a leading role in the development of a new Common Agricultural Policy, then this debate, however late at night and however sparsely attended, will have been worth while. I should like to apologise to the House for having gone on so long, but I feel that, however late the hour, this is a subject of such importance that, having taken so much trouble in our Committee to collect evidence, it was necessary to bring it before the House. My Lords, I beg to move.

Moved, That this House takes note of the Forty-sixth Report of the European Communities Committee of this session on Structural Reform in the CAP—( Lord O'Hagan.)

12.21 a.m.

Lord MACKIE of BENSHIE
My Lords, I will not, as everyone says, keep the House for long at this late hour, but it is a subject of immense importance and I think that a general structural reform of agriculture in all forms is probably the most important agricultural subject that we have discussed today. Structural reform really means the creation of efficient farms, and by "efficient" I do not mean farms that can be run with one man by turning on taps, pouring fertilisers in all directions and sweeping up the result in the cheapest possible manner. I think that structural reform and efficient farms must mean a system whereby we can go on improving the land and making it more fertile, improving the buildings and seeing that there is a succession of good farmers to people the farms. The Mansholt plan in Europe was intended to get rid of a very large number of very small farmers, and to approach the kind of structure which gives us a tremendous advantage in Great Britain. Real wealth in the world started only when people could be spared from hunting or producing food, and this process has gone on in every civilised evolved country to the extent where in  America they produce all the food they require and export a great deal, with only 4 per cent. of the working population engaged in it. This must be the objective of any structural reform in Europe. We require to look at our own structure. We have a great advantage at the moment, for we do not appear to know where we are going. We do not know whether we want the landlord and tenant system, taxation has made it nearly impossible to continue with an owner-occupier system, no word has been heard, thank Heave! about land nationalisation for a long time, and now in the Highlands we are engaged in trying to get the crofters to buy their farms. The Government must, sooner or later, get their taxation policy right. I am all for a lot of taxes, such as wealth tax, estate duty and capital transfer tax, if they are allied to the ability of a hard working chap to keep enough money with a reasonable rate of income tax to pay them off, which can be a great incentive. But at the present moment nobody knows what he is doing. I do not think this has much to do with the CAP policy, but it has a great deal to do with our own policy and our own farms. There are a number of points which have not been touched on and I should like to mention one or two. We have not taken evidence on the last Directive, although a few people mentioned it, which is the one on mountain and hill farming and farming in the less favoured areas. This is a matter which the Government would do well to look at, because while the headage payment under the hull farming schemes is quite satisfactory, an enormous amount of food in this country is produced on the land immediately below the hills and that is not taken care of in exactly the same way as the pure hill areas. We need to stress this point because in this country a very large amount of stock and very large acres are represented by this area of marginal land. At present they are catered for largely by the beef and the calf and ewe subsidies. The capital grant scheme has been of great advantage to farming, and there is little doubt that the new farm and horticultural development scheme is rather better once you get over the initial complication of making your application. I understand that the result of the introduction of the new rates is that grants are being taken up rather more frequently. I think we ought also to consider, especially in the case of the areas badly hit by drought for two years running, mainly in the South of England, whether people will have the money to put up their part of the scheme. I have always said that the Government should consider cheap loans in areas where the farmers have not the money. There are certain areas in Scotland and in favoured parts of England at the moment where they would not need the money. On the other hand, in large areas of the South of England the farmers must be short of money. I am glad that the noble Lord, Lord O'Hagan, mentioned the socio-economic advisers. I should like to say something not only about their name but about their function. I am very glad that we have a certain amount of money with which to train these socio-economic advisers, but I hope and trust that they will be purely part-time and that they will desist from their curious duties when farmers, who are not stupid people, understand the advantages to be gained by the various grants. I view these socio-economic advisers with grave suspicion. I think that they are an addition that we could well do without because farmers are not nearly so stupid as many bureaucrats seem to think. We ought to pay a good deal of attention to our own experience in the Highlands of the crofting Acts which we have had from time to time and the development of crofting in the Highlands. I agreed with the noble Lord, Lord Peart, when he said that amalgamation grants might do as much as anything towards improving structure. What has often happened in the Highlands and the crofting areas is that the old people have hung on to their crofts—not only the house but the land also—while young men have been unable to get enough land to make a go of it. Very often the co-operative schemes—the communal hill farms—are not worked, simply because the system of bookkeeping is that you pay all the accounts when you get the cheque for the lambs and the wool and you divide what is left; therefore no reserves are ever kept with which to enclose land. But where the crofters take advantage of a rationalisation scheme and enclose land themselves one begins to get a good deal of advance and to see  green areas in the hills where people are really working and applying themselves. All of these matters are very relevant. We took evidence also from the Friends of the Earth. The Friends of the Earth might be thought by a number of people to be cranks and I dare say that they are a bit cranky, like all of us. However, they spoke a great deal of common sense. It is no good having a countryside containing enormous farms, but very few people to work them and nobody to do the odd jobs, and putting enormous inputs of bought-in energy, in the form of fuel, sprays and fertilisers, into the land when it can be done a great deal better, in some cases, by using more labour. As the Friends of the Earth pointed out, we are using far too much in the way of the indigenous fuels and riches of the earth without looking at the question of a biological approach to the inputs in farming. They pointed out one or two quite interesting facts. That Denmark, which is supposed to have a surplus of 300 per cent. if you take away inputs, in other words the barley, the wheat and other things that they buy in from abroad, would in fact reduce production to about a quarter and might not then be self-sufficient, and I think we want to look at these long-term biological factors when we are studying structural reform. I think the Government could well mount more serious investigation into the claims of various biological Friends of the Earth and others who believe in biological rather than in chemical farming. As a farmer using all the modern devices myself I sometimes worry about it, and I would like to see more serious investigation of the claims of the biologist as against the claims of the chemist.

12.31 a.m.

Baroness ELLES
My Lords, I really must start by saying how very unfortunate it is that not only such an important subject is being debated in your Lordships' House at this late hour, but also that so few Members of your Lordships' House are here to take part in the debate. I know it is extremely difficult to get Members of the European Parliament to be within your Lordships' House during these debates because both my noble friend Lord O'Hagan and I have gone through this process, but I think it would  have been both interesting and helpful if we could have had at least one Member of the European Parliament available to take part and to give us some of the views of colleagues in the European Parliament of Strasbourg and Luxembourg. I should like to take this opportunity of congratulating my noble friend Lord O'Hagan not only on having obviously been the driving force behind the report which we are considering tonight, but also on the very clear and excellent speech with which he introduced the report. Again, I think it is a great pity that more people were not here to be able to hear his speech and to debate it. He has stressed the enormous implications of the CAP and the policies relating to the restructuring of the CAP; the implications of this policy on individuals in their thousands—those individuals, the farmers and their families, who will be affected by changes in farm structures, to say nothing of the 250 million people who will be indirectly affected, by prices, by product availability, and so on, as a result of the measures which are to be taken. We have earlier considered in some detail aspects of the agricutural industry and I share with my noble friend the regret that this was not all considered at the same time, because obviously both these subjects must impinge very much one upon the other, and particularly in the United Kingdom, where the dairy industry is, of course, one of the largest elements within the agricultural industry and it is almost impossible to discuss properly and seriously the one without the other. In fact, many of the proposals of the restructuring will presumably to some extent affect the dairy industry. One of the difficulties in discussing the Common Agricultural Policy is the wide divergence in the farming structure in the different Member States, and, like my noble friend Lord O'Hagan, I will try to concentrate, at any rate to begin with, on the CAP in relation to the United Kingdom. I know that the noble Lord, Lord Strabolgi, will not take it in bad part if at this stage of the evening I start to be slightly Party political. I think we must begin by realising that the whole of the consumer interest, that is, the price of  food in this country, is very largely dependent on the beneficence of other Member States of the Community through the monetary compensation amounts which, due to the state of the pound, are now flowing at the incredible rate of over £1 million per day. Something nearer £1,250,000 per day is being paid by the Member States of the Community to enable people in this country to keep down to some extent the price of food. It is being kept down by something like 20 per cent. I really must say, although it is late at night, and I know that the noble Lord, Lord Strabolgi, will not take it amiss if I embark on Party politics, that it would be inappropriate to advise our friends on the Continent who support us so much financially at this time that they should take any regard whatsoever of the card vote at the Labour Party conference last week on the subject of direct elections, when we are depending so much on our friends for this bonus of over £360 million a year. I should like from this side of the House to assure my friends on the Continent that it in no way reflects the feelings of the British people. My Lords, another slightly Party political point is in relation to Directive 72/159 relating to Community policy to increase the size of the average farm. I accept that the Community farm in most of the other Member States, on the whole, is smaller than that in the United Kingdom, but the policy of Her Majesty's Government seems not to be restructuring farms to increase their size in order to increase efficiency, but to take every means, fiscal and political, to reduce the size of farms. What is in fact happening is that by fiscal measures you are forcing a reduction in the size of farms and limiting the possibility of one generation succeeding the other. That is in relation to the owner-occupier of farms. On the other hand, this afternoon we have been discussing an equally interesting hereditary principle—indeed, a feudal hereditary principle—which will be applicable to the holder of land as a tenant. Of course, this will be very greatly to the detriment of the agricultural industry as a whole. What in effect will happen is that the young man who wishes to become a farmer will never have a chance of becoming a tenant farmer because  tenant farms are being held practically in perpetuity. So it will be only the young man with some capital who has any chance at all of becoming a farmer. What young man nowadays, at the age of 23 years or 24 years, has sufficient capital to buy a farm, with the price of land as it is? If the Government are seriously going to consider applying policies of the CAP in this country, they will have to reconsider their fiscal and political activities in this field. One has only to take obvious evidence in a magazine such as the Farmers' Weekly, in which about five years ago there were at least two or three pages advertising farms available to rent or to lease, and now probably about one or two farms only are being advertised. This indicates that there has been a very rapid decline in the number of farms available for young men wishing to enter the industry. One must take this in relation to Directive 72/160, which refers to farmers going out of agriculture. If elderly farmers are leaving agriculture, and you are dissuading them from running small farms, and you want large farms with younger people in them, they have to have the possibility to buy these farms. So one must ask who will be going into farming in this country in the conditions as they are being set out by Her Majesty's Government? With regard to other Directives within this report, the Forty-Sixth Report of the European Community Committee, I very much welcome the consideration that the Commission are giving to the reform of upland and mountain farming, particularly in relation not only to Scotland but to other parts of the Community, because I think this is an area where there have been for some time conflicting interests as between tourism, farming and regional development. They are all three policy aspects of activities which are going on in those regions and which seem to have been pulling in different directions. I think they must be considered together, not in isolation. So much of the farming problem is not an isolated problem and one will never find any sort of solution unless one looks at the picture as a whole. There is a danger in taking people off the land for economic reasons and this cannot be done without having some very  serious side-effects not only on the land itself but also on society. There are already many derelict areas of land which were formerly farmed and have now been abandoned by the farmers in favour of the city. In those areas which have been abandoned I believe that there should be very energetic policies devoted, possibly, to reafforestation. Very much more should be done in the field of forestry; and I consider that it is a part of the agricultural industry which has been very much neglected both in this country and in other parts of the Community, particularly with the need that exists in the Community for wood, which for the time being has to be imported. I think this is an area to which much more consideration should be given. For the individual, the farmer who leaves his farm, the change from farming to urban life may turn out to be disastrous. I do not think it is an easy thing to say, "We will close down the farms, enlarge them, and take people off the farms". That is, in fact, making families change their whole way of life. Not only that; it is divorcing them from a background and habitat to which they have been brought up from childhood, and very much more consideration must be given to this problem, because the farmer more than any other worker is the one man who is attached to his job, to his house, to his physical surroundings. It is very much harder for a farmer to move into the city than, say, for a steel welder to move from one factory to another in another part of the country. Here again there should be a much more human approach and more understanding of these particular problems. I am not sure whether it is a socio-economic director who is wanted—I do not care what he is called—but I really think that consideration must be given to the kind of social problems that must arise from this aspect. If there is a criticism to be made of the attempt by the Commission to analyse and make proposals relating to the structure of CAP it concerns the apparent lack of correlation between the financial, economic and social considerations, and also, of course, the repercussions in areas of policy-making and policy decisions, which overflow from one sector to another. Previous speakers both in the  earlier debate and to some extent in this debate, although only a few have so far spoken, have tended to think in United Kingdom terms of large farms, but we have to understand that the CAP is based primarily on the objective of the farmer who is working his own land for a fair return on his work. That is really the principle on which the CAP is based—that he must not suffer from price fluctuations and be discouraged from producing what society needs. I think we all agree that agriculture and the products of agriculture must be the most essential of all industries and products. I apologise to the House for not having had lime to look up in the latest Department of Employment Gazette the average wage for an unskilled manual worker, but the last time I looked it up it was somewhere near £68 a week. You can imagine what a farmer must earn in order to get an equivalent income. This really is at the back of the thinking of the Commission: that whatever measures are taken the farmer who stays on the land should not have an income value less than at least the average wage of the skilled, or even unskilled, manual worker; because, of course, the differential is now narrowing. I very much welcome the Commission's proposals. I think they are thoughtful. They are taking into account many of the problems. I do not say necessarily that they are the total solution. Enormous sums of money have been going in MUA's which obviously will have to be phased out, because it is an intolerable situation that so much money that could be spent on doing so much good throughout the Community should be spent to prop up a falling pound in order to prevent consumers in this country from having to pay too much for their food. I welcome the report from the European Communities Committee. I particularly welcome from these Benches the presence of my noble friend Lady Tweedsmuir. I think these reports are some of the most efficient documentation we are privileged to have in your Lordships' House, and I should like to extend my gratitude to her for all the work she and her Committee do. In conclusion, I would thank again my noble friend Lord O'Hagan for presenting this report and for all the excellent work that has gone into it.

Lord RAGLAN
My Lords, if I may, I want to advert to a point made by the noble Lord, Lord O'Hagan, and the noble Baroness, about the reasons for discussing the milk proposals and the structure proposals separately. We had a long debate in the Committee, and I think they were right in believing that they should be taken separately. This debate should have been a very wide debate indeed, and I am very sad that, because of this ridiculous timetable we are having to pursue, the debate is being held at this time and so thinly attended. I agree with the noble Baroness that we should have a debate when there is time for the Members of the European Parliament to attend. I hope at the start of the next Session, when very often your Lordships' House is looking for something to do, we can have a full-scale debate on the CAP which will include reference to this excellent report which the noble Lord, Lord O'Hagan, has taken such tremendous trouble to produce.

Baroness ELLES
My Lords, may I thank the noble Lord for his very kind remarks. We will take note of what he has said.

12.48 p.m.

Lord STRABOLGI
My Lords, I agree with my noble friend Lord Raglan; we are indebted to the noble Lord, Lord O'Hagan, for this excellent report, and I am very grateful to him for moving his Motion. We are indebted also to the European Office—I am very glad, also, to see the noble Baroness, Lady Tweedsmuir, here—for the lucid way in which it has been presented. I agree also with Lord O'Hagan that the CAP is the central pillar of the Common Market's farm structure. The noble Lord and other noble Lords have made various points which I shall deal with later. It is a rather memorable debate for me in many ways; it is the first one in which I have taken part with the noble Baroness, Lady Elles. I have often admired her polemics across the Dispatch Box, but this is the first debate in which we have taken part together. I did not really expect her to keep off Party politics; she hardly ever does. I can hardly think of a subject on which she would. This is, of course, a particular week in which her mind is concentrated on these things. So, apart  from a few Party political points, I do very much welcome her most constructive approach. I will try to answer some of the questions she raised, as well as those of Lord Mackie of Benshie, who is an old debating partner on these subjects. My Lords, the debate has provided an opportunity for a wide-ranging discussion of points of great interest to British agriculture. If I may address my remarks at the outset to the Motion before the House, I must express my gratitude to the Scrutiny Committee under the chairmanship of the noble Lord, Lord O'Hagan, for the excellent work they have done in the large area of farm structure policy, and my agreement with their finding that the structure Directives raise important matters for the future of British farming within the Community. The Commission's report on the operation to date of the agricultural structure Directives, numbers 159, 160 and 161, states that it is too early to make a detailed assessment of their effect. The report for the most part describes the history of the structure policy and summarises the implementation of the three Directives in the various Member States. The most important point to stand out from the report is that the United Kingdom's agricultural structure is substantially different from that of other Member States in having an average size of holding several times higher than the Community's average, as has been said in this debate. But average figures can conceal great variations in size and efficiency. There is, in fact, in this country still scope for improving farm incomes through greater efficiency, for example by replacing old buildings and equipment and educating and training farmers and workers to a higher level of technical competence. It is important too that farms should be of an economic size. The Government consider that there is an important place in the Community for a policy on agricultural structure, since an efficient agriculture offers the best hope of containing the EEC common prices for commodities. I will have a little more to say later on about the Government's future thoughts in this direction. We have come to the conclusion that Directive 72/159 provides a useful framework for aids to farm modernisation. The planning concept in the Directive,  the treatment of farm income as a structural matter, the range of aids available and the scope for national schemes are good, and in our view should be beneficial. It is true, of course, that our early experience of development plans under the Farm and Horticulture Development Scheme, which implements the Directive in this country, was disappointing in that there were not many applicants. One reason for this was that the development plan procedure, apart from being new, was complicated and time-consuming and may well have restricted the scheme's appeal to farmers. However, the simplification introduced into the Scheme on 1st June this year and the major promotional effort which the Agricultural Development and Advisory Service are now putting into the Scheme have resulted in a dramatic increase in applications. Now that initial teething troubles have been overcome the Directive seems to be well suited to United Kingdom conditions. The Directive and the FHDS concentrate on the middle band of farmers, since both the farmer who is already efficient and whose income is above the comparable income outside agriculture, and also the relatively inefficient, non-viable farmer who could never hope to reach the comparable income are excluded from the most favourable forms of aid. In short, the Directive is aimed at those farmers with the greatest potential for development. At the same time there is a continuing need for investment aid on other farms, both those above the comparable income and those below it. There will therefore be an important place for national aid under the Farm Capital Grant Scheme for investment on these farms. Directive 72/160 aims to encourage farmers to give up non-viable farms in order to release the land for amalgamation with other land to form or expand commercial units. The Commission's report states that the effectiveness of the Directive has been limited by the way in which it has been implemented in Member States. Experience in the United Kingdom, based on schemes operating since 1967, suggests however that the Directive's approach is not really suited to United Kingdom needs, and other Member States have expressed doubts. The success of schemes of this kind as a means of encouraging  farmers to give up farming must depend greatly on the extent to which other employment is available—and I shall have more to say later about this point, which was raised by the noble Baroness. Moreover, United Kingdom evidence is that most amalgamations take place outside the schemes and this suggests that many farmers who receive grants under the Scheme might well have released or amalgamated their land anyway. It must be recognised that, by virtue of its concepts and the measures prescribed, the Directive has implications well beyond the economics and efficiency of agriculture. It raises major social and regional issues. Barring a comprehensive approach, perhaps on a regional basis, which went well beyond strictly agricultural questions and is outside the scope of this debate, we believe that the most effective direct way to improve farm structure is by means of capital aids to enable farmers to maximise their incomes. Thereafter, natural economic and social forces should be left to operate—I am sure that would appeal to the noble Baroness—as they have been doing in the past, to increase farm size to match agricultural conditions in this country. We feel that the Community should now seriously consider whether Directive 72/160 continues to fulfil a useful role, not only in relation to the United Kingdom but as regards the rest of the Community. One firm conclusion that the Commission Report comes to is that all unit of account limits set out in the structure Directives should be increased in order to take account of inflation in the Community since the Directives were first introduced. This proposal would be given effect by the adoption of Draft Instrument R/1234. This Instrument would increase rates of aid broadly in proportion to the length of time which has elapsed since the Directives came into operation. In broad terms, it seems acceptable that amounts should be increased in order to maintain the levels of incentive in the face of inflation and that the increases should be in proportion to the age of the Directive. Nevertheless, it must be borne in mind that only 25 per cent. of expenditure is reimbursed by the Community and, for this reason, it may be desirable for the  Community to select those limits on which the need for action is urgent and proceed with those in advance of the others. We would hope to see in this category the limit per hectare for compensatory allowances under the Less Favoured Areas Directive. The Government also intend to seek some flexibility over guidance premiums so that individual Member States might make payments at the level most appropriate to their own circumstances. In total, structure policy should be aimed at improving the economic viability of farms throughout the Community and thus reducing their dependence on high levels of price support. This would best be done by concentrating on farm modernisation and leaving social and economic forces, including the relating of prices to efficient production, to eliminate inefficient farms, without prejudice to circumstances where social considerations point to the need for special measures of assistance. The Government aim to direct Community policy towards this end and to ensure that all measures are fully cost-effective and bearing in mind also the need to allow sufficient flexibility to take account of national circumstances. That is the general picture, but I was asked some specific questions which I will do my best to answer. The noble Lord, Lord O'Hagan, asked about pig investment. Directive 159 provides that grant aid to encourage investment in pig production must be limited to enterprises which are capable of producing 35 per cent. of their own pig feed requirements. The object is to avoid encouraging the development of intensive pig production units divorced from agricultural land. It makes sense in a community which is virtually self-sufficient in pig meat that the funds available to improve farm structure should be aimed at developing smaller, less intensive farms rather than large, intensive production units. This restriction is well understood and accepted in the Community. The noble Lord also asked about FHDS and whether this was not too complicated and too rigid. There is no escaping the fact that Directive 159 and hence the FHDS are more complicated than previous investment schemes have been in this country. Partly because of its complexity and partly because of its  unfamiliarity, the scheme attracted disappointingly few applicants in its first two years of existence. Because of this, the Government decided to simplify the scheme. On 1st June this year various changes were introduced. Application under the scheme is now simpler than before and some of the conditions are less strict. There is more flexibility over how plans may be carried out and in the conditions in which changes can be permitted. Also, since June the ADAS has devoted a major effort to promoting the scheme and to advising farmers on it. These developments, coupled with the favourable rates of grant under the scheme, have attracted a greatly increased rate of application which suggests that the earlier problems of complexity and rigidity have been overcome. The noble Lord also asked for some figures. Of course, this has not been going for very long and I can only give him figures for the last two years. But, for example, in 1974 there were 685 applications received as against 979 in 1975. In 1974 there were 132 development plans approved and in 1975 there were 465. So I think that that 6hows quite an improvement. The noble Lord also asked about agricultural training. The EEC grant paid under Title II is intended partially to reimburse costs of training measures that relate to the EEC's policy on agricultural restructuring. This grant is not intended to reimburse any part of the Member State's normal provision of vocational training at secondary and tertiary levels. Consequently, the grant is partly intended to assist in the vocational training of those persons who have "missed out" on normal State provision of basic agricultural vocational training and education. With regard to advanced courses of vocational training and education the Commission take the sensible view that this type of training will benefit only those persons who are sufficiently receptive and capable of applying new learning. To ensure, therefore, that EEC grant-aided advanced training is given to those who can benefit, the Commission has decided that eligible persons must have either previously undergone a course of basic  agricultural training or be over age 25 and have at least five years' relevant practical farming experience. I very much welcomed the constructive speech of the noble Lord, Lord Mackie of Benshie. He asked, as I thought he probably would, about hill farming and made some points which we shall of course note very carefully. The EEC Directive No. 75/268, on mountain and hill farming and farming in less-favoured areas, is designed to ensure the continuation of farming, to maintain a minimum level of population and to raise farm incomes in hill areas. Under this Directive headage payments are made to hill farmers to compensate them for the handicaps of farming in hill areas and favourable rates of aid for expenditure on capital investment are available. I would remind the House that the Government commitment to this policy amounts to about £60 million annually. The noble Baroness, Lady Elles, asked about efficient farms—which I thought was an important point to have raised and I am very glad she did so. If I understood her aright, she asked why large and efficient units were excluded under the FHDS and whether improvement should be concentrated on better land where returns would be greatest. There is no limit on the size of farm benefiting under FHDS. The central feature of Directive 159 is the concept of development plans. The Directive, and the FHDS which implements it in the United Kingdom, are therefore aimed at those farms which could most benefit from undertaking a development plan. These are, broadly, the middle range of farms where labour incomes are low at present but could be brought up to the comparable income outside agriculture. Farms which already earn an income equal to or above comparable incomes are probably highly efficient already and have less need of formal development plans. Aid for investment is available to them under the United Kingdom national scheme, the FCGS. A number of very large units indeed have, in fact, qualified for aid under the FHDS. I also took very careful note of what the noble Baroness said about farmers who cannot be persuaded to leave their land, and I thought there was a lot of very basic  truth in what she said. This, of course, is not a matter of such concern in the United Kingdom as elsewhere in the EEC on the Continent where, of course, there is a large peasant farming community. Money it self is not always the main attraction when it comes to farming, as the noble Baroness recognised. It is, of course, a way of life; and farmers, especially the owner-occupier, are fundamentally reluctant to give up their land until they have to retire. They look upon their land, quite rightly, as a durable asset especially in times of inflation. Other Member States have experienced this, too, which is why the EEC has set up a Working Party to examine the position in advance of reviewing all the structure Directives. Lastly, my Lords, the noble Lord, Lord O'Hagan, laid emphasis, I think, in his opening remarks on the need to reform the CAP. He asked particularly about the Government's priorities and how they are going to be achieved. Before I deal with the future, however, I hope that the noble Lord will not take it amiss if I remind him that the present Government have, during renegotiation and during the discussions on the stock taking, and indeed subsequently, pressed for and achieved a substantial measure of improvement in the operation of the CAP. I think that we owe a great debt, if I may say so, to my noble friend Lord Peart as a spokesman on agriculture. I am very glad that we have the former Minister now in this House as Leader. I should like to associate myself with all that has been said. But do not let us suppose that we are just starting out on this path, as I thought in a way the noble Lord perhaps implied. We have already made good progress, for example, in the beef sector with the introduction of the beef premium scheme and in the restructuring of the support arrangements for cereals. The Government's central aim has been to see the CAP operating effectively and without unnecessary waste of resources. This remains of basic importance. The CAP, in our view, should provide effective support for efficient producers, but it must not be allowed to impose excessive cost burdens on taxpayers or on consumers. The problem is to avoid the creation of wasteful and unnecessary surpluses which are generated by pitching support prices  too high. An important way of achieving this is to link support prices to the needs of the modern and the efficient farm and to the situation in the market of the commodity in question. I know that my right honourable friend the Minister of Agriculture, Fisheries and Food will have these points very much in mind during the approach to the next Community price fixing. My Lords, let us be realistic: improving the operation of the CAP is a continuing process; different Member States have different interests and objectives. We cannot unilaterally change the nature of the CAP overnight. But we can work for change on the basis of a general recognition, shown, for example, in the Commission's report on the stocktaking of the CAP, that improvements must and indeed shall take place.

1.10 a.m.

Lord O'HAGAN
My Lords, I must thank all Members of the House for staying so long and especially the Chairman of our Committee for keeping a watchful eye on our proceedings, as ever. I want to thank particularly the noble Lord, Lord Strabolgi, for having replied so comprehensively and exhaustively—not exhaustingly—to all the questions that we put to him. I will study tomorrow what he said and perhaps write to him if there are any further points. I must also thank my noble friend Lady Elles for her contribution. If she ever has the time to offer herself for co-option to the Agricultural Committee, her speech tonight will have qualified her without any of the other qualifications that she has already chalked up in the European field. I will say one more thing. When somebody who is a full-time chairman of one of the Scrutiny Sub-Committees, or, as in my case, somebody who is acting as chairman, introduces a debate in your Lordships' House it is the custom to stay as non-Party political as possible and to reflect the views of the Committee in so far as there was a coherent view in the Committee, when presenting the debate. I say to the noble Lord, Lord Strabolgi, that I will think of his comments on the train to Brighton tomorrow; I will reflect about the effect of the Government's policy on British farm structure and  hereditary tenancies. I will not mention it now, but I may write a letter to him. I beg leave to withdraw my Motion.

Motion, by leave, withdrawn.