My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, I am sorry to say that this information is not held centrally. I appreciate that it is a matter of great interest to many noble Lords, but the only way of obtaining the information would be to write and ask every local authority individually.

My Lords, while thanking the noble Baroness for her reply, may I ask her whether she agrees with the noble Earl, Lord Mansfield, who said (Official Report, 9th June; col. 128):

"I think it important that there should be a clearly identified point of contact on questions of access for disabled people in all authorities which exercise planning and building control responsibilities"?

Yes, my Lords; the Government support the principle behind this Question and this recommendation. As the noble Viscount, Lord lngleby, will know, under the Disabled Persons (No. 2) Bill local planning authorities will be under a new duty and will have to have someone who will be able to consider this duty. The point is that we think it would be unsuitable to require them to appoint a named officer in that respect.

My Lords, is the noble Baroness aware that environmental health officers, through their central organisation, have already indicated their willingness to be designated as access officers and take on these responsibilities? Is she also aware that the environmental health officers now give advice on home adaptations for the disabled and many of these matters, but if they were designated as access officers the public would at once know who is responsible, without the cost of an additional penny to public funds or without increasing staff for the local authorities?

Yes, my Lords, I know what the environmental health officers have said on this question and I should like to assure the noble Lord that this is a matter which the Government understand and accept in principle. However, it is not for me to say whether or not we should accept this suggestion. Local authorities have responsibilities and it is right for them to determine how this new duty should be met.

My Lords, is the noble Baroness aware that in Scotland at the last count all but two of the responsible local authorities had responded in this context, and that it is confidently expected that the response will shortly be 100 per cent.?

Yes, my Lords, I am aware of it.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, while it is not the sole cause, the continuing failure to resolve the Arab-Israeli dispute, an important element in which is the need for Palestinian self-determination, is indeed at the centre of continuing instability in the Middle East. Both we in the Ten and the United States are committed to promoting a comprehensive settlement of the dispute. There is close and constant consultation between us on how this can be achieved, and agreement that our efforts should be complementary.

My Lords, I very much appreciate that reply. My noble friend has made it clear on a number of occasions that he would welcome conditional recognition by the Palestine Liberation Organisation of Israel's rights, which were clearly restated in the Venice Declaration. Going on from that, does my noble friend share the view that it would be a great deal easier for the PLO to recognise Israel's rights if they were confident that the reaction in America would be to say that they in turn recognised that the Palestinian people have the same rights of self-determination and of security as the Israeli people have?

My Lords, in a sense, the difficulty with all this is that it is a sort of circular argument: who recognises what first? I think that this is the position that we must all try to break out of. Certainly with regard to my noble friend's first question, I believe that a statement of that kind by the PLO would be very helpful to peace efforts, and I think could produce a significant breakthrough.

My Lords, is the Foreign Secretary aware that the United Nations has not the responsibility for, nor is it capable of, providing self-determination for the Palestine refugees? Further, in order to deal effectively with the refugee problem and resolve it as we would all wish, irrespective of our views, is it not essential first of all that there should be negotiations as between the State of Israel and the other Arab countries, entering into full consultation and with the desire to solve the problem? Also, as a pre-requisite, is it not essential that the Arab countries should agree for the first time that they are no longer at war with Israel?

My Lords, I think that the noble Lord, Lord Shinwell, is absolutely right when he says that nobody can impose a settlement. The only way in which you are going to get a settlement in the Middle East is if the Arabs and the Israelis are prepared to have one. I think that the noble Lord is perfectly right in what he said, so far as he went. He very nearly repeated the Venice Declaration with one exception, that the Venice Declaration has two parts: first, it suggests that one of the principles should be that the Arabs should recognise the State of Israel and its right to live in security in its own boundaries, and the second principle is that the Israelis should recognise the rights of the Palestinians.

My Lords, while appreciating what my noble friend has done, and is doing, in trying to promote peace in the Middle East, will he take the opportunity of the forthcoming British presidency of the EEC to try to make further progress in getting the EEC and the United States together to urge a solution?

Yes indeed, my Lords, that of course is one of the priorities of our presidency in Europe. All I can say is that I do not think that the events of the last month have made things any easier, but we must do what we can.

My Lords, would not the Foreign Secretary agree that it is not just the failure of the United Nations at all but the fact that in the PLO Covenant there is a wish for the destruction of Israel? I myself heard Yasser Arafat one year on American television. He was asked, "Do you really intend and wish for the destruction of Israel?" He said, "This is the first step." This was after a spectacular debut which he had had in the General Assembly. So we should not really kid ourselves that it is because they just cannot get together. Until the PLO take out of their covenant the desire for the destruction of Israel, there can be no peace in the Middle East at all.

My Lords, I think that actually was the purpose of the Question asked by my noble friend Lord Chelwood, because that is precisely what the PLO would be doing if they recognised Israel, and that is what the Venice Declaration says, and is what we all want to happen.

My Lords, would the Foreign Secretary agree that the instability in the Middle East is caused by a plethora of inter-Arab disputes, apart from the Israel-Arab dispute itself? Would he further agree that resolving the Palestinian problem within the parameters at present set out by the EEC initiative would not resolve such disputes as the Iraq-Iran conflict, the Iraq-Syria rivalries, the internecine warfare between Moslems and Christians and other disputes in the area?

Nor, my Lords, would it solve the Cambodian refugee problem—but if we could solve the Arab-Israeli problem it would be a great step forward.

My Lords, is my noble friend aware that the leadership of a number of the Arab states, including Egypt, is distinctly helpful and moderate in this context and that a new initiative by my noble friend and his colleagues in Europe, with America, would greatly strengthen their position, which is already under considerable pressure from their militant elements?

Yes, my Lords, I entirely agree with my noble friend. The object of the European initiative is to get all men of moderation round a table to solve the problem.

My Lords, does the Foreign Secretary welcome the statement of the Israeli Prime Minister on television last night that Israel would be prepared to sign the non-prolifieration treaty if the hostile Arab states would sign a peace treaty with Israel? Would the noble Lord agree that much of the hawkish attitude of the Israelis is due entirely to the repeated statements by many of the hostile Arab states that they are bent on the destruction of Israel?

My Lords, any statement which is made by any leader of a country in the Middle East which leads to a peaceful solution is to be welcomed. The difficulty is that so many people in the area on both sides make such hawkish statements.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, VAT is not chargeable on subscriptions paid by members of trade unions, nor on the political levy. This in fact accords with the EEC Sixth Directive on VAT, Article 13A1(1).

My Lords, while thanking my noble friend for that reply, may I ask whether he can give additional cause for gratitude by indicating if the Government, following on their conscientious implementation of that part of Article 6 which relates to contributions by trade unions, intend to extend the exemption to the other bodies covered by the same directive, in particular non-profit-making clubs?

My Lords, the present situation is that it is not considered that non-profit making clubs of all kinds can well be compared with trade unions. Trade unions and professional associations, where it is customary for people to pay subscriptions, are considered to be on all fours; but, for instance, the National Liberal Club or the Carlton Club, though they have political test for membership, would not be considered to be in any way suitable to a trade union.

My Lords, has my noble friend looked recently at the terms of the directive? If so, can he not confirm that non-profit-making clubs with political and social objectives are not only in the same clause of the directive but are actually in the same sentence, which insists on immunity for trade union contributions? May I ask my noble friend again: Why the discrimination?

My noble friend has clearly done his homework on this, my Lords. The exemptions are for non-profit-making organisations with aims of a political, trade union, religious, patriotic, philisophical, philanthropic or civic nature. I would suggest to my noble friend that perhaps one of the clubs he is considering produces many goods and services for which VAT is chargeable and the political test of membership is ancillary.

My Lords, does the Minister think that the Question asked by the noble Lord, Lord Boyd-Carpenter, is weighted by malice against the trade unions? May I further ask him to say whether contributions to the CBI by private enterprise are charged VAT and the other penalties which the noble Lord suggests for trade unions?

My Lords, I think the noble Lord was suggesting that there was something anti-trade union about the Question. I am quite unable to answer that question, as I did not ask it.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, it is an offence in Northern Ireland to aid, abet, counsel or procure the suicide or attempted suicide of another person. The steps taken to enforce this law are the same as for any other serious offence; the police initially investigate the circumstances and submit their findings to the Director of Public Prosecutions for his directions.

My Lords, while thanking my noble friend for that Answer—I am sure he is aware that we warmly welcome the recent statements of the Irish hierarchy—may I ask whether he is aware that this matter is being treated as one of theological dispute, whereas incitement to suicide, rightly or wrongly, is a simple crime and should be treated as such?

My Lords, I echo my noble friend's welcome for the pronouncements by the Roman Catholic bishops in Northern Ireland and I endorse that a crime is a crime and treated as such.

My Lords, is the Minister aware that there have been many hunger strikes in this country, in England, over the years, including some which ended in death, yet no one has felt it necessary to launch a prosecution?

My Lords, unless a complaint is made a prosecution does not normally follow.

My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Trenchard will, with the leave of the House, repeat a Statement that is to be made in another place on the United Kingdom defence programme.

My Lords, I beg to move that this Bill be now read a second time. This is a pure consolidation Bill, bringing together the provisions of the New Towns Acts of 1959, 1965, 1966, 1975, 1977 and 1980, and of the New Towns (Amendment) Act 1976, together with provisions of the Local Government, Planning and Land Act 1980. If the House gives the Bill a Second Reading it will go in the ordinary way to the Joint Committee on Consolidation Bills.

It will not have escaped your Lordships' notice that the next three items on the Order Paper are also Second Readings of consolidation Bills. It may save time if, with the leave of your Lordships, I briefly set out the purposes of the other three Bills. The Acquisition of Land Bill consolidates the Acquisition of Land (Authorisation Procedure) Act 1946 with related enactments; the Compulsory Purchase (Vesting Declarations) Bill consolidates provisions from a variety of enactments dealing with vesting declarations and is drafted on the assumption that it will pass in the same Session as the Acquisition of Land Bill; and the Broadcasting Bill consolidates the Independent Broadcasting Authority Acts of 1973, 1974 and 1978 together with the Broadcasting Act 1980.

I will put the Questions separately, but I trust noble Lords have found it convenient for me to explain the series conjunctively.

My Lords, I am sure that the House will think that this is an appropriate course to follow. The only thing I wish to say is how splendid is the process of consolidation. That it is needed was indicated by what the noble and learned Lord said about the multiplicity of Acts of Parliament that are involved in the consolidation relating to the New Towns Bill. I think that the Law Commission is to be complimented on the massive amount of work that it is devoting to this matter, as is our own committee on its involvement.

My Lords, I am very grateful to the noble and learned Lord for those words, which entirely accord with the views of the Government.

My Lords, I beg to move that this Bill be now read a second time.

My Lords, I beg to move that this Bill be now read a second time.

My Lords, I beg to move that this Bill be now read a second time.

My Lords, I beg to move that this Bill be now read a third time.

My Lords, before we part company with the Bill I should like to say a few words about it—

My Lords, I think that perhaps the noble Lord would find it more convenient if we now proceed to deal with the amendments. He will have an opportunity to speak on the Motion that the Bill do now pass.

moved Amendment No. 1:

Page 11, line 4, leave out ("and").

My Lords, I wish strongly to support the amendment so forcefully and so persuasively put forward by the noble Lord, Lord Caccia, on behalf of British industry. As has been said over and over again during the course of the long discussions on the Bill both in your Lordships' Chamber and in the other place, the importance of the telecommunications industry to the recovery of the economy and to the generating of jobs cannot be over-emphasised. Accordingly, the responsibilities of the Secretary of State under the Bill are very onerous and are extremely significant to the development of our economy. Consequently, it seems to me, if I may put it quite briefly and bluntly, to be plain commonsense that, in the national interest, the Secretary of State should under Clause 6 of the Bill give an account of the performance of his responsibilities in the way that the noble Lord, Lord Caccia, has indicated.

My Lords, I should like to express some perplexity about the fact that there should be any opposition to this suggestion. One has learnt so much from the elucidations already furnished by the noble Earl in the course of our discussions of this new experiment in industrial structure that one is tempted to wish for a more systematic exposition of the way in which policy evolves. I can only believe that the wish must be to save the time of the Secretary of State himself, but I hardly find that convincing having regard to the multiplicity of talent which he will have at his disposal.

My Lords, I wonder whether I could add a little to what has been said. I should like to ask this specific question. How are the accounts of the organisation to be presented? The reason why I raise this point is that for many years the Post Office survived, and is with us to this day, because the accounts were drawn up in what we now realise was a wholly irregular way. I think it is perhaps worth while to recount this story for the benefit of those who may not have heard it. In 1949 the accountant to the Post Office, which was then under the control of the Government, inserted an item in the accounts to provide half a million pounds towards the maintenance of capital. This item was kept in the accounts (because accountants are conservative men) and two years ago, when I heard this story from Sir William Barlow, it amounted to £350 million and was approximately equal to the declared profits of the Post Office as a whole in that year.

It is because this money was kept in the Post Office and was used by them for the capital expenditure which, mainly, will now be the responsibility of this particular section of it, that the Post Office is with us today. In effect they devised a system for indexing their accounts which did not accord with any of the mechanisms proposed by the chartered accountants in their various exposure documents but which, nevertheless, has been exceedingly effective. I want to know whether, when the accounts are presented, they will be presented in a form based on historic costs, as is now the case with all the rest of industry, or whether they will be based on the old, traditional and wholly unique system of indexing accounts which the Post Office has been able to get away with, to the enormous advantage of everybody, ever since 1949.

It is a most obscure point but in fact it contains the secret of the success (such as it has had) of the Post Office in surviving at a time when, for many years, this country invested less in telecommunications in general than did any other country in Western Europe.

My Lords, on the specific question put to me by the noble Lord, Lord Bowden, I understand that the accounts will of course be available in British Telecom's annual statement which has to be laid before Parliament, but if the noble Lord will be so kind as to allow me to check on that I will do so and will also write to him on the methodology employed by the corporation in laying its accounts. I imagine it is the same as in the case of all the other public sector industries, but I should like to check it if I may.

The noble Lord, Lord Caccia, has once again put forward very succinctly and clearly his arguments for requiring the Secretary of State to make an annual statement commenting on British Telecom's annual report and covering the exercise of all his powers under the Bill. The noble Lord feels that, in addition to all the statutory requirements already laid by the Bill on the Secretary of State to publish or notify Parliament of his actions, there should be a still further requirement to publish an overall statement once a year to draw everything together; or, in the words of the noble Lord, Lord Robbins, in support of the noble Lord, Lord Caccia, in order to achieve a more systematic exposition of the matters involved.

I have some sympathy with this view, although I also remind the House of the very many provisions in respect to information that already exist. But if it will meet the purposes of the noble Lord, Lord Caccia, with which I am in some sympathy, as I said, I am prepared to give an undertaking that the Secretary of State will report to Parliament from time to time, not necessarily strictly on an annual basis, which might give us some difficulty in respect of other and comparable corporations, but as and when necessary in order to keep the House informed of what actions he is taking under the Bill in connection with the liberalisation of the telecommunications régime.

I hope that if that undertaking, allied with the other provisions that exist in the Bill for communicating information about the corporation and about the Government's policies, is acceptable to the noble Lord and to those like the noble Lord, Lord Lloyd of Kilgerran, who supported him, he might feel that he would not press his amendment.

My Lords, while thanking the Minister for this response and particularly for the precise words in which he put it, I would be ready, as far as I am concerned, to withdraw this amendment. If in the passage of time it is found that this particular procedure does not meet all the requirements which can reasonably be expected by industry and other interested parties, then naturally there will be further opportunities to reconsider whether another look should be taken at the need for an annual report. With your Lordships' leave, I beg to withdraw this amendment on that understanding.

moved Amendments Nos. 3 to 5:

moved Amendment No. 6:

Page 47, line 43, leave out ("the Post Office Acts") and insert ("Part III of the 1969 Act or this Part").

moved Amendments Nos. 7 to 9:

moved Amendments Nos. 10 and 11:

My Lords, I beg to move that this Bill do now pass.

My Lords, we believe that this Bill is both foolish and irresponsible. It is irresponsible because it risks great damage to the efficiency of a vital element in our economy, in our defence arrangements and in our social life. Noble Lords can go out of this Chamber and into a telephone kiosk and dial any subscriber in the Kingdom, from Land's End to John O'Groats, immediately. By pressing a few more buttons they can speak to anybody on the other side of the Atlantic or in Australia or New Zealand, because we have a highly efficient telecommunications system. It has its faults, which I discussed fully on Second Reading, faults which are due to under-investment; nevertheless it is one of the best telecommunications systems in the world. The postal service in this country, again with all its faults, is infinitely better than almost any postal service in the western world. As I have said before in the House, any noble Lords who know the United States or Canada will agree that the postal service in Britain is infinitely better.

These two systems, the postal system and the telecommunications system, comprise the Post Office, the public corporation set up in the 1966–70 Parliament by the Labour Government. I, myself, announced the decision to turn the GPO into the Post Office Corporation just before the Summer Recess in 1966, to free it from the constraints of the Civil Service and to allow it to act in a commercial way.

Now, this irresponsible Government are going to replace the corporation with two quite separate bodies—an emaciated Post Office and an emaciated telecommunications business called British Telecom, each of them competing for business in the lucrative areas with private enterprise licensed by the Secretary of State, each surrounded by a number of partially-owned subsidiary companies, again, in lucrative areas.

I would remind the House that it is not just a matter of commercial judgment on the part of the two bodies—the corporations—whether they set up subsidiaries, because the Secretary of State is taking power to direct them to set up subsidiaries. In our considered opinion, this will turn one of our finest British institutions into a veritable dog's dinner, a mish-mash of private enterprise and public enterprise which it is difficult to understand unless we remember that its author is Sir Keith Joseph. It is his brain child and his, whim, just as the reorganisation of the Health Service was his whim. He is assisted by civil servants who, because the report of my noble friend, Lord Fulton, was unfortunately never implemented, are still gifted amateurs who know little more about telecommunications than he does. I do not say that in any derogatory sense at all, but they are still amateurs. They move very quickly. I know most of them. Like the Secretary of State most of them have done a Cook's tour of the United States for 7 or 14 days and they have come back here and believe themselves qualified to pontificate to us about how our telecommunications should be organised.

The initial decision to break up the Post Office, and all the subsequent consequential decisions were made for purely political reasons. The noble Earl, Lord Gowrie, and other noble Lords admitted that during our long discussions. That is one fact that we have established. They have not been made for business reasons; the noble Earl himself has said that in terms. Let me read a quotation to noble Lords:

"Decisions are being made for political and not for business reasons. The process has been managed in such a way as to damage the long-term interests of the industry".

That is not from a Labour Party spokesman, it is not from a union spokesman; it is from a senior representative of the British telecommunications industry.

The object of this Bill has nothing to do with efficiency, because it is going to result in a much less efficient postal system and telecommunications. So far as telecommunications are concerned, the Secretary of State will receive evidence this week from the Beesley Report which will point out that it will benefit only 4·6 per cent. of business subscribers with quarterly call bills of over £300. Approximately 95 per cent. of business subscribers and 100 per cent. of domestic subscribers will lose out under the new pattern under this Bill. It is being done solely to enable investors to pillage the Post Office.

The Government are proposing in this Bill to do exactly the same thing with Cable and Wireless, our most successful publicly-owned company and one of our finest companies. During the Committee stage and Report stage my colleagues and I made certain forecasts about what would happen under the Bill. Almost every day, evidence is accumulating to support the views we put. I strongly urged the view that the rural areas would suffer under this Bill. I have here a recent report in the Western Daily Mail. This report makes it clear that rural areas will suffer. I quote:

"With the new Telecom Bill going through Parliament to allow competition in the telephone market and inevitably cutting Post Office profits, the organisation is determined to go through with its plans to cut off kiosks that make a loss".

Then a British Telecoms spokesman was quoted, who said:

"We realise the social need for the kiosks and we do not go into this sort of thing lightly but no company can be expected to give such a big slice of its revenue to social needs".

The noble Lord, Lord Mottistone, spoke about this. He is not with us today. He said, "So what? The rural communities can look after themselves. If their telephone kiosks are not paying then they ought to raise the money locally". We on this side believe that Eaton Square ought to subsidise a remote village in the hills of Cumberland or the Western Islands. This from the Western Mail illustrates another point:

"Community council clerk, Mr. Jones, said, 'The Post Office has offered to leave the kiosk there so long as we can either subsidise it or guarantee the revenue they expect, but we think it is a national service and should not be looked upon as a local thing. Travellers and visitors use the box in emergencies and the Post Office has a national responsibility to keep it there".

The point is that British Telecom will get the blame for the effects of this Bill. The Government and the noble Earl know quite well that this Bill will reduce services for many customers and will increase costs for almost all customers. Why does not he, why do not the Government, stand up and acknowledge their responsibility and justify what they are doing on the grounds of their ideology? That would be fair. What is not fair is for the noble Earl, as he has done throughout the Committee and Report stages, to fail to acknowledge what he knows the consequences of the Bill will be. I think that the only admission that I extracted from him was that the quarterly rental would rise by £6 if the Beesley Report is implemented, as it almost certainly will be. He said that that is nothing; that £6 on a quarter's rental is nothing. It will happen in two or three years' time and inflation will be such in the meantime that £6 will not be important.

I have also warned the Government about what they are doing to Cable and Wireless. What they are doing to this company is, I think, quite shameful. The scene is being set for it to be pillaged for loot by the Chancellor and by investors. Ever since the Government came to office, I have warned them that they are in danger of destroying this company which has existed for over 100 years. The greater part—95 per cent.—of its revenue and almost the whole of its profit is earned by providing international telecommunications for foreign countries under franchises. I warned the Government that if they persisted in this Bill there was a danger of those independent countries nationalising the operations of Cable and Wireless within their territories. I have read press reports about the three major profit-earning areas for Cable and Wireless which account for 80 per cent. of its profit: Hong Kong, Bahrain and Bermuda.

Hong Kong, we have heard from the press, has driven a hard bargain for its acquiescence in the Government's proposals. Now the company will have to pay 40 per cent. of their revenue to the Hong Kong Telephone Company (which is independent) and have had to agree to a local company being set up in which there will be Hong Kong directors and which will give the Hong Kong Government power eventually to acquire the equity. I should like to ask the noble Lord, what will happen to the profits which Cable and Wireless earn in Hong Kong? Up to the present all profits have been remitted to the United Kingdom and with that profit it has been possible, as I have said, to subsidise such places as St. Helena, the Falkland Islands and others. In future, if this Hong Kong company is set up, that will not happen.

I read in the press also that talks are taking place with the Bahrain Government, which wants to have a similar arrangement. I am told that the Prime Minister of Bermuda is quite furious because Bermuda does not have the same arrangments, and he is demanding that it should. If Cable and Wireless lose the major part of their revenue in these three areas, the company will virtually cease to exist.

Again referring to a report in the press which I read this last weekend, if the Government feel that Cable and Wireless can find an alternative role for themselves by joining a consortium in the United Kingdom to skim off the cream of British Telecom by providing an alternative network—for example, to Birmingham—then the Government and Cable and Wireless had better think again. We should like to make it absolutely clear to everyone concerned that an incoming Labour Government would give an immediate directive to stop this sort of activity. The essential function of Cable and Wireless, which they have carried out with brilliant success for the past 100 years and which has brought great profit to this country—the company paid a dividend of £10 million to the Government last year—is to provide telecommunications for independent countries overseas. Both these excellent British institutions are shortly to be boarded by the piratical hordes led by Sir Keith Joseph and the noble Earl, Lord Gowrie. All I can say on behalf of my noble friends and for myself is that I hope and pray that both institutions will survive until sanity is restored by an incoming Labour Government.

My Lords, we on these Benches have at all times supported the objectives of this Bill. There can be no doubt that the Bill is one of the most imaginative measures to come before this Parliament. We have endeavoured to contribute to the many key issues that have arisen, by means of proposing amendments and by making speeches during the hours of speeches upon this measure. I am sorry to say that we on these Benches cannot record many outstanding successes in regard to our amendments, but nevertheless we feel that the Bill requires our support at this Third Reading. Here, I should like on my own behalf to pay a personal tribute to the noble Earl, Lord Gowrie, and his team for the clear, careful and courteous way in which they have received the amendments and contributions which have come from these Benches.

We still have a number of reservations about the framework of the telecommunications industry as envisaged by the Bill. The development of this industry will require massive investment and we would have preferred to see the Government being more sympathetic to the proposals we made from these Benches for a more flexible system of investment, unconstrained by the rigidity of the public sector borowing requirement. As a result of the contribution made by the noble Lord, Lord Byers, on Second Reading, I feel that in the course of this debate we have made some progress even in this very important matter.

At Committee stage I submitted some amendments to try to ensure that the high standards and international value of research undertaken by the Post Office will not in any way be inhibited by this Bill. I received from the noble Earl, Lord Gowrie, some assurances that so far as research was concerned the Government and British Telecom will maintain those high standards. On a personal note, on behalf of the innovators who are members of the staff of the Post Office and of British Telecom, may I express the hope that the reward for their innovations will be even more generous than they have been in the past. My Lords, for these reasons we support the Third Reading of the Bill.

My Lords, when I moved the Second Reading of this Bill I suggested that it was one of the most important Bills of this Parliament, and I think that the subsequent debates in your Lordships' House have confirmed that judgment. Telecommunications are and will continue to be of fundamental importance to the country. At the moment we are standing on the threshold of very rapid developments in telecommunications. The new technologies—especially those concerning information handling—will revolutionise most of our lives. We need a new framework for new telecommunications in order to make this revolution possible, and we need a framework that will enourage innovation and give entrepreneurs the chance to provide new services—and thereby to create new jobs.

Quite clearly in our judgment, this can only come about with competition, and this Bill will introduce much needed competition into the industry. We have had a number of debates on this subject and I do not consider that it is necessary for me to go over all the ground again this afternoon. Both the Post Office and British Telecom affect the lives of everyone in this country, and this fact has been reflected in the variety of important discussions which we have had at Second Reading, at Committee, and at Report. We have debated privacy, interception, the relationship between Ministers and nationalised industries, and the proper liability for the mail and for telecommunications. We have also debated the right to strike and other industrial relations issues, and there have been a number of stimulating debates on the means of financing the investment programmes of nationalised industries. May I say to the noble Lord, Lord Lloyd of Kilgerran, that we too should like to escape from the rigidities of PSBR, but alas! these rigidities are imposed less by ourselves than by the national and international money markets of the world.

I do not want to start a further debate on this very important subject, but I believe that anyone who reads the proceedings on this Bill in the Official Report will appreciate the high level of discussion and will indeed learn a lot about an exciting industry. I yield to no one in my desire to find a solution which will allow investment in profitable projects, which stimulates employment, but which is compatible with wider economic objectives. In that connection I am sure that your Lordships' House has welcomed the recent increase in British Telecoms' external financing limit, to which I drew your Lordships' attention just last week.

This has been a long and complex Bill, reflected by the time given to it by your Lordships' House in considering more than 350 amendments. The amendments reflect the wider interests in the Bill and in many cases they have been the result of consultation with several groups and bodies. Before sitting down I should like to pay tribute to the most helpful way in which your Lordships' House has dealt with the Bill, and particularly to the noble Lords on the Opposition Benches for the important debates which they have stimulated and for their interest. We have of course been rapped over the knuckles by the noble Lord, Lord Glenamara. He said today that it was a foolish and irresponsible Bill. I must still express some astonishment at this comment. in the old days the Labour Party used to stick up for the poor. Now they are never so zealous as when defending some giant corporation or monopoly, so long as it is one in the public sector.

I shall pass over what seems to me to be extraordinary remarks by the noble Lord, Lord Glenamara, about civil servants. If what the noble Lord said were to be taken literally there could be no advice ever given to Governments from anyone except those with a vested interest. I would point out to the noble Lord that all domestic subscriber services, whether they are in Eaton Square or in Little Gidding, so to speak, are in fact subsidised by the business subscriber. I would also remind the noble Lord and your Lordships' House that in keeping down the costs to the subscriber the major element in an industry which employs very many people would be pay restraint.

Leaving the Opposition Benches, there have been many friends on my own side and in other parts of the House who have taken a close interest in the Bill and sought on a number of occasions to improve and clarify it. I am glad that I have been able to accept some of their suggestions, including, to some degree, that made by the noble Lord, Lord Caccia, this afternoon. The Government are very grateful to the whole House for keeping us on our toes.

My Lords, before the noble Earl sits down, I should like to echo the remarks of the noble Lord, Lord Lloyd of Kilgerran, about the warm response that the noble Earl gave to many of the amendments moved on this Bill. But I should like to point out that of the 350 amendments tabled, 110 were tabled by himself. All of these were accepted but not one of the amendments tabled by the Opposition—many of a constructive nature—received any constructive response at all.

My Lords, with the leave of the House, I shall now repeat a Statement which is being read by my right honourable friend the Secretary of State for Defence in the other place. The Statement is as follows:

"Mr. Speaker, the Government have reviewed the Defence Programme; and a full account of our conclusions is contained in a White Paper which will be available shortly in the Vote Office.

"The Government intend to honour the NATO aim of 3 per cent. real growth in defence expenditure and have, exceptionally, taken a firm decision now to plan to implement the increase until 1985–86, a full four years forward—and two years beyond the published plans for public spending generally. This may mean that defence absorbs an even greater share of our gross domestic product; and while it will be necessary to curb several of our forward plans and aspirations, the additional funding should enable us to enhance our front-line capability above its present level in very many areas.

"The House knows of our basic problems, which are not unique to Britain. We have a defence programme which is unbalanced and over-extended. Last year we suffered from severe cash problems; and similar difficulties are already emerging in the current year.

"We cannot go on like this. We have no choice, in the longer term, but to move towards a better balance between the various components of our effort—front-line numbers, quantity and quality in equipment, and military and civilian support. And we must determine this balance in terms of real defence capability, rather than as the outcome of a debilitating argument over each Service's budgetary share.

"We have looked first at the defence of the United Kingdom itself especially in its role as a crucial reinforcement base for NATO. For some time we have felt the need to give greater emphasis to our reserve forces. For the Territorial Army, whose readiness and efficiency were vividly shown in Exercise Crusader, I intend a progressive increase in numbers of some 16,000 men and women and there will also be an increase in training days from 38 to 42 a year. We will order new minesweepers for the Royal Naval Reserve as soon as resources permit; and we will expand the use of Royal Air Force Regiment reserves in airfield protection.

"In United Kingdom air defence a priority requirement—we will sustain all the programmes already in hand, including the Nimrod early warning system and the doubling of modern air-to-air missile stocks. As a new enhancement we will provide Sidewinder air-to-air missiles for a further 36 of our Hawk aircraft, making 72 Hawks in all available to supplement our fighter force; we will run on two Phantom squadrons instead of phasing them out as had earlier been planned when the air defence version of Tornado comes in; we will examine the possibility of switching 20 Tornados to the air defence rather than the strike version; and we will substantially increase the VC10 tanker fleet which multiplies our fighter force by prolonging patrol time and range. Around our coasts, we will increase our capability to counter enemy mining, and we have set aside funds for enhancing our defensive mining capacity, to help secure our ports and maritime routes.

"I turn next to our major land/air contribution on the Continent of Europe. BAOR's manpower, which is above our Brussels Treaty commitment of 55,000 men, will return to that level. But we will retain in Germany our full present combat fighting strength of eight brigades and our responsibility for the forward defence of a vital 65 kilometres of the Central Front.

"We intend however to withdraw from Germany one divisional headquarters and other supporting staff with a consequent reduction in the number of locally employed civilians; and this, together with other necessary economies, will enable us to move over the next five years towards a slightly smaller Regular Army of 135,000 trained men, 7,000 less than at present, but partly balanced by the increase in the Territorial Army.

"Suggestions have been made, I know, that we should go for a much greater reduction in our troops in Germany. But quite apart from the fact that there is no one else to perform our task of defending 65 km of the Central Front, it would be much more expensive to bring them home, because we simply could not house or train them here without a massive new infrastructure programme. Only disbandment would relieve our budgetary pressures and we cannot prudently cut our Army below a certain minimum level.

"But the small reduction in regular Army manpower which I propose will help us to afford, as is our intention, the very wide range of re-equipment projects now envisaged for BAOR. The scale or timing of some of the projects will be modified, partly to restrain costs but mainly to provide for a further increase in war stocks and ammunition, to improve the combat endurance, the staying power, of 1st British Corps, which will be substantially enhanced. We plan tor instance to increase further the buy of Milan anti-tank missiles.

"The Challenger tank will equip four armoured regiments. New night sights for missile systems and tanks will be introduced and improvements will be made both to the present Chieftains and in due course to Challenger. We will bring into service the 2nd Chinook helicopter squadron to enhance Army logistic support and mobility. We shall introduce the tracked version of the Rapier missile system and the TOW anti-tank missile launched from Lynx helicopters.

"I am glad to announce that subject to final negotiations we should shortly be signing, in Washington, an agreement with the United States Government for the joint manufacture with the United States of the AV8B, the advanced Harrier. This has turned out to be an agile and effective aircraft, with a susbtantial weapon-carrying ability; and we plan to order 60 aircraft for close air support. Within the total Anglo-American programme of some 400 aircraft we are looking for a 40 per cent. share for British Aerospace, and a 75 per cent. share for Rolls-Royce on the engine. There should be something like a billion pounds' worth of work for British industry, the bulk of it for export to the United States.

"I have decided that we cannot afford early replacement of the Jaguar, though possibilities remain open for new combat aircraft in the longer term, perhaps through international collaboration. On the other hand, we must exploit our investment in Tornado—some £10,000 million at current prices. We will continue with the JP233 system for neutralising enemy airfields and we shall seek also to acquire new weapons to equip Tornado in an anti-armour role and for suppressing enemy air defences.

"At sea, the Royal Navy will continue with the key task of providing a strategic nuclear force by the modernisation of the Polaris force with the Trident system. We have maintained one Polaris boat on station continuously for the past 12 years. One Trident submarine, invulnerable to any preemptive strike, will carry up to 128 independently-targeted warheads which can hold at risk targets over a vast area of the Soviet Union. No enhancement of our conventional forces could possibly prove of equal deterrent value. In a world where nuclear weapons cannot be disinvented, it is the United Kingdom's surest way of preserving peace.

"But we must also keep strong the three conventional elements of power at sea. In maritime air, in addition to present plans, we will fit a further three Nimrods, making 34 in all, to the full Mark II equipment standard, which is as great a leap in technology over the Mark I as the Mark I was over the Shackleton. Armed with our Sting Ray torpedo, the Mark II will have great striking power against submarines. We will proceed with a new stand-off anti-ship missile to be delivered by Buccaneers—which we will keep on for this task—or by Tornado. Subject to the satisfactory completion of contract negotiations, we intend to acquire British Aerospace's Sea Eagle anti-ship missile.

"We will increase our fleet of nuclear powered attack submarines, newly equipped with Sub-Harpoon, from the present 12 to 17; I have today confirmed the order with Vickers at Barrow at a cost of £177 million for the next boat. We will also proceed as fast as possible with a new and more effective class to replace our present ageing diesel-powered submarines; these should also have a market overseas. We will acquire a new heavyweight torpedo for all our boats, and are considering alternative British and American designs for this.

"Overall our maritime air and submarine capability will be much enhanced.

"As regards surface ships we will go ahead with all the very large orders—20 new warships, to a value, with their weapons, of well over £2,000 million—already in hand in British shipyards, and shall be placing an order for a further Type 22 anti-submarine frigate at a cost of £125 million, which will sustain work at Yarrows on the Clyde. We are placing an order for five patrol craft with Hall Russell of Aberdeen for service in Hong Kong.

"But I believe we must make changes here in a number of ways. Firstly, if we want to build a reasonable number of new ships in the future, we must devise much cheaper and simpler designs than the Type 22 frigate. We must accelerate urgently, and I have provided funds in the programme for this, a new type of anti-submarine frigate, the Type 23 built with an eye to export as well as Royal Navy needs, for we have not sold a major British warship of Royal Navy design for over a decade. I intend to pursue as well the possibility of still more cost-effective, smaller, ships than the Type 23.

"Secondly, we only maintain our surface fleet at its present full strength through a continuous programme of refits and major mid-life modernisations of older ships, requiring a huge and costly dockyard infrastructure. Typically it can now cost up to £70 million to modernise an old Leander frigate which is actually more than our target cost for the new Type 23.

"If we are to be able to build new ships in our shipyards and fulfil other priority defence tasks, we simply cannot afford to sustain such a policy of refit and modernisation, or for that matter maritime air defence, at the present level, where the planned forward investment in major equipment for the air defence of warships at sea has been about double that for the air defence of the United Kingdom itself.

"It is for reasons like these that whilst we shall complete the new carrier 'Ark Royal', we intend to keep in service in the longer term only two of the ships of this class, with their heavy demands on supporting anti-submarine air defence escorts. The older carrier 'Hermes' will be phased out as soon as the second of the new carriers is in operation.

"Overall we will try and hold the destroyer and frigate force declared to NATO at around 50 ships compared to 59 ships at present. This will be achieved by disposing early of older and more manpower-intensive ships, for example from the County, Rothesay and Leander classes, and timing their withdrawal so far as possible to avoid major refit or modernisation. We shall place some of these ships, without further modernisation, in the Standby squadron where they will still be available, though at longer notice, as part of our force declaration to NATO. There will be a consequential reduction of Royal Fleet Auxiliaries.

"On present estimates the reduction in target numbers of the Royal Navy will be between 8,000 and 10,000 men by the end of 1986, rather more than the reductions of 7,000 in the Army. We will maintain the three Royal Marine Commandos since we place great value on their unique capability; but we will dispose of the two specialist amphibious ships rather earlier than planned.

"In consultation with the United States Secretary for Defense about these changes, I have indicated our wish to play an enhanced role alongside our allies, outside the boundaries of the NATO area. We envisage resuming the deployment of naval task groups—centred sometimes around a carrier, sometimes around destroyers or frigates—for substantial periods on visits and exercises out of area. We have made specific provision in our programme for the extra costs of such deployment. We are continuing with our plans designating an Army field command to plan out-of-area contingency tasks; for providing an extra stockpile of equipment and giving our Hercules aircraft the equipment needed for a co-ordinated assault by parachute troops.

"As regards support, the change in policy on refits which I have described earlier will mean that we cannot justify keeping a dockyard organisation of its present size. I regret to inform the House that the base and dockyard in Chatham will have to close in 1984; work at Portsmouth Dockyard will contract very severely, though the naval base will be retained; and consideration will be given to alternative ways of fulfilling the Government's obligation to support the economy of Gibraltar if it is decided that the dockyard work there cannot be kept up indefinitely. We shall consult closely with the Gibraltar Government about how best to deal with the situation.

"Much more naval training will take place at sea, and there will be a reduction in shore-based naval establishments, stores and fuel depots. Overall civilian numbers in the Ministry of Defence will fall by between 15,000 and 20,000 as a result of all our measures. Our total workforce will in due course be significantly below 200,000. Redundancies will, I am afraid, be inescapable.

"Mr Speaker, I have described to the House the main thrust of what we propose—and the substantial enhancement of our frontline capability in very many areas, but with a major reduction in the supporting infrastructure of defence.

"I am asking my right honourable friend the Leader of the House to find time, as soon as possible, for a debate on all these issues. At that time I shall be able to explain more fully the background to these proposals. In conclusion, the Government have, in accordance with their undertakings to the country, decided to provide the increased resources our defence demands by increasing spending by 3 per cent. in real terms for the next four years; and we have decided also to apply the extra funding in a revised programme which will enhance the combat endurance and the hitting power of our frontline forces in the decade to come."

My Lords, that ends the Statement. May I just say that I think the White Paper will now be in the Printed Paper Office. May I also say that I believe it has been agreed through the usual channels that Monday, 20th July, be set aside as a date for debate of these subjects in this House. Finally, may I mention that in last moment alterations to the Statement a cross-reference to a Written Answer in the other place released today on the Royal Ordnance factory organisation has been lost, but there is a Written Answer dealing with the Royal Ordnance factories which has been issued in the other place today.

My Lords, I thank the noble Viscount for his very grave Statement, if I may put it like that. It is a very serious one which we must consider. It is, I think, the longest Statement that I have ever heard in either House, but I am not complaining because noble Lords will now be able to get the White Paper and to digest it. I shall make just one or two comments but they will be brief, because we shall await the debate. It is there that we shall deploy our main arguments as to whether or not the Government are fulfilling their promises, or are trying to live in cuckoo-land by ignoring the fact that one of the decisions which is relevant to our country's economy is the decision of the Government to go along with Trident. I think that Trident will distort the defence budget and many of the proposals that have been mentioned today.

A second factor which influences the Government's expenditure plans is, inevitably, the dramatic increase in social security, unemployment and supplementary benefit payments, brought about as a direct result of the Government's economic and industrial strategy. In many parts of our economy, men and women are unable to find jobs. I am prepared to examine very carefully and constructively what has been said about the army and the navy. I am anxious that we should always have adequate defence, and have always taken that view. So I shall not probe today. I shall start probing when we have the debate.

It is important that all noble Lords should carefully look at the White Paper, because it is a very important document. It is one of the most comprehensive documents that I have seen on the subject. But then, again, we have had all these wonderful documents over the last six months. Are these all to be thrown away in the dustbin? Do we stick to the White Paper, which goes further than the Blue Papers which I have mentioned? I should now allow Members to cross-examine, if they so wish, but I believe that it would be right and proper to wait until the debate.

My Lords, this very important Statement, which I thank the Minister for repeating, will clearly have to be debated before long and I understand that the Minister has already arranged a date, which is a very good thing. Of course, it is impossible at short notice to appreciate all the consequences of what seems, on the face of it, to be a major, and in many ways, a totally new defensive concept. At first glance, I feel—and I only speak personally—that much of what is proposed is, with one exception, acceptable. I am, at least, relieved to hear that it is the firm intention of the Government to give effect to the increase of 3 per cent. in real expenditure on defence for another full four years. But are we to assume that this is exclusive of any expenditure on Trident during those four years, or is the expenditure on Trident to be included in the 3 per cent. increase? If I may, I should like to have a reply to that question.

Even the withdrawal from Germany of one divisional headquarters does not seem to me to be unreasonable, given the very considerable saving which would result. But I take it that the German Government has been consulted and has not expressed any concern at this move? In general, I should also like to be assured that the proposals, as a whole, have been put before our allies and that there have been no major objections on their part—notably, on the part of the Americans—to any of the suggestions for new defensive schemes that have been put forward.

The major exception, of course—and your Lordships will not be surprised to hear this from me and my colleagues here—is the decision to go ahead with Trident, for it must be clear that, but for the £6 billion or so that is to be spent on this over a period of 10 years, we should be able not only (for instance) to provide a replacement for the Jaguar aircraft, which is important, but also to construct considerably more hunter-killer submarines, which are so essential for the closing of the Iceland-United Kingdom gap in the Denmark Strait, on which, after all, it is quite likely that our whole future will depend.

As is known, it is our view on these Benches that it is just not true that the enhancement of our conventional forces would not prove of equal deterrent value to Trident, which, as we see it, can only deter a nuclear assault on these islands and can in no wise be used as a first strike to counter some Soviet offensive on the Continent. Whether nuclear weapons would be used for this last purpose must, after all, depend on the decision of SACEUR and not on the decision of the United Kingdom. It is, in any case, more than likely that the next war, if it should come, will be waged by conventional means only. But, as I have said, these are all arguments which can be properly developed at length only in a debate, and I am glad to hear that such a debate will shortly be possible.

My Lords, I thank the noble Lord, the Leader of the Opposition, and the noble Lord, Lord Gladwyn, for their remarks, and particularly for agreeing that, for the major part of our discussion, we should await the day of the debate. I apologise for the length of the Statement, but I think the noble Lord, the Leader of the Opposition, thought that no bad thing. This is a matter of great importance, so we felt that it was warranted.

Both noble Lords have again raised the question of the Trident expenditure. At this stage, let me merely say—we have debated this before and will do so again—that, at the moment, the expenditure on Trident is very small indeed and is not the reason for the budget problems which have arisen. Over the full years of its capital construction programme, it will represent 3 per cent. of the defence programme, which is very close to the requirement of Polaris before it. Any alternative deployment of that 3 per cent. on conventional forces would move only a very fractional way towards correcting the huge imbalance between the conventional weapons of the Soviet Union and those of the alliance.

I am grateful to the noble Lord, Lord Gladwyn, for saying that with that exception he finds the general thrust acceptable. I can assure him that my right honourable friend has consulted with the German Government, with the USA and with important figures in the NATO structure, and that the detailed implementation of these plans will be co-ordinated in the future through the annual discussions which take place with NATO.

I must refer to the castigation of us by the noble Lord the Leader of the Opposition concerning the effect on job numbers. I ask him: would his alternative Government have increased real expenditure by 3 per cent. for these four years? Though we very much regret the necessary reduction in job numbers which will take place in some areas as a result of these changes of emphasis, we believe that with a virtually 90 per cent. "buy British" policy in the Ministry of Defence under this Government's policy we shall be keeping and, indeed, promoting in new areas of technology job numbers far in excess of what the alternative would have been under the Government of the Opposition.

My Lords, I was very glad to hear in the answer by the noble Viscount to the noble Lord, Lord Gladwyn, that a date has already been fixed for a debate. We may suspect that although Trident is at the moment costing virtually nothing and that although it may cost only 3 per cent. a year over its entire life, there will be a period in a few years' time when, like some monstrous and lethal pet, it will be devouring everything in the larder, and that this is the real meaning of this White Paper. The defence debate will be better if we can get answers to certain preliminary questions out of the way now and, if the House will permit me, I shall ask four of them. I make no apology for the fact that they all concern the Navy, which is the most difficult part.

First, are the frigates and destroyers which are to be mothballed included in the figure of 50 which will in future be declared to NATO instead of the present 59? Secondly, has the Secretary of State for Defence consulted the Government of Norway about these large naval changes, particularly in view of the fact that the two amphibious ships which used to carry Royal Marines to Norway on exercises are to go? What, if anything, is to carry the Royal Marines to Norway, bearing in mind that the sea frontier up there is the only undefined frontier between NATO and the Warsaw Pact, that Spitzbergen is in effect a "West Berlin" in the north and that that is a place where, while it is obvious that we could not win a war, it would be extremely easy to lose one in advance by not being there?

Thirdly, what is the intention regarding the expeditions outside NATO? Is it to be as NATO? And, if so, is it proper to do this without widespread public debate? Or are these expeditions to be not as NATO? In which case, why did the Secretary of State inform the United States Government of his desire to do it? Fourthly, which I shall abbreviate as I see that the Government Front Bench are looking impatient, whom did the Government consult among the civilian beneficiaries of naval activity in this country and among the many industries, civilian more than military, whose turnover depends upon naval purchasing power as regards exports as well as domestic sales?

My Lords, the first point which the noble Lord, Lord Kennet, made was that the expenditure on Trident in the future—I think he felt at the peak years—would be at a crippling level. I must mention that the expenditure on Tornado over the whole period, at £10,000 million, which is twice the estimate for Trident, merely shows that all modern weaponry is highly expensive. In this comparison one has to realise that, within the Trident estimate, we are including the whole cost of the bases, including the bases ashore, but that we are not including the airfield costs in the Tornado cost.

The answer to the noble Lord's first question is that about eight frigates and destroyers will move into standby over the next few years. Standby is not mothballs. Standby vessels can be manned, and manned effectively, within approximately one month. The noble Lord then asked whether we had consulted Norway regarding our role on the northern flank of NATO. At this stage, I would merely say that we shall continue to discharge our role on the flanks of NATO, including the northern flank. I do not believe that detailed consultations with Norway have yet started, but they will.

So far as the noble Lord's last question is concerned, which I think I heard correctly and which related to the out-of-area capability that we intend slightly to augment, all NATO countries have expressed worry about the threat out of area. The United States, being the bulwark of the NATO alliance in terms of defence and with its huge maritime power on a worldwide basis, has taken the lead. We have certainly told the United States and our NATO allies that we shall give what help we can. Whether in the course of time other nations will help to counter the growing possible threat outside the central front area will be up to them.

My Lords, inevitably noble Lords and, indeed, honourable Members will criticise different parts of the Statement. Certainly I shall continue to criticise the reference to Trident. However, having listened to the noble Viscount one is bound to say that one has admiration for the skill, ingenuity and flexibility with which he and his colleagues have contrived to marshal conflicting defence claims within given cost limits.

Having said that, may I ask three questions. There will be many who will regret the decision to buy the American version of the Harrier, although I understand the arguments which led to the AV8B decision. But the noble Viscount said that we shall be "looking for"—I think this was the phrase he used—a 40 per cent. share for British Aerospace. Would it be reasonable to ask whether, for "looking for", one can substitute "insist upon" a 40 per cent. share? Secondly, can the noble Viscount give an assurance that this contract will not mean that British Aerospace or Britain will lose the design leadership which they have had hitherto on VTOL aircraft, and that we can expect on the VTOL aircraft, and also when we come to the supersonic version, that it will be a question of Britain taking the lead there? My third question relates to the Jaguar replacement aircraft. The noble Viscount said that the possibilities there were being considered "longer term". Now "longer term" is a somewhat elastic definition. If there is a suitable international collaborative arrangement there, may I ask the noble Viscount whether the longer term would be brought into a shorter term?

My Lords, I thank the noble Lord, Lord Beswick, for his initial remarks. So far as the AV8B is concerned, the reason for the wording in the Statement is that we are not quite at the end of the negotiations. The intention, I believe, of all parties is that it should be pretty nearly exactly a 40 per cent. share of the production of the whole order, bearing in mind that the total number of aircraft required is some 400 and that the United Kingdom order is only approximately 60 of that number. So there are still some negotiating points to be completed. However, after a recent visit of my own to Washington I am satisfied that the combined intention, in agreements which are not easy to put on paper, is that it should be 40 per cent.

So far as the design leadership in V-STOL aircraft—a British invention—is concerned, I believe that if this partnership goes ahead the know-how, including developmental know-how, on the whole aircraft, including aspects where the USA have made major contributions to technology in the prototype aircraft which has flown, particularly in the areas of carbon-fibre, which the noble Lord will know about—in those areas and in our own we shall be in possession of the latest know-how across the whole field of the construction of this aircraft, and this is our main security for being able to plan, when the day comes, a further advanced aircraft in this area.

So far as the longer-term combat aircraft is concerned we are currently exploring, with other nations, the future needs, but as my right honourable friend said, a balance has to be struck between armaments and modern weapons and missiles for our existing platforms and a constant expenditure of enormously larger sums of money on the platforms.

My Lords, I hope it will not be thought out of place, as the Medway subcommand is in my diocese, if I comment on the very sad news about the closing of Chatham dockyard. It is grievous news, not only for the Royal Navy as a whole but also for employment in the Medway towns, and I should like to ask Her Majesty's Government whether at this stage they see the prospect of alternative employment for those civilians who are at present in the dockyard at Chatham.

My Lords, I thank the right reverend Prelate for his remarks. We share his sadness about the closure of Chatham and we also share his concern in relation to job numbers when we are at, I believe, the bottom of a recession. I can tell him that my right honourable friend the Secretary of State fitted in to today's programme, before going to the House, a meeting with the industrial and non-industrial unions representing the employees at Chatham and agreed a special programme for full consultation over the next few years which we have to plan how this will be carried out. I hope that during those years we shall see the continued growth which is already visible, of a number of small businesses and of certain modern industries, and we shall see the bottom out of the recession and, hopefully, some relief to the problem of job numbers all over the country.

My Lords, may I put it to the noble Viscount that the only reductions contained in that very long Statement in the teeth arms available to the Government were those to the Royal Navy. They were savage reductions, amounting in the first instance to about 15 per cent. of the surface fleet and, as the answer to the noble Lord, Lord Kennet, revealed, within another two or three years another 15 per cent., making a total of something like 30 per cent. of the surface fleet.

It is within my knowledge and within the knowledge, I do not doubt, of many of your Lordships that there is no strategic assessment of the threat available in the western world which would suggest that that was a prudent thing to do. Nor is it possible that any of our allies can fill that gap. Whatever may have been said to the Secretary of State in the United States, or in Bonn or in Brussels, it is within my knowledge that there is no other Navy which can fill the gap which, within three years, according to the Statement, will appear in the North Atlantic and especially in that part of it for which this country has been responsible since the North Atlantic Treaty was signed 32 years ago. I have no wish to go into detail. That is proper for our debate, but I put it to the noble Viscount that there can be no strategic assessment of the threat which could conceivably justify this savage reduction in the Royal Navy.

My Lords, I answer the noble and gallant Lord, with all his qualifications, with some humility, and I have no doubt that he will spell out his views in greater detail when the time comes for debate. I would say to him that he suggested that the cut falls only—and his phrase was "on the Royal Navy". This is a cut in numbers to offset the cost of the enhancement of fire power which modern weapons and the modern threat make necessary. The suggested cut is in the surface fleet area. Expansions will continue in submarines and in maritime aircraft which have a major bearing on the roles which he will no doubt wish to raise in the debate.

The cut in naval personnel we estimate comes to 8,000 to 10,000, compared with 7,000 in the Army. I would ask him to remember the expansion areas; I would ask him to accept, because I believe the figures are valid, that the cut in frigate and destroyer numbers will be from 59 to about 50 in terms of our contribution to NATO in a time of tension, to prevent it moving to a time of disaster.

I believe—and I have to say it—that the majority of my right honourable friend's advisers in the services and the civilian experts who also advise him, while they would like a bigger expenditure than the Government have decided to incur and would thus like more of a number of things, nevertheless, within the budget constraints of the 3 per cent. increase, have shown support for the kind of emphasis which the Secretary of State has decided upon.

My Lords, can my noble friend reflect that after all the anxieties and the gloom and doom which has been forecast, I think, from most of us in this House and in the other, this is a realistic and a constructive Statement—surprisingly so? Is my noble friend aware that perhaps one of the most anxious points is the further rundown in uniformed personnel in all three services but particularly in the Army, and that the decision to build up our reserves will be most welcome? But does this action not reflect the fact that three all-professional armed services are now becoming very expensive indeed? Does he realise that no other Western European nation has been able to form this structure for their armed forces but have had to make use of national service or some other form of reserve; and will he now examine whether we cannot look to the next decade for some reassessment of all professional services, so that we can save money and give young men an opportunity of serving in a disciplined force? They may be very valuable should an emergency arise.

Unfortunately, the noble Viscount's words will be listened to less than those of Libby Purves and Brian Redhead in this morning's "Today" programme, when they stated, to some million or so listeners, that he has already spent £5,000 million in the United States for Trident. Can he put this matter right by reminding the House that the total cost of the Trident programme in the USA is £1½ billion over the next 15 years, and that billion of this Trident programme will be spent in this country, mainly in Barrow and other places where the jobs will be most warmly welcomed, in forming an effective deterrent for the next few years? Could the point also be made perhaps to the Liberals opposite, that this is not a costly programme; in real terms it is a very cheap way of ensuring an independent deterrent.

My Lords, I thank my noble friend for his initial remarks. He has indeed himself put the figures right in relation to a press srticle on the expenditure in America on Trident; indeed the proportion of expenditure in this country is slightly higher than the figure he has given. He has also put his finger on the main problem, in terms of the growing expense of equipment over and above the rate of inflation, due to much more powerful and sophisticated equipment, which has been running for many years at somewhere between 6 and 10 per cent. above the rate of inflation. My noble friend's suggestions in relation to manpower are one of the areas and one of the ways in which my right honourable friend is trying to tackle this problem. There are many others which I would like to leave until the time of the debate.

My Lords, I would like to begin by apologising to the noble and gallant Lord, Lord Hill-Norton, for trying to get in in front of him. The reason is a perfectly simple one; I did not know who he was. I hope he will accept my apology.

I want to say only this to the noble Viscount who has made this Statement: I am sure he realises that there is great anxiety throughout the country at what has generally been regarded as a much bigger cut-down of the Royal Navy than he has now told us in the Statement. I think he has gone a long way to allay the fears of those who were afraid of a very serious cut in our surface Navy. I would only like to say that I remember Lord Beatty, in the 'twenties when he was First Sea Lord, saying to me, "We are running down the Navy now to a point which will bring us near defeat if another war comes". In fact he proved right because we came nearer to defeat in the battle of the Atlantic than we did in the Battle of Britain. Sea power is essential to our existence.

I only want to ask, in conclusion, can the noble Viscount give us an assurance that the Royal Navy, which has now been supplanted at sea by the Soviet Navy, will emerge from these proposals stronger, not weaker, than it is today?

My Lords, I am glad that the noble Lord raised the question of the much greater anxiety caused by press speculation on what might come. I very much hope that by bringing forward the date of this Statement my right honourable friend will have relieved people's minds from the worst forms of conjecture which seem inevitably to accompany this kind of examination.

On the second point, I would ask the noble Lord to wait until the debate. My right honourable friend is absolutely clear that the performance of the maritime role in the Eastern Atlantic depends upon us; we must do it and we will continue to do it.

My Lords, may I intervene briefly, partly to congratulate the Government on an extremely throughtful Statement, even if one does not agree with all of it; it at least shows welcome signs of having been filtered through some fairly rigorous mental processes, and that is a very welcome thing in defence matters. May I ask one very quick question; the Minister may not be able to answer it now, but I ask it so that, if possible, it can be answered at the time of our debate. Can he say what, in terms of the Trident agreement with the United States, is the position with regard to what are called late spares? In other words, if the Trident production line goes out of action in the United States, how do we ensure a continuous supply of spares for Trident in the future. I should like the noble Viscount in answering that question to bear in mind the unfortunate experience we had over Chevaline on the Polaris missile.

My Lords, I thank the noble Lord, Lord Chalfont, for his remarks on the general Statement. May I ask him to wait until the debate to go further into the detailed question he raised, but to be assured that one of the reasons for our moving from Polaris to Trident according to a certain timetable and the discussions currently going on, is to ensure that we do not run into expensive production hiatuses.

My Lords, this was a long Statement which my noble friend repeated on a very important subject. I felt that the House wanted to run on rather longer than usual in asking supplementary questions, but I have the feeling that it would be the wish of the House now that we should resume our main business.

My Lords, while wishing to agree entirely with what the noble Lord the Leader of the House has said, may I ask the noble Lord the Chief Whip to consult with his colleagues in another place? Is it really reasonable that in the middle of a busy afternoon the noble Viscount should be required to repeat a Statement which lasted over 20 minutes? The noble Lord the Chief Whip keeps us under constant pressure to get the Government's programme through. May we have an assurance that this kind of performance, when there is a debate coming on on the White Paper published this afternoon, will not be repeated during the rest of this Session?

My Lords, of course I will always listen to what the noble Baroness opposite says. I think it is true that your Lordships would have wanted to have this Statement which was made in another place repeated here. I shall be only too happy to discuss future occasions, should such occur, with the usual channels.

My Lords, I beg to move that this Bill be now read a second time. Before I embark on the customary review of the provisions of this Bill, may I say a word about the form in which it has been drafted. It will not have escaped the attention of noble Lords that certain of the clauses are very long and that they contain within themselves a number of separate sections. This presentation has been adopted to enable. its content, after enactment, to be embodied in the Education (Scotland) Act 1980, which was itself a long overdue consolidation of the statutes relating to education in Scotland. This will retain the advantage of having the law in an easily readable form. I hope it will not make life too difficult for noble Lords. Those who have been dealing with the Bill in another place assure me that one quickly gets used to it.

I turn now to the actual provisions. Clause 1 fulfils the Government's manifesto to commitment to place a clear duty on local authorities to take account of parents' wishes when allocating children to schools, and to set up a local appeals system for parents dissatisfied with an authority's decision. Authorities vary in their response to requests from parents who would like their children to be educated in a different school from the one normally serving their area of residence. Some are flexible and try to accede to parents' wishes wherever possible, but others are prepared to grant requests only in very exceptional circumstances. In those areas where authorities have a rigid policy, parents find it difficult to understand why their requests should be turned down, especially if there is plenty of room available in the school of their choice, and their disappointment is intensified when no reasons are given for refusal. For too long parents have been forced to conform to the pattern of educational provision imposed for the convenience of education authorities. It is time to remember that it is on the parent that the statutory responsibility rests for seeing that his child receives "efficient education … suitable to his age, ability and aptitude", (I quote the words of the Section) and it is time to act in accord with the spirit of this provision and give the parent a greater say in how his child is to be educated.

This is what Clause 1 does. It lays on education authorities a duty to comply with a parent's request for a place for his child in a particular school, except where one or more of a number of specified grounds for refusal apply. It also lays on authorities a duty to tell a parent of his right to ask for a place in a school other than the one the authority propose. If a parent chooses to exercise this right, the Bill limits the grounds on which the authority can refuse his request to those set out in new Section 28A(3). Obviously, an authority will be able to refuse a request if the school which the parent wants is already full. Similarly, the authority may refuse if a school has room, but is not staffed to take more pupils, and the authority cannot transfer a teacher from another school. But even if these, or one of the other grounds specified in the Bill, apply in any particular case, education authorities will still have discretion to grant a parent's request if they consider it appropriate to do so.

Inevitably there will be cases in which parental requests have to be refused. Popular schools may be oversubscribed, and, although the decline in the school population means that many schools will have surplus accommodation, authorities will not always be able to provide sufficient staff to meet all requests for places. Clause 1 and Schedule 1 therefore provide for the setting up of independent appeal committees to which dissatisfied parents can have recourse. The Government hope that the number of references made to appeal committees will be small. The fact that authorities will not be able to refuse a request if there is room and staff in the school of the parent's choice, will remove one of the reasons why parents sometimes feel aggrieved, as at present. There will none the less be cases where parents feel that their request has perhaps not been treated entirely adequately, and where they wish to take the matter to an appeal committee for independent review. There may also be some parents who remain dissatisfied even after that, and the Bill therefore provides for a further right of appeal to the sheriff. This is a substantial improvement upon the present position, under which a parent can only get the case for his choice of school before the sheriff by with-holding his child from school until attendance order proceedings are taken.

One of the Government's aims is to ensure that parents have a right to information about the school serving their area, or alternative schools which they may wish to consider for their children. Clause 1 therefore empowers the Secretary of State to make regulations about the information which education authorities must give parents. Here I call your Lordships' attention to the consultation paper which my right honourable friend has issued about the content of the proposed regulations. Copies of this are available in the Library. It lists the information which we propose that each parent should be given about the school in which the authority proposes to place his child, and which he can request about any other school that he may wish to consider for his child. The Government are at present considering the comments received on this consultative paper.

I turn to Clause 2. Naturally at a time when we are committed to reducing public expenditure, we are very conscious of any new expenditure implications. A major one would of course be the cost of transporting children to schools more distant from their homes or of paying their expenses if the school chosen was too distant for daily travel. It would not be right to lay a duty on education authorities to defray these extra costs, and Clause 2 therefore provides that authorities are not committed to additional expenditure in respect of board, lodgings and transport. The extent of any financial assistance to be given will be for authorities to determine.

The next part of the Bill, and one which has been generally welcomed, contains the provisions relating to special educational needs. These are Clauses 3 and 4 and Schedule 3, which give statutory expression to the recommendations of the Warnock Committee on the educational needs of handicapped children and young people. The committee's report described in detail how these educational needs, and particularly the needs of those with serious disabilities, might be identified and met. Its essential message however was a simple one—the handicapped are not a race apart. Generations of dedicated teachers have made the nurture of the individual the foundation of their educational philosophy and have striven to give it effect in their work. It is more than time that it should be recognised also in the statutory framework of education and that we should provide for a new and positive approach to the needs of children, with emphasis on these needs rather than on causative factors such as disability. This approach calls for us to end the statutory categorisation of children for educational purposes by their handicap. The Government welcome the opportunity to end categorisation and the distinction between remedial, special and "ordinary" education, and to introduce in their place the concept of special educational needs within the body of school education.

Clause 3 defines special educational needs in terms which establish the application of the concept to all children who require a measure of special intervention, short or long term, if they are to make all the progress they can at school. It thus covers many children besides the 2 per cent. or so now receiving special education—indeed, the Warnock Committee suggest that up to one in five children would evince some special educational need during their school life. It does not, however, set them apart or regard them as essentially different from their fellows.

Clause 4 then makes new provision for children whose special educational needs are marked and continuing, broadly those for whom special education was found necessary in the past but now extending also to those continuing at school after the school-leaving age. The clause begins by placing a duty on authorities to make known the importance of the early discovery of special educational needs and the opportunity for assessment. Thereafter it replaces the special education provisions of the 1980 Act by a series of provisions concerned, first, with the identification of children and young persons with marked and continuing needs and, secondly, with the participation of their parents and of the young people themselves in decisions about their education. Where a child or a young person is found on assessment to have, in the words of the Bill:

"pronounced, specific or complex special educational needs"

which are such as to require continuing review, the education authority have a duty to keep a special individual record profiling his impairments, listing his special educational needs and the measures proposed to meet them, and where appropriate nominating a school for him.

The provisions include the same right to the parents of recorded children to express wishes with regard to choice of schools as is given to other parents by Clause 1. In addition, particular opportunities for them to comment and to be consulted are built into the process of assessment leading up to recording or the periodic review of the record. If parents object to a decision to record a child or to the description of impairments and needs in the record they may go to an appeal committee, who will be required in turn to refer these issues to the Secretary of State but will deal themselves with any appeal against the refusal of a parent's choice of school. Clause 4 also confers on the Secretary of State the power to make regulations covering such things as assessment and recording arrangements, the content of the record and the conduct of schools making provision for recorded children. These regulations will not be controversial but they are certain to be complex and will require careful consultation with education authorities and other bodies representative of interests in these matters.

I come now to Clause 5—the assisted places scheme. This clause requires the Secretary of State to establish and operate a scheme to enable pupils who, in the words of the clause, might not otherwise be able to do so, to take up places in fee-paying schools. The scheme is essentially a fee remission scheme, the amount of remission being determined by a family income scale. There is provision also for the payment of some incidental expenses for school transport, meals and so on, at the lower end of the income scale. Fee remission will be available at schools chosen by the Secretary of State, but the choice of pupils to receive fee remission will lie in the hands of the schools themselves within the scope of the resources allocated to them.

This is a simple scheme, a praiseworthy scheme, and at the present stage a relatively small scheme. It has most regrettably been misrepresented and blown out of all proportion for purely political reasons. The truth is that the people who have been attacking it are opposed not so much to the scheme as such as to the very existence of independent schools. We do not, of course, expect to convert all noble Lords opposite to a belief in the value of independent schools. But I would like at this stage to deal with some of the misrepresentations.

First, the scheme certainly does not imply that this Government believe that independent schools are inherently better than schools in the public sector. We all know that there are good schools and not so good schools in both sectors. It does show that the Government believe that there should be as much choice as possible. Although independent schools are not necessarily better than public schools, they are certainly different both from the public sector and from each other. The independent sector contains a great variety of schools and can meet the demands of a great variety of families who are interested in a particular kind of education for their children and cannot necessarily find it in the public sector. That concern about their children's education and that desire to choose what they believe best for them is not limited by some mysterious law to people who are reasonably affluent. It goes right through society. But in present circumstances the power to choose is limited. The assisted places scheme is the beginning of a new kind of provision that will extend the power of choice to all levels of the income range.

Let me deal briefly with some others of the common misapprehensions. A second one is that the scheme will impoverish the public sector by creaming off its its best pupils. This is wholly without foundation. The scheme is not aimed exclusively at brilliant pupils. Each participating school will operate its own normal admission procedures. The whole ability range will be represented. I understand—and this is a very significant point—that the biggest group of the participating schools, that is to say, the Edinburgh Merchant Company schools, made it clear right from the start that they would not be prepared to participate in the scheme if it was directed exclusively to pupils of high ability. Thirdly, new public money is not being poured into the scheme. All the resources to be devoted to it—and they are no more than a drop in the ocean of education expenditure—will be derived from the phasing out of the block grant to the grant-aided secondary schools.

Finally, it is not true that the scheme has no friends in Scotland. We never imagined that it would be popular with Left-wing dominated bodies and from them we have had only the response we foresaw. But there is now very satisfactory evidence that the scheme is popular with the people for whom it is intended; that is to say, with parents who would like their children to go to a fee-paying school but who simply could not afford to pay the fees. The scheme is certainly something of an innovation in Scotland but it is, I believe, taking firm root.

I come now to Clauses 6 to 8 of the Bill which contain another main theme—greater freedom to education authorities to take their own decisions locally, after due consultation with parents. Under the present law education authorities have to obtain the Secretary of State's approval before they can close any school or make a change in the schemes governing their school provision. These controls date from a time when the school system was closely monitored by central Government—the control over school closures dates from the Education (Scotland) Act 1872—and they are no longer appropriate in present-day circumstances. Clause 8, therefore, abolishes the requirement on education authorities to prepare schemes and to submit them for approval, and Schedule 9 repeals the specific requirement on education authorities to obtain approval for any school closure. In addition, Clause 7 removes certain controls over denominational schools.

The repeal of these requirements is balanced by Clause 6, which empowers the Secretary of State to make regulations requiring authorities to carry out consultations before they close a school or make other changes of a kind prescribed in the regulations. Clause 6 also empowers the Secretary of State to prescribe changes which will still require his approval. Again, there is available in the Library a consultative paper setting out my right honourable friend's proposals for the content of these regulations, comments on which are awaited. Because we recognise the special position of rural schools, we have proposed in the consultation paper that the Secretary of State's consent would still be required where the closure of a school would result in pupils having to attend a school more than five miles away in the case of a primary school or 10 miles in the case of a secondary school.

Clause 6 contains two particular safeguards for denominational schools. First, under new Section 22C the Secretary of State's approval will continue to be required for the closure of a denominational school if the result of the closure would be that the pupils concerned would have to attend in future a non-denominational school.

Under new Section 22D the Secretary of State's approval will also be required if the authorised representative of a denominational body or, in the case of a Roman Catholic school, the Scottish Hierarchy of the Roman Catholic Church, satisfies the Secretary of State that an education authority's proposal would result in a significant deterioration in the position of denominational schools compared with other schools managed by the authority. The right to make representations can be exercised only where the education authority and the denominational body concerned have failed to reach agreement after discussion of the proposal. The Government's aim is to preserve the balance between denominational and non-denominational education, in accord with the spirit of the 1918 Act, and if authorities continue to observe the spirit of the 1918 arrangements, it should seldom, if ever, be necessary for a church to make representations of this kind.

Clause 9 is consequential on the establishment of the assisted places scheme. As I have explained, the resources for the scheme are being taken from the traditional block grant to the grant-aided secondary schools. When the phaseover is complete these schools will become independent schools and will have to be entered in the register of independent schools. Normally such registration cannot be made final until the school has been inspected. That requirement, however, is obviously meant to apply to a new school. The grant-aided schools are all subject to inspection already and in normal circumstances there is no reason why they should not be finally registered on the strength of the information already available about them. This clause, therefore, amends the procedure to allow registration without the formality of an extra inspection unless there is some good reason for such an inspection, in which case inspection can of course be required.

My Lords, I think that I have dealt with the majority of the more important clauses, although if noble Lords raise any points in debate I shall, of course, have the right of reply and try to answer any questions which may arise. I think that I should just deal with Clause 12, which relates to social work establishments and is a clarification of the law. Some education authorities provide nursery education in nurseries run by social work departments, and they have assumed that they have power to do so under Section 14 of the Education (Scotland) Act 1980, which deals with special arrangements for pupils to receive education elsewhere than at an educational establishment. I understand, however, that legal doubts have been expressed about the appropriateness of Section 14 for this purpose. This clause now removes that doubt.

Let me emphasise once again the Government's main objectives in this Bill. First, we are proposing to give parents clear rights in relation to the choice of the schools their child should attend. We do not believe that choice should be arbitrarily limited for the convenience of local bureaucracy or to mask the differences in the level of popularity of different schools.

Secondly, we are providing that parents will have the information they need about the school their child attends or which they want him to attend to enable them to make an informed judgment.

Thirdly, we are providing for an appeal system for parents whose choice of schools is not granted by the education authority. We accept that not all parents will be successful in their requests. But in order to ensure that justice will be seen to be done we are providing for avenues of appeal which will be clear and fair to all parties.

Fourthly, we are providing a new framework within which to cater for those children and young people who have special educational needs. The old rigid system of separate categories of handicap is to be abolished. Of course, the Government regret that at a time of public expenditure restraint it is not possible to provide for a great expansion of services for children with special educational needs but that should not be allowed to obscure the fact that the Bill greatly improves the statutory position and provides a foundation for progress when the expenditure position is more propitious.

Fifthly, the assisted places scheme will open up to parents a new area of choice—giving them the chance to send their child to a school outside the local authority system if that is the kind of education they prefer.

These, and the other valuable measures in this Bill, together fully justify the claim the Government made when it was first published, that it represents the most important initiative in Scottish education legislation since the passing of the Education (Scotland) Act 1945. I beg to move.

My Lords, we should like to thank the noble Earl for his very careful and clear description of the Bill in his introduction. I only regret that I have been unable to look at the documents to which he has referred as placed on the Library table. It is also with regret that my noble friend Lord Mackie of Benshie is unable to take part in this debate today due to a longstanding engagement. From these Benches we welcome the principle of parental choice contained in this Bill. Throughout the lengthy debates and Committee sittings in another place there appears to have been an underlying assumption, which was referred to by the noble Earl, that the choice for parents was automatically from a state school to an independent school because all independent schools somehow gave a better education than the State equivalent in their district.

This may not always be the case, as the noble Earl said, as there are some poorly run independent schools in Scotland, as indeed there are in England and Wales. The question I should like to ask for clarification from the noble Minister is this. Are all independent schools, and especially those which receive Government subsidies through the assisted-places scheme, required to provide exactly the same information to parents as that required for the state schools? This information should include the facilities for parental choice of courses within the schools, as well as representation for parents on a school council for each school, as it applies to state schools.

All these details should be made available by the local councils to parents—and I understand that this is contained and explained in the consultative document—who request it in order that the parents are properly informed before exercising the rights of parental choice as given in this Bill. I hope that the Minister can confirm this, because this requirement in the Bill, if it is not met, that independent schools need the same requirement for information as state schools, would seriously weaken what is fundamentally a good Bill, and it would also encourage what I believe to be the issuing of misleading prospectuses by independent schools of poor educational performance.

Coming on to the other part of the Bill for children requiring special educational needs, we welcome that the attitude of the Government has become the same as that of Mrs. Warnock and her committee. That is that the object is to try to take away the stigma that has affected children of the ESN category—educationally sub-normal—or with handicaps of other kinds. I think it was Mrs. Warnock who also said that money is not the answer entirely. Although the Government have said, as usual, that they have not got funds to assist greatly in this area, they are at least doing something to change the attitude.

I wonder whether the noble Minister can help in this debate by reassuring those parents who are worried about their children's progress that they have been properly and expertly assessed at their school work. A number of noble Lords and Members of another place received requests from the Society for the Deaf, which is often a difficult handicap to identify in a child. There is also dyslexia, which is equally difficult to recognise with children who cannot read at an early age. On the other hand there are also—and nothing has been said about this, and I assume that it is covered under the term "special educational needs"—those children who are known as gifted and have difficulty in fitting into a normal school system because of their exceptional intelligence.

Would the noble Earl be able to say whether there is any system of identification like a visiting psychologist, or educationalist, who is able to identify at an early stage any symptoms of the kind that I have described in order that they can get the extra teaching requirements? Above all, I want to make it clear that we are pleased with the spirit of Mrs. Warnock's recommendations, that the integration of ESN children into the normal school system will end discrimination against them later in adult life.

The noble Earl mentioned cost, and the inability of the Government to increase facilities due to cost. But I think we should remind the Government from these Benches that the cost to the State is far greater when these children reach adult status without having had remedial education and so they become then passengers of, rather than contributors to, society. I am sure the noble Earl is well aware that if remedial education achieves one thing, and one thing alone, it is to get these children back as adults into society so that they are not passengers of it. Once they become that, then the cost to the State, and indeed to society as a whole, is far greater than the cost that originally could be allocated to them at an early stage for remedial education in the schools. I wonder whether the financial experts in Her Majesty's Government have worked this calculation out. Perhaps they might look at this area again, or perhaps the noble Earl can give a reassurance that investment in remedial education is perhaps worth while from purely fiscal reasons, which is the reason he has given why money cannot be given at the early stages for children requiring special education.

The noble Earl also made reference to a consultative document on the position of the closure of rural schools. Unfortunately I have not read it, as I did not know when it was made available. This has been a great worry to those of us who live in the outlying areas. I am pleased that the noble Earl mentioned the five-mile rule, because in many of the outlying areas in Scotland the closure of the primary school in a district would certainly mean a distance far greater than five miles to travel in order to receive primary education. We shall reserve any judgment on this matter until I have had time to see the consultative document.

Finally, there is just one thing worth saying. I have read most of the debates and what was said in the Committee. A great many words were said—often heated words—in another place, and there is no point in repeating them. This is not my usual subject on which I speak but there is one thought that comes to me as a Scot; there is a feeling of hopelessness in some parts of Scotland where there is crushing unemployment. There is a feeling of hopelessness filtering through both from the teachers and the children on the point of being educated at all. The school-leavers leave school, and their friends, the school-leavers of the year before, are still on the streets of Glasgow and other parts of the depressed areas of Scotland without a job, and with an education that appears to be of no use to get one.

This is an attitude that must be killed now during this difficult time of recession. The questions that the children ask their teachers have to be answered in a way that is going to give them hope and re-assurance for the future. Otherwise there is a danger of young people feeling that there is no point in going to school in these areas because it gets them nowhere. This again leads to a much wider question, well outside the confines of this debate and this Bill, as to the kind of education children are receiving in the later stages, the sixth form stages of their schools, to prepare them for what is an impossibly tough life without a job.

My Lords, I, too, should like to thank the noble Earl for the care and clarity of his presentation of the provisions of this Bill. I rise, not for the first time, with some hesitation because the education of the young is not a field in which I would claim any high qualities or qualifications to pronounce any judgment. I can hear some of your Lordships saying to yourselves, "In that event, why do you presume to detain us here somewhat late on a Thursday afternoon?" I would answer that question by saying, "I do so because I am a Scotsman, and also because am a Social Democrat".

Your Lordships may then say, "What on earth has that got to do with it, apart from the circumstance that it is a Scottish Bill?" Well, my Lords, I have read much of what has been reported in the press about this measure and much that was said in the other place, and much, though not all, of the report of the proceedings in the Scottish Standing Committee. What I saw there was a microcosm of the widespread and profound concern that is abroad in Britain at the political state of the nation—the feeling that the adversarial style of politics conducted by the Conservative and Labour Parties for so long, whatever its value may have been in the past, is now played out and needs replacing. It is those concerns and feelings which have re:;ulted in the birth of the new party of which I am a member.

That may seem distant from what has been said so far in the debate, but since this measure was conceived and taken through its various steps in the Westminster square dance—that dance which, incidentally, so fascinates so many of the performers but so often baffles the spectators who are the ultimate judges—the Bill has been variously described. It has been described seriously and in a considered way, on the one hand, as:

"the greatest and most imaginative initiative in Scottish education for a generation",

and, on the other, as:

"a ragbag of a Bill born out of prejudice of, and the promises to, the Edinburgh bourgeoisie",

and:

"an irrelevant conception of a Government concerned with privilege and sheer snobbery",

and:

"setting the clock back if not for a thousand years, then at least until we have the return of another Labour Government".

That has all been said perfectly seriously in the controversy surrounding this measure, but the victims of this tragedy—or comedy, according to the way you view the way in which we handle these affairs—are of course our much-prized Scottish education system and the children who are educated within it. Of course it is not said in your Lordships' House, but from what has been said in the controversy so far, both sides appear rather detached from reality, and it is time that we had a breath of fresh air in these debates; and that is one of the things this new party is concerned to bring into the atmosphere. However, this is neither the time nor occasion on which to discuss our policy on education.

I see nothing wrong in principle in giving to parents a greater say in how and where their children are educated—in seeking to increase rather than diminish the concern of parents to influence the destiny of their children—which, as I understand it, is what Clauses 1 and 2 of the Bill are concerned with. I see nothing wrong in principle in the education provisions implementing, so I believe, Warnock, which is what Clauses 3 and 4 are concerned with. I see nothing objectionable in principle in the provisions of Clause 6 relating to school closures and affecting the changes and the way in which education authorities discharge their functions. And I see nothing wrong in principle in any of the other miscellaneous provisions. No doubt many of us have a large question mark against the provisions for assisted places in Clause 5, but we shall hear more about that in due course. Therefore, the Bill seems to do more good than harm, but of course many questions will arise in Committee.

At this stage I would mention only one matter to the noble Earl, although I appreciate it may be a Committee point. Like a number of other noble Lords, I received this morning a letter from the Convention of Scottish Local Authorities complaining about the deletion from the Bill of what they describe as:

"an essential safeguard to education authorities for the rational development of school provision".

The safeguard, in their view, was contained in the provisions which were deleted on Report in another place in subsection (3)(a) of new Clause 28A, to be inserted by Clause 1, and the related subsection (1)(c) of new Clause 28B to be similarly inserted. I understand that concern has also been expressed about this matter by the Education Institute of Scotland. The noble Earl will, I hope, have something to say to allay the grave concern expressed by both those bodies and at the failure of Government to consult with them before the step was taken and the amendment made at so late a stage in the passage of the Bill.

My Lords, I thank my noble friend for the very clear way in which he outlined the Bill and its purposes. I wish to address myself to two of the subjects, subjects with which I have been involved, the first being the new proposals for the education of handicapped children, and the second, the assisted places scheme and the position of grant-aided schools.

As it happens, I am chairman for Scotland of the International Year of Disabled People and therefore have been concerned with the first of those subjects. I am also chairman, and have been for the four years since it was founded, of the Scottish Council of Independent Schools; that covers boys' and girls' schools and both secondary and primary schools, as well as the grant-aided schools and those which are completely independent. One of the tasks which that council has had has been to crystallise the views of the independent sector of education in Scotland, to convey them to the Government and to keep in discussions with the Government. I declare those two chairmanships not as pecuniary interests; far from it, they are voluntary and honorary and indeed take up a great deal of time.

On the question of handicapped children, to which Clauses 3 and 4 apply, I am very glad that in the International Year the Government are putting into effect the main proposals of the Warnock Report; that report applied to Scotland as well as England and Wales. At present, there are, as noble Lords will be aware, special schools for handicapped children, and their education is separate from able-bodied children in ordinary schools. The local authorities are also, under present legislation, required to concentrate on the disabilities of handicapped children and to place them in categories.

The two principal recommendations of the Warnock Committee, as I see them, were, first, to change the distinction between special and ordinary education and, secondly, to place emphasis on the abilities and potential of handicapped children, and thus to determine the special educational needs in individual cases. I fully support both of those principles. The results should be that in future more handicapped children should be educated in ordinary schools. This will be good for them and it will be good also for the able-bodied children in those schools. It will mean that from an early stage in life they will become familiar with disabilities and they will form an informed and enlightened attitude to handicapped people in the community.

No one should think that the need for special schools or for special education will disappear. I must emphasise this because there have been misunderstandings about it. Here I should like to give your Lordships two examples. The first is of the almost completely paralysed child aged 10, who can move only one hand and who has difficulty in articulating words. The second example is that of the child who is blind and partially deaf and completely unco-ordinated in his movements. Those are two examples where children can, and often do, have basic intelligence potentials which are much above the average. But in cases of this kind—and they do exist—it is very unlikely that they can ever be catered for in ordinary schools.

There will be some observers—and I have already heard this view being stated—who favour complete integration, who say that if the Warnock principle is to be adopted, all handicapped children must be in ordinary schools. I cannot support that view, nor indeed did the Warnock Committee. If your Lordships read its report, you will see that it pointed out that the kind of case to which I have referred cannot be covered in an ordinary school. Therefore special schools and special education—and that means in hospital or in the home; and certainly in the cases that I have given the education would probably have to be in hospital or in the home—will still be needed. However, substantial numbers of children can, and should, be accommodated in ordinary schools in accordance with this principle, and I ask those who will call for complete integration to make more inquiries into the kinds of case of very severely handicapped children that exist and of which they are probably not even aware.

The second principle that the Warnock Committee puts forward is that of the determination of the special needs of a child, and here the committee recommended a system of recording. This means that there would be a case history and the progress of a child would be recorded and monitored. The methods of assessment proposed in the Bill will no doubt be examined in some detail at later stages of the Bill, but the Warnock Committee suggested that this would apply to about 2 per cent. of the children in the country. My comment on this is that those who have been recorded but who none the less are thought able to enter ordinary schools—and here much will depend on the character and determination of each individual child, as well as the physical handicap involved—must not be left to sink or swim.

I think that the particular merit of the system of recording is that those children who enter ordinary schools, as well as those who will be in special schools, or who have to have special education, should none the less have some surveillance—someone keeping an eye on them—so that their progress can be closely monitored.

In the Warnock Committee's report and again I am glad to see in the Bill, too, it is suggested that parents of handicapped children should be kept informed and should be closely consulted. I think that again there might be some questions asked as to whether this is going far enough, because it appears that there will be some reports that might not be conveyed to the parents. My noble friend pointed out that the Bill is drafted in a particular way; namely, huge new clauses are to be substituted in the principal Act, and Clauses 3 and 4 (about which I am now speaking) are almost totally in this form. The clauses are concerned mainly with the new system of defining needs for each child, as well as quite an elaborate system of appeals to enable parents to pursue their rights if they so wish. But as a result of the drafting it is not very clear from the Bill itself how the precise obligations are being placed on the local authorities to carry out the principle of more children entering the ordinary schools, and the number of special schools being reduced.

The White Paper which my right honourable the Secretary of State for Scotland issued in August of last year, at the same time as the White Paper for England and Wales was issued, made the Government's intentions clear. They are not clear in the method of drafting this Bill. I accept what my noble friend said: that this might well be a good method for those of us in this House. We might well become familiar with this form of drafting, in the way in which he said honourable Members in another place did. This form of drafting might also be convenient for those working in local authorities and other experts who have to deal with these matters. But it is very difficult for the layman and for many people concerned with handicapped children, including parents, to be able to follow the Bill in its present form, and so I hope that at some stage my noble friend will make quite clear where these obligations are spelt out in the Bill.

Accompanied with that, many would like to know what are the target dates that the Government have in mind. Clearly, progress will be faster in some areas than it will be in others, but anything that can be said as to when it is expected that local authorities will be moving substantially in this direction would be helpful. In that connection I would add that this seems a propitious time for this kind of change to take place. The pupil population is becoming less because of the fall in the birthrate some years ago, and therefore there is scope for this kind of change. Places are becoming available much more easily in ordinary schools.

I turn to the other subject, that of the assisted places scheme, referred to in Clause 5. In Scotland there has been a tradition of support from public funds to grant aided schools. That is the nearest equivalent to the direct grant schools in England and Wales. There have been high academic standards attained in these schools. Many of their pupils have brought success and prosperity not only to Scotland, but to the United Kingdom. They have become leaders or have become eminent in their occupations or fields of activity. Six years ago the Labour Government took the first steps to abolish that system, and I accept that that was a decision which they took as a party. They carried out the decision with phased reductions of the grant. So by May 1979 the grant had almost disappeared when the change of Government took place. In the meantime the schools had faced difficult decisions about their future. I recognise that it is virtually impossible for the Government to try to reinstate the system as it was. The Labour Government took a deliberate decision to abolish it.

However, if a system of grant is to continue—and there are many who would greatly regret its abandonment altogether—this kind of scheme in this Bill is the best for present-day conditions. It has a wider scope. It is open to all independent schools, not simply the grant-aided schools, as in the past. The former grant-aided schools are of course able to make use of it, too, subject to the qualifying conditions which will be in the scheme. Under this system the grant will be attached to the pupil, and not paid direct to particular schools. I know, and accept, that it is Labour Party policy to oppose this system, but at the moment there is also coming forward a Labour Party document proposing the abolition of private education altogether, apparently within 10 years. So I do not today expect those on the Opposition Front Bench to be convinced about this point. I would only remind them of what a Labour Party leader said some years ago, which was to the effect that if a citizen has paid fully his rates and taxes, and thereby his share of state education, it is difficult to justify stopping him spending what is left of his own money on education, and thereby adding to the educational resources of the country. Is he expected, instead, to buy another motor-car, to go on another holiday abroad or put a television set in each of the rooms of his house? I think that is something which needs to be thought out for longer.

Here is a scheme, the assisted places scheme, which will continue to provide opportunities for those who can benefit from them. It is a different form of a principle which has served Scotland and this country well in the past.

My Lords, I, too, should like to thank the noble Earl for introducing this Bill. As with all education Bills, we cannot think that it is not a controversial Bill. It is controversial, and no doubt we shall hear from the noble Lord, Lord Ross, all that he feels in this matter. I have had, as I expect most people have, a great deal of information sent to me by COSLA, by the Educational Institute of Scotland, by the Advisory Council on Child Care and by the mentally handicapped children's organisations. I have studied all these with great care; and I know, of course, that we all have different views about how best education shall be handled in Scotland or, indeed, in any other part of the United Kingdom.

I can speak only from the experience that I had for some 8 or 10 years as chairman of an education committee in a rural area. That, I know, is quite different from the experience that people have in the great industrial centres where the conditions are utterly different. On the other hand, one has had the chance of doing things connected with education, and I think that that, anyway, gives one some experience as to how a new Bill of this kind is likely to work. I would support entirely what the noble Lord, Lord Campbell of Croy, has said about the clauses which allow the parents to choose the school to which they want their child to go. It is not easy; and it is not easy for the education authority, either.

On the other hand, there are opportunities which can be fulfilled, and I do not anticipate for a moment that it will mean a tremendous number of children trying to switch from one school to another in a highly-populated area. But the fact that they can and will be able to get information about schools, that the parents will be able to know what schools are especially good at, and so on, will all be of great help; and I think that to allow parents to choose the school that they want their children to go to is something I would support.

I should then like to support those proposals which provide for the special needs of children who are handicapped in any way. The noble Lord, Lord Campbell of Croy, who has enormous experience of this, has outlined, I think very succinctly, what is the right thing to do and what would be the best way of carrying it out. I should like to say that in my experience the children that were not handicapped to a very severe degree were able to join in classes for the non-handicapped provided that one was able to give a certain amount of assistance through the teachers or through the other children who went to those classes.

I can well remember an occasion when, in one of the areas for which I was responsible, we were building a new school and I insisted that instead of having a separate school for the handicapped, or the not so very handicapped, in this new school we should have classes for them which would be side by side with the classes for the ordinary children, so that you would be able to pass a handicapped child into an ordinary class very easily because they would not have to go anywhere else; in the old days there was a quite separate school for the handicapped. This has worked extremely well; and I think that the idea of bringing the handicapped and the non-handicapped as close together as possible is, as Lord Campbell has said, very good, not only for the handicapped but also for those who are not handicapped but who should understand and grow up with their less fortunate bretheren.

Here I should like to put in a plea for a particular handicap which, in Scotland, has been recognised, though not quite as much as I should like it to be—and that is the autistic child. We have, I think, one special school for autistic children, and one or two areas where there are classes in which autistic children are being helped. I should like to suggest to the Minister that when they are considering the needs of the handicapped people they do not forget the autistic child. There are very many fewer autistic children, hence the reason why it is not easy, possibly, to provide accommodation. But it can be done, and in various places it has been done.

I also agree with the proposal for the assisted places scheme. This could be a great help, either to those who have special talents—in the arts, for instance—or to those who would benefit from a stay in a school which has particular academic qualities. There is no reason why these assets and these qualities should not be applied to all children, no matter what their status; that is to say, I cannot see any reason why those who cannot afford to go on their own, perhaps, should not be helped to do so. I can remember that in the case of our education committee we never refused to subsidise children who could go to a university after their schooling or could go to a special technical college, et cetera, and I cannot see why the same thing should not apply to children who would benefit from going to the often very long-established and very important, fee-paying, independent schools.

I should like to say one word about the rural schools, because I know how difficult it is, with rural populations getting smaller, to keep rural schools in being. On the other hand, having lived, as I have all my life, in a rural area, I know how important rural schools can be to the whole community. It is not possible to keep all rural schools open—that is obvious. I can remember one school for which I was responsible being reduced to five children. Quite obviously, it was most unwise to keep five children in a rural school, when, if you took them four or five miles to another rural school and joined them up in another community, they found themselves in a school with 30 or 40 children. So, obviously, it is important; and one has to take a judgment on any particular case. But I think it is worth while spending possibly a little more money on keeping certain rural schools going in a rural area rather than transporting them all into the towns. I am sure that the Government, who are really wise about these things, will realise that this is one of the things that we should like to see preserved to a sensible extent—not 100 per cent., because that is not possible, but to a sensible extent in rural areas.

The proposal to simplify the way in which teachers' salaries are to be managed, outlined in Clause 14, will, I hope, be successful, and I hope the National Union of Teachers will co-operate. This is a very difficult subject and a very controversial one. But I think that anything that can simplify it, provided the teachers' organisations agree and go along with it, will be a help.

I hope the clauses which deal with further education will enable young people to be trained for the kind of jobs which need to be filled in the modern world. The schemes put forward by the Manpower Services Commission are, I think, very helpful, and I hope the Minister will encourage these schemes as much as possible, particularly, of course, because of the present position with regard to unemployment. I think these schemes have been successful in many areas and there is no reason why they should not be successful in Scotland. I hope that under this Bill when enacted, if further education is developed, it will be developed along lines which will help train boys and girls for the kind of jobs that are wanted today. That is important. It is easy to say because it is common sense, but it is more difficult to put into effect. I hope that under this proposed new Act the continuation and enlargement of further education will be on a highly practical basis.

I support this Bill. I am sure that there will be moments when we shall have to discuss amendments and controversial matters, but I think the Government are right to bring in this Bill with its various clauses to which many noble Lords have spoken. I hope that it will be a great success.

My Lords, may I have permission to intervene? I was unable to get my name on the list of speakers. I welcome this Bill very much. It is somewhat overdue. I am particularly glad about the parental choice of schools. I think that this is a big step forward. It may not be used frequently but it is a very good safety valve and this will avoid friction and the indignation of parents and pupils. I wish to draw attention to one point, the appeals committee. The appeals committee is to consist of three, five or seven members nominated by the authority. They can be drawn from members of the authority or others outside who are not members of the authority. The drafting of the schedule, as I read it, means that the majority of such an appeals committee will be swayed always in favour of the members of the education authority concerned. In making their decisions they will be tempted, I fear, occasionally to take the side of their own committee's previous decisions in the matter. It is not a very big point but I think it is an important one. When the Bill comes to Committee I hope to have the opportunity to put forward an amendment.

My Lords, there is no doubt that, whether one likes everything in this Bill or not, it is an important Bill. In many cases it deals with things that, as has been suggested by the noble Baroness, Lady Elliot, are long overdue. I noted the comments of the representative of the "Democratic Socialist Party". Is that what one calls them? They have got to be careful not to get into a "holier than thou" attitude. They stand apart, but to take every one to task and then to say that they have not got a policy at the moment is to put themselves into a rather dangerous position. When one appreciates exactly what this contains, I would not call it a ragbag of a Bill; I would call it an "Education (Miscellaneous Provisions) (Scotland) Bill".

I hope that those who are in charge of the proceedings of this House and the allocation of time will take note that the day before yesterday we had an English Education Bill before the House and that the equivalent of that English Education Bill is incorporated in this Bill. The first four clauses take 28 pages; and the clause to which, for the most part, most people have referred and some concentrated on—the clause about the changes in respect of those with special educational needs—takes about 14 pages. No wonder the noble Lord, Lord Campbell of Croy, said that it was complex. Consider the whole drafting. There are two clauses about parental choice in respect of transfer of schools and then there are provisions which take 28 pages—virtually two Bills. Then one wanders through the rest of it. I think it was the Minister of State who suggested that it was a rather curious way of legislating to get great chunks of what would be virtually a new Bill, a separate Bill in a form that is readily available to push into a new consolidation measure. He said that we would quickly get used to it. We shall not get the time to get used to it quickly. The Committee stage in another place took several months. I should be surprised if we get more than two days. No doubt the Government will say that the Session is coming to an end and that we must rise by such and such a date. I hope that they will remember that the Queen will be in Scotland the week after next. That would rule that out from the concern of noble Lords probably on all sides of the House. There is going to be a considerable concentration in the legislative programme for Scotland. And it does not end there. The noble Baroness, Lady Elliot, is the only person who has so far mentioned a very important clause, the clause in relation to the teachers' salary negotiations and how they must be conducted in future.

I think that the only part of the Bill that has had universal acclamation is the transfers of the appointments of university principals from Her Majesty to the university courts themselves. It is a very important Bill but it is not a very cohesive Bill. There are people who have said, and I think rightly, that from an educational point of view and the needs of Scotland at the present time it is not terribly relevant. Even in the parts about which we may agree no date is stated. There are other weaknesses in respect of it.

Yesterday, we had the announcement that there were over 300,000 unemployed in Scotland. The noble Lord, Lord Campbell of Croy, like me, must be appalled at the situation and at what we would have felt in our day when we were Secretaries of State. How we would have been pilloried if things had got to that state! The saddest feature about that—and there is more to come in Scotland; the figure is now over 300,000—is that a considerable number of these thousands are youngsters who have just left school. There is still more to come next month because at the end of this week, the greater number of schools in Scotland will be closing down and the children will make up their minds whether to stay on at school or whether they can get a job.

We shall be in a difficult position. Yet although people have complained and suggested that it is time we got down to the education of the 16 to 18 year-olds—and this was mentioned by the noble Baroness, Lady Elliot—there is nothing in this Bill about it; not a thing. There is nothing here for them. I think that probably from the United Kingdom point of view and from the whole stability of society, the sooner we get down to the hoped for advances in education which were provided for in the 1944 Act, and which were certainly in the 1945 Education (Scotland) Act, the better things will be. There is nothing more despairing than children leaving school at 16, looking forward to a job for which they hoped they had the correct qualifications, and finding that there is nothing for them. Indeed, they find they are joining unemployed children who left school a year before and have spent all that time doing nothing.

I spent part of the weekend at the Craigie College of Education, where I met one mature student who, three or four years ago, made up her mind to become qualified as a primary school teacher. At very considerable sacrifice within her own family she did just that and succeeded in getting on with a number of her subjects. Now what does she face? She faces unemployment. Perhaps some noble Lords saw the Glasgow Herald last week in which Mr. James Scotland, the principal of Aberdeen College of Education, stated that of the 277 teachers who had graduated only 144 had jobs to go to. That is even worse than it was last year.

This position has led to the present cynical attitude towards education, when people ask, is it worthwhile? I think it is fair to say that one of the things we have fallen down on in Scotland in respect of people's behaviour and the way in which they misuse the time they now have is the need for changes in the curricula. We increased the school-leaving age to 16 without looking properly at the content of education. The noble Lord, Lord Tanlaw, made reference to this in his speech. Now there are going to be changes arising out of the reports by Munn and Dunning, which will affect curricula and examinations.

The educational priorities in Scotland have been neglected and this itself has led to the question being asked, is education relevant? A party that has no policy on education has no right to belabour everyone else for creating confrontation and being sterile. There is nothing sterile about controversy; out of controversy one eventually achieves a measure of progress.

I should like to deal next with that part of the Bill which has been rightly applauded and arises from the Warnock Report. We have groped and stumbled towards a correct approach to those who have special educational needs. There were hopes that things in the 1944 Act were going the right way, but then we stumbled and fell by the wayside. This may well have been due to a lack of resources and the priority of rebuilding after the war. But then we found—and this is what we are now trying to escape from—that it was far easier to segregate than to educate. Unfortunately, it was not always the kind of education that was required. Some children were being classed as ineducable. They were pushed aside. Anybody who has been in the position of examining this matter, who has spoken to parents, and who has seen what some parents have done with children who have been classed by others as being hopeless cases will know that even the slightest improvement becomes almost a revelation in respect of people's attitudes to family life. The parents themselves have pushed us into this position and I believe the Warnock Committee will have done a very considerable service if something is now achieved.

I have been, as I am sure other noble Lords have been, most interested in comparing the wording of English clauses with the Scottish clauses. In England the word "statement" is used; in Scotland we are a little more blunt and refer to "recorded children". We talk about "children with a record" and I hope that will be looked at again when this Bill comes to Committee, because anyone who appreciates the sensitive nature of this subject will agree with me that we should consider carefully the way in which we describe children.

I remember the school to which the noble Baroness, Lady Elliot, referred. What has happened at that school is very encouraging. It is amazing how helpful young children can be in the presence of a handicapped child. I can recall a case in one particular school where there was a young handicapped boy and where the rest of the members of his class became his protectors. We must introduce young children to the fact that handicaps are part of life and that they are natural. Handicapped children require special treatment within the school, but we must not push them aside right away without proper assessment.

I agree with the whole procedure in relation to assessment, but once again I am interested in the differences between Scotland and England. I believe I am right in thinking that in England parents have 29 days' warning of an assessment, but in Scotland they have only 14 days, and if the parents do not turn up they are liable to be fined £50. That may well reflect a desire to get things done.

We have been talking about pre-school assessments of children under the age of two, but these cannot be done in nursery schools. That means that we have to get all those concerned with children looking for difficulties at an early stage so that early assessments can be arranged. It is, of course, a very touchy subject with parents. It is amazing how many parents convince themselves that everything is all right, whereas an earlier diagnosis and assessment would have been much more helpful.

The right of appeal is there and I am glad that the appeal will be to the Secretary of State and not to the sheriff. I hope that I shall be able to convince people that, so far as education is concerned, the last thing one wants to do is to bring in the sheriff; and, in any case, coming before the sheriff is likely to lead to publicity which can be embarrassing all round. That applies not only in this case but also at a later stage when it comes to the choice of school even for those children who have special educational needs.

Our new interpretation of special educational needs and all that follows from it would be meaningless unless there is the required development of teacher training in colleges of education and in in-service training. It is wrong for people to suggest that we should throw our hats in the air. That could be misleading. It is also wrong to suggest that all this does not cost a penny. The Government are saying that all this has to be done within existing resources. Remember that the Warnock Report said:

"The integration in ordinary schools of children currently ascertained as handicapped, if achieved without loss of educational quality, is not a cheap alternative to provision in separate special schools".

There is no short cut. In the Financial Memorandum is says that there is not an extra penny to be spent. We cannot even begin with a framework and the preparation in respect of this new deal in respect of the handicapped without incurring very considerable expense.

Teacher training and in-service teaching. Where did I begin? I began with unemployed teachers. Many of these young teachers presently unemployed could be trained to do a first-class job. But it is going to cost money. There is no use getting up and saying "We applaud all this" and at the same time recollect the actions of this House and another House when we dealt with the rate support grant that cut local education authorities. We are cutting that this year by £20 million. Local education authorities are cutting out special classes; they are cutting out remedial classes—the very thing demanded and required to make sense of this.

I hope that I am not being too aggressive for the noble Lord who sits behind me. I do not think that he will disagree with me on anything that I have said. It is not sterile controversy, it is real. We have to face the facts of reality in respect of this. The reform of the law itself is not enough; we must go forward so far as we can with what can be done.

Now I want to come to parental choice in schools. I do not think that anyone would disagree with the parental choice in schools. It was written into the Scottish Acts and has been there that the parent had a right to select the kind of education for the child. There was a limitation in relation to expense and what it would cost for that special provision that a child needed according to the parent. It would have been only fair to Scottish education if the Minister had proved his case. He said that there were some education authorities that were not prepared to go along the way with it. Who were they? Was it the Borders? Was it the effect of the régime of the noble Baroness, Lady Elliot? She knows quite well that there was flexibility in approach to parental choice. Was it Lothian? The right of appeal is there at the present time.

In the Lothians there were 391 appeals. Of these, 265 were granted. In the central region education authority there were 300 appeals and 226 were granted. What about Strathclyde? Strathclyde is half of Scotland. There are more teachers in Strathclyde than there are pupils in the Borders. This is the nonsense of this local government. In Strathclyde there were 3,707 appeals. The numbers agreed were 3,373. Where is the difficulty?

It is true at the present time when rolls are falling that there is a better chance of getting flexibility in respect of this kind of thing. But there are limits. At the same time as the Government are putting in this and proclaiming a charter for freedom—and Tories, as the apostles of freedom, are to me the stuff that nightmares are made of—it is the local authority that has to cope with this. At the present time there is a working party with the Scottish Education Department and the local education authorities getting together and looking at the question of falling rolls. Where we have annexes, where we have schools scattered all over the place, maybe a mile apart, they are looking now at the practicability of getting rid of all that and, as far as possible, getting all the children in one school in the one area. It means fixing a maximum roll, an optimum roll.

When this Bill first saw the light it was in the Bill. Now it has been taken away. This is the thing that we got from COSLA without any consultation. I think this was done in the Report stage. It is going to make it more and more difficult for the local authority to deal with the question of getting rid of unused capacity. If a parent comes along and says "Yes, but there is an annexe there and you can use it". The Government themselves have admitted that there is a limit to parental choice. I think there were about eight or nine subsections limiting the things which could deal with that. They took two of them out which dealt with the school roll. When COSLA wrote to them, they replied to say that it was unnecessary because it was covered by something else.

It is far better from a local authority point of view to be specific because they are concerned about the state of the law; they are concerned about whether it is vague or clear and so will the parents be if they are going to exercise that point of law to the point of going eventually to the sheriff. There again, I think it is wrong. The appeal, Yes (though there have been complaints about the nature of the appeals committee); and we have had something from the Scottish Consumer Council about the unfairness of this. This is because of the over-balancing domination of the local authority in respect of it, although it is a local authority that has the responsibility of carrying out the other aspects of all the pressures that we are putting on to them by the Government at the present time.

Another great "freedom" is that they close the schools without reference to the Secretary of State. I can remember noble Lords from the Borders area being very worried about what was happening with the closure of schools there. They were very glad that there was an appeal to the Secretary of State. There is going to be no appeal to the Secretary of State unless it is in a very limited field. One of the fields is going to get the Secretary of State into trouble. It was raised in another place by Mr. Frank McElhone when it was suggested that if there was alarm and disagreement about this in respect of a denominational school—and, let us be blunt, a Roman Catholic school in Scotland—then there would be the right of appeal to the Secretary of State. If it is a Protestant school, there is no right of appeal to the Secretary of State.

There is trouble there. It may be construed as unfairness. Certainly we have responsibilities in respect of denominational education in the 1918 Act, an Act which I uphold and which has saved us from a lot of troubles in Scotland. If there is discrimination in this particular field quite gratuitiously the Secretary of State and the Education Department should think again. Instead of departing halfway they should keep where they are. Therefore, so far as parental choice is concerned, there is no great departure from the present position. In Scotland most people already have parental choice.

Now I come to the assisted places scheme. Will the Minister of State tell me whether we require legislation for this at all? Am I right—as has been suggested to me—that certain of the regulations have already been gone through and gone through under existing legislation? To my mind this part—and this is a very small part of the Bill—is politics, not education.

As far as Scottish education is concerned, this is a return to a form of the old divisive education that grew in Scotland in the Victorian era. Many schools that are independent or were grant-aided started life as charity schools, that is, for the poor burgesses of Edinburgh or Glasgow—they were "Hutchies", "Hutchisons". It is fascinating to go back, and equally fascinating to see the changes that have taken place in some of those trusts and how they developed away from the original purpose of many of the schools. We rid ourselves of the Victorian hangover when we had fee-paying local authority schools. When I was Secretary of State in a Labour Government, we wiped that out; we never heard any more about it. If they felt so proud of it, why did not the present Government bring it back? It really is a nonsense to have fee-paying local authority schools.

Then there was the question of the grant-aided schools. Those grants in aid were grants to the whole school. Certainly, I agree with the Government to this extent, that in that case they were subsidising people who did not require subsidising. Now they have moved to the more English form of the subsidy nominally being given in the form of remission of fees and other charges to the parents of those children who get there. Freedom of choice?—there is no freedom of choice here. As far as I know, there are only 44 schools involved. Is there one in Ayrshire? They are mainly in the Glasgow area and, above all, in the Edinburgh area. The bulk of them are in these two cities. There is not one in the Highlands as far as I know; I think there is one around Fort Augustus; there is nobody from Orkney and Shetland and there is nobody from the Highlands who is going to get a choice here. I think the suggestion was that there should be one in 25. If this were part of Scotland's tradition of education you would have these schools all over Scotland, and you have not got them. This is an English import.

The whole tradition of Scottish education is a democratic form. I do not want to mention names in case I am wrong, but someone mentioned these schools and the fine men they produced. There is nothing wrong with the school I went to and the men it produced. I remember a fellow called Sir Andrew Duncan, the Member of Parliament for the City of London—or was it the City of Westminster? One of the first great heads of the steel industry came from the same school. Doctors, lawyers, administrators—they came from all the local authority schools in Scotland and we prided ourselves on it. And the suggestion here, that we should subsidise these schools in another way, is something that is not good for the health of Scottish education—and to pretend there is freedom of choice!

There are nearly 400,000 children in the secondary schools in Scotland—400,000. How many are going to get places? Freedom of choice? I think there will be 1,200 places available: that is all. Indeed, some of the schools themselves would rather have the grant aid than the form of subsidy that they are going to get—and that is what it is.

The only eligibility mentioned in the Bill is one of age, residence or "other matters". We have been given no clear indication. The Secretary of State selects the schools. I think there are 44 or 45. I hope we shall get as much information in this House as was given in the other place. But who selects the pupils? It is the schools who select the pupils. It is not the parents: they have no inborn right, once they have made their choice—oh, yes, Glenallan is the place, or Fettes, or Strathallen or St. Aloysius's, or somewhere else. The choice is going to be made by the school. And how is it going to be made? We were told by the Minister that there are going to be all bands of people considered. I have been reading the debate in another place and at various times somebody slipped up and talked about "the more able pupils".

There is one line I object to in the Bill—"that children will benefit". They probably are not able at the present time to afford to go to the school, but that does not mean that if they go they will benefit. This implies a superiority in a kind of school in which there is no superiority in Scotland. I quote from col. 1015 of the Official Report of the other place for 12th February, 1981:

"There is no restriction according to the ability of the child. The decision on whether the child will benefit will depend upon whether the family is on a low income … The children who benefit may be of any ability—good, bad or indifferent. The common factor is that their families will all have low incomes".

That was the Secretary of State.

I shall be interested to find out, once we get this thing going, how many children are involved from Drumchapel in Glasgow, from Lochside in Ayr or from the big housing schemes in Kilmarnock and elsewhere. Why make a pretence, when we know that for the greater part this will be selective, purely and simply according to ability? There will be an element of creaming off.

This, I suggest, is really politics rather than education. It was a pledge that was given: the Government are keeping their promise. But remember, that promise was not supported by the people of Scotland. The people of Scotland's idea of education is the traditional Scottish education, and at the present time, when all local authorities and the other 398,000 in the Scottish schools are being subjected to cut, cut, cut, affecting courses, school books, nursery classes and remedial classes, is this the time to go for a proposal like this, with £5 million more being spent on it than was spent on it three years ago? Three years ago, when I had started the phasing out in respect of these grant aids to direct grant schools, it was about £1 million. Last year it was £3.3 million—three times what it was. There is not a phase of education in Scotland that has had that kind of treatment and it is suggested, even at the present time, that the increase has gone up to something between £4 million and £5 million.

It may be only a little, but many local authorities are faced with educational problems in respect of schools and structure and in respect of teachers and remedial teachers, and at the present time, thanks to the Government's activities, are looking through their educational programmes to see where they have to make further cuts. I am not against independent schools. I think that anybody who suggests that you can wipe them out does not know what he is talking about. There are many independent schools which perform a function that is not performed by any other academic establishment at all. Indeed, if you take away from parents this right there is nothing to prevent them sending their children to schools on the Continent or elsewhere. But if there are independent schools they should be independent. In other words, they should not be subsidised by the taxpayers; and anyone suggesting that somehow or other they are already paying full rates and taxes, had better look into the status of some of these establishments, which are registered as charities so that they can get a reduction in taxation, even in respect of covenanted fees. But this is not the right thing for Scotland, and this is why I hope there will be some very heated and illuminating discussions when we come to the Committee stage of this Bill.

There are tremendous weaknesses in this scheme of assisted places. I shall give your Lordships a quote from the Scottish Secondary Teachers' Association, which is no revolutionary body. They said:

"It appears to be based on the faulty premise that a better education is provided in secondary grant-aided or independent schools than is provided in state secondary schools. If this is not the premise, why offer a choice only to parents of able pupils'?".

That is a phrase which has been used in document after document. They go on:

"Ate the parents of 'less able' pupils not also entitled to a choice and, indeed, not more deserving of a choice?".

But the choice is to be made by the school, not the parents. They end by saying that they come to,

"… the conclusion that the main objective of the scheme is not to provide parental choice but to restore financial assistance from public funds to the grant-aided schools and to extend such assistance to independent schools".

And this at a time when the publics schools, properly called in the Scottish way—that is, the local authority schools—are being deprived and deprived, when teachers are being sacked and when young people who have prepared themselves to go into the teaching profession are being denied the opportunity because of the cuts. We look for expanding opportunities, and even for the expanding developments that we require in respect of those who need special educational treatment. They will be denied, because of the activities of the Government in the financial field. I would say that this is a charter for the few and not always the most deserving.

My Lords, I should like to thank noble Lords who have taken part in this debate. Their reactions, in some cases, have been predictable; in others, perhaps, less so. For instance, I was very interested to learn how the noble and learned Lord, Lord Wilson of Langside, would view the assisted places scheme and, indeed, the Bill generally; whether he like one wing of his party, regards some independent schools with anathema, or, like the other, as establishments which do a certain good and which should be encouraged. But I shall come more especially to what the noble and learned Lord said in a few moments.

A great many of the points which were raised are points which we shall come back to in Committee, and if I do not answer them now it is for that reason and that reason alone. I think that the noble Lord, Lord Tanlaw, welcomed most of the Bill. He asked me a number of questions. First, so far as the assisted places scheme is concerned, he asked whether schools which participate in the scheme will be required to publish the same type and quality of information as, for instance, schools in the public sector. The answer to that is, yes, they will.

Then he went on to talk about children with special educational needs, and those in need of remedial education. As regards the identification and assessment of such children, there are standing arrangements already for development screening by health authorities. These, combined with normal surveillance by education authorities, will ensure that there is a consistent and, indeed, high standard of assessment. Remedial education, as such, is now comprehended within the scope of education generally.

Then the noble Lord stressed, as did my noble friend Lady Elliot of Harwood, the importance of the preparation of young people in their last years at school for the particularly unpleasant economic conditions in which we are now living and, of course, the extremely grave incidence of unemployment. I can say to the noble Lord and to my noble friend that a good deal of attention is being given to preparing young people for today's conditions, so that they can make the best of such opportunities as may be open to them.

The noble Lord will know of the Consultative Committee on the Curriculum in Scotland. That body has put a good deal of time and thought into a five-year major project, which is called An Education for the Industrial Society. That is aimed, among other things, at preparing young people for working life and at making the curriculum more relevant to the needs of industry. Other schemes include work experience for pupils and, also, secondment to industry for teachers. So I can say that this problem is not being lost sight of.

The noble and learned Lord, Lord Wilson of Langside, and also the noble Lord, Lord Ross, touched—if "touched" is the right word—on the deletion, on Report in another place, of the maximum roll as a ground for refusal. There has been a considerable misunderstanding about these provisions. It was always the Government's intention that authorities should be required to explain their reasons for fixing the maximum roll for a school at a particular figure, and that these calculations should be open to challenge before both the appeal committee and the sheriff, if it appeared that a school had not made out its case for the limit which it imposed. Those reasons would have to be based on the school's physical capacity and staffing. Otherwise, it would be all too easy for a school to get around the provisions of this part of the Bill, merely by quoting a number as being the maximum for its roll.

Because, as I have said, these provisions were mis understood, and because it was seen that they would enable authorities to restrict the intake of popular schools, the reaction of the Convention of Scottish Local Authorities and some of the teachers' associations convinced the Government that it was right to remove them. Of course, there have been complaints that the Bill as it now stands could, or might, lead to an exodus from unpopular schools to popular ones. But I ask the question: Why should parents be forced to send their children to unpopular schools for the sake of the administrative convenience of local authorities? It is for the schools to find ways of improving their performance and the standard of the education which they provide, and to become more popular, rather than try to dragoon pupils into attending them, regardless of whether or not parents want them to do so. Those are the reasons which lead on Report to the deletion of that part of the Bill.

My noble friend Lord Campbell of Croy welcomed, as I anticipated that he would, those parts of the Bill which deal with handicapped children in particular and their integration into the educational system. Because of the choice of school provisions in Clauses 1 and 2 which limit the grounds on which entry to a school can be refused, if a parent wants his child to go to an ordinary school the authority cannot refuse merely on the ground that the child is handicapped, although they could refuse if the cost of providing special facilities in relation to the child would be excessive. So that is a very real advance.

My noble friend went on to ask about the timing of the Warnock provisions, as I call them. The Government hope to bring them into operation, subject to necessary consultations, by the summer or autumn of 1982. The improvement of standards in ordinary schools to make them easier for handicapped children to attend is something which education authorities are attending to all the time and, naturally, as and when they have the necessary resources to devote to such causes. It is a gradual process.

In his contribution my noble friend Lord Balerno asked about the composition of the appeal committee and complained, if that is not too strong a word, that the members of the local authority in question would be in a majority on appeal committees. The composition of these appeal committees is a matter to which the Government have given considerable thought. There are two reasons why it was felt that it should be possible for local authority members to be in a majority of one on these committees. The first reason is that an appeal committee is empowered to overturn the refusal of an education authority to grant a placing request. The second is that such a decision could well commit the authority to additional expense. In those circumstances, it was thought that local authority interest, so to speak, on appeal committees should be well protected. However, I would remind my noble friend that if the appeal committee does not act in a way which the parent considers to be fair and right so far as he and his special circumstances are concerned, then there lies a further appeal to the sheriff. So there is that additional safeguard in respect of parents.

I come now to the noble Lord, Lord Ross of Marnock. If I say that a great many of the points which he made are Committee points, I do not do so in any way offensively. I have no doubt that we shall return to them, perhaps at some length, at later stages of the Bill. The noble Lord said that parental choice may be all right, and I think he would not accuse me of unfairness if I said that he gave some sort of grudging approval to that part of the Bill.

I said that it was unnecessary.

My Lords, my choice of phrase is "grudging approval". If the noble Lord does not think that his words amounted to that, I shall not complain. "Why is the legislation needed?" the noble Lord asked. Unfortunately, the situation in Scotland is perhaps not quite so rosy as the picture which the noble Lord paints. The proportion of appeals granted, for instance, in Lothian has been going down as the school rolls decline—not, as one might imagine, up. The fact is that 24 per cent. of the requests received for the 1978–79 session were refused; 32 per cent. of those for the 1980–81 session were refused—almost one-third; and my right honourable friend the Secretary of State has received a large number of representations from individuals objecting to Lothian's policy. It is also fair to speculate, at least, as to how many parents do not bother to apply because they do not expect to succeed.

In the circumstances, I suggest to the House that quite apart from any other consideration it was a good move, and entirely logical, to tidy up the process, renew it in the form of a new statute, generally to make it more logical and also to make more obvious to parents what their rights are.

Then the noble Lord turned his attention to the assisted places scheme which, perhaps not entirely unnaturally, he failed to welcome. Again he asked whether it is necessary to legislate. The noble Lord is perfectly right to the extent that interim regulations have been made to enable the scheme to get off the ground in 1981–82. These interim regulations have been made under the existing powers in the 1980 Act. However, the Government felt that there were advantages in taking fresh, specific powers. Not the least of these was a desire to embody the scheme in primary legislation, as we think a scheme of this importance should be. I am sure that the noble Lord, as a good democrat, would agree that by embodying it in primary legislation it gives Parliament, and both Houses within it, the fullest opportunity to discuss it and to make any amendments, where necessary. By reproducing and making a new scheme in this particular Bill we give full scope to making regulations which will be more up-to-date and in general more satisfactory.

The noble Lord in effect claimed that what the Government were doing was to milk the public sector in order to top up the finances of the private sector which enjoy a charitable status, which he did not think was altogether fair, and that, as such, this was a provision which was unfair, ill-advised and not in the interests of the majority of the children of Scotland. I would just remind him that the cost of the assisted places scheme, which is coming out of money which is being phased out in any event (not an extra penny of public money is being used) is in the region of £800,000 out of £900 million, the amount of money that is devoted to Scottish education at the moment.

It is not my purpose tonight to make any justification for the independent schools and the way in which they work, but what this scheme does—it is the way in which I commend it to the House—is to give a little wider choice to people who would otherwise, because of their economic circumstances, never have it. It is not a panacea for the ills of the Scottish educational system. It is never going to be and it was never claimed that it would be. But it is, as I have said, one more illustration of the Government's determination to give freedom of choice to individuals in every respect that they can. It is in this particular instance that I commend this part and, indeed, the whole of the Bill to the House.

My Lords, I beg to move that the Shipbuilding (Redundancy Payments Scheme) (Great Britain) Order 1981, which was laid before the House in draft on 1st June, be approved. For the convenience of your Lordships, I should like to point out that my remarks on the technical aspects of this order apply equally to the order which my noble friend Lord Elton will move later. The Shipbuilding Redundancy Payments Schemes in Great Britain and Northern Ireland are identical in substance.

Your Lordships will not need reminding of the uncertainties facing the shipbuilding industry. The Shipbuilding Redundancy Payments Scheme since its introduction in 1978 has been a useful and effective instrument in easing hardship in the industry, and against the present problems facing the industry it is clearly right that it should continue for the further two years set out in this order. Your Lordships will recall that I said on 24th February that we proposed to prolong the scheme for a further two years. The two year extension of the scheme is effected by Article 2(1) of the draft order. If approved by Parliament this order will have the effect of extending scheme benefits to those made redundant or transferred on or before 30th June 1983 and could give rise to continuing payments to such individuals up to the end of June 1985.

The need to prepare an order to extend the scheme provided the opportunity to consolidate the four existing statutory instruments. I hope that this will be helpful to your Lordships and also to those in British Shipbuilders affected by and involved in administering the scheme. The changes made on consolidation are mainly routine in character involving an up-dating of references to legislation and some consequential drafting changes. There are, however, three substantive changes proposed in this draft order each of which I should explain in turn to your Lordships.

There is first a change foreshadowed last February in the course of the debate in another place on the last order amending the scheme. It was then explained that the Government had agreed, subject to Parliament's approval, that the scheme should be amended to provide that benefits under the new corporation-wide British Shipbuilders pension scheme, to be introduced in April, should not result in the abatement of scheme lump sum and periodic benefits. Under the transitional provisions of the draft order this change is made retrospectively from 6th April 1981, the date when the new pension scheme was introduced. The Joint Committee on Statutory Instruments in their Twenty-Fourth Report have drawn the special attention of both Houses to this element of retrospection. I appreciate that all Members of the House dislike anything even appearing to be retrospective, but in this particular case we are giving effect to a proposal announced in February in another place which confers benefits and does not adversely affect anyone. This will become clear as I explain the reason for the amendment.

The purpose of the original provision on abatement was to prevent beneficiaries receiving redundancy benefits, in each case funded in the end by the taxpayer, both from the statutory Shipbuilding Redundancy Payments Scheme and from non-contributory company schemes. In order to accomplish this it was necessary to provide for the abatement of scheme benefits for pension as well as redundancy payments because there was no clear distinction between the two in the wide variety of company schemes inherited by British Shipbuilders.

The new British Shipbuilders pension scheme is quite clearly a contributory pension scheme subsuming existing company pension schemes. It is possible therefore, as Article 11 of the draft order provides, to exempt from the abatement provision payments under that scheme alone. Were the scheme to be changed to provide enhanced benefits on redundancy such payments would not be exempt from abatement in this way. I have accordingly no hesitation in commending this provision to your Lordships as providing a useful measure of help to those over 50 who are likely to find most difficulty in getting alternative employment through having the option of drawing on their British Shipbuilders pension right away without penalty.

The second change made by this draft order relates to the calculation of the current earnings of the self-employed. Current earnings need to be assessed in order to ensure that a person's total receipts from the scheme and from earnings together do not exceed 90 per cent. of his previous earnings with British Shipbuilders. The present scheme requires the calculation to be done weekly on the basis of a rolling average over four weeks for all beneficiaries. This is straightforward for those who are in employment and who have a relatively steady income from employment. But it was judged impracticable in the case of the self-employed. It would have meant British Shipbuilders getting weekly statements of earnings from the self-employed together with supporting evidence. This would have been burdensome both to the self-employed individual and to British Shipbuilders. They therefore developed the more manageable practice of making assessments of current earnings for this class of beneficiary on a 6-monthly basis. The practice does not accord with the scheme as it is and some action had to be taken to put the matter right.

The solution adopted by the draft order, which I commend to your Lordships, is to alter the formal provision to accord with actual practice. Accordingly the draft paragraphs (2) and (5) of Article 5 provide for a "single payment" to be made related to a "relevant period" normally of 26 weeks. Additionally we propose to give British Shipbuilders the option, in paragraphs (3) and (4) of Article 5, to make payments on account to the self-employed subject to agreement by the individual to reimburse any excess payments. Experience with the scheme shows that at least in the early months of self-employment earnings normally prove to be modest so any risk of over-payment is slight; where the assessment of current earnings at the end of the first or any subsequent period shows that payments have been made in excess of entitlement British Shipbuilders would reclaim the excess and would be cautious about making further payments on account. The course followed should provide valuable help to the self-employed individual at a time when he has all the costs of starting up his own business.

Before I leave the self-employed I should mention that I recognise that because the practice of British Shipbuilders has not accorded with the strict provisions of the scheme some individuals with a high but spasmodic income could in theory have been disadvantaged in the past by comparison with their strict entitlement. British Shipbuilders propose therefore to invite any who feel that they fall into this category to make a case for re-assessment on the basis of a weekly rolling average, that is the system for which the scheme strictly provides.

The third change made by the order is of a procedural character. Paragraph (2)(e) of Article 1 of the 1978 Order provided that references to an enactment were references to that enactment when the order was made. This had the effect that the previous earnings limit on which benefits are based was that specified in the redundancy payments legislation at the time of the order. It meant therefore a fresh order to raise the limit whenever the limit in that legislation was raised. The fact that the two limits were not automatically tied to each other may also have brought about some uncertainty in the minds of potential recipients on whether amending orders would be introduced. The policy is indeed that they should keep in step, and this order therefore omits the provision in the 1978 order which had the effect of requiring fresh orders each time the limit is raised. I hope your Lordships will welcome change proposed. I recommend the draft order to your Lordships. I beg to move.

My Lords, may I thank the noble Viscount for explaining this order and for the detail of his explanation. I note, as he said, that both this order and the subsequent order have been considered by the Joint Committee in their 24th Report and that they have found that the element of retrospection in the order is such that the interests of the redundant shipyard workers are fully protected by these orders. So far as we are concerned, we welcome the laying of the orders and hope that the House approves them.

My Lords, from these Benches I would simply like to say that we, too, welcome the clear exposition from the noble Viscount of this order, which certainly at first sight in terms of its formulae appears rather complicated, but in the same way as the noble Lord, Lord Ponsonby of Shulbrede, has been happy to accept it, so do we from these Benches.

My Lords, I am most grateful to the noble Lord, Lord Ponsonby of Shulbrede, and the noble Lord, Lord Rochester, for their kind remarks in helping through this draft order.

My Lords, I beg to move that the Shipbuilding (Redundancy Payments Scheme) (Northern Ireland) Order 1981, laid before the House on 2nd June, be approved.

As my noble friend Lord Long has explained, the amendments made to the Northern Ireland scheme by this order are exactly the same in substance as those which he has described in introducing the previous order. I do not think your Lordships would wish me to detain you, therefore, in rehearsing what he has already made so abundantly plain. I commend the order to the House.

My Lords, may I thank the noble Lord, Lord Elton, for his remarks and just say that my noble friend Lord Blease was hoping to be able to speak from this Bench in response to the order which the noble Lord has moved, but he has had to return to Northern Ireland. I know that he would also welcome very much the laying of this order and would be pleased that the House should approve it.

moved Amendment No. 1:

Page 4, line 40, leave out ("regional") and insert ("scenic").

My Lords, on the face of it this is simply a drafting amendment and I should like to deal with it as such in the first instance. I am bound to say that, looking carefully at the Bill, I cannot see any advantage in changing the name. I have listened to the noble Lord's speech and I cannot really say that there are any powerful arguments as to why the name should be changed at all. There are, in fact, rather substantial disadvantages. First, these areas are not selected for scenic purposes as such. One may say, of course, that it is an advantage that any part of Scotland's countryside has a scenic value and I would not differ from that. But, taking the special meaning of the word "scenic" I must say that they are not selected for that; they are selected because of their locations and because they are convenient for the urban populations of, particularly, the central belt of Scotland. In actual fact they will probably not exist very much in the Highlands or in the Borders because it is not really necessary for them to do so. They will be managed by the regions; that is the purpose of the Bill. If the noble Lord really has an ulterior motive to change the management of the parks, then he is dealing with quite a different subject—one which we have already discussed at considerable length and at that time the noble Lord did want to change it. If he does want to do that, he is changing the Bill substantially and I cannot accept it.

Dealing with the amendment as a purely drafting amendment I must advise the House that I see no advantage in this course and I think the description of "regional park" shows quite clearly where the responsibility lies—it lies with the region. It may conceivably run into two regions and it is their responsibility. It would be a great mistake to change it at this stage.

My Lords, I am disappointed but not surprised for the simple reason that the noble Earl is concerned about time. He told us the other day that the Bill must be elsewhere and through by—I do not know whether he has an American bias—4th July. I can understand that. But he must be aware that there are already parks that are called "regional parks" which once this Bill is through will not be regional parks. There are the regional parks within Strathclyde; the Muirshield Regional Park and the Strathclyde Regional Park. I think that it would have been far, far better to have had a different name. He must know the genesis of this.

I am interested to find out that they will be somewhere in the Central Region—I am perfectly sure that they will not be. It may well be that we will change the name of the park in the Hamilton Mountains area to something else. This runs counter to some of the descriptions we have already had from the noble Earl about the new concept of regional parks.

Noble Lords should remember the definition of "the countryside". It is on the maps. I think that there are 40 areas, and great stretches of the countryside, including areas where there will be these new parks, have already been designated in respect of their scenic value. If the noble Earl had not been limited by time, if he had not been tied by the sponsorship of the Bill and his desire to get rid of it, he would have seen that there is far more value in this than he suggests. We have somehow got to designate not for lawyers or anyone else but for the general public that there is something different about these parks from the countryside parks. Quite frankly, I think there will be considerable confusion about it and that is why I have made this suggestion.

However, if the Government are not prepared to give us any indication as to the final outcome of their considerations about responsibility for the parks, then there is not much hope left. I am not at the moment—and there is nothing in this that suggests that I am—objecting to the regions controlling these parks. I raised that point during the Committee stage. Much of what the noble Earl has replied to me was to the effect, "If this is my intention". It could not be my intention because all that I am changing is the word "regional" in respect of "park" for "scenic" and leaving the fact that regional councils will or may embark on this new type of park. That is all. I am sorry. I think that this is wrong and that it is muddling. I do not think that it is right. However, in view of the lateness of the hour—and I hope that people will appreciate that it is not the Scots who have kept them late; we have spent more time on various statements and other matters before ever we reached, belatedly, the Scottish business—and the fact that I am getting rather hungry anyway, I beg leave to withdraw amendment.

moved Amendment No. 4:

Page 5, line 42, leave out ("without modification").

My Lords, I think that this was an amendment which the noble Lord did not move in Committee; I say that because I was not too clear as to why the noble Lord intended to move it now until he rose to his feet. I think that the noble Lord's concern is perhaps a little misplaced. The provenance, if that is the word, for this procedure, is entirely respectable and, in fact, it is taken from Section 58(5) of the Town and Country Planning (Scotland) Act 1972, which deals with tree preservation orders and which has the same caveat.

The purpose of this part of the section is to make clear that when specific provision is made in statute, in certain circumstances a local authority can both make and later confirm an order which affects the interests of private individuals, but they cannot change the content or effect of the order during the process of confirmation, and I stress that. We consider that this safeguard is of particular importance in this clause dealing with the designation of regional parks. The concept is novel. I am quite sure that some landowners will, rightly or wrongly, be apprehensive about the effect which such a designation will have on their land. In fact, a designation does not directly affect private land in that by itself it lays no burdens upon it. But such matters as the extension of public access can be pursued under existing statutory provisions.

Nevertheless, the willing co-operation of landowners is essential for the success of these new regional parks, and I believe—and I am sure that I am right in this—that the adoption of a safeguard like this is likely to remove any concern that landownwers may have about the possibility of a regional council attempting to alter agreed proposals, as it were, after the process has otherwise been completed, save for confirmation.

Therefore, the provisions will mean that if the council wants to make any modification to what is, in effect, an unopposed order, it would have to seek the confirmation of the Secretary of State. I agree with the noble Lord that on occasions that will mean that a fairly minor modification will bring the Secretary of State into the matter. I do not believe that it will happen very often, but it is necessary so that the rights and interests of those who can be affected by the designation are seen to be protected. So it is a provision which is sensible and should remain in the Bill. Therefore, I hope that the noble Lord will agree that, in fact, nothing is being taken away from either the function or, indeed, the proper designation of a regional park by the local authority; it is a small safeguard which will probably be more valuable than it looks when one merely reads through the Bill.

My Lords, I am sure that that is clear to everybody. This is a new amendment; it is not one that I have tabled before, but I may be wrong. It was intended to be helpful. I realise that it might well have to be qualified by some other words to deal with the point that the noble Earl has mentioned, because the information would have to be conveyed to all the other people concerned. As I understand it, if there is the slightest modification, it could be sent to the Secretary of State, he being asked to make the modification; he would pass it or those concerned would then drop the order and proceed with yet another one which included this matter, and then go on. I had hoped, as I am always anxious to help, to save the Scottish Office trouble, but I sometimes think that it likes trouble. That being so, I beg leave to withdraw the amendment.

moved Amendment No. 6:

Page 6, line 12, leave out ("or the Commission").

My Lords, the noble Lord of course is perfectly right. In the ordinary course of events management agreements will be carried through by local authorities. That is perfectly clear. On the other hand, there is a slight addition here—and the noble Lord is quite right—in that it gives the commission a slight executive task for special circumstances, which I shall mention in a minute. These powers have been agreed by the Convention of Local Authorities. They are quite happy about them. They are very much the same as already exist for the Forestry Commission, and which have existed for a long time for the Nature Conservancy.

In England, as the noble Lord may well be aware, it is also done in the national parks. We do not have national parks in Scotland, and it is thought that this is desirable in certain circumstances. They have to go through a quite full process. That is to say, they must consult the local authorities to see whether they agree, or at least whether they know about it. They must make a voluntary agreement with those interested in land. The object must be to preserve and enhance beauty, and the Commission of course will pay for it.

The circumstances which seem to me to arise as possibilities are those in which the local authority do not want to do it. There may be quite a big scheme, something worth while, and maybe of a national character, I do not know, and the local authority does not put it at such a high priority as perhaps the commission would. The local authority may say, quite reasonably, that they have not got the money, because in most cases of a management agreement some contribution would be made by the local authority. They may say that they do not want to do it. All right, the commission can take on doing something that the local authority feel at that moment they do not want to do.

Another occasion when it might be more convenient is, for instance, when a certain scheme straddles two authorities. It might be much more convenient in those circumstances for the commission to make the arrangements than for the local authorities to do it together. Those are examples. This is merely an additional method, or procedure, to enable enhancement of the beauty and preservation of the beauty of certain countryside. The noble Lord himself gave an example, and of course there are many examples like dry stane dykes in certain areas. These in most cases will be done by the local authorities, but this is another outlet which could enable the attractive character of the countryside to be slightly advanced.

Those are the purposes that we have in mind, and which I think are right, and it is important too to get the fullest co-operation that we can in this work. That is very much in mind. I hope that the noble Lord, who very rightly says that this is a probing amendment, will see no objection to the procedure here. I recommend to the House that this is not a necessary omission. It would be better to leave the commission in to do this work which, in many ways, is a matter in which they specialise.

My Lords, I am grateful to the noble Earl. I am sorry I did not go ahead with it on Committee but, as he knows, some people object to Scotland taking up any length of time at all in this place, so from that point of view, I withdrew the amendment. The noble Earl now tells me that it could possibly be that in special circumstances only would the Countryside Commission come in, if it was a large scheme. If it is a large scheme it might cost a large sum of money. In that case I should have thought that maybe the Secretary of State would have been interested. There is nobody to hold back anybody here. Although at the present time, if the noble Earl has been reading the report of the Countryside Commission, he will see that they have been saying "No" to an awful lot of people who want things done, because they have not got the money. It does not necessarily follow that because the local authorities have not got the money that the Countryside Commission will have the money.

One of the other things that attracted me to asking questions about this particular clause was that where the commission is going to do something they have to consult the relevant planning authorities. But the relevant planning authorities, if they are going to do something, do not need to consult the commission. When the noble Earl listed the things that could have been done that the local authority did not want to do, he implied that it was because at the time it may be that they did not have the money. It may well be that they objected very strongly to it being done at all. It would have been far better if we had, as we did with the other Bill in relation to parental choice and the powers of local authorities, listed so far as we could the exceptional circumstances through which it would come within the ambit of the new powers of the Countryside Commission.

I do not want anyone to get me wrong. I set up the Countryside Commission. I reappointed the present chairman of it. She does a first-class job because she is full of enthusiasm. But it may well be that you have to watch all this. I am not the opponent of this Quango. The whole Quango idea is opposed by the party opposite, but here is the one Quango they have taken to their heart. Indeed, they are increasing its powers, and not only in Clause 1 but here again in Clause 9.

It is not my intention to pursue this matter, but it is only right that we should know something of what the Bill is about. It is only by having discussion on the Floor of the House here that we will get that information. I do not think we have had a clear indication. There was no Second Reading in the other place; there were two sessions of Committee, and then it came through fairly quickly after a discussion on Report stage. This is the purpose. On the information that has been given I do not seek to pursue this particular amendment, and I beg leave to withdraw it.

moved Amendment No. 7:

Page 9, line 5, leave out ("quiet areas of").

My Lords, the noble Lord, Lord Ross, clearly wants there to be quiet parts of the countryside, but his amendment would open it far too wide, giving local authorities power suddenly to declare that any particular area must be a quiet one, and that would extend to factories, quarries and virtually anywhere, when that is not the intention of the Bill. The intention is that those areas which are quiet should be preserved as such. It is not intended that local authorities should impose quietness on areas which are naturally noisy. The amendment would go further than that. It would give a local authority power, say, to close down an aerodrome. I appreciate that a by-law to that effect would have to go to the Secretary of State—all Secretaries of State are eminently sensible people, which the noble Lord, Lord Ross, knows extremely well; he is a great authority on that subject—and he would not agree to such a move.

We are here seeking simply to preserve an area which is already quiet. We are not intending to give a local authority power to say, "There will be silence" in any given area of the countryside. Frankly, much of the countryside is quite closely inhabited, and certainly I would not want to include agricultural noises. To do so would be ludicrous. If a local authority had power to say that all agricultural machinery must be stopped at once, the measure would have no meaning whatever. I hope the noble Lord will not press the amendment. What we already propose is sensible and, as I said earlier on a similar point, it has the advantage of enabling, albeit in a negative sense, those who want to make a noise to know the areas where they can be noisy (for motor cycle racing and all sorts of such exercises, which may take place) and they will have to go out of the quiet areas which may be defined by local authorities. I might add that local authorities could define areas which should be quiet, say, five days a week and allow noises on certain other days, and that would form part of their regulations.

As I say, the amendment would open the provision far too wide and would not provide much advantage. If an area where quarrying was taking place suddenly had quiet imposed on it, that could have a very serious effect on employment. That would be wholly undesirable, and I am certain the noble Lord would not want to achieve that by his amendment. I believe he is in agreement that there should be parts of the countryside which are quiet, where people can rely on quiet, and I suggest that what the Bill proposes at present is the way to achieve that. Indeed, it may help those who want to make a noise to know that there are certain areas where they must not make a noise. For that reason, the present drafting is reasonable for a new concept which I believe will enable the public more fully to enjoy those parts of the countryside where they want to be quiet, and the amendment would not add anything of value to the Bill.

Frankly, my Lords, I do not think the clause itself adds anything of value to the Bill because it is so vague and contains no definition of "quiet areas". Why was that phrase not defined? Indeed, "countryside" itself has not been defined, except by reference to maps. Indeed, anyone who wants to pick a hole in the clause legally will have no difficulty, and the noble Earl is a lawyer. "Quiet areas of the countryside" will be very difficult to define in such a way that we get at the troublesome engine noises of vehicles and aircraft which are disturbing the public. The noble Earl said the amendment would open the provision too wide and disturb, for example, quarrying activities. Bearing in mind that such developments would already have planning permission, I suggest that if he examines the matter a little further he will find that that would not arise. I believe difficulty will arise over the question of defining "quiet areas of the countryside", and we must bear in mind that it will not always be the district council which will have to deal with the subject. For example, in the Highlands the regional council will have the planning powers, and the same applies to Dumfries, Galloway and the Borders. The regional councils may not always be the right people, and therefore had it been the district with which we were concerned, then what is proposed might have been worth while.

The noble Lord has been emphasising the importance of the district, my Lords; this is purely a district council power.

My Lords, it may be a district council power, but they do not have planning powers in these areas. Next Session we shall be looking at the whole question of the by-laws of districts and the hangover from the old days of Borough Police Acts and by-laws in towns that are presently being continued by special processes. Perhaps that would have been the time to have dealt with this sort of matter, and in my view the way the Bill deals with it is not the correct way. I do not think it will work, and that is my simple view of it.

I do not know whether the districts want this sort of provision and if they were asked if they wanted it. Frankly, I think it arose because someone was annoyed over water skiers and what are called snowcats. That sort of thing is beyond my ken; maybe I have spent too much time examining legislation as a result of the activities of Scottish Office legislators. I hope we shall have a rest next Session, when we shall have time to find out where these quiet areas of Scotland are and who are the hooligans who are subjecting us to all these strange engine noises that are likely to cause havoc in the eountryside of Scotland. I do not think they exist, but that this is a bit of nonsense.

I see approaching the noble Lord, Lord Denham—the great white chief himself—who constantly gets worried about Scottish legislation. I regret he was not in his place earlier, when we discussed the Education (Scotland) Bill, when I pointed out that within that Bill was another full Bill. He may care to remember that when he is allocating time for our future debates. I see that the noble Lord is about to intervene. I do not want him to delay the House by making a speech; I know how long he is usually, so I beg leave to withdraw the amendment.

rose to ask Her Majesty's Government what action can be taken to ensure that the Edinburgh outer city by-pass, of which roughly half has been constructed, is completed in time to the Commonwealth Games in 1986.

My Lords, I must start what I have to say by congratulating my noble friend upon his great persistence. He has shown it in many ways in dealing with the traffic problems of the Lothian region. I especially remember his presistence in getting the second runway for Edinburgh. But before going further I must myself declare an interest in the subject, as I think I live nearer to this problem than any other Member of your Lordships' House.

This outer ring road has been a very long time in coming—coming on the instalments system. A start was made over 40 years ago, and it helped the raffle getting to the then Turnhouse. It was a broad road, and it was named Maybury—ominously, after a Minister of Transport. Then came the Forth Road Bridge, which, as my noble friend Lord Ferrier has said, pourted the traffic into Princes Street, and especially the heavy lorries. It is difficult for an Edinburgh person to believe that lots of traffic just does not want to go into Edinburgh; nor, may I say, does Edinburgh want to have that traffic coming into it. The heavy traffic, especially that released over the Forth Bridge, wants to get to Rotterdam and Amsterdam, and to Felixtowe, as quickly as possible. The flood into Edinburgh of heavy traffic plus the private car has resulted in Edinburgh becoming absolutely lousy with traffic wardens. It is rumoured that these traffic wardens have a very high casualty rate. Those who do not get run down end up in the mental hospital, which is wonderfully conveniently placed.

Another instalment of this road has just been opened, and it has got over the greatest obstacle, which is the Water of Leith. It has had to cut into one side of that valley to a considerable extent, and a very fine bridge has been put up. The result is that you get on to that new by-pass there, you whizz along and before you know it you are passing through some of the finest highland scenery to be encountered anywhere. But suddenly you come to an abrupt end, and you are then faced with a dilemma. Fork right, and you are faced with the alternative of three roads. Little wonder that that has now become one of Edinburgh's worst accident spots! Little wonder that you vow never to return that way again!

On the other hand, should you go left you have a most puzzling roundabout, with a myriad of traffic lights which are most difficult to comprehend—that is to say, if you can get into the system. There are usually long queues of vehicles already building up to get into it—poor souls! So you vow that you are never going to get caught in that again. So the poor little pig never gets to market at all, and misses the Commonwealth Games. Of course, it can still go back and come through Edinburgh—and that, of course, creates more work for the ambulances and the police cars.

My Lords, I should like to thank the noble Lord, Lord Ferrier, for what he has said on this. This is an important subject. I do not know whether your Lordships remember, but the late Lord Brabazon said, "There is a road which they humourously call the Great North Road". Those were the days when one could perfectly correctly say that. Now the A.1(M) goes up half-way through Northumberland, and then it steadily degenerates until it buries itself in that charming but entangling place called Musselburgh. That has been the position for years and years, and, really, it is time we extracted ourselves a little from that.

I can claim that as far back as 45 years ago I tried to impress the Edinburgh Town Council, of which I was at that time a member, that this was important, but absolutely nothing happened. I was supported, I understand, by the Buchanan Report, which was about 10 years later and which obviously took the same position. My Lords, it is ridiculous. Here is the Forth Bridge, built at immense expense, and w here does it go? All it can do, practically, is to bury itself into Edinburgh. You have to drive practically the whole way to Glasgow before you get on to a moderately decent road. Even then, if I may say so, on that road, the A.74, if you go up the M.6 to Gretna Green, suddenly the road stops and you come into the land of native, simple, human beings, with a very much inferior road. It really is time that we began to put that situation right.

I should like to add the importance of this. There was a time before the war when I was rather deeply concerned with the industrial side of Scotland. What was the central problem of industry in Scotland? It was access to markets—market power. Where is the big selling area in this country? It is, of course, London; and it is essential to get easy access for these goods, in many cases carried from Scotland by lorry, to these markets. It is because that access is difficult that Scotland has always done a great deal of overseas trade.

I know that the Government will say that we are in money trouble. Everyone is in money trouble all over the world. It makes no difference where you are. This is capital development of first-class importance. I hope the Government will keep in mind that this is connected with industrial development which is well worth doing. I hope that they will not pass it aside as something not to be considered. It is time that the disgraceful state of the roads around Edinburgh should be brought to an end. I ask the noble Lord who is to reply to carry the message to his honourable friends and right honourable friends that this is something which must be clone.

My Lords, after the very detailed information given by the noble Lord, Lord Ferrier, and his two noble friends, it is questionable whether I should intervene at all but it is felt that this matter comes under transport responsibilities plus the fact that for the best part of the last 25 years I have spent all my holidays in the north-west Highlands and on a number of visits there I have travelled through Edinburgh by car; so that I know something of the problems. In many other visits to the city by train and by air, I was taken around by car and I know the problems when I wanted to get to Preston Pans and Tranent to keep engagements. People want to visit the city; but if you are going to the north-west Highlands there is no time to spend in admiring the sights of the city. You want to get through and haulage traffic wants to get through.

The noble Lord, Lord Ferrier, referred to the A1 and to the radial roads. They will want to get links with the motorways on the West side to Glasgow, Perth and Stirling where at the moment the only way is to go through the city. It is not for me to say whether this is the priority. But I presume that the views expressed by the noble Lord, Lord Bellwin, in the transport debate in this House on 21st January would be similar to the views held by the Minister at the Scottish Office. I presume that they talk the same language. When he was referring to the roads programme he said that the first priority were the schemes to help economic recovery. He went on to say that the second priority were roads to take the traffic from towns and villages which were never designed with cars and lorries in mind, and particularly the historic towns. I said something similar; so that we are in agreement that these are the priorities, the priorities which the Minister has said are priorities, despite the fact of the present cuts in the road programme.

The noble Lord, Lord Ferrier, referred to the saving in fuel. I saw today a statement made in January by the Federation of Civil Engineering Contractors. They estimate that the 12-mile Glasgow urban motorway saves no less than 3 million gallons of fuel a year. That, at present prices, is over £5 million a year saved on fuel. When you add to that the cost of delay and the congestion of cities (which Lord Ferrier explained) the increase in accidents, pollution and other environmental problems; plus the fact that if other traffic is taken out public transport moves freely, there are vast advantages.

I think that the noble Lord, Lord Ferrier, made a very sound case. The question to be asked is this. Is this a priority which should be carried through in any event? If the answer is, Yes, then the question must be: "Why the delay and particularly the long delay mentioned of 40 years since the project was first talked about"? If it is a priority which is prevented at the moment only by cuts, then I must emphasise what I and others have said in this House over recent weeks and months: that a decision must be taken whether or not some of these things are of such priority for industry and other purposes that the reversal of cuts is a priority which will pay dividends and that mere cuts for cut's sake is not the answer. Government supporters who may feel that the noble Lord, Lord Ferrier, has made a good case—which I think he has—may have to decide to say to the Government, "This is a case where you are not making a hole and putting money in it; but where you are developing something of value to industry and to the environment and which in the long run can be a saving of money".

My Lords, before I reply to the very interesting and substantive points raised by my noble friend Lord Ferrier, and most amusingly and charmingly by other noble Lords all round the House, I may commence by reciting to my noble friend one of the lines in the national anthem of France:

"Enfin le jour de gloire est arrivé".

—because, after four postponements, today we have had the full panoply of the noble Lord's arguments as to his reasons and requests for the pursuit of the construction of the Edinburgh ring road to be completed and pursued more diligently. My noble friend Lord Ferrier raised one point which, in the absence of my noble friend the Chief Whip, perhaps the House would allow me to mention. The usual channels understand the reasons which have prompted my noble friend to make his point ever so gently at the start of this evening's Unstarred Question. As your Lordships will know, the Question has been postponed at very short notice on two occasions because of the length of the preceding business. I would make one or two points in mitigation and I hope that the House will bear with me. It is not simply Government business which has caused my noble friend's Unstarred Question to come on late. We have had a number of Private Member's Bills in this Session; and we had one earlier this evening. The subject matter of my noble friend's debate is of local interest but it is very important as Edinburgh is the capital of Scotland.

All of us would be grateful to my noble friend Lord Ferrier for raising this interesting subject which has concerned him for many years—as many as 40 years. We are aware that many people in Edinburgh and, from the remarks made in this House this evening, around the United Kingdom, as well as amenity groups and road users around Edinburgh, are of the opinion that the outer city by-pass would act as a valuable link between the A.1 trunk road and the A.8 trunk road; and also that this by-pass would divert through traffic away from busy city streets in the centre of Edinburgh and would ease journeys between the suburbs. Nobody would suggest that this would not be a good thing, or that it would not make a useful contribution towards easing the traffic problems which beset the city of Edinburgh. The outer city by-pass has long been planned and is now being carried out as part of the road construction programme.

The ultimate responsibility for the outer city by-pass is laid firmly and squarely upon the regional council, which is Lothian Regional Council. This by-pass is being built by them because they are the highway authority. The by-pass is not a road which the Secretary of State for Scotland is responsible for constructing. I am sure your Lordships will appreciate that a project which involves the construction of some 12 miles of new roads, largely through the outskirts of a major urban area, is very costly. My noble friend mentioned the figure of £2 million. The current estimated cost for the completion is more than £50 million at current prices.

In addition to the problem of cost there are other problems and obstacles of design, land use and environmental effect to be overcome. The construction of this by-pass is a major undertaking for the Lothian Regional Council and it has to be related to the technical and financial resources which are available. It is for the regional council itself to decide on how the work shall be carried out and the timing, phasing and expenditure of the work. It is the council that has to set its own priorities and plan its own programme of work within the capital resources which are made available to it by the Secretary of State. In the light of the resources which are likely to be available over the next few years the council has decided, very sensibly, to construct the by-pass in five separate sections. No one could have reason to suppose that the council does not intend to construct the by-pass as quickly and as efficiently as practicable.

The first part of the route to be constructed is the Colinton section, which runs from Wester Hailes to the A.702 Biggar Road, which was so wittily and amusingly mentioned by my noble friend Lord Balerno. Work on this particular section started early in 1979, and I am sure that my noble friend Lord Balerno and the noble Lord, Lord Ferrier, will be aware, and that your Lordships' House will be very happy to know, that this section was open to traffic on 14th May this year. This first section is providing much needed relief to motorists who previously suffered very considerable delays in the bottleneck at the village of Colinton, not to mention the improvement to the environment for people who happen to live along the existing route. Just by itself, this section is making a very useful contribution to improving communications from the south-west flank of the city.

There have been questions from all sides of the House about why more resources could not be devoted to the speedier completion of the by-pass. In the Government's view, we have to take into account the economic position as we see it and the recovery on the economic front has to be soundly based, as many noble Lords will know having heard this on a number of occasions from my colleagues—and I risk being rather repetitive: we believe that inflation must be brought under control first. In order to do this we have to restrict the growth of the money supply and of the public sector borrowing requirement. This requires restrictions on public expenditure and local authorities are not able to have an unlimited share of national resources. What can be made available for their road and transport capital programmes has to cover a very large number of roads in all parts of Scotland. At a time when financial and economic resources are limited, local government (just like central Government) has to tailor its programmes to the funds which are available.

The view was strongly expressed that the outer city by-pass should be uprated to trunk road status. I hope that I might be forgiven for digressing slightly in referring to the status of trunk roads, which were initiated in 1936. At present trunk roads are primary through routes linking major centres of population. This has been the convention since the inception of the trunk road system in 1936. It has also been the convention that trunk road status ends at the boundaries of cities.

My noble friend Lord Ferrier mentioned a traffic survey that was undertaken in the 1960s. There has been another survey within the last two months which shows that a very small proportion of all vehicles (less than 20 per cent.) which enter Edinburgh—heavy vehicles, light vehicles and other types—comprise traffic which is "by-passable", or in other words, traffic which is going from one side of Edinburgh to the other side of Edinburgh and has no particular business or reason for visiting Edinburgh. In view of this finding we do not consider that the by-pass should be considered as a major national arterial route. Certainly on the basis of this survey the Government would not contemplate giving the by-pass trunk road status. I understand that the Lothian Regional Council has never pressed for the road to be "trunked".

There are disadvantages as well as advantages in a road having trunk road status quite apart from the fact that planning controls over development alongside trunk roads reside in the Secretary of State rather than the local authority. In fact, the local authority loses the ability to determine the place which that particular road shall have in its scale of priorities, and the capital allocation made to the regional council for the purposes of road and transport takes account of the fact that the council and not the Secretary of State is responsible for the by-pass.

If the by-pass in Edinburgh were to become a trunk road then it would be the responsibility of my right honourable friend the Secretary of State to decide on the place that this by-pass should have in the national trunk road programme for Scotland. My right honourable friend believes, as I do, that if this happened there would be a considerable risk that the priorities of finance allocated to the Edinburgh bypass might not be as great as they are at the moment, when the finance comes through the regional council.

My noble friend also made one or two points about the share of resources available for the speedy completion of the by-pass. The share of the resources available to Lothian Regional Council out of the total economic resources for regional road expenditure in Scotland is 12½ per cent. of the overall Scottish expenditure. In 1978–79 the share was only 9·5 per cent. We feel that this figure is reasonable, especially when there are many urgent calls on these resources from other parts of Scotland. The rate of progress envisaged in the completion of this by-pass may seem unduly slow to my noble friend and to other Members of your Lordships' House, but it is not possible to think in terms of the capital resources being available for the council to achieve completion of the total by-pass by 1986.

The by-pass is not the only major project which the council has programmed for the next few years. Indeed, Lothian Regional Council plans to start the Mussel-burgh by-pass in the current year. I understand that the Musselburgh by-pass will be of primary importance to the arrival and departure of the motor traffic which is likely to be generated by the Commonwealth Games in 1986 at the Meadowbank Stadium and at other centres. My noble friend Lord Ferrier and the noble Lord, Lord Underhill, in reference to Glasgow, made the point that a by-pass might be desirable and indeed would be helpful from the point of view of energy conservation.

Of course, road building can save energy by reducing the congestion which leads to waste of fuel and traffic building up. This cost-saving effect is normally built into the assessment of costs and the benefits of major road projects. We are quite sure that the Lothian Regional Council have done so. Even if fuel will be saved—as has been asserted by my noble friend, the noble Lord, Lord Underhill, and others—we believe that it is not a magic wand which outweighs all other considerations and automatically calls the road into existence and gives it a boost in the priorities of the Lothian Regional Council and indeed their road programme. Of course, the regional council should look at whether the benefits, including any energy saving, outweigh the costs. They should assess the speed at which the project should be carried forward within the region's capital allocations and its guidelines for roads and transport.

My noble friend, Lord Balerno, made an outstandingly amusing and witty contribution in five minutes which was an example to your Lordships in questions and debates of the type that we are hearing tonight. I would say to him that the survey I spoke of just a few moments ago shows that 80 per cent. of all traffic that comes to Edinburgh wants to go into the city to do business there. Even if there were a by-pass, the replies which were given by the "questionees"—if one can call them that—who were driving cars, was that only 20 per cent. of them would want to use a by-pass and would want to go from one end of Edinburgh to the other or from one side of Edinburgh to the other without stopping.

I was amused—and I am sure that the House was amused—by my noble friend's reference to the fate of the traffic wardens in Edinburgh. Certainly the Scottish Office are not responsible for the fate of traffic wardens in Edinburgh, Glasgow, (my own home town) or anywhere else. I am interested in this institution for retired or squashed traffic wardens which was referred to by my noble friend. I regret that I have nothing in my background notes to indicate where this might be. I shall make inquiries of my noble friend Lord Balerno if the fate of traffic wardens is so desperate.

I was also interested in what he called the pattern of the traffic lights. Next time I drive through Edinburgh I must see whether the pattern is different, whether my Highway Code can be thrown out of the window and that in Edinburgh red means "go". It could be interesting! My noble friend Lord Balerno mentioned—as did other noble Lords—the question of the Commonwealth Games. Indeed, that is the basis of the Question on the Order Paper from my noble friend Lord Ferrier.

We are all pleased that Edinburgh has been successful in its bid to host the games in that 1986. It is true that the games will attract a great number of visitors and that a by-pass would relieve some of the ensuing traffic problems for residents, visitors and I hope for the aggrieved traffic wardens alike. But this by-pass is not a panacea for congestion in Edinburgh and indeed the success of the games is certainly not called into question by the fact that only part of the by-pass will be available. It was 11 years ago when the Commonwealth Games were last held in Edinburgh, that was in 1970, and about 240,000 people came to the city, either to participate or to spectate. There were naturally some traffic problems associated with this influx of people round Meadowbank Stadium, where the main events were held, and also round the Royal Commonwealth Pool. These were minimised, and I am sure the same planning procedures for traffic can be adopted for 1986. Further improvements in regard to the problems of congestion were made in 1970 by sign-posting and the fact that the venues for various events were spread over as wide an area as possible.

Even when the by-pass is completed—and this is scheduled for 1990—it will have only a minor effect on the traffic problems associated with such events, since it will still be necessary for traffic to penetrate the main urban areas to reach the sites of the events. Every year we have major rugby matches at Murrayfield, and football matches in most weeks of the season within the City of Edinburgh. The Government have no reason to think that the fact that Edinburgh is to be host to the games requires the completion of the by-pass more speedily than Lothian Regional Council, as the responsible authority, has planned. Indeed, when the Government signified approval for the games to be held, it was made clear that no grant or increase in resources would be provided on that particular score.

My noble friend Lord Selkirk started his remarks by saying that he was for some years on the City Council of Edinburgh. I hope that he will agree with me, in view of much of what I have said, that it is the responsibility of the Lothian Regional Council, not the Government, to plan and carry out the construction of the outer city by-pass. Indeed, the Government are giving all the encouragement that they can to Lothian Regional Council in this particular project. It really would not be constructive, we believe, to adopt trunk road status for the by-pass.

The noble Lord, Lord Underhill, mentioned his personal experience of Edinburgh which I share, since whenever I drive from my home to London I always go straight through the middle of Edinburgh. I regret that I have not yet tallied, as my noble friend Lord Ferrier has, 37 sets of lights through Edinburgh. I shall count them carefully this coming weekend and I shall be in touch with my noble friend. So far as I am aware, the longest that it has taken me to go in a private car at all hours of the day or night—even in the rush hour and on a Friday—from the old Dalkeith road right to the Maybury roundabout is in the region of 17 minutes. I hope that I am not an aggressive driver or anything of that nature but I do not think that that is an inordinate length of time. The fact that the noble Lord, Lord Underhill, myself and heavy lorries can cause congestion and annoyance to the City of Edinburgh is a case which is taken into account in the construction of the ring road. If there was a ring road, I have no doubt that I would use it, and I am sure the noble Lord, Lord Underhill, would use it.

From the survey, and indeed from my comments earlier, it is interesting that, from the information we have at present—that is, the 1980s not the 1960s, as has been referred to by my noble friend—we would be very much in the minority, about 20 per cent., who would be using the ring road. Possibly the flow of traffic might rise to fill the ring road, but I would be doubtful of that.

In conclusion, I am very grateful to my noble friend Lord Ferrier for raising this particular subject which is one of great interest to the residents of the Edinburgh area and not just to the City of Edinburgh. I can assure him that the Government appreciate very deeply his wish to see the construction of the by-pass proceed as smoothly and as quickly as circumstances will allow so as to provide the very necessary relief to a number of congested areas around the city. But the by-pass is part of a wider programme which has to allow for other projects as well. Resources are not, and indeed cannot be, entirely unlimited. As I have said a number of times, the road is the responsibility of the Lothian Regional Council, but the Government are retaining liaison with the council as far as trunk roads are concerned and they are bearing in mind the need for the by-pass in setting the ceiling for the council's expenditure on its roads and transport programme.

My Lords, I am afraid it is not realistic to hope that the entire by-pass will be completed by 1986. However, the Commonwealth Games will not be endangered by that. We hope and believe that the Games will be a very great success. As I have pointed out to your Lordships, we have already seen a major portion of the road opened to traffic, the most immediately pressing problems on the line of route have been tackled and I am sure your Lordships will join me in welcoming the relief that this is bringing.