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

The Question was as follows:

To ask Her Majesty's Government whether they are proposing to claim reparations against the Argentine in respect of the damage and loss suffered as a result of the Argentine aggression against British territory and ships in and around the Falkland Islands.

My Lords, as was stated by my right honourable friend the Prime Minister in another place on 30th July, we reserve the right to claim compensation from Argentina.

My Lords, while thanking my noble friend for that not wholly informative reply, may I ask him when the Government intend to announce their decision? And will my noble friend confirm that it is in accordance with international law and precedent that, when aggression is committed by one power on the territory of another, it is normal for that power, when the aggression has been repelled, to make reparations?

My Lords, we were wronged by the Argentines in their aggression and would certainly be entitled to claim compensation, as my noble friend says. However, there would be formidable practical difficulties in our securing payment. Our objective throughout the conflict was to restore the rights of the islanders. While we reserve the right to claim compensation, we do not believe that it would serve any useful purpose at this stage to put in such a claim.

My Lords, would there have been any practical difficulty in requiring the Argentinian forces to clear up the land mines which they had strewn around before they left the islands?

We seem to have got beyond that point, my Lords, because there are no Argentine forces on the Falklands.

My Lords, is there not a danger that any claim made against the Argentines for their aggression might hasten the collapse of the international banking system?

My Lords, perhaps that is a little wide of this Question.

My Lords, will the noble Lord, Lord Skelmersdale, give an assurance that British information services throughout the world are making every effort to draw public attention world-wide to the gross violations of the Geneva Convention by Argentina, including the deliberate desecration of islanders' homes and, above all, the laying of unmarked minefields, to which the noble Lord, Lord Beswick, has just drawn attention?

Yes, my Lords, I am well aware of the point which the noble Lord has made.

My Lords, considering that a very remarkable victory has led, or has foreseeably led, only to our behaving as though we had been defeated, what was the point of going there at all?

My Lords, there is absolutely no question of our behaving as though we had been defeated. What matters in all this is the rights and future lives of the islanders. Whatever we do and whatever policies we pursue, we will put them in the forefront of our minds.

My Lords, the noble Lord, Lord Skelmersdale, has said that a claim is in the process of contemplation; that is what I understand him to have said. If that be the case, will he confirm that at some stage a claim will be made; and, if so, with what authoritative body will that claim be filed?

My Lords, the noble Lord, Lord Elystan-Morgan, misunderstood me. I certainly did not say a claim was in the process of being consulted upon in London or anywhere else; and I am not prepared to speculate on when and whether such a claim may or may not be made.

My Lords, did my noble friend's first supplementary answer to me and the supplementary answer he has just given suggest that in the view of Her Majesty's Government it would be more economical to commit aggression if one was a bankrupt state?

No, my Lords, they suggested nothing of the sort.

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

The Question was as follows:

To ask Her Majesty's Government whether they are aware of the joint statement by the Soviet Peace Committee and the World Disarmament Campaign proposing among other things a move towards the dismantling of both the Warsaw Pact and NATO, the establishment of nuclear weapon free zones and the prohibition of chemical biological and radiological weapons; and whether they welcome this development.

My Lords, the Government are aware of this statement, which contains a number of well-worn Soviet proposals. My right honourable friend the Minister of State for Foreign and Commonwealth Affairs (Mr. Hurd) met members of the British delegation on 11th March and discussed their visit to the Soviet Union. We hope that the proclaimed interest of the Soviet Union in peace will be reflected in a constructive response to the fresh proposals made by the West for reductions in conventional and nuclear forces.

Yes, my Lords, but may I ask the noble Lord, Lord Skelmersdale, two further questions. First, is it not the case that the Soviet Peace Committee seldom does or says anything that is not approved by the Soviet Government and therefore that anything in a statement entered into by the Soviet Peace Committee and the World Disarmament Campaign may be taken as an official statement by the Soviet Government, and will the British Government look at it in that light? Secondly, in a Written Answer that the noble Lord was kind enough to give me he said that the Government expected to have an opportunity in the near future to make known to the Russians the Government's views on their initiatives for a nuclear freeze and for a comprehensive Test Ban Treaty. Is the noble Lord now in a position to say what those views are?

My Lords, with regard to the noble Lord's second supplementary question, these views are still under discussion and I am not yet in a position to give the noble Lord the information he wants. As far as the Soviet Peace Committee is concerned, I agree with the noble Lord that it is a loose organ of the state but I cannot draw from that the same conclusions that he does because there are other peace movements which are under what I can only describe as subjection in the Soviet Union at the moment. For example, the noble Lord will know well the case of Mr. Sakharov, whose dissenting views are certainly not tolerated. There is also the fact mentioned by the right reverend Prelate the Bishop of Norwich in his letter to The Times today—and I quote:

"The 15 brave Russians who tried to form an equivalent of a CND movement in Moscow earlier this year were immediately imprisoned".

So I cannot subscribe to the theory that the views of the Soviet Peace Committee represent the views of the Russian people, although on occasions they may well represent the views of the state.

My Lords, while welcoming my noble friend's statement, may I ask him whether it is intended to impress upon the Soviet Government that success in this matter depends upon multilateral disarmament and bona fide reciprocity?

Yes, my Lords, most certainly that is the intention of Her Majesty's Government; and further, we are absolutely determined to seek an agreement on the very difficult problem of verification, which will still take a long time to clear up, I am afraid.

My Lords, would not the great and noble words of the Soviet Union be of infinite value if only they bore some relation to what they do?

My Lords, I have a lot of sympathy with that view, because I noticed that, in Mr. Gromyko's recent speech to the United Nations, he said:

"The urge to give orders to other countries and to dominate the world must not be allowed to overshadow the experience of the past or muffle the voice of reason".

From that noble Lords can draw their own conclusion, as I have.

My Lords, the Minister has referred to proposals of the Soviet Government being in this document. Is he aware that it was not a device of the Soviet Peace Committee? Is he aware that I proposed it and I drafted the terms of the agreement with only slight amendments, and that the agreement proposes endorsement of the recommendations of the United Nations Special Assembly four years ago and makes a series of progressive proposals ending with the demilitarisation of both the Warsaw Pact and NATO? Are not those proposals worthy of the support of the Government?

My Lords, I was not aware of the noble Lord's involvement in all this, although of course I did know that he was a member of the delegation to the Soviet Peace Committee. However, I accept that there is good reason for looking at the proposals very carefully. I hope that some progress can be made on at least some parts of them. But I quite definitely do not think that the inference that all is sweetness and light can be drawn from these particular proposals. I think they ought to be looked at with a great deal of care.

My Lords, would my noble friend not agree that it is really rather strange that there is no mention of Soviet nuclear disarmament in the Question?

My Lords, the Government are not responsible for Questions on the Order Paper.

My Lords, would the noble Lord not agree that, if these proposals are to be taken seriously, perhaps the British Government, along with our allies, would make a fair challenge to the Soviet Government as to what are their views upon them?

Yes, My Lords, I thank the noble Lord for that very helpful supplementary question.

My Lords, in view of the dependence of the Soviet economy on the imports of American wheat, and on the supply of European technology, to sustain their economy, is not this the right moment to press the Soviet Government for new initiatives in this direction of securing a greater degree of multilateral disarmament?

My Lords, I am afraid I am not prepared to commit myself on whether this is the right moment, but certainly the current multilateral negotiations going on between the EEC—both as a collective organisation and as individual members—and the United States have this object partly in view.

My Lords, did my noble friend notice the possibly Freudian slip of the noble Lord, Lord Jenkins of Putney, when he said that the Soviet Peace Committee was an organ of the Soviet Government? Does it not debase the value of the world disarmament campaign if it gets into bed with such odd fellows, who seem to be part of the same Government which went into Afghanistan?

My Lords, I was a little thrown by the noble Lord, Lord Jenkins' supplementary question, in that I would have thought it was an argument against proposals coming from the Peace Committee rather than for them.

My Lords, is it not the case that the fact that the proposals were originally drafted by my noble friend, and were subsequently endorsed by the Peace Committee in the presence of a Soviet Minister, indicates that the Soviet Government and my noble friend are in accord? It only remains for the Government to get into accord with my noble friend and then the Government could find themselves in the search for peace with the Soviet Union. Is not that something devoutly to be wished? Is it not desirable that the Government should find itself, if it can, on common ground with the Soviet Union, so that the world becomes a more peaceful place?

My Lords, to make the world a more peaceful place is, quite definitely, the objective of us all, wherever we sit and wherever we may reside. However, the information imparted to the House by the noble Lord, Lord Brockway, on his drafting of the original communiqué came to light and was given to your Lordships' House after I had answered the supplementary question of the noble Lord, Lord Jenkins. So I answered both questions at the time and in the light of what was presented to me.

My Lords, may I suggest to my noble friend that he does not waste too much time examining these proposals? If the Russians really wanted to seek a reduction of tension and an increase in disarmament there is plenty of opportunity for them to put forward such proposals without using the Peace Committee as a stalking horse, let alone the noble Lord, Lord Brockway.

My Lords, I am grateful for parts of that supplementary question by my noble friend, and I shall bear his advice in mind.

My Lords, is the Minister aware that there are many issues on which I am not in accord with the Soviet Government and that I so expressed myself when I was in Moscow?

I am sure that that is the case, my Lords.

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

The Question was as follows:

To ask Her Majesty's Government whether they can give a date on which they will make a statement on The Legal Basis of Further Education.

No, my Lords, but we hope to be able to make a statement shortly.

My Lords, I thank the Minister for that not very satisfactory reply. Is he aware that The Legal Basis of Further Education was published in June 1981, and that organisations, and so on, were asked to comment by, I think, the end of October, certainly about a year ago? The people who have responded are feeling concerned and disappointed that the Government have not taken a greater interest in this matter, since adult education is an area where the Government have not been very kindly. Those working in that field are very much hoping for an early response.

Will the Minister also agree that there are a great many anomalies in the education law as it stands, particularly where 16 to 19 year-olds are concerned? For instance, a young person in school never has to pay fees, but a young person of 16 to 19 years in further education may have to do so. There is also the matter of recoupment. An authority is bound to pay recoupment if a young person is in school but not for further education. Will the Minister urge the Government to respond quickly?

My Lords, as to the delay, as the noble Baroness described it, the latest comments on the report were not received until the end of last year and it is a very complex matter. On the friendship of the Government towards the world of further education, I shall only say that the Government have in this year alone given additional expenditure provision totalling about 100 million to enable more young people to stay on in education. Most of those extra people are, in fact, staying on in further education colleges. As to the anomalies, I think I should leave that to our response to the report.

My Lords, can the Minister assure the House that, when he is preparing his statement, full consideration will be given to young people between the ages of 16 and 19 who were the subject of special statements under the Education Act 1981 because of physical or mental handicap? Will he also include consideration for young people between 16 and 19 years of age who become handicapped, either physically or mentally, after they have left school but who need educational facilities up to the age of 19?

My Lords, the Government are well aware of the importance of the 16 to 19 year-old bracket. What I have said refers to those staying on outside school. We do not disaggregate payments for the 16 to 19 year-old bracket inside school. As to disabled people, the noble Baroness will be aware of our recent White Paper and the attention which my honourable friend the Minister for Social Security, in his special capacity as Minister responsible for the disabled, is giving to this matter. My honourable friend Mr. Hugh Rossi is doing a good job in seeing that the aims that the noble Baroness furthers are effectively pursued by local authorities.

My Lords, does the noble Lord agree that those who are economically and socially deprived are also those who are educationally deprived? Does the noble Lord also agree that the Department of Education and Science agrees that much of further education is almost certainly ultra vires and that the need to amend Sections 41 and 42 of the Education Act 1944 is pressing? Finally, will the noble Lord say what is the Government's attitude to the voluntary bodies on further education, such as the Workers' Educational Association, which seems to be bearing a disproportionate amount of economy cuts?

My Lords, the noble Lord's first premise would be the subject of an interesting sociological debate. I agree only that often social deprivation is accompanied by educational deprivation, although not always. His second question on the legality of further education is central to our response to the report, when it comes. If the noble Lord will remind me of his third question I shall answer it.

My Lords, may I remind the noble Lord that my question was in relation to the Workers' Educational Association, which seems to be experiencing a disproportionate amount of cuts?

My Lords, the Government are well seized of the value of the Workers' Educational Association, as indeed am I. We seek in no way to limit the good work which it does.

My Lords, is the noble Lord aware that there are many aspects of this issue of legal recognition of adult education? Is he further aware that Professor Roger Dyson has just been talking about grants to students at universities and taking courses? A 24-week course will now cost £45 for adult students. There is a great difficulty with the Workers' Educational Association, now celebrating in North Staffordshire 60 years of existence, in finding courses which the young unemployed can attend, because they can no longer afford them. The nation, having this unemployment situation, has an obligation to the young adults who have not had the opportunity of education that many noble Lords in this House have had themselves.

My Lords, much as some of your Lordships may sympathise with the noble Lord's remarks, I have to remind him that the Question is whether or not there is a date on which we are to make a statement. I have had to say that I cannot say precisely when that statement will be made. When it is made it will be made in the knowledge of the noble Lord's views.

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

The Question was as follows:

To ask Her Majesty's Government what benefits they expect will accrue to our economy now that they intend to proceed with plans to abolish the Fair Wages Resolution; and whether the International Labour Organisation has been notified of this intention to denounce the ILO Convention Number 94; and further when Parliament will be given an opportunity to debate this.

My Lords, industry and the economy will benefit by the removal of unnecessary and outdated constraints on the ability for people to reach settlements as a result of free negotiation on terms which suit their own circumstances. A Motion to rescind the resolution is to be put before another place in the next Session. Denunciation of ILO Convention No. 94 was notified to the International Labour Office on 20th September, 1982.

My Lords, is the noble Earl aware that this issue of the International Labour Organisation on fair wages is of paramount importance internationally on contracts? It has been in existence in this form for 35 years. Is he further aware that efforts to get fair wages goes back 91 years and that the ILO was awarded the Nobel Prize for its efforts to get friendly relationships on the industrial front throughout Europe? We have now broken or intend to break this convention. The answers were fudged, inosculated and brought in quietly by means of Written Questions in the other place and here.

Finally, and then I shall sit down, when I asked the noble Lord opposite about fair wages I was partly told I did not know what I was talking about. I had already read Hansard, which he had not. There was a Written Answer, and I can give the dates. It is of importance—

Question!

Give me an introduction.

Order!

My Lords, I think the whole House realises that the noble Lord, Lord Davies of Leek, feels strongly about this matter. Could he just frame his question and ask it briefly?

My Lords, every question has been framed with the question mark at the end. I read a piece in the newspaper about this when the other place had already discussed it. Will the Minister tell the House when the Government are to allow a debate on this issue as asked in the Question?

My Lords, I did not realise that anything that I had said had insinuated that the noble Lord, Lord Davies of Leek, did not know what he was talking about. If the noble Lord reads my original Answer I think that he will find nothing in it to lead him to construe it in that way. The noble Lord is quite right in saying that the present fair wages resolution goes back 35 years. He was not right when he said that we are breaking that convention. We have a period by which we can withdraw from the convention if we like. It comes once every 10 years. The date of our possible denunciation, which is the equivalent of withdrawal, goes from 20th September 1982 to 19th September 1983. If we give that notice of withdrawal it comes in a year later. So we are not breaking a convention.

The noble Lord asked whether I would answer the last part of his main Question. I did so when I said that a Motion to rescind the resolution is to be put before another place in the next Session. The resolution is a resolution of another place and it is for the other place to countermand that resolution; it is not a matter for this House unless the noble Lord, Lord Davies of Leek, or anyone else wishes to put down a Motion.

My Lords, going back to the noble Earl's original Answer, may I ask: is he aware that a widespread and intellectually highly respectable case can be made out for the view that the obligation to pay fair wages, far from having adverse effects on the economy, has very favourable effects on efficiency? Therefore, it is quite possible that the abolition of the obligation to pay fair wages will encourage the survival of inefficient enterprises and will, therefore, act to lower our national wellbeing and not to raise it.

My Lords, I am aware from what the noble Lord, Lord Kaldor, has said that there are people who take an opposite view from that which the Government take—I accept that. However. I should tell the noble Lord that we consider the fair wages resolution to be obsolete. It refers to employees who are on Government contracts only; it does not help the low paid; it can be disruptive to companies who are in difficulties; and it does not mean that it will help companies, because very often they are obliged to pay what is the "going rate" in the industry and that is not necessarily the lowest paid rate. Also the complaints which we have had about the fair wages resolution, or the applications, have tended to come from those in the higher, and not the lower paid industries.

My Lords, I have listened to the explanations which have been given. However, before this decision was taken, had the Government consulted the TUC, who obviously have a great interest in this particular convention, and also, of course, the ILO with which I was connected for many, many years? If the Government did not consult the TUC, can the Minister tell me why they did not do so?

My Lords, the Government have consulted with a number of people, of which I think the Trades Union Congress was one, and they had a variety of different responses.

My Lords, are we to assume that the Government wish to be free to enter into contracts with people who pay unfair wages?

Certainly not, my Lords.

My Lords, can the noble Earl the Minister tell us whether ILO Convention Number 94 has ever been ratified by the United States of America?

No, it has not, my Lords.

My Lords, is the noble Earl aware that his right honourable friend Mr. Tebbit in another place, when delivering a breakfast-time broadcast on the Thursday of the Conservative Party Conference, answered the contention of his right honourable friend Sir Ian Gilmour that the payments to the unemployed should in fact be increased, by saying that that would cause widespread resentment among the lower paid workers, some of whom were paid below that rate? Is it, therefore, the Government's intention that wages should now be driven down to below the normal unemployment rates?

My Lords, I find the deductions of the noble Lord, Lord Bruce of Donington, quite astonishing. There is nothing in what I have said or in the abolition of the fair wages resolution which will encourage wages to go down below the unemployment level. What the noble Lord must know, if he knows about the fair wages resolution—which I am sure he does—is that it sets a wage rate which is at the "going rate" in the industry concerned. It may oblige certain companies to go above the minimum, to pay what is the "going rate", which may well put them in financial difficulties and thereby end the company and the jobs for the employees. The purpose of this action is to allow free negotiation.

My Lords, can the Minister indicate how many countries or Governments have denounced the convention, or have indicated their intention of doing so?

My Lords, I can tell the noble and learned Lord that 55 countries have ratified the convention, which means that some 93 have not done so. Those who have not ratified it include the United States, West Germany, Japan, Australia, New Zealand, Canada. Sweden, Norway, Switzerland, Portugal, Greece, Luxembourg and the whole of the Eastern bloc.

My Lords, that has not answered my question, but perhaps it does not matter.

My Lords, if the noble and learned Lord would be kind enough to repeat his question I shall listen with even more care and see whether I can give an even better answer.

My Lords, I merely asked, how many Governments have denounced the convention or announced their intention of denouncing the convention?

My Lords, in that case my answer will be briefer. I shall find out and write and let the noble and learned Lord know.

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged—(Baroness Young.)

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

Moved, That the Commons amendments be now considered—(The Lord Chancellor.)

My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 1 and 2. Amendment No. 2 is a small drafting improvement. Amendment No. 1, however, is the substantive amendment and it makes it clear that the duty solicitor scheme could be confined to a particular class of persons if it appeared appropriate to do so. This reflects the fact that those in custody and those charged with serious offences are obviously more important candidates for a duty solicitor scheme than some others and it might be that it was necessary to recognise the fact. I beg to move.

Moved, That this House doth agree with the Commons in the said amendments—(The Lord Chancellor.)

My Lords, the noble and learned Lord's explanation is obviously a wholly satisfactory one. It may be necessary to establish priorities for defendants in custody as distinct from those who are not in custody, and the amendments proposed give greater flexibility and, indeed, strength to the duty solicitor scheme.

My Lords, I am very grateful to the noble and learned Lord for his support.

My Lords, we now come to a new clause. I beg to move—and this will be the case as regards all the subsequent amendments—that this House doth agree with the Commons in their Amendment No. 3. This amendment makes criminal legal aid available for appeals against orders and decisions made by the Crown Court when dealing with contempt of court. Civil legal aid is at present available for these cases, but, since the Supreme Court Act 1981 transferred them from the civil to the criminal division of the Court of Appeal, it is desirable to rationalise the existing arrangements in that sense. This clause effects the change. I beg to move.

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

My Lords, this, again, is a helpful amendment. The structure of the law and practice in regard to contempt is always subject to attack and it is very useful that, in the limited category to which the noble and learned Lord has referred, legal aid should be available.

My Lords, I am again grateful to the noble and learned Lord.

My Lords, I beg to move that this House doth agree with the Commons in their amendment. This is another new clause. It enables the Lord Chancellor to make regulations providing recourse to persons refused legal aid by magistrates' courts. The House will, of course, recall the debates that we had when the matter came before this House. I agreed to try to take this power, and I intend to carry out my obligation to do so by means of the regulations when they are provided.

It is a little more difficult than it seems. Ever since the Widgery Committee it was always held to be doctrine that it was impracticable to introduce a system of appeals against refusals of criminal legal aid. I could well sense the feelings of the House when noble Lords wanted me to make this promise, and I did make it, and it accorded with my own inclinations. My officials are now engaged in the process of consulting those concerned. I cannot yet say whether recourse will be to the Crown Court, to the legal aid committees, or to some other ad hoc body. But I intend to carry out my obligation, and this is the means by which I intend to do so. I beg to move.

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

My Lords, we—and I suspect the whole House—are pleased that the noble and learned Lord has accepted the principle of a right of appeal in respect of the refusal of legal aid by a magistrates' court. The problem that worried us very much when we discussed this on a previous occasion was the vast variation in the refusal rates of application for legal aid orders as between one magistrates' court and another. Indeed, it seemed that success in regard to such application very often depended not so much on the merits of the application but on in which court the application was made. We had the fascinating statistics that there were 33 per cent. refusals in Highgate, whereas in perhaps the more salubrious area of Hampstead there were only 4 per cent. refusals. Looking at the matter statistically, it indeed indicates a strange state of affairs, because I hardly venture to think that the nature of the cases coming before the Hampstead court would have been very different in substance from the nature of those elsewhere. This is one of the factors which certainly led us to stress the importance of this matter.

The noble and learned Lord has gone a good deal of the way to meet what was said in different parts of the House on this in Amendment No. 4. We wondered whether perhaps he could go further. As it stands, the amendment gives a power to make the regulations. We wondered whether it could be made mandatory. However, we appreciate that there are difficulties in the way of that. It is not contended that every case that results in a refusal of a legal aid application in a magistrates' court would necessarily call for the power of appeal. As I understand it, over a million of the cases that come before magistrates' courts relate to minor traffic offences. Nevertheless, the wide range of "(2)(a)" cases, as they might be called, remains for consideration.

I wonder whether the noble and learned Lord could give us a little more guidance as to how he intends this power to be used and the kind of machinery that he has in mind. The amendment refers to the power to enable:

"a person who has been refused legal aid under the principal Act by a magistrates' court to apply to such other court or body as may be specified …"

I do not know whether the noble and learned Lord has been able to carry his thinking on what the nature of the other body ought to be further than the tentative suggestions that he helpfully made when we discussed the matter further. If further guidance could be given on those lines, I am sure that it would be well received.

My Lords, I am very grateful to the noble and learned Lord. Again, we had quite full debates on the matter when it was before the House, and I yielded to the pressure which was brought to bear on me. My concession was in the face of what was always held to be established doctrine, but I intend to find a way through it if I can, and I am sure that I shall be able to. It is, of course, true—and I agree that it has a relevance—that there is a surprising divergence between individual magistrates' courts as to the rate of refusal. I did point out some of the difficulties because magistrates' courts have a different pattern of offences before them.

Moreover, it does not, of course, follow that those who refuse it in the fewest cases are those which are necessarily right. But the noble and learned Lord will remember that I have directed my office to investigate the reasons for that wide variation. As regards the type of body to which recourse could be made, I would rather leave the question open until the consultations that I am having are complete. The options really are what I adumbrated before. In theory, you could send it to the Crown Court; in theory, you could refer it to the legal aid committees of the Law Society; or you could create another body ad hoc for the purpose. It is precisely as between those three options that those consultations are primarily directed. I think that that is about as far as I can go. If the noble and learned Lord will look at subsection (3) of the new clause he will see why it cannot be made mandatory on me.

My Lords, I am grateful to the noble and learned Lord.

My Lords, I beg to move that this House doth agree with the Commons in their amendment. The amendment ensures that those in receipt of supplementary benefit are not required to contribute from capital. The Bill already provides that they cannot be required to contribute from income by Clause 7(8). So this exempts capital as well. I beg to move.

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

My Lords, my honourable friends in another place pressed this matter very hard in Committee and the right honourable and learned gentleman, the Solicitor-General, was good enough on that occasion to give an undertaking. That undertaking has now been inplemented and I am sure that we are all grateful for it. As the noble and learned Lord has said, it means that capital will not be taken into account where supplementary benefit is paid. That seems a very logical, sensible and humane thing to do.

My Lords, I am very grateful to the noble Lord, Lord Mishcon, for what he has said.

My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 6. This is simply a clarification giving a clearer meaning to the word "forthwith" and I think it requires no further justification from me.

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

My Lords, here again this is a most welcome amendment. Your Lordships may remember that great diffidence was expressed—certainly on this side of the House but in many quarters of the House—about the power to revoke an order where a payment had been ordered to be made and had not been made. This makes it clear that the court will take into account various considerations before revoking the order. They are proper, just consideration, and I think we ought to be grateful for this amendment.

My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 7, 8, and 9 together because they stand or fall together. I am not absolutely sure whether some of Lord Mishcon's remarks were not perhaps directed to these rather than to the previous amendment which was really of a drafting character. They are, as he indicated, intended to ensure that the courts shall not revoke legal aid unless they are satisfied both that the assisted person is able to pay at the time when he is required to do so but fails to do so, and also—and this is important—that he is able to pay all or part of the amount due at the time when the revocation is in question. That is the effect of it, and I think it is a liberalising amendment.

Moved, That this House doth agree with the Commons in the said amendments.—(The Lord Chancellor.)

My Lords, we agree that these are beneficial amendments, and we agree with them.

My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 10 and 11. They enable the Lord Chancellor to make regulations to prohibit or restrict the receipt by counsel or a solicitor acting for a legally assisted person of payments apart from those legal aid monies. This will be done by regulation under the amendments. It is designed to prohibit or restrict the process known as "topping-up", which will be familiar to noble Lords opposite.

Moved, That this House doth agree with the Commons in the said amendments.—(The Lord Chancellor.)

My Lords, while the expression, "topping-up", may be known to the legal profession, I do not know that it is known as familiarly to all your Lordships. It is, as the noble and learned Lord indicated, a rather objectionable practice that there would be of a solicitor, for example—I prefer to choose my own side of the profession in order not to be offensive to any other side of the profession—saying, "Well, I have got a legal aid certificate, but I am afraid that the charges that I would be entitled to thereunder do not console me at all, and therefore I would like to charge you, if I am to act for you, an additional sum." This is prohibited in the civil legal aid and obviously ought to be prohibited in criminal legal aid, and that is so. So that I do not leave the other side of the profession completely out of it, that would similarly apply where there was a question of a silk not being authorised and in fact a silk comes on the scene in order that payment may be proffered to him in respect of his services when that is not covered by the criminal legal aid certificates.

My Lords, with respect, this could in special circumstances work an injustice. With the greatest respect, I would hope that these special circumstances might be taken into account when the regulations are made in due course. Take, for example, the situation that you have a complicated immigration appeal or application going up to the Divisional Court. It comes, say, from Birmingham or Wolverhampton with an ethnic minority solicitor and an ethnic minority counsel on legal aid who have little knowledge of the practice and procedures of the Divisional Court, or indeed of the Court of Appeal.

There is a difficult point of law involved—perhaps a spin-off of Zamir, something like that. Then what happens is that the local head man of the community passes the hat round and gets a few hundred pounds together so that they can approach leading counsel and pay him some fee to conduct that case. I am speaking from a position in my own experience. From seeing the papers some leading counsel who knew what he was up to was certainly required, and in circumstances like these I am not sure what the basic morality is. If there is a conflict of moralities, I would have thought that one should err on the side of ensuring in special circumstances that everything is done to uphold the highest standards of representation.

My Lords, I think my noble friend is for the moment forgetting that this Bill has to do with criminal legal aid and not civil legal aid. His example was a civil legal aid one. Under civil legal aid "topping-up" is already prohibited, so that the point is not, as stated, a good one. But I would also point out that the power which I am taking if this be agreed to is one to prohibit or restrict, which I think would take account of any points which may arise but which do not immediately occur to me as I stand here.

On Question, Motion agreed to.

My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 12, 13 and 14. They ensure that defendants are given a credit towards their legal aid contributions for any contribution paid in respect of advice and assistance even where different solicitors give them advice and assistance and act for them under the legal aid order. I think again this is a beneficial change.

Moved, That this House doth agree with the Commons in the said amendments.—(The Lord Chancellor.)

My Lords, I agree that this is also a beneficial change.

My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 15, 16, 17 and 18 together. These-are all technical amendments. The first two are designed to ensure that sums due to an assisted person as a result of an order for costs made in his favour may be paid to his solicitor, while the second two amend references to "legal aid contribution order" in other legislation. For instance, Section 14 of the Costs in Criminal Cases Act 1973 is covered by the first two amendments, and the Attachment of Earnings Act 1971, the Magistrates' Courts Act 1980 and repealing paragraph 4 of Schedule 4 to the Legal Aid Act 1974 are referred to in the last two amendments. I think I can fairly describe them as technical.

Moved, That this House doth agree with the Commons in the said amendments.—(The Lord Chancellor.)

rose to move, That the draft order laid before the House on 14th October be approved.

My Lords, I thank the Minister for explaining the details of the order. We are glad to know that it has been approved by the Joint Committee on Statutory Instruments. We are also glad to know that the order will enable there to be sufficient financial support for the Welsh language channel. The figures in the order are, in a sense, slightly complicated because, on the one hand, one has the increase in the amount of the free slice from £250,000 to £650,000 before the payments start, but, on the other, those additional payments—the amount of the levy payments—are increased from 2 to 2.8 per cent.

Although presumably most contractors will, as the noble Lord, Lord Elton, said, have a decrease in the amount of levy payment which they make—because of the increase in the size of the free slice—there must be a point at which they would be making an increased payment. Perhaps the Minister could say to what point advertising receipts would have to increase for a particular contractor to have to pay an increase in the amount of his levy payments. With those words, we welcome the order and the purpose for which it was made.

My Lords, I had intended to preface my brief remarks by thanking the noble Lord, Lord Elton, for explaining the order so clearly. Unhappily, I was prevented from being here to hear the explanation, but I am assured it was very clear and I rise to say that we on these Benches welcome the order in so far as it will be of help and assistance to the independent television contractors and other broadcasters at a time of very great difficulty. Looking at the order and the legislation on which it is based, it seems that there is an element of assistance here and a recognition of the special problems they face.

There is a tendency at present for us to assume that independent broadcasting is free—that somehow it falls from the sky and does not have to be paid for—whereas the amount of advertising income available is necessarily limited. As we now diversify into a fourth channel and breakfast television. I can see a point when the independent contractors will be in increasing difficulty in meeting their obligations according to the high standards with which they have always met them in the past. And therefore, in so far as the order is of some temporary assistance to the independent contractors at present, I would merely say, "Thank you for small mercies", but will look continually at the increasing difficulties which the independent sector will face as we diversify into new fields and as, in other words, we dilute the possible revenue that can come forward from advertisers to support this very important part of our public service broadcasting.

My Lords, in thanking noble Lords for their reception of the order, I can explain the difficulty which the noble Lord, Lord Ponsonby, expressed by saying that this works not unlike income tax. By increasing the exempt income of the companies, we are not drawing more money from them and any company would have to increase its advertising revenue by a greater amount than the amount by which the free slice has been increased before it started to pay more, and of course it would be paying it on a larger income. I thank the noble Lord, Lord Winstanley, for his kind remarks and I hope that his break fast Hansard will have the effect of confirming his opinion of the lucidity of my explanation. If it does not, he has only to write to me.

rose to move, That this House takes note of the report of the European Communities Committee on Natural Gas (15th Report, 1981–82, H.L. 190).

My Lords, before the noble Lord sits down, may I ask him whether the committee formed any opinion about converting natural gas into methanol in order to transport it, rather than to transport liquefied natural gas?

My Lords, I must confess to the noble Lord, Lord Wynne-Jones, that we did not consider that possibility, but it is one which, now he has mentioned it. I will bring before the committee.

Moved, That this House takes note of the report of the European Communities Committee on Natural Gas (15th Report, 1981–82, H.L. 190).—(Lord Kings Norton.)

My Lords, we are grateful to the noble Lord, Lord Kings Norton, for initiating this debate, and I think it is appropriate, as I am sure the House will agree, that he should do so as the noble Lord is, as the House knows, the distinguished chairman of Sub-Committee F, which has produced this thorough and far-reaching report. I should like to congratulate him, if I may, on the clear and concise way in which he has introduced this complicated subject.

Of course, the subject is also an important one, as he has said, since, as the Commission's documents make clear, natural gas meets around a quarter of the Community's domestic, commercial and industrial market. The Commission recommends that in view of the rapid growth of imports from outside the Community, including imports from the USSR, future supplies should be secured, and indeed improved, by encouraging, in particular, more indigenous production in Community countries. The United Kingdom has, as we know, substantial reserves of natural gas on the United Kingdom continental shelf, and there are also substantial Netherlands and Norwegian reserves, as the noble Lord said.

As the report makes clear, the problem lies in the longer-term. When natural gas reserves begin to decline, there must be a balance struck between imports by pipeline, imports of liquefied natural gas and the development of substitute natural gas from coal and oil. One of the difficulties seems to be, as the report points out, that there is by no means full agreement on how long the United Kingdom's reserves are likely to last—and this was touched on by the noble Lord, Lord Kings Norton. The most pessimistic forecasts estimate until about the year 2000, while the more optimistic predict another 20 years on—until, say, 2020. The most optimistic prediction of all, from Phillips Petroleum, one of the leading oil companies, concludes that the United Kingdom's needs could be satisfied until the middle of the next century. The only way to prove which is right among these various "guesstimates" is surely to have more drillings of both exploration and appraisal wells. The report suggests various ways in which this can be done.

The committee has also proposed that more weight should be given in future, when awarding new licences, to the contribution made by drilling work on existing licences to any knowledge of the gas reserves in the area concerned. This, I think, is a very important point which I hope the noble Lord, Lord Skelmersdale, will be able to comment on when he comes to reply. I should like to ask the noble Lord also to tell the House when he replies how the Government propose to encourage more drilling, and whether they think that the recent legislation has had any effect, or whether the onerous tax regime is proving more of a disincentive. Can the noble Lord let the House have some idea of Government policy, if it exists, on long-term export commitments when knowledge of the extent of our reserves is so hazy and apparently dependent on a fog of conjecture? Here, the committee comes down firmly on the side of prudence, against the advocates of free market forces. Will the Government tell the House where they stand?

The committee's report considers the possibility of a cross-channel pipeline to bring the gas from the large Norwegian reserves due to come on stream in the 1990s to the European continental grid via the United Kingdom. This, I think, is a very interesting point, which was also alluded to by the noble Lord, Lord Kings Norton. Some of this gas could be delivered en route to the United Kingdom's grid. It is thought that an overland United Kingdom route might be cheaper than the seabed alternative. The committee concludes that such a pipeline would be an advantage to this country and also to our Community partners, and that it would improve Europe's security of supply in general, as this surely can only be increased by such a diversification of sources. I hope the noble Lord, Lord Skelmersdale, will be able to tell the House what the Government think of this proposal.

Whatever the timespan for our reserves of natural gas, not even the wildest optimist would predict that these will last beyond the middle of the next century—a mere lifetime away for a 1980s child. Let us hope that one day substitute natural gas, SNG, which can be synthesised through coal and oil, will be available to meet some of our everyday energy needs. The European Commission support research and development in this field, and I believe the British Gas Corporation have a pilot plant in Scotland which is part of the EEC research programme. I should like to ask the noble Lord, Lord Skelmersdale, when the Government think that SNG will become commercially viable, and what are their long-term plans for large-scale production.

There are several other matters which I should have liked to allude to, but I think there is no time available. These would have been particularly liquefied natural gas, its import and storage; but I know that many other noble Lords have their names down to speak, and we are also looking forward to the maiden speech of the noble Viscount, Lord Torrington. In conclusion, therefore, may I say that we are grateful to the noble Lord for introducing this report, and I commend it to the House.

My Lords, I want to echo the remarks which have been made by the noble Lord, Lord Strabolgi, to the noble Lord, Lord Kings Norton. It has been a privilege to serve on his committee and to be part of this really excellent report. I think the staff who helped prepare it deserve considerable congratulation on the way it is presented and on the way it can be read. I think that the speeches will be extremely short, because virtually everything we should like to say has almost certainly been said rather better in the report which is before us. I should like also to say how much I am looking forward to the maiden speech of the noble Viscount, Lord Torrington, because he made some very high-quality contributions to the subcommittee, and I look forward particularly to hearing what he is going to say to us in this debate.

As the noble Lord, Lord Kings Norton, has said, the report raises a number of questions for which Her Majesty's Government should have some answers, or at least they should be in a position to indicate, at the same time perhaps, the longer-term thinking of the Department of Energy and the right honourable Minister concerned. But, for me, there is one question which the evidence in the report answers, which is the so-called energy crisis of resources. So far as gas is concerned, for me it appears to be over.

We have much more time to work out our policy than was thought two or three years ago. I feel that it is very important that we use this time wisely to present policies, not only for this country but for the whole Community, in order that gas supplies remain stable as do their prices for the next 30 years. The sources of gas supply, whether they are to be found under the land or under the sea, whether they are liquefied natural gas or substitute natural gas, are there to a certain degree in abundance. The only question that remains is that of the price to the consumers. This, of course, in turn, must depend upon the cost of production and delivery. Therefore, if I may paraphrase, supply stability must equal price stability. That, to me, is what should be the objective not only of Her Majesty's Government but of the Governments of the EEC in their future thinking about gas and its position in the energy programmes.

The only problem with the EEC is that they have a different approach, in that they are mainly importers of natural gas, whereas we in this country are in the fortunate position of having our own reserves. Therefore, the EEC may approach the subject from a different angle: although, basically, I do not think so.

The problem of forecasting has been mentioned. If I may put it in gambling parlance, you either go for the low field or for the high field on the estimates that have so far been given. The only way that we can get nearer to the truth of the matter is by a rapidly increased programme of exploration—and the incentives put forward in the Oil and Gas Bill are perhaps a start. The question is whether they are going to activate further exploration at a level and a rate which can give us some of the answers upon which to formulate an energy policy for the future.

I should like to ask the noble Lord, Lord Skelmersdale, if he would ever consider incentives to smaller, independent owners of land actually to dig for gas—if that is the right expression—at a low level. This has proved a very successful policy in the United States; and it need not necessarily be very expensive for a riparian owner to conduct his own search for natural gas on his own property. This may be a wasteful and expensive matter for the individual concerned but I should like to ask whether Her Majesty's Government would consider at any time giving incentives for riparian owners to do their own research at their own cost.

To return to forecasting, if we reach the high-field option or if the indications show that the Phillips Petroleum estimates may be more correct and are deliverable, then I believe that there is a case for the United Kingdom to consider exports to the Community. If, on the other hand, the increased exploration indicates a low field, then perhaps we might have to reconsider the matter of exports. My own guess, for what it is worth, is that the figures contained in the high-field estimate show that the high level table may prove more correct than the more cautious estimates. In that case, I think that a pipeline network in the United Kingdom, including a cross-Channel link to look after the transport of the gas from the large Norwegian fields, is something we on these Benches fully support.

There is one matter which has already been touched on briefly. It is the Siberian pipeline, which will prove to become the biggest single supplier in Europe apart from Norway. Again, if I may go hack to the paraphrase of supply stability equals price stability, the diversity and continuity of supply for the Community must be at the forefront of any energy policy for the Community itself. I think it has been embarrassing to those of us connected with the subject of energy to see the efforts the United States Government have made to dissuade manufacturers from taking any part in this programme, and its quite considerable efforts to block this project in the form of technology. It could also be a costly policy to the Community, if it was successful, in the sense that it would create unemployment and would also create difficulties for those American subsidiary companies operating in Europe.

I should like to ask the noble Lord, Lord Skelmersdale, if he can give reassurance on the Government's position here to those companies that have been involved with the supply of technical apparatus for this pipeline. I believe that there are legal problems connected with this, and I think that some clarification would be helpful—as much for the reassurance of employment in France and Scotland as for those companies which are directly connected with the supply of gas equipment. When all is said and done, gas is not a very complicated item to supply. This technology ban would only make it a more inefficient supply; it would not stop it. A number of Press reports have indicated that, if the Americans were to effect a proper embargo on this technology, then the Siberian gas pipeline deliveries would be unable to go ahead. I am informed that that is not so. They may not be able to produce gas as efficiently as they would with this special turbine equipment; but it would not stop it.

Again a matter of principle is involved here. I do not want to widen the question into foreign policy or to deal with Poland. It is a question of a fair price for gas for the future of all in Europe. I believe that the Siberian gas contribution (which will amount to 22 per cent. of the European uptake) will go a long way to stabilising gas prices for the citizens of the EEC. I do not think it is any business of the United States to interfere with this policy, for whatever reason they may give. I cannot see the logic of it either, in the sense that they appear quite happy to export grain, possibly to feed the workers who are actually building the Siberian pipeline itself.

I do not want to enter into the wider context of this, but it raises a matter of principle which I think that we in Europe could do without at the moment. We wish to maintain the friendly and harmonious relationship with the United States on which the whole security of the Western Alliance depends. I think that this has been a silly, misguided policy which is creating unnecessary misunderstanding and certainly a lot of doubt about the long term future of Scottish employment, as well as unnecessary frustration for those of us who are trying to involve any government which is part of the Community in a sensible energy policy for Europe. I hope that the Government, without affecting in any way our friendly relationship with the United States, will make their position more firmly felt than they have done to date, in that perhaps this matter can be dropped and the Community can plan its gas supplies rather on the lines that have been suggested in this report, without any disturbance for political reasons from our allies.

My Lords, I must thank the noble Lords, Lord Kings Norton and Lord Tanlaw, for their introductory remarks. I had thought to open by saving that natural gas seemed a very appropriate subject for a maiden speech; but I think that that perhaps would be to treat it with undue levity. The benefits of natural gas now reach into a vast number of homes and commercial enterprises throughout this country. If we are going to continue to enjoy those benefits beyond the year 2000, we must take a number of important decisions in the relatively near future. I must declare an interest in this subject in that, outside this House, I am a director of a small gas and exploration company.

As a number of speakers have already said, and I agree, the most interesting aspect of the report is the very wide diversity of views over the ultimately recoverable reserves of gas from the United Kingdom continental shell. As has been said, we will only ascertain the truth by drilling a very large number of exploration wells. In order that the industry can raise the capital to drill those wells two important aspects need to fall into place. The first is that the industry should he permitted to make the best possible use of the very small supply of prospective exploration acreage; and the second is that a market should exist so that when an explorer makes a discovery he knows that he may sell his gas.

The raw material of the exploration industry is of course the exploration acreage and I must welcome, obviously, the decision of the Government to award new licences in the southern gas basin in the forthcoming licensing round. But in many ways we must be more concerned as time goes on with what I call secondhand exploration acreage. A great deal of prospective exploration acreage is now held by companies who have fulfilled their initial drilling obligations and whose original geological concepts have been shot down. The companies at the end of a primary term of a licence have to give up half the area and they give up the least interesting area.

But, at the same time, they find it difficult to persuade their managements to make additional drilling expenditures. Waiting on the sidelines of course there are a number of companies with different geological concepts of a given piece of acreage and the funds to pursue their ideas. This is in effect the traditional basis for a farm out where he who has the acreage gets together with he who has the funds and the new idea and together they pool their interests and drill another well and possibly make another discovery.

However, it is my impression that the Department of Energy in the past has not welcomed farm out arrangements, possibly because they have tended to put a value on acreage which was handed out by the Government originally effectively for free. At the same time, the Inland Revenue has in a number of cases endeavoured to recognise this value and seek to charge a capital gain on he who is farming out the acreage. I am not aware that they have successfully recouped any tax on this basis, but obviously it is a disincentive especially as in quite a large number of farm-outs no cash actually arises in anybody's hands with which to pay the tax.

Geologists are artists rather than scientists and the oil companies are their patrons. We must ensure that the very small supply of canvas is used to the maximum efficiency and that the bad pictures can be repainted. I certainly ask her Majesty's Government to consider easing and encouraging farm out activity.

The other important aspect that I mentioned was market, and a very prominent aspect of the market is price. I do not think that it is appropriate for me today to say very much about price except that the pricing policy of the British Gas Corporation during the latter half of the 70s resulted in virtually no exploration activity at all. I hope that we are now about to see a change in that situation.

As to the market itself, which is what will give the security to the explorer, the United Kingdom is a closed market. Gas may come into it but it may not get out. The domestic explorer is therefore faced with the situation that if he brings a discovery on stream he may be trying to sell gas into a saturated market, either saturated by other discoveries or saturated by an over-commitment to Norwegian or Algerian LNG imports. At the same time, the Norwegians have recently discovered a number of very large potential fields in the northern North Sea which will be slow and very expensive to develop. They have to take careful decisions. They appear to be faced by two markets: one, which is nearer, is the United Kingdom; but, as I said, it is a closed market and from the Norwegian point of view the problem is exactly the same as for a British producer.

The European market is probably insatiable, although rather further away. Unless we take certain steps to encourage the Norwegians, I think that the bulk of Norwegian gas will go to Europe; but this need not be so. As another noble Lord has already said, the United Kingdom is a logical route for a grand trunk gas line. If such a gas line existed with the cross channel link, the Norwegians would be able to sell into the United Kingdom without the fear that perhaps domestic preference for a major, indigenous discovery will squeeze them out. The United Kingdom producer will be able to develop his field, knowing that if the market is saturated he will merely displace Norwegian gas which will travel on to Europe or (dare I say it?) maybe his gas will be exported. What is perhaps most important of all is that the United Kingdom consumer will have the bulk of the supplies of gas available to Western Europe passing through his back yard. That must be a very valuable aspect.

This is not really a European Community matter; it is more a matter for Westen Europe and we might still be having this debate if the EEC did not exist. It must he to the benefit of the whole of Western Europe that Britain is encouraged to find and develop its gas reserves to the maximum—and this is so for Norway—so that ultimately the large anticipated imports of gas from Eastern Europe remain merely a useful palliative and not an addictive drug to Western Europe. My Lords, I commend the report to you.

My Lords, it is my good fortune immediately to follow my noble friend Lord Torrington and to congratulate him on his superb maiden speech. He has demonstrated in this speech his very powerful analytical mind, his great knowledge of the industry and the extraordinarily constructive comments that he always has to make on very complex subjects. I was one of the many on Lord Kings Norton's Sub-Committee F who learned a great deal from my noble friend Lord Torrington. It is customary to say on these occasions that we all hope that the maiden speaker will speak much more frequently in future. This is certainly the case with my noble friend. In this House I have noticed, as a sometime attender, that either the very young or the very old speak best, and those of us in the middle do not speak too well. I think my noble friend Lord Torrington, although no longer in the very first flush of youth, is one of the younger speakers whom we would like to hear very much more.

It was a great privilege to sit on Sub-Committee F under the chairmanship of the noble Lord, Lord Kings Norton. It was an interesting investigation, we had excellent witnesses and the documentation of the report which, as has been said, was so well put together, will provide a source book for many years to come on natural gas matters.

It is said in the beginning of the report—this is in paragraph 7—that gas reserves hold the key to policy making. I think the range of gas reserves in the North Sea is perhaps even wider than has been already mentioned. The firm reserves, the reserves that people are absolutely sure about, are about 25 trillion cubic feet. In the upper range, the possibility, which was the one mentioned by Phillips Petroleum, is 130 tell So the ratio between what is certain and what might be is six to one and that is a very wide variability.

It was generally agreed by the oil companies and the Department of Energy that the probable and possible reserves will ultimately turn out to be from between 50 tcf and 60 tcf. But to determine this figure will require a great deal of additional drilling. I should like to put into perspective the figures of 25 tcf which are the firm, indigenous reserves on the United Kingdom part of the North Sea shelf. They are about 1½ per cent. of known world reserves. Similarly, if further drilling proves right at 50 tcf, it will still be about per cent. of the probable world reserves. So although natural gas is so important to us, it is really a very small fraction of world resources, and as a lot of the gas which exists is in countries which have no specific use for it, we obviously should consider importing some of our needs in future years.

Why do we not know what is in the North Sea? The obvious answer: not enough drilling. Why did we not have enough drilling? I think the basic reason is that the fields found early were very large indeed and the British Gas Corporation was able in the 1960s and early 1970s to enter into contracts which ensured its needs for some 15 years ahead.

British Gas concentrated on premium outlets and were able to develop those premium outlets because they were able to offer advantageous prices to the customer. British Gas did not want to establish great quantities of new reserves. They felt that if they did so the demand to use up those reserves by the producers who had spent their money on exploration would be to degrade the end use of natural gas. In other words, instead of being reserved for premium uses, the gas would start being burned under boilers. This is what happened with the Gruningen gas from Holland, and I frankly think that the policy of the British Gas Corporation turned out to be the correct one for the country.

British Gas was able to develop this market because of its extraordinarily good service, because its price was right and because it did a brilliant job all round. It did an excellent job on transforming all domestic appliances to use natural gas, and the way it put up the equipment to handle the gas coming ashore was very well done. The land distribution of the natural gas was a major enterprise, again extraordinarily well done, and I think that the whole way in which British Gas tackled this wonderful new benefit to the country is deserving of the highest praise and credit.

The low prices which British Gas offered, by which they were able to take the market from electricity and other energy forms even at lower purchase prices—and it must be remembered that some of them were very low—were freely entered into at the time by the producers, and this gave British Gas great cash resources. They used these progressively to write off all their obsolescent plant; they used it to pay off their debts and they invested heavily and wisely. As my noble friend Lord Torrington has said, British Gas perhaps got a little complacent about the strength of their position and in the mid-1970s were not very popular in the North Sea. At the time, if I might declare an interest, the British National Oil Corporation had a 50 per cent. share in the Viking Gasfield and I struggled very very hard indeed to get a rather better price from British Gas for the supply. I had to do it from BNOC because our partners, Conoco, were so intimidated by the British Gas Corporation that they did not like to do the arguing themselves.

The British Gas position, as sole monopoly buyer, was extremely strong. I might mention that the price British Gas were paying in 1975–76 was as low as 2p per therm, or even less. Since 1976–77 there have been progressive increases. British Gas has been more accommodating to adjusting southern North Sea prices. They have had to pay a higher price for Frigg gas and for gas from the Brent field; so we have seen this progressive increase in the last few years in the price paid by British Gas. In the last financial year it was up to 10.5p per therm, which is five times what they were paying a few years earlier—still very low, but more satisfactory.

All the indications now are that British Gas is having to adapt to a new position. It coped very well with very wide seasonal demands: the difference between peak demand and the low summer demand is a factor of about four. British Gas renegotiated many of its contracts for the southern North Sea to cope with this to ensure that there was no hitch in supplies. But by now their comfortable position is going. Those original contracts are coming to an end, some of the southern gas fields are becoming exhausted and more than half the gas has already gone. It realises that it is going to need new gas, certainly in the second half of the 980s—some figures put it as near as 1985 and others in 1988. But in only a few years from now British Gas will want fresh gas and this has altered its outlook on the price it is prepared to offer.

As my noble friend Lord Torrington said, price is a very keen component in the whole exploration and development scene and the latest news is that for the associated gas from the North Alwyn field it is prepared to offer something like 22p per therm. The gas which British Gas was expecting from the North Sea spinal pipeline has not matured because the pipeline has not been proceeded with. Brent gas will be rather late and I think it has been rather below expectations in quantity. So we are going to have a change from the picture of a satisfied buyer with adequate gas and strong contracts into one of a buyer which needs extra gas; and all the indications are that the British Gas Corporation will be coming close to what is now the accepted price for new gas in Europe, whether it is from Algeria, Tunisia or Russia, of round about 25p per therm. So I think the anxieties of the producers and explorers, which were very real indeed for most of the 1970s, will now be a thing of the past.

It is essential that the Government take steps, as outlined in the report, to make sure that more exploration is done. If we are going to get the extra gas we need, not just for the 1990s but even for the second half of this decade, exploration must take place now and development must be put in hand very shortly. I think the idea that the new Oil and Gas (Enterprise) Act will greatly change the position of British Gas as a main buyer is not well founded. We did not find anyone in the witnesses from the oil companies who thought that being able to sell the gas directly to perhaps industrial consumers in this country would make any great difference. As my noble friend Lord Torrington said, selling into this closed market, the British Gas Corporation has an overwhelmingly dominant position. My own view is that with supplies of gas so uncertain this factor of six between what we know is there and what possibly might he there, and probably only a factor of two over what we know is there (and even that is dependent upon a great deal of exploration), does not really leave us with much room to export to the Continent, not if we are to safeguard our own position. If in fact some of the exploration produces major fields, then, as the report indicates, the Government could reconsider the position.

I have paid some compliments to British Gas, and I think rightly, because their contribution in making possible the development of the North Sea has been really quite amazing and they have finished up providing tremendous assets for the nation. At current prices, the British Gas balance sheet is about £10.5 billion. Their capital liabilities, which are normally regarded as equity capital, are under £400 million; and even offsetting the £400 million British Gas have £300 million on loan to the National Loan Fund. So to all intents and purposes this immense asset of £10.5 billion has been provided by British Gas by clever commercial operations with no load on the taxpayer whatsoever. For the future I have fears that the Government will try to take too much out of the gas industry, as undoubtedly they are trying to take too much out of the oil industry at the present time. It seems reasonable, I suppose, when the Gas Corporation get into the position of lending the Government money that they should take the money from it directly: hence we have the gas levy, which was about £300 million last year and will probably be between £400 to £500 million in the current year.

However, when one looks at the figures of British Gas, one finds that their selling prices are now up to about 30p per therm, their buying price, plus the levy, is up to about 13p per therm and, if they have to pay—as they undoubtedly will have to pay—the going market European prices for the extra gas, which will be around 25p per therm, then the selling price for British gas, both to industry and to domestic consumers, will increase quite markedly over the next five or six years. It is most important that we do not get into a position where British industry is penalised by paying more for gas than its industrial competitors in Europe.

I think that the Government have fairly asked British Gas whether the operating costs, which in the last year's accounts are 16.5p per therm, can he reduced. But if they cannot he reduced, then any further loading of taxation or levy on the British Gas Corporation will make the position both of the domestic consumer and of the industrial consumer of this country very much worse. I think that we must do everything we can to encourage more gas production. Our taxation system is already too onerous on the producer, and we must not make the parallel mistake of making the taxation system too onerous on British Gas.

The report brings out that there is a great deal of natural gas in the world, and your Lordships will probably have gathered that I believe, as the report states, that British Gas should keep their options open when it comes to the importation of natural gas from other sources. It makes great sense to have this trunk pipeline from Norway, through the United Kingdom, across the Channel and into the Continent. We shall require a great deal of nursing to get this done. Our relationships with the Norwegians on previous negotiations have not been too happy. Maybe we were asking too much: maybe they got suspicious of us. But the fact remains that there are fences to mend there. Although there is a great deal of gas in Norwegian waters, it is not thought that it will be either very easy or cheap to extract and to get the full benefit of North Sea reserves in Norwegian waters passing through this country and on the Continent is going to take at least 10 years, as I think most experts would agree, and a great deal of money. Therefore, if we are to have our share in the 1990s we must get negotiations starting now.

With regard to substitute natural gas from coal, I think that this is for the very distant future. Even the evidence from the Coal Board put it in the decade 2000 to 2010, and even that is probably optimistic. When one thinks also that, to provide even half the present natural gas that we are using from the North Sea by substitute natural gas would take 40 million to 50 million tonnes of coal, it does not seem to be an extremely sensible thing to base our future gas supplies on gasifying coal. It would be much better to scour the world to see what other supplies of natural gas we can import or, even more importantly, do everything possible, as outlined in the report, to get more exploration of the North Sea to make certain that our own reserves are established at a firm figure as soon as possible.

My Lords, I have had the privilege of being a member of the sub-committee which produced the draft of this report and I, too, should like to thank the noble Lord, Lord Kings Norton, for the admirable way in which he introduced it in this debate today. I declare an interest, as I have in the past, as having worked during the last seven years for an oil company which is the operator of one of the largest fields producing oil in the North Sea at present. I am very glad to be following the noble Lord, Lord Kearton, because I am well aware of the great achievements which he made as the first chairman of the BNOC, which was a partner in the consortium for the field which I have just described.

We have had the pleasure of listening to an outstanding maiden speech from my noble friend Lord Torrington and I congratulate him upon it. He can speak to us with great knowledge and experience from his position as a director of a company that is engaged in exploring for oil and gas. He said that geologists are artists, rather than scientists. He was certainly an artist today, with his brush painting the picture of farming out acreage in the North Sea. I know that we all look forward to hearing him many times in this House in the future.

Already speakers have pointed out that there is a very wide range in the estimates of the remaining gas in the United Kingdom's sector of the North Sea. If one takes the minimum figure which the Department of Energy puts forward, and compares that with the maximum which the Phillips Company puts forward, the difference is enormous. I think we all agree that we need more knowledge, not only in order to evolve a policy for natural gas for our country, and also for Europe, but because it is basic to an informed policy on energy as a whole for this country. The question is: What are the best methods of finding out more information about our reserves?

Hitherto, after the 1960s, there was little incentive for the companies to explore for gas; the gas had already been discovered in the basin off East Anglia. Companies were naturally attracted in the early 'seventies and onwards to finding oil further north, which led to the discovery and the development of the major oilfields east of Shetland. Those were, indeed, successful discoveries, because our self-sufficiency today depends to a great extent upon the oil flowing from those fields. But because the companies felt that it was not worth while or economic to find and produce more gas in those days, we have not gained as much knowledge, or as much gas, as we could have done.

Of course, associated gas has been produced with the oil in oilfields and that will, no doubt continue. The point about that is that, in most cases, the gas has to be produced at the same time as the oil, if one is to get the oil. It has been important to make sure that as much gas as possible was saved, either by being used on the platforms for power, or by being pumped back into reserves in the sea, and not simply flared. Those operations will still be necessary, but new, deliberate searches for gas are now required. I believe that the Government are aiming to encourage this—certainly, their new legislation appears to have that as an objective—and, for various reasons, as the noble Lord, Lord Kearton, said, prices are likely in future more to reflect the costs of producing natural gas from the North Sea.

As regards the recommendations in the report, I should first like to turn to licensing. There are many factors to be considered when a Government are awarding licences to applicants. But I believe that the recommendation in the report should be taken very seriously; that is, examination of the extent to which companies have in the past gone out of their way to try to find gas. That mentions a past contribution, but I suggest that it should not be exclusive; after all, some companies have not had the opportunity to seek for gas in the past. So that recommendation should not be carried out in a kind of rough justice way. To some extent, it has been a matter of chance. So I should like to add a footnote to that recommendation, and say that Government should consider the general performance in the past of companies, and the likelihood in the future of their being able to add to knowledge, from the programmes which they are putting forward, of our reserves of natural gas. So it is also the contribution which can be made and is to be made by companies, as well as their past performance, which should be considered.

I now turn to taxation, which is mentioned in paragraph 10 of the report. As the noble Lord, Lord Kearton, indicated, the North Sea tax regime has become oppressive so far as oil is concerned and it is now. I believe, a deterrent to development plans. This is not the only factor which deters companies but it is one which the Government can control. Most of the other factors are not within their power.

Of course, it is not exploration that is as seriously affected by the tax régime as decisions on development. It can be pointed out that there are applicants who come forward, apparently eagerly, at succeeding rounds of licence awards, and that will no doubt continue. But it is the later development decisions which are very much more expensive and which indeed involve huge quantities of money. Exploration is expensive but it is small compared with the amounts of money involved when a field has been discovered and decisions have to be taken about development. The lead times for both oil and gas are very long. In order to ensure the supplies which the Government and the country will expect in the 1990s, decisions on the development of fields need to be taken in the near future and not delayed. The fields on which these decisions will be taken are, on average, going to be considerably smaller than the ones which have been found and developed in the past. Most of the large fields in the North Sea have been discovered.

Another point is that the supporting industries, especially the platform building companies, are finding themselves without work while development decisions are being delayed. They may dwindle, and later we might have to go to foreign suppliers because our own industries have declined.

As I have said, I do not expect the applications for exploration to be much affected by the oil tax régime. It is the very important development decisions concerning our future supplies to which I draw attention. I urge the Government to re-examine very seriously the effects of the North Sea tax régime with their eyes on the 1990s and the quantities of both gas and oil which we ought to be producing in those years. I am not suggesting that there should be massive expansion. I am simply considering self-sufficiency in those years. But decisions will need to be taken now in order to ensure supplies.

I come to the pipeline which has been suggested in the report: a pipeline for gas from the Norwegian sector to the United Kingdom and then another pipeline, which would be part of the scheme, from Britain to the Continent. It looks as though this scheme will be needed. It will provide flexibility of supplies and it will enable the price mechanism to operate. As other speakers have pointed out, this seemed to the Committee to be desirable and necessary in the future, but it will take some years to bring to fruition. It seems that recently gas pipelines have been bedevilled with difficulties. I refer to the gas gathering line which eventually did not come about and also to the Siberian pipeline. But in this case I suggest that the pipeline must be so clearly advantageous to all concerned that there should be no difficulty about the financing of it, whether from private sources or public, or a combination of both. Those decisions, however, must clearly be taken before the pipeline scheme is embarked upon. As regards this pipeline, I do not think there would he any difficulties about the strategic side.

With those comments, adding to the recommendations of the report which I fully support, again I should like to congratulate the noble Lord, Lord Kings Norton, on introducing this debate.

My Lords, from this side of the House, I should like to join in congratulating the noble Viscount, Lord Torrington, upon his informed speech. I hope that we shall have many more opportunities of listening to him. I should also like to congratulate the noble Lord, Lord Kings Norton, and his expert team upon this splendid report which I have read, including that part where the noble Lord, Lord Kearton, expressed his doubts about the marginal development of gas from coal.

I shall not detain the House for very long, because there are speakers yet to be heard with much more expertise than I have. However, I have a number of points to make. What has to be remembered is that the onshore infrastructure for the supply of gas from our indigenous offshore supplies was completed—and suprised us all—in the mid 1970s. It was a massive job, and it has proved effective. It proved so reliable that the demand for gas from industry as well as from domestic users almost outstripped supply. This was because of the excellent pipeline communications. To meet this demand the industry planned to increase capital spending from £300 million per annum in the current year, to about £400 million in 1983. It would be absolutely foolish of the Government to cut down on that capital development. I am not going to discuss whether private or public enterprise should be involved. However, if Britain is to be less moribund than it is at the moment, it is vitally important that our sources of energy should be co-ordinated.

This gas industry—it is God's gift to us, together with oil—is not being exploited and organised as it should be. Lack of capacity to meet today's demand for gas has placed a restraint on the industry's freedom to set prices. This is a political area. There must be a reasonable price, whether it be public or private enterprise. A private entrepreneur must get his price per therm for the gas which will allow for development. We want reasonable exploration and a reasonable rate of profit for those who are courageous enough to enter this difficult area. As I have already said, the demand for gas has placed a restraint upon the industry's freedom to set prices. The public do not seem to be aware, although I believe that it was the noble Lord, Lord Kearton, who mentioned it in his speech that the Gas Council did a magnificent job. They capitalised the expenditure programme with no recourse to national funds. This was an achievement in itself, proving that public enterprise has done a good job.

Let me turn to Cmnd. 1978/7049 and Cmnd. 1979/7439. Without boring the House with the details, what do we find? In 1978–79 there was a drop in the estimates of capital expenditure by 50, in the following year by 149, and in the next year by 188. Then it crept up a little to 100 in 1981–82, because there was supposed to he a re-phasing of major transmission projects. The steel industry is of paramount importance to the gas industry, because it will supply the pipelines. What is the good of discovering gas in Morecambe Bay and the Irish Sea unless one can guarantee that British Steel will provide the pipes? We should not forget that President Reagan threatened not to provide steel for the transmission of gas from Siberia. We do not want to be in the hands of a Reagan or anybody else.

We want our British steel industry to be kept alive, and if this Goverment had courage they would take the opportunity now of seeing that South Wales and other steel areas get cracking on producing. Once you lose good steel labour it is like losing miners, and the young ones will not come into it. Not any Tom, Dick or Harry can cut coal at the face; it is nothing like a factory. Once you lose these men and their strength (and, God forbid, they are good for Rugby only until they are 25, and then they are finished, with pneumoconiosis) it is very difficult to get the training undertaken for coal cutting. It is exactly the same in the steel industry. Although we are discussing gas, we are also discussing gas pipelines for communication, and the Government must be alerted to this point.

Domestic, industrial and commercial consumers need as much energy as we can get. This Government's job—because they now have the job of running the country and I do not want to make any party politics out of this—is to get down to co-ordinating energy supplies. Do not let us forget that ruthless competition could be a drag on the co-ordination of energy supplies; competition, yes—but do not let us get ruthless about it.

Finally I should like to ask what progress is being made with the Morecambe Bay sites in the Irish Sea.

We have heard very little about this although it is in the report. Will the Government act on the expertise which has been presented by the assiduous progress of the noble Lords who sat for weeks to produce this report? Something should be done with this report. One other point; it is important to develop new resources and technology. I remember that on a visit to China I learned that the Chinese were trying fluidised combustion, which they had just heard about, and the liquefaction of coal. I am not qualified enough to get an in-depth argument going on that point but, from my reading and discussions, a coal-based natural gas is now already beyond the experimental stage. I do not know whether the noble Lord, Lord Kearton, who is well informed, thinks that this is so far beyond the experimental stage that it is nevertheless worth dealing with that side of producing gas.

My final point—and it is not a crack at the noble Lord the chairman—is that I have here a little book of initials and what they mean. I paid a lot of money for it. It states:

"This is a guide to initials, acronyms and abbreviations designed to soothe the temper of everyone who suffers from the current worldwide initial mania".

In the name of the Lord above, I was on a committee to which I suggested that on the first page of its report we put a list of the abbreviations so that when Lord Davies of Leek looked at SNG or ABC and has forgotten from three pages previous what those initials stood for, he could turn to the list and find the meaning. That is a bit of a jocular remark but to a student of these problems and to men who are busy, it would be time-saving and good for the English language.

My Lords, I wonder if I shall ever listen to a speech by the noble Lord, Lord Davies of Leek, when he does not refer to acronyms. Of course, one starts one's contribution to this debate by joining with other noble Lords in their accolades to the maiden speech of my noble friend Lord Torrington. It was a very well-informed speech: clear, precise, instructive. It so happens that we got him interested in the sub-committee as a result of my meeting with him at a dinner, when I asked him, "Why not come and test the temperature and see how you like it for one morning a week, with two or three hours' reading a week?" He came and we on Sub-Committee F were all enchanted and instructed by his contributions. He has now gone a stage further and taken the temperature of the House itself. This is clearly welcome to us all and there is no doubt of the sincerity of successive speakers' conventional assurances that they look forward to hearing him again.

I should disclose an interest in that I too am connected with a company that gave evidence to the committee. But nothing I have to say now has come out of my office nor from any kind of briefing they have given me. I always feel overwhelmed in these energy debates by the expertise of those who have gone before and those who threaten to come after. One is comforted by sitting for week after week under the distinguished and genial chairmanship of the noble Lord, Lord Kings Norton, and in company which is always stimulating.

Most of the things I wanted to say have been said already but, to abbreviate a little, the short point of our report is that both Britain and the EEC will need a lot more gas than they at present know where to find—and it will certainly he needed if the famous upturn in the economy ever comes about. In our consumption in this country of about 50 billion cubic metres per year, we have to import one-third from Norway. The EEC, consuming five or six times as much as Britain, will face a yearly shortfall greater by about half than our total annual consumption—and that even when they have supplies from the Soviet Union. As has already been said, the difficulty is that nobody really knows where further gas is to be found nor indeed whether the Phillips estimates make sense or not.

The first question that arises is, what about the gas in the Norwegian sector south of the 62nd parallel? There are not less than 500 billion cubic metres there and north of the 62nd parallel there may be anything up to 3,000 billion cubic metres, although the safe guess is about half that. It will he difficult to get—costly in deep water and stormy seas and, moreover, there is oil beneath the gas which the Norwegians will naturally want to take out first. There are two big Norwegian fields in production now, Frigg and Ekofisk, and shortly there will be gas from Statfjord and Sleipner for which it is worth bearing in mind that BGC are now in sharp competition with European consumers to obtain an adequate share. The bargaining is, of course, about price.

How does one discover more gas? The answer revolves around gas price on the one hand and fiscal disincentives on the other. We know that as a monopoly BGC did pretty good business for itself and paid chickenfeed for the gas supplies available from the British side of the continental shelf. Then they had to go to Norway and pay a great deal more, as the noble Lord, Lord Kearton, has reminded us. Until the Government agree in principle to the export of gas found on the British side of the shelf there will be no free market such as was adumbrated in the recent legislation. Until that happens the price of gas cannot rise to its natural level and therefore provide the price incentive for exploration and development that is needed.

Although the Government are now inviting applications for new exploration licences—and in the Southern gas basin in particular—this is no guarantee that gas will be found. Nor is it any guarantee that if gas is found, those who find it will feel it is worth while developing it. As the noble Lord, Lord Campbell of Croy, pointed out, there is a big difference between the cost of exploration with a wildcat well and the actual development of a field. One is going to cost up to £50 million or so, but a field may cost more than £1,000 million. No wonder companies are hesitant about going for the development of a field even when they know pretty well what is there.

The Government are busy putting out—I call it propaganda—information from the press department of the Department of Energy that things are going very well, that no fewer than three big field developments are under way now or in early prospect. Well, at least two of them—and I speak with knowledge of one—could have been under way 18 months ago but for the extraordinary and almighty confusion which subsisted in the Department of Energy focussing on the gas gathering pipeline. If ever a department has missed the bus I am afraid that is true of the Department of Energy. It reminds me of Rossini's words:

"Look in my face. My name is 'might have been'; I am also called 'no more', 'too late', 'farewell'."

Of course, but for the violent fiscal disincentives to which the Government continue to be deaf and blind (despite arguments for months all over the country from economists, from businessmen, from oilmen, from gasmen, from investors)—I say, but for those disincentives, to which the Government are blind and deaf, there are certainly smaller fields which could now be on the way to development.

We read in today's paper that the United Kingdom Offshore Operators' Association are still deadlocked in their talks with the Treasury: those talks have been going on half the year. One can imagine the sort of wisecracks that these weary people must toss at one another: if we are to continue advance PRT, "give me today and take tomorrow". One pictures the exhausted negotiating team emerging from their long talks with the Treasury and the Inland Revenue wringing their hands and saying, "no use planting boiled potatoes; no use pumping a dry well".

As to getting the gas ashore, the scheme for what has been called a gas land-bridge pipeline has already been well spoken of in this debate, and it is a particularly important recommendation in the Committee's report. But one or two points about it have not yet been made. Such a pipe ought to cheapen the transport of Norwegian gas from the northern areas of Norway down to continental Europe. Secondly, it ought to enable the British Gas Corporation, as a result, to offer a more competitive price to the Norwegians when the time comes. Finally, it should eventually facilitate the inward movement of Algerian gas from across the Continent.

But there has been no sign, overtly at any rate, that the Government are much interested in this idea—rather the contrary. The word that one gets in talking to people in Whitehall is that if this or that private enterprise company cared to launch the idea and put up the money, HMG would not stand in their way—not much at any rate—and might even allow a tax concession here and there to help it on. This was the trouble about the ill-fated gas-gathering pipeline scheme. Private enterprise was expected to fund this public utility, earning a return at public utility rates without a Government guarantee. Without a Government guarantee there never can be a public utility of this sort funded by private enterprise, so far as I can see. In all these matters I am reminded of a useful phrase which appeared in yesterday's London Times:

"In the administration of inertia, Britain has led the world".

These energy debates always produce interesting questions, and I believe there would be more energy debates and certainly more energy questions at Question time if we had the good fortune to have the noble Lord who is going to reply as in fact a Minister of the department concerned. This is no criticism of him at all. We know him, we like him, he is assiduous in his studies, he never misses an opportunity of trying to learn more about energy, he has a bright and sharp intellect and a ready wit as well. But he is not a Minister of the department, and because of that I am afraid we have to expect—I say it in the nicest possible way; I hope he will treat me as a friend afterwards—little more than a dose of passionate apathy. We could wish that the apathy, when it does come, would be a hit more authoritative.

There are more than 80 Ministers in the Government but not more than a dozen in this House. This is an opportunity to say, once again in the nicest possible way as I always do, that if the Prime Minister does not take the House of Lords more seriously and substantiate the familiar lipservice which is paid to a bicameral legislature, then the Government are likely to face more defeats in this House than they have had already. This is said in the most gentle and friendly way to my colleagues on the Front Bench, and I do not want to labour the point unduly and spoil the moderate temperature of this debate. But of course a dose of indignation does do one good.

My Lords, I must immediately apologise for the fact that I was not able to be in the House when the debate was opened. I shall certainly read the speeches that were given then, and particularly I shall read with interest the maiden speech of the noble Viscount, Lord Torrington.

When I try to study the problems of supply and demand in the gas and oil energies I always feel like a rookie who, somehow or other, has managed to get himself into a poker school where all the other players are professionals. The energy correspondent of the Financial Times, when he was writing last August about the Siberian pipeline gas supply project, said:

"Bluff hard and play your cards close to your chest. These are the tactics currently being employed."

It seems to me to be obvious—and the noble Lord, Lord Campbell of Croy as well as the noble Earl, Lord Lauderdale, have underlined the fact that it is obvious—that sooner or later western Europe will need to import gas. It seems to me that that is likely to be sooner rather than later.

But there seems to be a wide difference of opinion about when additional supplies from outside Western Europe are going to be needed. In July of this year The Times correspondent said that Europe badly needs the 40,000 million cubic metres of gas that the Soviet pipeline can supply, but only three months before that Peter Odell had said:

"I do not think 1982 will be out before Westen Europe as a whole does not need Russian gas".

As World Gas pointed out, Peter Odell was "never one to avoid controversy", and in the past he has made forecasts which were so widely different from those made by other experts that they were thought of as being derisory. I was among those who did think of them in that way. But a few months ago I was examining some of my old files and I came across letters and papers which Professor Odell had written in 1967, and I found that time has shown that the forecasts which he made in those papers were nearer the mark than the forecasts that were fashionable at that time.

Professor Odell's present prediction is for the end of this year, and I very much doubt whether he intends it to be taken as a long term forecast. Even in the short term he may be thinking only about supplies from Russia through the proposed new pipelines and not of the very considerable quantities of gas that reach Western Europe through existing pipelines. As the Committee's report points out, there is little unanimity even among the major oil companies about the size of the United Kingdom reserves of gas. Most of those companies gave figures of between 1.1 trillion and 1.7 trillion cubic metres, but the Phillips Petroleum Company, as the noble Lord, Lord Campbell, pointed out, gave a very much larger estimate of about 3.4 trillion cubic metres. Your Lordships' sub-committee was not able to obtain a logical explanation of this major difference and we were left having to accept it simply as a "gut reaction" to the evidence that was available.

An article which was published in the Westminster Bank quarterly review in August of this year gives the probable reserves in the Community of Ten as 4.2 trillion metre cubes, with a life of 25 years. Their figure of 4.2 trillion cubic metres compares with the Brussels figure of 3.2 trillion for the EEC. The consumption of gas is given by the EEC as 0.167 trillion cubic metres per year, but, of that, 25 per cent. is imported. Those imports are mainly of piped gas which came in from the USSR, the Middle East and North Africa—countries which between them contain some 70 per cent. of the world's natural gas reserves.

I think that those figures give a picture of the Community's present dependence on imported gas which is surprising to those of us who are not professionally engaged in the gas industry. When one realises that already a quarter of the gas that is used in the Community reaches us through pipelines which cross international frontiers, a man who is as politically naive as I am is inclined to wonder why the proposals for additional pipelines from Siberia which extend into France have caused as much friction as they have done.

The production of indigenous gas within the EEC is likely to rise only slightly, if at all, above its present level and increased demand can only be met by imports of gas or by gasification of coal. Gasification of coal is not at present attractive. It is expensive and I have been unable to find any process which claims an efficiency of more than 70 per cent. for the coal conversion processes. Moreover, indigenous reserves of coal are limited within the EEC and they are, in effect, restricted to Germany and Britain, where supplies may meet further restriction by labour and by environmental limitations.

It is likely that any coal for conversion would in the long run have to be imported into the Community, so that even when economical processes for the manufacture of SNG—perhaps I should say "substitute natural gas," in the light of what the noble Lord, Lord Davies of Leek, said—have been developed.

The raw materials of supply would have to cross frontiers, or more probably cross oceans, and they would not be immune from interruption. The alternative of importing natural gas by pipeline with cryogenic transport is difficult. Your Committee was told that this was cheaper than the conveyance by pipeline for distances of more than 3,000 to 4,000 miles, but it is quite certainly not proof against interruption. Moreover, it may be difficult to find sites for terminal facilities. My own reluctance to live on the doorstep of a liquid methane terminal may arise from ignorance, just as the widespread reluctance to have nuclear power plants as neighbours arises from lack of familiarity with them, but in both cases the restrictions must be recognised.

It seems to me that for many years to come the Community must rely, as it does now but to a far increasing extent on imports by pipeline and that whatever its origin the gas or the raw materials from which it is made are hound to cross the frontiers of some countries with which our relationships are not always cordial. If I take a relaxed view about possible hazards arising from this it may be because, having been in the electricity supply industry. I know how often supplies of electricity have continued to flow between countries which, to say the least of it, have had no friendly relationships with one another.

It is true that gas pipelines may be more vulnerable than electricity supply lines, but if gas has to be imported into the Community by pipeline—and commercial considerations seem to demand that there should be such imports—I suggest that this is a reason why there should be many pipelines from many sources bringing gas in. As the article in the National Westminster Bank review points out, price as well as reliability of supply emphasise the dangers of overdependence on a limited number of sources of supply. As availability and demand for natural gas have grown, many countries have built and are extending distribution grids in which flow can be in either direction so as to give greater security of supply. Although these national gas grids have been built, little if any thought seems to have been given to the desirability of an international gas transmission grid.

Now that additional pipelines are being built across frontiers, one wonders if they could be routed so that they could ultimately form a real international gas network instead of following discrete paths. It would, for instance, be possible to bring one of the Siberian pipelines through Finland to a point in Sweden, perhaps south of Stockholm, where it could join up with pipelines from Norway and run from there to cross through Denmark to Germany, having linked up with a line from the west coast of Norway and our own North Sea continental shelf gas. That line might run southwards through Britain to cross the Channel into France, and the ring could be completed by a pipeline from the Gulf States which could pass through Turkey and link up with lines running southward from Siberia through the Moscow area; interlinking rings could pick up gas from the North African countries.

I obviously am not trying, nor if I tried should I be able, to design such a system; I am doing no more than to suggest it as a possibility. If that possibility has a basis of realism I am not so unrealistic as to imagine that the construction work on a complete system could be started now; I merely suggest that the skeleton of such a scheme could he prepared and that, as the need grew, each succeeding pipeline could be so designed and routed as to conform with the ultimate plan. This plan would obviously have to be prepared in collaboration between the countries concerned but, in so far as the Common Market countries are concerned, the responsibility might be placed with the EEC which could organise collaboration across frontiers in a way that could hardly be arranged by any one of its individual members.

It can, of course, be argued that the fundamental weakness of the idea is that gas supplies might be exhausted before the network is complete. We do not know what reserves and resources of gas are available, but the USSR is at present negotiating its contracts to run for 25 years. If they do not have very large resources it is hard to understand why they are using gas to supply 40 per cent. of their boiler fuel (a most wasteful use of a premium fuel); why (according to the Financial Times) gas supplies 90 per cent. of the fuel that the Russians use in their iron and steel industry; and why 60 per cent. of the fuel used in their cement manufacture is gas. If they are wise in using gas in this way, it suggests that they must have immense reserves. In the longer term, we should remember that the gas network could be used for distributing gas brought in cryogenically from further afield and for distributing gas which is made from coal, as will ultimately be necessary. I suggest that at least the possibility of such a grid system is one that should not be discarded without thought.

My Lords, I should like to congratulate the noble Viscount, Lord Torrington, on his admirable maiden speech to which I listened, I must admit, with a measure of envy remembering my own effort some 18 months ago. I can do little but echo all that my noble friend Lord Lauderdale has said with humorous emphasis and deep knowledge of the subject.

As is shown in the committee's report, exploration has been inhibited by the low prices offered by the British Gas Corporation for gas from the United Kingdom sector. Consequently, we do not really know what the resources of that sector may be. Competition from members of the European Economic Community has forced the British Gas Corporation to offer higher prices for Norwegian gas than they are prepared to offer for gas from the United Kingdom sector. Nevertheless, the British Gas Corporation have been recently outbid in their efforts to purchase gas from the Norwegian sector and most of this gas will now go to Emden.

As my noble friend Lord Lauderdale has said, negotiations are taking place for gas from the Norwegian Sleipner field, which contains, I understand, as much gas as the Frigg Field, perhaps more. It is well known that the British Gas Corporation are making a very determined effort to obtain this gas. If they fail, they are likely to be short of gas by the end of the present decade, or at any rate in the early 'nineties.

It is said that Her Majesty's Government are trying to remedy this situation in the eighth licensing round by licensing areas of the southern North Sea, but this would only succeed if the British Gas Corporation are prepared to offer good prices. The measures taken by Her Majesty's Government to permit direct sales of gas to United Kingdom companies are unlikely to have much effect and could well be frustrated by tariffs inposed by the British Gas Corporation for the transport of this gas. In those circumstances the most effective step which can be taken is to allow sales of gas from the United Kingdom sector to be made freely throughout the European Economic Community. That would stimulate both exploration and development; it would not diminish Government revenues since tax is based on sales price, and overseas earnings would be increased. Moreover, it would help to dispel the illusion that we are not good Europeans. I am well aware that the United Kingdom reserves are limited—we do not know to what extent—and it could he argued that these should be preseved for United Kingdom use. But in the present circumstances and in our present plight, it is surely to the immediate benefit of industry in the United Kingdom that the gas deposits should be developed now rather than hoarded for the distant future.

My Lords, I am delighted to follow my noble friend the Duke of Portland because he always gives us very briefly a very wise message. I am, of course, also delighted to support the noble Lord, Lord Kings Norton, in his Motion drawing attention to this report, and to have the opportunity of congratulating my noble friend Lord Torrington on his admirable maiden speech. It looks as though he has left the Chamber for the moment, but I must none the less pay my tribute to his work on Sub-Committee F. Why he has not taken part in our energy debates in this House previously, I fail to understand for he is perhaps as qualified as man), of us, if not more so, to speak on this subject. I hope that he will indeed address us again frequently, especially on energy questions.

We have indeed had some interesting meetings in Sub-Committee F, discussing this subject with the various witnesses listed in paragraph 4 of the report. I need hardly add that I warmly endorse the conclusions, markedly brief and to the point—exceptionally brief and to the point—that are given in paragraph 32. Most of the points that I should like to make have already been made, but I think that I should repeat as others have done that there should be increased exploration drilling, and certainly in my view the Government should give more weight to the contribution made by drilling on existing licences to improve our knowledge of gas reserves.

I agree, too, that the Government should consider whether and when exports of natural gas to continental member states of the Community would be justified. In that connection—and, incidentally, having visited that part of the Frigg Field which falls within the Norwegian sector—I think it most important that Her Majesty's Government in the United Kingdom should encourage construction of the so-called "gas land-bridge"; that is to say, the Norway-United Kingdom cross-channel pipeline.

In advocating this I would not consider this pipeline as taking the place of the proposed Soviet pipeline. There must, as the noble Lord, Lord Kings Norton, said, and as many other noble Lords have said—and I listened particularly carefully to what the noble Lord, Lord Hinton, has just said about a Eurogrid network—be a diversity of supply to the European Community. I feel certain that the Norway-United Kingdom cross-channel line would be of' great value, especially to continental member states of the Community, and especially in the event of any interruption of supplies from Siberia.

I would like to add here (although it was not, I think, a matter specifically raised during the deliberations in Sub-Committee F) that I strongly support the Government's attitude, as I am sure do other noble Lords—and indeed the attitude of other member states in the Community—in authorising the export of turbines and other equipment needed by the Soviet Union to complete the Siberian pipeline as soon as possible. I feel sure that if we do not supply the turbines the USSR will be capable of manufacturing them themselves. Moreover, I completely fail to understand the United States' Government's attitude in this matter considering the quantity of grain that they are supplying to the USSR.

I trust that the hopeful signs which were mentioned by my right honourable friend the Foreign Secretary in another place yesterday, that agreement could he reached which may result in a lifting of the American pipeline sanctions, will be translated into fact, and that all members of your Lordships' House will urge the United States Government to reverse their policy in this respect. I wonder whether my noble friend Lord Skelmersdale may be able to add this evening to what my right honourable friend said yesterday on this matter.

On a semi-personal note (and I hope that late in the debate your Lordships will permit me this personal note) I well recall how my great-grandmother, a distinguished Welsh lady—her name was Lady Charlotte Guest of Guest Keen—when she was managing the ironworks at Dowlais, in the latter part of the 19th century, supplied all the rails for the construction of the Trans-Siberian railway. She negotiated personally with the Czar. There were some who criticised this because there were many who criticised some of the policies of the Czarist regime.

Nor do we now approve the present policies of the Soviet Union in their own country, Poland, or in their invasion or penetration of Afghanistan, Africa and, indeed, in other parts of the world. However, most sensible people in this country in the 19th century thoroughly approved of our helping to build the Trans-Siberian railway and considered it a great tribute to British industry, and especially to those working at Dowlais, which the noble Lord, Lord Davies, knows so well, who played such an important part in its building.

I think, too, now that we should take this opportunity of congratulating John Brown on having contracted—and I emphasise the word "contracted"—to supply turbines for the Siberian pipeline. I would indeed congratulate the other firms in France, Germany and Italy for being capable of making their own contribution to the laying of this pipeline. This is indeed a notable achievement in West European technological and industrial co-operation.

In respect of our other conclusions, I hope that noble Lords will read the report in its entirety and also glance through the transcripts of the evidence from our witnesses, and perhaps especially that given by Mr. Robert Belgrave, on pages 91 to 97. There are a great many points that I would like to underline in regard to the evidence given by our witnesses, but in this relatively brief speech I would particularly draw attention to Mr. Belgrave's remarks regarding relations between the British Gas Corporation and the Norwegians. While supporting what the noble Lord, Lord Kearton, said of the British Gas Corporation's remarkable achievements, like him I regret that British-Norwegian relations have not been altogether happy and that Norwegians involved in the negotiations are said to have been distinctly cool towards our own gas corporation. It is in my view unfortunate that a senior executive of a Norwegian company could have been led to say that we, the British, missed a chance last year, but that there might be a second chance as a result of the new discovery. We must not miss that second chance, and it looks as though we shall not do so. I think that we were glad to learn from Mr. Belgrave that he did not think that there was any underlying hostility in Norway towards us, and I felt that he was right in saying that the Norwegians were merely fed up with our method of negotiation. I certainly hope that that will change.

I think that one of the conclusions of our committee is that the European Commission—and, as your Lordships know we are particularly concerned with their proposals—and our own Government will regularly review the need for and the timing of liquid natural gas imports and also synthetic natural gas manufacture, and that regular reviews on the subject will be published. Incidentally, I was very glad—as obviously my noble friend Lord Lauderdale must have been—to read over the weekend that Total and Elf Aquitaine, the French oil companies, have submitted development plans for the £12 million North Alwyn oil and gas field and that the Department of Energy hopes to give the go-ahead for these plans well before Christmas. Again, I hope that my noble friend Lord Skelmersdale will confirm that this is indeed the Government's intention. My Lords, I warmly endorse what the noble Lord, Lord Kings Norton, and other noble Lords have said, and also the conclusions of the report.

My Lords, I sincerely wish to associate myself with the congratulations extended to the noble Viscount, Lord Torrington, on his able maiden speech and, with so many other noble Lords, I look forward to hearing him address this House again. In my view, the report before us fully warrants the serious attention that previous speakers have given it. It justifies the time and expertise that the committee has given to it throughout and, together with the noble Earl, Lord Bessborough, I commend detailed attention to the whole of the report.

At this time, after a comprehensive discussion of the character that has taken place, I propose to rationalise my contribution. As I have indicated, I associate myself with the appreciations to the noble Lord, Lord Kings Norton, for initiating the discussion on the report before the House. I think he had the advantage of a concise presentation, which appeals to me in particular. He was not at any stage talking for the sake of talking. It was a presentation that was apposite to the report itself.

I would accept the general direction set out in the report on the export of gas resources, in particular by the submissions of the Department of Energy. I do not accept that a flexible tax régime should not be equated with definite obligations. I appeal, and I think join others who in varying phraseology have appealed for flexibility. The obligation on the operators is the key question, and is one of control, and that clearly remains with the state, which in my view expresses the national interest at this time.

The obligations are set out and restated in paragraph 14 and in Parts II and III on gas exports, and I understand those finally to contest the Phillips contention, which has been mentioned in this discussion. I suggest that that is a proper contest because I do not see the basis for it, even with all the expertise that has been presented to us.

I see no advantage in weakening our security referred to in paragraph 16 in Part IV. Surely the alternatives set out in paragraphs 16 and 17 move in the right direction. Paragraphs 19, 20 and 21 of Part V are long-term alternatives which have been the centre of the last part of the discussion here on alternative supplies for the United Kingdom. These are set out in precise form in a few words, which again appeals to me. Paragraph 20 sums up much of our discussion and presentation.

Imports by pipeline would need least in the way of new facilities and would pose fewest environmental hazards. Witnesses generally—and this gives us a wide sweep when one studies the report—agreed that the pipeline import should be the first option.

"Norwegian gas is an obvious source. A cross-Channel link, if suitably designed, would permit access to supplies entering the European grid, including gas from the Soviet Union and Algeria".

It says so much in such a little space, but it is consistent with the whole of the discussion.

In saying that at this time of the discussion, and with a thin House, I think it is sensible to rationalise the presentation, and I find the summing up in the report itself another shortened version of a logical and sensible presentation to the House at this time. May I, without wearying your Lordships, go through it, because I am sure that I should save so much time in rationalisation if I could take advantage of an easy presentation, which is yet so important. In (b), the report says:

"In the award of new licences the United Kingdom Government should give more weight to the contributions made by drilling on existing licences to improve knowledge of gas reserves".

We have all been asking for more knowledge.

"Disincentives to 'farmouts' activity should be eliminated.

"The United Kingdom Government should consider whether and when exports of natural gas to the Community would be justified".

I am sure that that is correct.

"The United Kingdom should encourage the construction of a Norway/UK cross-Channel pipeline.

"The European Commission and the United Kingdom Government should regularly review the need for and the timing of LNG imports and SNG manufacture and should publish the results of such reviews.

"Diversity of supply to the European Community should be encouraged.

"Market forces are the best defence against unreasonable price demands".

Finally in their summing up, they say:

"No convincing economic case can be made for strategic storage of natural gas in the United Kingdom".

I would disagree with that. Of the nine points in the summing up, I would give six, and in order to save the time of your Lordships now I should like to leave it there and say that on the three I have not marked favourably I should be open to conviction by the many noble Lords who have the expertise. Thank you very much.

My Lords, in the course of this debate, there has been a wide measure of agreement with the report of the committee, which is hardly surprising seeing that out of the 12 previous speakers no fewer than 10 were members of the committee. Perhaps that is my only possible excuse for detaining your Lordships at this time by coming in myself as an outsider, perhaps with the excuse and the interest, which I declare, of being involved in various activities such as pipe laying, platform building, and the supply of equipment and services to the oil and energy industries.

We are enormously grateful to the committee, first of all, for tackling this vitally important subject, for looking at it so thoroughly and so expertly, and for commending it to us for debate. They have done us a great service. They are a perfect example of what we in this House can do in a field where we can apply our specialised knowledge. What better example of that than the splendid maiden speech of the noble Viscount, Lord Torrington, with all his personal experience in the oil industry. I hope that he will come to us regularly. I know the difficulties. It underlines Lord Lauderdale's point, that when people like him and others who are very busy in such activities take the time and trouble to come down here and contribute to our deliberations, perhaps they are entitled to the occasional ministerial reply. Again, I emphasise that this is absolutely no reflection on the noble Lord who is to reply. I have the greatest sympathy with him and admiration for the way in which he handles a plethora of different subjects for us.

I am so glad that we are looking at the Community aspects of this subject, because in this whole energy field we have tended to be rather inward looking and chauvinistic in the light of our good fortune in having these resources. Why do we not know what are the reserves of gas in the North Sea? Many noble Lords have already made clear the reason; namely, that there has not been the inducement, the encouragement, to producers, in the form of a reasonable market, to make it worth their while to do the vital development drilling needed. I need not reiterate that or the reasons.

On the gas front, we had for a long time the British Gas Corporation monopoly, and a good job indeed they have done. As the noble Lord, Lord Kearton, said, they have created a great asset; but of course ultimately it was not they who created it. It was the consumers of the gas who created that asset, through the good offices of the Gas Corporation.

The other aspect that is perhaps not emphasised so much in the report is the tax régime as it applies both to oil and to gas. I found it intensely disappointing to read another article yesterday in the Financial Times indicating that the talks between the industry and the Government on the tax régime seem to be just as much at a stalemate as ever, the Government insisting they are not convinced that an easier tax regime is necessary to encourage further development. I can only assume that this is not through ignorance but through stubbornness. The evidence is there; as we heard, it was only in the last few months that three new field developments have been announced, the first since 1980, and some of those after a good deal of arm-twisting.

Perhaps the prospect is a little better now. There is the prospect of some competition in the purchase of gas, but it will not be a really free market until, as other noble Lords have said, we are able to export. There can be much argument about how long we should hold on to those resources for our own use or how soon we should be prepared to export. I believe we should show a little more courage and faith in the undoubted reserves there are or must be. It is, after all, a little ironical, is it not, that the French, who played such a leading part in developing our gas resources (with a little help from my noble friend Lord Lauderdale) should be unable to enjoy directly the fruits of all that work in the North Sea?

There is the very exciting prospect raised by the committee of the eventual trunk gas line through Norway via this country to the Continent and, as we know, the Continent is already linked to the Continent of Africa. The security aspect has been emphasised. While I do not for one moment agree with the American view of the problem—indeed, I think it was misguided and improper of President Reagan to be trying to cause our companies to break contracts freely entered into; as the noble Earl, Lord Bessborough, said, one particular company, John Brown, were suffering considerable hurt, financially and otherwise, from the policy adopted towards them—nevertheless, it will be all to the good if the Continent of Europe can be less dependent on the existing supply.

That will not merely be us doing them a favour. One can envisage a scenario well ahead when North Sea reserves might begin to run down—and who knows by then what other discoveries may have been made in the African Continent?—and we might be very glad indeed to have pipeline to bring gas to us from south of the Mediterranean. I appreciate the problems of pipeline schemes. We saw them with the proposed gas gathering scheme, on which, incidentally, the Bank of Scotland, with which I am connected, did a great deal of work to produce a viable financial arrangement, but it foundered because there were factors of monopoly and a failure of the Government to be prepared to give it real backing.

I believe—this is the view of nearly every noble Lord who has spoken—we should give every possible encouragement to exploration for gas and oil because I cannot conceive that we shall not need all we can find. The market will dictate what should be done, if we allow it to, and we must always remember that there is a need not merely for fuel but for feedstock for our petrochemical industries which will continue to be important and grow in importance. I think it is never the right policy to leave one's talents in the ground. After all, we have the highest authority for that, and we know what happened to the one who did!

There is a further reason for encouraging development in gas and oil more than we are at present, and that is because of the substantial industry we have built up in support of oil and gas. It has been the deliberate policy of successive Governments, through the Offshore Supplies Office, to create a British industry for supplying and contracting to oil and gas, and they have had great success in doing so. It has been a real success story. The proportion of components of British content in the industry is now. I believe, up to about 70 per cent., and this has created a great deal of employment. It would be the greatest shame if that were allowed to languish, and I can tell your Lordships at first hand that a number of companies in the construction industry on this front are in a very uneasy position at present through the lack of orders coming forward as a result of the lack of new development. There could well have been substantial lay-offs and there could well be considerable, more, most of them in areas where there is very little alternative employment. That is another good reason to back a highly successful British industry that is not only supplying in this country but for export as well.

At the end of the day, I fear that one of the main troubles has been the dominance of the Treasury over the Department of Energy. We had high hopes of the translation of the present Secretary of State from his previous Treasury post, and I believe we have seen some progress since that move. I hope we shall see more. We read yesterday of the translation of a senior official who played a great part in developing the oil and gas industries, being moved to another sphere outside, and rumours as to the succession to the senior post in that department, rumoured to be a Treasury man. One could take that in one of two ways. Will it bring Treasury views into the Department of Energy, or, more hopefully, will we have a gamekeeper turning poacher who will teach the Department of Energy how to tackle the Treasury on equal terms? Let us hope it will be the latter in the interests of the development of these very precious resources which we are lucky to have, not just for ourselves but for the benefit of the Community of which we are part.

My Lords, I do not know whether my correct course of action is to blush or hide. Whichever it is I should be doing, before beginning my daunting task of replying on behalf of the Government to the debate, I must apologise for rising to my feet for the third time today. The noble Lord, Lord Davies of Leek—if I might have a quick aside to him before I start—made a comment which comes often from his lips on the subject of acronyms. When I was studying for my second Question, one of the prepared supplementaries I was given to read and consider was headed, "Non-First Use of Nuclear Force" with the acronym in brackets, "NOFUN". I am sure that is not in the little book.

The House should be grateful to the noble Lord, Lord Kings Norton, and his sub-committee for initiating today s debate, which I may perhaps summarise as covering the role which gas will play in the national, Community and international context. I was somewhat alarmed when I saw the list of speakers and related it to my experience of their erudition, but I need not have worried. It is a credit to the noble Lord to have collected such a list, not forgetting the expertise of my noble friend Lord Torrington, whose excellent maiden speech will repay much study. I hope your Lordships will have the opportunity to hear him again both soon and often.

The future of the natural gas industry is of great importance to both the United Kingdom and the European Community. It is important to us as a country, as we are both a major gas producer and consumer; and I agree with the noble Lord, Lord Davies of Leek, that we as a nation sometimes play down the immense success of the development of our reseves in the North Sea and onshore, and I was glad that the noble Lord, Lord Tanlaw, referred to that. His idea of incentives to smaller independent owners of land to dig for gas is a most sensitive area. Safety, environmental and planning considerations are of great importance, and it is of course essential that the best oil industry expertise is utilised in such drilling and production operations. The Government are confident that their current onshore licensing procedures are effective in ensuring that such expertise is appropriately employed. I would add that it is not as yet—although the situation could change, and I take the noble Lord's point—generally considered that onshore finds are likely to make a significant contribution to the totality of United Kingdom gas reserves compared with prospects for additional offshore gas discoveries.

We can, and should, be justly proud of our achievements over the past 20 years in this industry. The rapid discovery and development of the North Sea gas fields and the efforts of the British Gas Corporation in building with impressive speed the national gas transmissions system, have been major factors contributing to the situation where the gas share of domestic energy demand has doubled in the last 10 years, and where natural gas now accounts for about 56 per cent. of the total energy consumed in the United Kingdom domestic sector. My admiration of the British Gas Corporation's role in all this is obviously equalled by that of the noble Lord, Lord Kearton.

This subject is important to the Ten as natural gas consumption in the Community virtually trebled in the 1970s, triggered initially by the development of the huge Groningen gas field in the Netherlands and spurred on by the oil crises of 1973 and 1979. The Community understandably hoped that this growth in the use of natural gas would reduce Europe's dependence on the fickle and politically volatile international oil trade. However, it is now apparent that Europe has in part decreased its dependence on imported oil at the expense of increased dependence on imported gas supplies. Imports accounted for only 5 per cent. of Community gas supplies in 1975, grew to 27 per cent. in 1980—which is a fraction more than the figure quoted by the noble Lord, Lord Strabolgi, but I hope that we shall not argue on this comparatively small point—and are now projected to reach some 40 to 50 per cent. of Community gas demand in 1990. Although, to be fair, gas imports will represent less than 10 per cent. of total Community energy consumption in 1990, it is, even so, an issue of major importance.

It is therefore an appropriate time to review the role of gas in the European Community as a whole, and I should like to round off this debate by running through the main conclusions of the Select Committee's report, touching on some of the many important points that have been made this evening. The committee has highlighted that, in order to make the right policy decisions, it is essential to find out more about the extent and nature of the United Kingdom's indigenous natural gas reserves. To that end it proposes three measures. The first is that the Government should encourage gas exploration drilling. On 24th September, the Government published the formal invitation to apply in the Eighth Round of offshore petroleum production licensing. The aim is to license up to 85 blocks in the round. Thirty-eight of the blocks on offer for licensing lie in the southern North Sea, where most of our existing gas reserves were discovered. We are confident that this licence round, together with the freeing of the gas supply market in the recent Oil and Gas (Enterprise) Act—I do not share the rather shallow doubts of my noble friend Lord Campbell of Croy on this—will stimulate renewed North Sea gas exploration efforts.

I shall return to this point later, but before I leave it I should like to tell my noble friend Lord Bessborough that press reports about North Alwyn are accurate, and I expect formal approval to be announced by my right honourable friend the Minister of State in the very near future—certainly well before Christmas.

Most noble Lords I think have mentioned the thorny subject of reserves. The Department of Energy estimates that the remaining gas reserves lie in the range of from 33 to 64 trillion standard cubic feet. That includes allowances for as yet undiscovered fields. My noble friend Lord Hinton of Bankside highlighted the problem of the difference between my department's estimates and those of, for example, Phillips, one of the oil companies. In an aside I should like to say how nice it is to see my noble friend with us again and to hear yet again his visionary ideas, which in the past have come to fruition in other fields with which he has been interested, and with any luck will do so again.

The Phillips Petroleum reserves estimate is about twice that of my department's upper figure for total United Kingdom remaining gas reserves. The official figures were supported by the other industry witnesses to the committee. The United Kingdom proven reserves are equivalent to 14 years of consumption at 1981 levels. Using the official estimates of total remaining reserves—that is to say proven, probable, and possible—increases the figure to between 20 and 40 years.

If I got his expressions right, the noble Lord, Lord Tanlaw, equated supply stability with production stability, and I must say that I completely agree with him. The noble Lord, Lord Kearton, said that British gas purchases must be at the right price to ensure supply stability. I agree with that analysis, too. I was less clear on the points made by my noble friend Lord Torrington on capital transfer tax in regard to farming out, and perhaps if he has any evidence on the point, he might write to me.

Secondly, the committee urges the Government in awarding licences to give more weight to the applicants' record in drilling and evaluating existing licences in the area in question. I should like to make it clear to your Lordships that the past drilling performance of each company is examined when applictions for new licences are considered. I am pleased to inform the House that the Government indeed intend to increase the weight given to the relevant past drilling record in the evaluation of applications for the current Eighth Round of production licensing, though I am bound to say that I do not feel that the prospective records of the oil companies in this respect have very much hearing in our thoughts. The extent to which it is practicable to allow that factor to influence awards is however limited, since the composition of licence applicant groups changes from round to round and often varies from one area of the United Kingdom continental shelf to another.

However, in respect of the Eighth Round blocks on offer in the southern North Sea, where most existing gas fields were discovered, there is a likelihood that applicant group composition will in many cases be the same as the groups already holding licences in the area. There should therefore be more opportunities for making a direct link between the award of new licences and the past performance of the applicants.

Thirdly, the committee proposes that disincentives to the "farm-out" of licences should be eliminated. The Government believe that in practice our "farm-out" procedures are no disincentive to additional exploration and appraisal drilling. Admittedly, it is necessary to obtain Government approval for such transfer of licence rights and obligations, but we generally take a favourable view of "farm-in" proposals that contain plans for additional or earlier drilling in the relevant blocks—and that, I would submit, is what we are all seeking.

On exports of United Kingdom gas reserves, the Select Committee endorses the present Government caution, but suggests that the Government should consider whether, and when, exports of United Kingdom natural gas would be justified. The noble Lord, Lord Strabolgi, asked whether I would come down firmly on that point, and it seemed to me that my noble friend the Duke of Portland was asking for the same thing. The position of the Government on the point is well known. We have said that we will consider exports if substantial new gas reserves are found and the United Kingdom gas supply position is thereby consolidated. I would tell my noble friend that I disagree with him, at least where he seems to be advocating exports whatever happens to supply. I would not condone that.

As I said earlier, we are confident that North Sea gas exploration efforts will be pursued with renewed vigour, and will help to prove up new reserves. In fact, we have evidence that the encouragement which the Act is intended to give to the oil industry, together with the British Gas Corporation's expressed willingness to pay realistic prices for new United Kingdom sector gas supplies, is already beginning to work.

My evidence is that in the three years before 1981, when our proposals for legislation were announced, there was not a single exploration or appraisal well drilled in the southern North Sea. Last year two such wells were drilled. The tally this year is already 11, and indeed I must tell the House that a week ago, when I was first studying this speech, the figure was 10. So things are increasing quite fast, and I suggest that the figures speak for themselves.

The House has been obviously intensely interested in North Sea taxation, as evidenced by parts of the speeches of my noble friends Lord Campbell of Croy and Lord Lauderdale. The Government are of course well aware of the continued oil industry representation that the present tax regime is too onerous. I think that my noble friends will not take it too hard if I say that we are not exactly minnows in this particular sea. We are constantly monitoring exploration and development activity and have seen a substantial rise in exploration drilling in the last two years, while indicators of development activity are also showing signs of some improvement. On gas developments, we are confident that more competitive prices will now be paid to North Sea producers as a result of the Act, and that there will be no shortage of projects coming forward.

The Government also made clear their position on the tax regime in the recent response of the Secretary of State to the report of the Select Committee for Energy on depletion policy; but we are not ignoring the industry's pleas, and will continue to keep the tax position under review. I thought that both my noble friend Lord Polwarth and, indeed, my noble friend Lord Campbell of Croy were more than a little unfair on the Government's record on tax, because it will not have escaped their notice that there were in fact considerable, very useful and, I believe, welcome tax changes in the recent Budget. A number of these important structural changes were introduced, as I said, in the 1982 Budget, and they have since been modified by the changes announced by the Chancellor on 9th June. All these changes move in a direction sought by critics of the tax regime, so it really is not fair to say that the Government are totally obdurate in this respect.

My Lords, I wonder whether my noble friend will allow me to interrupt him. I should just like to say that this is really not the moment to go into all the details of a very complicated tax régime, although in fact I was a Front Bench spokesman in April 1975, and about the only speaker besides the Minister, when the original tax regime for the North Sea was introduced. I acknowledge that there were changes in structure, which were the ones asked for by the industry and which the Chancellor himself had foreshadowed; that is, the disappearance of the temporary tax—the supplementary petroleum duty. But the main point is that the changes which have been made have very little effect in altering the deterrent to development—not exploration, but development.

My Lords, I shall refer the words of my noble friend to my right honourable and learned friend the Chancellor, naturally. The Select Committee recommends that the Government should encourage the construction of a Norway-United Kingdom cross-Channel pipeline, and my noble friend Lord Bessborough and the noble Lord, Lord Briginshaw, among many others, drew attention to this. As the primary purpose of such a scheme would be transhipment of Norwegian gas to European markets, it is clear that Norwegian participation is essential before the idea can be pursued. On a number of recent occasions, we have indicated to the Norwegian Government that Her Majesty's Government would be willing to consider any specific proposals for such a pipeline. So far, it is true, no such proposals have come forward, but we shall he ready to examine them positively if and when they do.

The noble Lord, Lord Kings Norton, raised the spectre—if I may so call it—of paying for this pipeline, and I would agree with him that this is obviously an important point in the whole agrument. It is, however, much too early to speculate on this. If the need for a land-bridge were established to the satisfaction of the Norwegian Government, of the United Kingdom Government and of other Governments concerned, it would still be some time before details of the scheme could be worked out. Only then would it be possible to establish the parties with the main interest in the project, to mobilise the banks and other sources of finance, and give detailed consideration to the financing problems, so perhaps the noble Lord is being a little previous on this.

While talking about exports and imports, perhaps it would be as well to discuss the problem of the Siberian pipeline. It is, of course, for the individual Governments concerned to ensure that they have given adequate attention to the security of supply question. However, studies have also been made by the European Commission, which give confidence that these matters are being fully considered. We note, for example, that the West Germans plan to limit their dependence on gas imports from any one source to some 30 per cent. of their total gas supplies, or only some 5 per cent. of total primary energy demand. Meanwhile, the International Energy Agency is conducting an IEA-wide study of the gas supplies and requirements of its members, including arrangements to cope with emergencies.

Turning briefly to the United States embargo on exports to the Soviet Union of goods for the pipeline project manufactured by European licensees of American equipment, as your Lordships will be aware my noble friend the Secretary of State for Trade has directed six United Kingdom companies not to comply with these measures in order that these companies can fulfil their contractual obligations. My noble friend Lord Bessborough made reference to what my right honourable friend the Foreign Secretary said yesterday, and I am afraid I have nothing to add to what he said then.

The Committee also urges that the European Commission and the United Kingdom Government should regularly review the need for and the timing of liquefied natural gas imports and substitute natural gas manufacture. The Government are aware that work on this subject is continuing in the European Commission. Within the United Kingdom, the Government are confident that the gas supply industry is monitoring the development of the gas markets, and will initiate projects of this sort when they believe them to be necessary to meet projected demand. That answer may not please the noble Lord, Lord Strabolgi, but that is what I believe. It is, however, much too early to say when SNG will become a commercial proposition, and I hope the noble Lord will accept that.

I would draw attention to the British gas industry's international reputation for both its pioneering work in the liquefied natural gas trade in the 1960s and its current research and development programme on substitute natural gas manufacture. It is therefore well placed to introduce these technologies to the United Kingdom when there is a market for such supplies.

Finally, regarding the broader question of gas supplies to the European Community as a whole, the Select Committee responded to three specific recommendations made in the earlier studies by the European Commission which were the starting point for the committee's deliberations. First, the Commission recommended and the committee endorsed that the Community should aim to diversify its import sources of supply. The Government agree with this principle and know that those of our European partners who are increasingly reliant on gas imports are actively reviewing possible new gas supplies on a worldwide basis. The United Kingdom itself is fortunate in getting 75 per cent. of its gas, via a number of separate pipeline systems, from its own offshore gas fields. The other 25 per cent. is imported from Norway, which we clearly regard as a politically secure and reliable source of supply.

My Lords, with so many speeches I am sure that I shall not have answered many of the points that I should have answered. I shall read Hansard carefully tomorrow, and, if I may, I shall write to those noble Lords whose dose of passionate apathy has been a little too little. I should like to conclude by recording how valuable I feel this evening's debate has been in bringing the attention of your Lordships' House to this important subject. I think its usefulness is due in no small part to the excellent report of the Select Committee, which has been the focal point of these stimulating discussions. I believe I am doing no more than echoing the sentiments of your Lordships in congratulating the committee on its report and noble Lords on their speeches today. I would end by saying that I believe that this report and today's debate have put another dent in the by now increasingly battered image that we in the United Kingdom have as bad Europeans.

My Lords, the House has a lot of business still to do this evening, and I do not propose to delay it any longer except to thank the noble Lord, Lord Skelmersdale, for his comprehensive comments on the debate. I shall read Hansard tomorrow just as carefully as he to make quite sure that Her Majesty's Government are as enthusiastic as I hope about the conclusions of the report.

Secondly, I should like to take this opportunity to add my congratulations to those that the noble Viscount, Lord Torrington, has received on his extremely articulate, very expert and most interesting speech. It was all that I expected it to be. Finally, I should like to thank all those who have taken part in what I believe has been a most interesting and valuable debate.

rose to move, That this House takes note of the Report of the European Communities Committee on Noise in the Environment (13th Report, 1981–82, H.L. 175).

My Lords, I am sure we are indebted to the Select Committee under its chairman, the noble Earl, Lord Cranbrook, who has just introduced the report. We are grateful to him for the way in which he has outlined this very detailed report and has referred to its conclusions. We value the contributions made by all those who gave evidence, both in this country and abroad. The subject of course is one of great importance at a time when all forms of pollution seem to be increasing, and the quality of life is diminished because of it. Noise is one of the factors in this because we gradually get used to higher noise levels, and we may not realise the effects of it on individuals and on the local environment generally.

To see the extent of the noise problem, we need to define what "noise" is. I was very pleased that the noble Earl, in his introduction, referred to that straight away. The report refers to it in paragraph 60, which says:

"Noise has been defined as unwanted sound".

This is not the best of definitions as there are many things that we do not want to hear, but they are not necessarily a noise. I think that it might be better for me to quote my own definition:

"A loud noise which annoys should not be allowed".

I think that sums up the position and the criteria which we might look for in studying the report.

While that is a desirable aim, there are noises which not only annoy but can cause harm within the environment and indeed to individuals, impairing their hearing and their health. I should like greater consideration to be given to the health aspects. Although "unwanted sound"—as it is described—is a factor, there are often hidden dangers and hazards for health and hearing. The report led me to look at the Health and Safety Commission's consultation document entitled Protection of Hearing at Work, which comments that, although noise at work has been known for many years as a cause of hearing loss, it is only during the past decade that major scientific studies have allowed a reliable estimate to be made of the relationship between noise exposure and the risk of hearing damage. Although high noise levels exist in many major industries, including among others, construction, agriculture, quarrying, shipping, transport, entertainment and a few others, it appears that with few exceptions no estimate of the percentage of the workforce exposed to various noise levels is available. This is a shortcoming which ought to be rectified soon.

The Health and Safety Commission's report stresses:

"Noise represents a serious problem",

and recommends uniform controls for workplaces. The health factors need more attention. While I am referring to this aspect, may I say that I am pleased that the document of the Health and Safety Commission's Working Group on Machinery Noise, published on 5th August 1981, allowed for consideration and consultations during the past nine months. I hope there will be positive results in the future. I do not know whether the Minister might comment on the possibility of the report of the Health and Safety Commission's Working Group receiving some consideration from the Government and whether he will let us know something about their proposals.

Regarding the committee's conclusions, there are many of great weight and it would be impossible and undesirable in a short debate to go too deeply into them. I feel sure that there will be general agreement with the Select Committee's conclusions. One difficulty was to sort out the priorities on a matter which is not only a national or even an EEC issue but indeed is international. The claim to reduce pollution in the community by reducing noise levels has to compete with commercial and other considerations. Another problem is the practicality of reducing noise levels, because what is desirable may not be technically possible, or indeed commercially acceptable, in a fiercely competitive world of trade imports and exports.

The first conclusion of the committee shows the right priority in that it recommends that the EEC should produce an overall policy to combat noise. This is vital if the most appropriate action is to follow and if the areas for action are to be limited, as they must be. Such aspects as timing, noise levels, harmonisation and enforcement must have their proper place in the overall plan and in this, of course, we should have regard not only to action within the EEC but to those outside, and not least to third world countries. I was very pleased to see that stressed in the report.

Harmonisation is important; research and development will be increasingly necessary, and we must bear in mind also that higher technical standards necessary to reduce noise levels could be costly. One has to balance the interests there. The Community is already involved, as the noble Earl has said, in prescribing noise levels between member states and is concerned about two of the most important areas—those of traffic noise and aircraft noise. I think it is necessary that the EEC should enforce noise levels agreed by members and should also comply with other bodies such as ICAO. So there is a need for a comprehensive approach which cannot be underestimated.

Paragraph 70 of the report suggests that the EEC's Second Action Programme accepts certain actions where appropriate at Community level and some at other levels, two—national, regional and local. There must he co-ordination of the work and a decision taken as to who will ensure it. This is another important point, because there must be some responsibility of Governments or other bodies in industry, trade, local authorities, transport and other interests. It cannot be left without some authority to shape it up and get it moving.

Recommendation No. 3, regarding an advisory committee to keep the EEC informed of activity in member states and to ensure direction of an orderly development of the EEC anti-noise programme, is most desirable. I think that efforts must be made not only to ensure that there are no gaps but also that overlap of effort is avoided. Technically, this could cost huge sums if, unknown to one another, companies and countries are pursuing similar research and development programmes at the same time.

A fair amount of legislation in the United Kingdom concerning noise has already been produced. I would remind the House that the Wilson Report was issued in 1963, and we are still waiting for some action on its proposals. I wonder whether the Minister would comment on the possibility of the proposals of the Wilson Report being reviewed and acted on so far as may be necessary.

One test of progress will be the extent to which the targets are met for noise limitation. Under the 1977 Council declaration, the EEC is working towards a limit of 80 decibels for all categories of new vehicles by 1985. I note that the British Government, in the evidence, aims for the meeting of that target by 1990; and it would be helpful to know what chances there are of achieving that target through the motor industry. Of course, this means consultation with those who have to bring it about.

Aircraft noise is an international problem, especially for those living near airports. I think I am right in saying that, from the evidence, the Department of Trade believe that the EEC should not initiate aircraft noise standards but should follow international bodies such as ICAO. While ICAO may well know what is desirable and what is practicable, there seems to be no reason why we should not have an independent view on this, given the facts about practicality and the costs required to achieve lower noise standards.

I think the Government should determine reasonable criteria in view of the continuing public concern which may not be matched by those who take the responsibility for noise standards in the airline business.

Even if limits set by non-governmental bodies are accepted, they must be enforced following directives. One factor to which our attention is drawn is the domination of markets in respect of aircraft, especially helicopters, by the United States, so that European reductions in noise levels may not be matched by the United States. This is a factor which could be damaging to our industry. Our Government departments, in their evidence, are rightly concerned with the effects of limits imposed internationally upon our own environment and upon our trade. They point out the need for exchange of information and the need for further investigation.

Transport, as the noble Earl said, is a big area for work in the limitation of noise, The enormous increase in transport and also in the size and weight of vehicles and the movement of vehicles across frontiers produces a problem which is becoming even more intense. There has been a great deal of controversy about the size of lorries from the Continent, hurtling their smoky, noisy way through some of our charming but Dickensian villages; and so transport is another urgent aspect.

Motor cycles seem to make their presence known, and indeed heard, in most of our towns and villages where the noise from the machines seems to be a modern virility symbol. Hordes of motor-cyclists screeching through our communities seem to have put the fear of God into more people than all the churches put together. I notice that the Consumers' Association—which of course should know what we all want, as consumers—considers that we should have more information about the goods we purchase, including test results and labelling. They rightly think that the EEC should bear in mind to a greater extent the view of consumers. Clearly, the Commission must do more to satisfy the Consumers' Association and those of us they represent; and I believe that the Government should be pressing for more assurances in that direction.

The noble Earl mentioned household appliances. I notice that the Consumers' Association report on the measurement of human responses indicated that the majority of persons interviewed regarding their feelings about domestic noise emitted by vacuum cleaners and washing machines gave a neutral response—25 per cent. and 28 per cent. respectively disliked the noise and I notice that 16 per cent. in both categories actually enjoyed the noise. I am not sure what that may be interpreted as meaning. But there are some noises we get used to—perhaps I should say not "noises" but "sounds", because it may be that we are getting used to the sound of church bells, which appeal to many of us—and of course we know that some noise is acceptable because it is part of the price we pay for higher living standards, especially in the case of domestic appliances.

These are the only observations I would make. One could go into greater depth, because the report is so comprehensive; but, to sum up, I think we are greatly indebted to the Select Committee for the work they have done in bringing this report to the House and in drawing the attention of the House and of the country to this problem, which is already well under way within the Community. We generally back their conclusions, especially the demand for an overall policy and for considered priorities which would include noise from motor vehicles, construction plant, aircraft and some domestic appliances.

I believe there is need for greater co-ordination in planning, research and development, and the testing and setting of standards, and also with enforcement, because without enforcement all this work and all the efforts involved will not be satisfactory. In this I believe the Government must play a major role in getting progress and in representing the views of our people, recognising that there are vital health factors also to be taken into account.

My Lords, I, too, would like to thank the Select Committee for the work they have done on this extremely important subject and I should like also to thank the noble Earl for his introduction. Both speakers so far have started by defining noise and the noble Lord, Lord Bishopston, seemed to be complicating the matter with his "noisy noise which annoys", rather like the riddle we all knew in our youth, I think:

"What kind of noise annoys a noisy oyster?"—

to which noble Lords will remember the answer is:

"It is a noisy noise that annoys a noisy oyster".

There are all kinds of different noises, some of which we find pleasant, some of which we do not, but which, in large quantity at high levels, we find extremely annoying. We can find them in every branch of life. We can find them in the goods that we have in our homes. We can find them even in the countryside where at times, particularly in contrast with the stillness around, they are extremely annoying. Since I am in a reminiscent mood, I remember the Saki poem, where he asks:

"Have you heard the groan of a gravelled grouse, or the snarl of a snaffled snail? Brother or husband like me or spouse. Have you lain awake in a darkened house where the wounded wombats wail?"

We may not suffer from problems of that kind, but there are major ones with which we have to deal. Two of them, which I want to deal with, have been mentioned already and the first is the noise caused by transport. There are the lorries, which the noble Lord, Lord Bishopston, and the noble Earl, Lord Cranbrook, have covered in quite a detailed way. This noise is something to which we must continue to pay a great deal of attention. It is exportable noise. The lorries that we send to other people's countries cause trouble, and the mere fact that you have to fix some kind of limit for them is something which affects the terms of trade.

The noble Lord, Lord Bishopston, mentioned the noise of foreign lorries, but one correspondent who has written to me on this subject says about the problem in Ilford;

"It is the British lorries which make even more noise than the foreign ones".

Unless we get some kind of control right across the EEC, we shall have a situation where, because of the advantages to be gained from not having controls, countries vie with each other and we get more noise rather than less. That is one reason why it is extremely important to insist on noise limits.

This is particularly so because, as noble Lords will know from experience, it is almost impossible to pin down and do anything about the noise of a vehicle in transit. How often have we seen a lorry go past and thought, "I wish I could report that, because it is obviously making a noise which must be well above anything that the law allows." But, of course, we never do anything and, if we did, it is almost certain that absolutely nothing would happen. So we have to rely on controls on lorry makers and on customs checks when lorries move from country to country. It is very important that we move as quickly as possible towards the quiet, heavy vehicles which are mentioned in the report, because to have to wait until 1990 is a very long time for people who live in areas which are badly affected by noise.

Of course, there are certain matters which are under our own control. While talking about the European Communities' report, I do not think I should fail to point out that more action should probably be taken domestically to direct heavy and noisy traffic away from residential areas, and also, perhaps, to increase insulation grants which are very helpful where the noise cannot be avoided. The rules governing insulation grants sometimes do not make a tremendous amount of sense. I have a letter here from the London Borough of Redbridge:

"Noise resulting from new or altered highways produces premises eligible for noise insulation. Noise resulting from increased traffic flows on existing highways does not, of itself, make premises eligible for noise insulation".

So there is plenty that we can do in the domestic area, but, primarily, we must forge ahead in the European area.

Aircraft noise is something which the noble Lord, Lord Bishopston, mentioned, but I want to deal with it in slightly more depth. It is rather more serious than is often appreciated, if only because it is very often a fairly limited number of people who suffer really badly from it over a long period of time; in fact, they suffer from it every hour of the day. I am particularly referring to those who live in the vicinity of airports. The ECC should certainly do something to limit the nuisance, because, if they do not, the fact that there is not a proper law which fixes limits will affect the terms of trade on which passengers and freight are carried.

The Wilson Committee said in 1963:

"Traffic produces a serious noise problem in the air. Aircraft noise at Heathrow is more than people should be required to tolerate".

The committee recommended that the noise should be reduced progressively, but, in fact, it has increased since then. In 1963, there were 60,000 jet movements per year, while on 1982 there were 248,000. There are the problems of noisy aircraft. The Airbus has a takeoff noise of 85db, while the Concorde, about which I have spoken before in your Lordships' House, has a take-off noise of 111db, compared with the 78 to 86db of motorcycles.

This has an international dimension, because, primarily, travelling across borders from country to country is what air travel is all about. According to the report, the,

"Trans-frontier effects of noise are … localised and cannot readily be called upon to justify Community involvement".

But that is not so, because a major share of air traffic is inter-European, and therefore the EEC must have a role to play in controlling this nuisance. The EEC need not involve itself in formulating noise standards. I take the point of the noble Lord, Lord Bishopston, about the ICAO levels and about our having a say in formulating the levels, because only in that way can we also control the use that we want to make of them. If we accept the ICAO methods of noise measurement, but apply EEC controls to enforce them, it will have, more or less, the main effect.

One or two of the countries involved in the EEC are not enforcing ICAO standards. Italy, I believe, is an example of failure to comply. The noble Lord, Lord Bishopston, spoke about helicopter standards. This is a matter upon which we should concentrate, because we can obtain some benefit for ourselves, in trade terms as well as in environmental terms, by developing a quiet helicopter. We ought definitely to pay more attention to the problem of supersonic aircraft. It may be that supersonic aircraft have a short life and that in the future we shall not have this major problem in front of us. Nevertheless, there is absolutely no doubt in my mind that Concorde produces a noise which is considerably worse and less tolerable than other forms of aircraft noise. It is far louder than all other jets, yet it is not included in the monitoring figures, nor is it included in noise infringement statistics.

There is also a problem about night noise. I do not see why the EEC should not take the lead in directing all European airports, certainly those with international trade, to close at night. In certain countries—Switzerland. Japan, Australia—there is a complete limit in many airports on the landings and take-offs which can happen at night. That would make a very great deal of difference to the many people who live near our major airports. Responsibility for noise seems to be largely the responsibility of the Department of Trade. In terms of the EEC, this obviously makes sense, but I wonder whether the Department of the Environment ought to have a greater say. A very interesting answer was given in evidence. At page 38 of the report, the witnesses from the Department of Industry and the Department of Trade were asked at Question 77:

"Will Europe fall in line behind France?"

The answer was:

"Not if we see it to be detrimental to our own industry, no".

One has considerable sympathy with that answer. We must do the best we can to keep our industry competitive. Nevertheless, there is a real sense in which we should try to do the best we can, regardless of the situation in which we find ourselves, in trade terms, to make certain that the environment is respected and that noise limits are acceptable to our citizens.

There is one other question that I want to ask, of which I am afraid I have not given notice to the noble Earl; it relates to the legal situation and the recourse which is open to citizens. I said earlier that there is a problem for us all with really noisy lorries. In the Noise Abatement Act 1960, noise became a form of nuisance against which local authorities or private individuals could take action, as the report says. So far as I can gather, this does not apply to aircraft noise. May I ask whether it would be possible for the GLC or local authorities to complain and to bring prosecutions on a noise basis against aircraft and airlines which disturb the rest of our citizens? I do not think that it would be at all a bad idea if popular control of that kind existed.

Finally, it seems to me that the most disturbing part of this admirable report is to be found at page where it is recorded that the member state which is strongly opposed to the total harmonisation solution put forward by the Commission was said by Commission officials to be the United Kingdom. If that is so, it is most unfortunate. I should have hoped that this country, which has always had a reputation for civilised living and for trying to ensure that its citizens can live in peace and quiet, would be one of the leaders in Europe. It is a great shame if we are not, and we should certainly reform.

My Lords, before my noble friend replies, may I apologise for not having put down my name to speak. May I also apologise to the noble Earl, Lord Cranbrook, for not being in my place when he opened the debate. I shall take up only a couple of minutes of your Lordships' time. This has been a very interesting debate. I agree entirely with most of what was said by the noble Lord, Lord Bishopston, and the noble Lord, Lord Beaumont of Whitley. The noble Lord, Lord Beaumont of Whitley, spoke about aircraft noise, and I understood him to say that aircraft noise was louder than motor-cycle noise. In my opinion, the reverse is the case. The aircraft comes and goes but the motor-cycle whizzes down the street and the noise reverberates between the buildings. I should like to know whether the Minister has got anything to say about motor-cycle noise.

The noble Lord, Lord Beaumont of Whitley, also spoke about airports. Those who design airports may put an airport in the middle of nowhere, but in no time at all there are houses all round that airport. Therefore one is in a cleft stick as to who is right and who is wrong. The people who work at the airport have got to bear in mind that they will have to live with the noise.

My Lords, the House will be most grateful to my noble friend Lord Cranbrook for introducing this subject today in such a lucid form, thereby offering to the House an opportunity to debate the report by the European Communities Select Committee on action by the European Community to control noise in the environment.

The Government welcome the review as a timely, useful consideration of what is going on in this field. As has been well demonstrated in the debate, noise nuisance touches all our lives in one way or another. It is quite clear when we are being bothered by noise. Unfortunately, it is not always so clear as to how to control, or who should control, that noise. So far as the European Community is concerned, it is a question of what is appropriate at Community level as part of the European Community action programmes on the environment under the Treaty of Rome. In looking at this issue, the report raises important matters of policy and principle.

The Government recognise the importance of these matters and appreciate the strength and breadth of interest which has been expressed. Noise pollution has been referred to on occasions as the Cinderella of pollutants. Control of noise nuisance has a relatively short history throughout the world, but increasingly more concern is being shown about the need to control it. In 1963, the Wilson Committee, to which noble Lords have already referred, defined noise as "sound which is undesired by the recipient"—a slightly different definition from those which have been mentioned tonight. However, I believe that that definition still holds good today, almost 20 years later. Since that date the United Kingdom has made substantial progress in controlling noise from air and surface traffic at source as well as, for example, controlling noise at construction sites, from factories and between neighbours under the Control of Pollution Act 1974.

The noble Lord, Lord Bishopston, asked particularly about the recommendations of that committee's report. I think I can fairly say that most have been implemented to some degree and that a considerable number fall within the scope of the Control of Pollution Act 1974. We in the United Kingdom are fortunate. We have a reasonably comprehensive legislative system for meeting our prime objective, the reduction and containment of noise wherever possible, both in the environment and in the workplace—although the latter was not considered in this report.

In the context of a European Community, the Government recognise that in certain circumstances noise causes nuisance and distress. For that reason we are far from complacent about noise problems. We recognise that our policies must keep pace with the times, and be geared to our internal domestic needs within the United Kingdom, and at the same time reflect the needs of a member state as part of the European Community. I can assure the House that all Government departments will continue to keep a watching brief on the activity of the commission on noise control which affects them. This will, I hope, become clear from what I shall say shortly about some aspects of noise responsibilities as they affect various departments.

As this report concludes, it is desirable that there should be an overall policy to combat noise on a Community basis where Community action is appropriate; as the report further concludes, control of products is just such a sphere of noise control. The United Kingdom welcomes Community involvement in the fight to control noise nuisance—provided, of course, that it is a balanced, discriminating involvement. My noble friend Lord Cranbrook will be pleased to note that, for this reason, the Government would welcome the creation of the advisory committee referred to in the report to take an overall view on the Commission's "anti-noise" programme. In this context, we recognise that the European Commission is concerned to investigate questions of noise pollution identified in the environment programmes.

We certainly attach importance to the Commission having full information, in advance of any action it may take, about the situation in and the views of, the member states. It is apparent from the wide range of this debate that noise is a complex subject, with many different facets. It is for the Commission to decide how they can best take advice to help them to identify policies and priorities on the European scale. We would certainly see merit in some form of mechanism; for example, an advisory committee meeting occasionally to make sure that both the Commission and the Government are informed. That would help to avoid the risk of individual proposals coming forward out of context and perhaps at fairly short notice. As far as contact between the United Kingdom Government and the European Commission is concerned, officials of Government departments are together meeting Commission officials at the beginning of next year to discuss noise matters informally in addition to ongoing commitments on specific proposals.

Clearly, as the report recognises, there are some aspects of noise pollution, such as neighbourhood noise, which are more appropriate to control within member states and which do not lend themselves to action at Community level. Indeed it is not appropriate in all cases to legislate even within a national framework; many noise problems stem from inconsiderate human behaviour. We cannot legislate to improve that, but we can hope to educate and inform. To bear witness to this, there has been the recent publication of the Bothered by Noise booklet and, before that, the codes of practice on, for example, model aircraft flying.

If I may turn now to road vehicle noise, which all speakers have mentioned, attention has been drawn to the report's comments on Community action to reduce noise levels for road traffic vehicles—heavy lorries, motorcycles and cars. Let me stress that the Government are well aware of the public concern about vehicle noise and the sub-committee's report reflects this concern. We are determined to see that action is taken to improve matters. There are two aspects to this problem: first, to make sure that new vehicles are as quiet as possible; and, second, to see that they remain quiet in use.

New lower noise limits will apply to vehicles coming into use from next year and we are already urgently looking at what further reductions would be possible in the future. The United Kingdom was instrumental in the setting up of a European Community Working Group which is looking at all aspects of future noise limits. The working Group reported in July, and discussion of its report is taking place in Brussels this autumn. The Government will press for the lowest limits that are technically feasible at an acceptable cost. We are also working with the motor industry to develop a quiet heavy vehicle for the 1990s that should be no noisier than present day cars.

The existing law and the annual testing of lorries and cars generally work well in ensuring that the agreed limits are maintained in use. But there is a problem with motorcycles, particularly because of the fitting of inadequate replacement exhaust systems. As a first step, my right honourable friend the Secretary of State for Transport laid regulations on 14th October 1982 which will make it absolutely clear that a replacement silencer must enable a vehicle to meet the same standards as the original equipment silencer did. We are also looking urgently at other ways of improving enforcement of the noise regulations in respect of motorcycles, bearing in mind that only an irresponsible minority do flout the existing regulations. I hope that it will be clear from what I have already said that the Government fully share the sub-committee's wish to see further substantial reductions in vehicle noise limits—subject, of course, to feasibility and cost.

We must take issue, albeit slightly, with the report's concentration on the 1977 declaration by the Council of Ministers that the community should work towards a limit of 80dB(A) for all categories of vehicle by 1985. First, the declaration set a goal rather than making a definite commitment. Secondly, the proposal was made on the basis of the test procedure then current. The test procedure has been tightened and will bring reductions in noise limits for many heavy lorries and some cars even though the numerical values are unchanged. This has, as the department's oral evidence made clear, made the goal more difficult to reach, particularly for heavy lorries and large motorcycles. Thirdly, the majority of new vehicles are already meeting this goal.

The European Commission is expected to make known its proposals for future noise limits early next year. Until they are available, the need for additional measures to promote the introduction of quiet vehicles into traffic cannot be assessed. However, the Secretary of State for Transport has already announced the collaborative research and development programme to take forward the work with the department's quiet heavy vehicle to show how the techniques may be applied to production vehicles. Work will begin on the project itself in the next months.

As the Secretary of State for Transport announced in last December's White Paper, we have put in hand the next stage in taking forward to the production stage the techniques domonstrated in the quiet heavy vehicle. Some projects supported by the Department of Industry are already under way and we are heavily engaged with manufactureres to define further projects. There is a tentative provision of £5 million from the two department's funds, which, if matched by industry, would give a total £10 million programme. Part of the reason for a collaborative research programme involving vehicle and engine manufacturers is to ensure that British industry is as well placed as its competitors to meet this major technical challenge of meeting a noise limit of about 80dB(A). Nevertheless, a ceiling of 80dB(A) remains the government's broad objective, and to answer one of the points made by the noble Lord, Lord Beaumont of Whitely, we are working towards it as quickly as possible in conjunction with our Community partners.

Turning now to aircraft noise, which was particularly mentioned by the noble Lords, Lord Bishopstone and Lord Beaumont of Whitley, the Governments agree with the committee's conclusions that the amendments to the Subsonic Aircraft Directive are a natural extension of the present directive and should be adopted. Since the Thirteenth Report was published, the Council of Ministers has approved the directive on Limitation of Noise Emissions from Subsonic Aircraft (EC 8153/82). Legislation to amend the 1979 Air Navigation (Noise Certification) Order, which will incorporate the provisions of the directive, will be laid before both Houses during the next Session.

The Government also accepts the committee's conclusions on the proposed helicopter directive. As suggested by the committee European pressure has been brought to bear on the United States, within the International Civil Aviation Organisation, to reconsider its decision to defer helicopter noise standards, but so far to no avail. Further pressure will be brought to bear through the relevant working groups of the organisation, but it appears unlikely that the Americans will change their attitude before 1984/85.

Another area of EC action, following an initiative by an individual member state, is that of the proposed directive of noise labelling of houshold appliances. Let me say at once that the Government have noted the report's conlusion on this; and also let me say that we entirely take the point made by consumer bodies that labels showing only noise emitted by household appliances might confuse a purchaser. They might for instance, confuse low noise with good performance, or even high noise with high power. The way out of this difficulty is to provide that noise information is not mentioned in isolation but is always accompanied by other information, for example relating to energy rating.

I note the consumer point, that the unit of noise, the decibel, and its relationship with everyday experience of noise is not familiar to the general public. I am sure that in the way in which the noble Lord, Lord Beaumont, was using the term they will become aware of it very soon. It is, however, a well established unit that has a sound scientific basis and is internationally recognised as a method of measuring noise. In view of this we do not think it would be practiclabe to attempt to introduce any other method of indicating noise emitted. We would rather prefer to rely on the public's often under-rated ability to absorb and put to practical use the terms involved in new technology. This they have quite easily done, for example, in the case of film speeds for photography and distortions in hi-fi systems.

It must also be remembered that the main aim of this directive is to remove barriers to trade, and we already have at least one member state anxious to introduce mandatory noise labelling. It is important, therefore, that we establish harmonised methods of measuring and quoting noise emitted, so that we do not find ourselves having to submit household appliances to a number of testing authorities in order to export to other member states. This is a most important consideration. We believe, therefore, that we should support the introduction of this directive, if only to prevent the emergence of barriers to trade.

My Lords, a number of other points were raised on specific matters and I might perhaps just deal quickly with one or two of them. The noble Lord, Lord Bishopston, mentioned particularly noise at work. This forms part of the Community's action programme on safety and health at work as set out on page 20 of the report, and we are awaiting the proposal for a directive which the Commission mentions in paragraph 5 on page xxxi. When the proposal has been received its details can be studied, to consider how far they are sensible.

The noble Lord, Lord Beaumont, mentioned specifically the sound insulation of dwellings against traffic noise. Recognising that noise is one of the most disturbing features created by a new road, particularly when it cuts through a residential area, the United Kingdom Government adopted the approach that where the coming into use of a road would result in more than a specified level of noise outside a dwelling house, there should he a right for the householder to claim and a duty on the highway authority to provide such insulation. This approach has been given practical effect in Part II of the Land Compensation Act 1973 and the detailed regulations made thereunder. The Department of Transport undertook to keep the regulations under review and for this purpose a working party was set up to review their scope in the light of experience and the implications of any change. My right honourable friend is awaiting the working group's report, which is expected shortly.

The noble Lord also referred to lorry controls or controls on lorry routeing. We are encouraging local highway authorities to make greater use of their powers to control the routes that lorries may use as part of our package of measures to control lorries. We have offered technical advice from the Department of Transport where required. Further encouragement will be offered through favourable treatment in transport supplementary grants settlements to councils making good use of these powers. Good progress has already been made in recent years with some 850 lorry bans made on amenity grounds.

My noble friend mentioned motor-cycles. As he is well aware, there are limits on how far we can go in this field. There are already rules on how noisy new machines are allowed to be and these rules have just been tightened. Consideration of further reductions is likely. There are rules about not making excessive noise or tampering with exhaust systems. We are looking into ways of controlling inadequate replacement silencers. But modern motor-cycles used sensibly are already fairly quiet. The problems are largely caused by an anti-social minority of young riders who seem to take delight in drawing attention to themselves. The police do their best but it is difficult for them to take effective action against such mobile offenders. In some cases we are getting into deep questions about the alienation of some young people from society, and vehicle regulation is perhaps not the best way of tackling this.

The noble Lord, Lord Beaumont, also referred to the noise at Heathrow Airport and from aircraft generally. At Heathrow itself, although aircraft movements have increased year on year, peak noise levels are already falling, and we believe they will fall further by 1st January 1986, when no older, noisier aircraft on the United Kingdom register will be allowed to operate in the United Kingdom. We and most other European Community countries greatly prefer to initiate aircraft noise proposals within ICAO, because, first, we have always done so, and, secondly, we feel that our own national interests are best represented in a wider international context. We are also anxious to avoid duplication of effort.

My Lords, if I have not covered any specific points I hope the House will allow me to do so by writing. To conclude, the Commission of the European Community has included a section on noise pollution in its proposed programme for environmental action between now and 1986. These proposals have been endorsed by the European Parliament and will be put to the Council of Ministers later this year. I assure your Lordships that the views expressed in this House this evening will form a valuable basis for the United Kingdom's contribution to the Council debate, particularly in seeking to guide the Commission's priorities for future action.

I would like to end by saying that I am sure all noble Lords would like to join me in thanking the noble Earl, Lord Cranbrook, for initiating what I believe has been a valuable discussion on noise pollution in the European Community. The Government appeciate the contribution of your Lordships, both in debate now and, more importantly, in the preparation of the Select Committee's report. This useful document will assist future progress on noise control both in the United Kingdom and in the European Community.

My Lords, I hesitate to cross the indefinable barrier and from being a mere sound become an unwanted sound and therefore a noise. I note that the noble Lord, Lord Bishopston, spoke of the appeal of bells and my noble friend Lord Avon spoke of the appeal of decibels, as a unit of measurement. But seriously, my Lords, I thank your Lordships very much for a fruitful and useful debate. The sub-committee will note with interest the remarks of noble Lords on the other side of the House, and I think they will note with particular gratitude two firm statements by my noble friend on this side: first, that the United Kingdom Government firmly supports the proposal for an advisory committee for exchange of information on developments in this field, and, secondly, for the assurance that there will be a grant of £5 million from the Government, which I sincerely hope will be matched by the £5 million from industry, if only to make true what we read in The Times today. My Lords, I thank you for participating in this debate.

rose to ask Her Majesty's Government whether they are aware that thousands of badgers gassed since 1975 under the requirements of the Ministry of Agriculture for the purpose of bovine tuberculosis control have died painful or miserable deaths from starvation or slow asphyxiation, during which period the public have been led to believe that this was a humane method of destruction; and what are the full facts about the discovery of this massive cruelty inflicted upon an otherwise protected species of wildlife.

My Lords, I should like to thank the noble Lord, Lord Houghton of Sowerby, for putting down this Unstarred Question. I trust that my noble friend on the Front Bench will take note of the various points raised by the noble Lord, as I for one have a certain amount of sympathy for what he has said.

I have no interest to declare, such as being a member of the National Society for the prevention of Cruelty to Animals or the Anti-Blood Sports League. On the contrary, I am a keen sportsman, especially from the point of view of shooting. It is my intention to be extremely brief and I have no wish to get into an argument with, or to criticise, the Ministry of Agricul- ture on their methods in the control of badgers where there is the slightest risk of bovine tuberculosis in cattle, and where there is a danger of it being passed on to human beings. However, where I am concerned is in the example set by the Ministry in the control of these unfortunate animals.

I had the privilege and pleasure of owning a small 20 acre wood less than 25 miles from London, in which there was a colony—if that is the right word—of badgers. It gave me great pleasure to know that they were there and if and when I had the time, I would make the effort to observe their environment. That was not easy, due to their nocturnal and burrowing habits. During the 15 years that I was in possession of this wood, I had to fight against continuous requests from neighbouring farmers and gamekeepers to allow them to gas the badger burrows.

My refusal to allow this to happen was no less relaxed by the passing of the 1973 Act, making the badger a protected species other than by control through the Ministry of Agriculture, as was referred to by the noble Lord in his speech. In fact, the absence of any evidence of bovine tuberculosis in the area and, therefore, the presence of representatives of the Ministry of Agriculture made the position even worse. It was very difficult to convince the farmer that there was no danger to his cattle, and the gamekeeper that the badgers were not responsible for the loss of some of his pheasants. It became obvious that their minds had been instilled by generations of superstition that the badger was a carnivorous, diseased monster that should be put down at all costs. After all, it was a little over a century ago that badger-baiting was a favourite sport in this country.

In conclusion, I would ask my noble friend when he comes to answer the debate, to make every effort to alleviate past misunderstandings in respect of this otherwise harmless and sometimes useful animal, before it is too late.

My Lords, there are two or three points that I should like to make in this debate. The first—and I say this because we must be fair to the people from whom I took evidence in the course of my inquiry—is that no one pretended to knowledge which he did not have. When it came to the question of cyanide as a means of getting rid of infected setts or setts which were suspected of being infected, I specifically asked the RSPCA representative about this matter, as I made clear in the report. I addressed the question to him and made quite sure that it was recorded as a matter of fact in the report. The RSPCA man knew no better way of dealing with the problem.

Secondly, the noble Lord, Lord Houghton of Sowerby, used the word "extermination". I really do think that it is unfortunate that we talk in terms of extermination. I know something about animal behaviour and animal numbers, and I should imagine that one of the most difficult animals ever to suffer extermination at human hands will be the badger. It is perfectly true that the densest populations are probably in the suspected areas where it is clear that transmission of the tubercle bacillus occurs between badger and cattle. I do not know which came first and, as I mentioned in my report, I think that is irrelevant. There is a direct link there and we have to deal with it and establish the nature of the link as well as one can establish a point of that sort with the kind of information that we have at our disposal. If, as I believe, it is a statutory duty of Government to see that tuberculosis does not spread in our dairy cattle or in any of our cattle, obviously, any link must be dealt with, and the badger is a link.

It so happens that in today's edition of the New Scientist—and I was totally unaware of this until about an hour ago when I picked up my copy—there is an article by Dr. Barrow, lately working at the London School of Hygiene and Tropical Medicine, on tuberculosis. It has the headline "Must badgers be destroyed?"

I shall not burden your Lordships with all that he says, but there are one or two points which he makes which I think are worth reading out. First, he quite correctly says that we are still ignorant of the ways in which the tubercle bacillus passes between badger and cattle.

Secondly, he says:

"This, however, does not detract from the fact that badgers do harbour"—

and I would not have put it quite this way—

"a considerable reservoir of

the particular bacillus concerned. Then he says—and this does not give me any pleasure—that he would not expect the slaughter of infected badgers to be effective always. He goes on to say something which I am afraid will cause a certain measure of distress to the noble Lord, Lord Houghton. He says:

"we are left with an inevitable conclusion; if we want to control TB we must do so by controlling badger population … It follows that eradication of TB from badgers can be achieved only by eradicating badgers. Any other notion is a pipedream".

That is the problem which I am afraid the Government face. It is a problem which causes me just as much distress as it does the noble Lord, Lord Houghton. However, I am also conscious of the fact that my sympathies go out to those Government scientists who, in carrying out their duties to the people of this country in seeing that tuberculosis is suppressed, now have this difficult task of finding more acceptable ways and more effective ways both of diagnosing the presence of tuberculosis in badgers and then of dealing with the problem in such a way that the tubercle bacillus does not go on spreading from badger to badger, from badger to cattle, back to badger, and then out of the affected area.

My Lords, I believe that one should pay tribute to my noble friend Lord Houghton for his continued vigilance with regard to the wellbeing of animals. Although he and many members of societies concerned with animal welfare often hit the headlines with their claims of alleged cruelty to animals—indeed, they are not always allegations, for they say that there has been cruelty to animals—I think your Lordships will recognise that they are not the only ones who care. We all share concern, some working behind the scenes as, indeed, has the noble Lord, Lord Zuckerman, in order to solve the problems.

The subject, of course, is an emotive one and in our anxiety to ensure the wellbeing of animals as far as possible we must do what we can to get the facts. I am sure that we are greatly indebted to the noble Lord, Lord Zuckerman, for being with us tonight and for his brief but telling contribution on this sad matter. It is, of course, easy for us to be selective in deciding what experts to believe and it is easy for us to reach some conclusion, for there is sure to be an expert somewhere who will prove what we say. But those who exercise power in Government, and, indeed, many others, have some very difficult decisions to make. This is a matter which does not concern only this Government but which concerned the previous Government as well.

How does a Minister with responsibility react when he is told that it is not only suspected but that there is real cause to believe that there is TB in some badgers which can spread to cattle, and when he is told that in one area—say, Dorset—several hundred cows can he affected and may have to be slaughtered? My noble friend says quite rightly that he is concerned about the way in which badgers are destroyed. There are two points to answer here. First, is the badger a real source of TB? Is he a carrier not only to cattle but to other clean badgers, and if it is necessary, to use nicer language, to put badgers to sleep, what is the best way to do it?

These are the problems which have been facing those in Government and, indeed, advisers for a very long time. I do not think it helps my noble friend's case for him to revive memories of badger baiting, badger digging and so on as though those who had to take responsibility in this very sad situation were enjoying the process. He must know that the noble Lord, Lord Zuckerman, and many others have since at least 1975 been actively involved in finding the best way to tackle this problem. If a Minister is told in 1975, or whenever it may be, that several hundred cattle are at risk, dare he say, "Until we can find a way of killing badgers humanely and be absolutely certain of it"—which is something that few can certify beyond all doubt—"we must not do anything about it"?

I would not ask my noble friend if he cares only for badgers which have TB and does not care about the clean badgers who could get TB from the small number which have it. I would not like to ask him whether he has no concern for the suffering of hundreds of cows which may be affected by the disease.

If one talks about the effect of TB, then human beings are, of course, among those who can be affected, and most species of mammals and birds are susceptible to tuberculosis. I quote from the MAFF handbook of 1978:

"Amongst farm animals, cattle and swine are most frequently affected; horses and goats occasionally and sheep rarely.

"Symptoms. The disease is often of a chronic nature and objective symptoms are not seen. When the disease is advanced or becomes acute in a particular organ more definite symptoms are observed.

"The lungs are a common site of disease in cattle. When the lungs are involved the animal may cough and, in advanced case, show signs of respiratory distress. An affected quarter of the udder becomes progressively harder. The milk appears normal except in very acute cases or after the disease is long established; in these cases it may be a straw coloured fluid.

"The existence of disease may be confirmed by the demonstration of the organism in sputum, milk or discharge from the uterus. For routine diagnosis it is necessary to use a tuberculin test".

That is the fate for cows which get the disease from badgers or, indeed from any other source, but there has been real reason to believe that the badger has been responsible for cattle suffering in a number of areas in the country, though thankfully the areas are not widespread.

Successive Ministers have had to deal with the problem which concerns not only badgers but cows as well, and I do not think there is any doubt, after what the noble Lord, Lord Zuckerman, has written or indeed said, that there is a strong link. The limited operation in the South-West, the most affected area, has been restricted to less than 4 per cent. of the land area, so there are not wide areas of land where badgers have been slaughtered. Clearly the Minister has been wise to seek evidence by collecting and examining badger carcases from other areas in order to restrict contamination where it exists. There is no doubt about the problem of infection.

I was rather interested in a letter published in December last in the Daily Telegraph from the chairman of the Dorset County Branch of the National Farmers' Union, who said then—and it is still true, I am afraid—that there is much misunderstanding as to the extent of, and the need for, the gassing of badgers. It is not suggested that he said that any badgers should be destroyed where healthy cattle are living alongside healthy badgers. He reminds us that in a period of seven years no fewer than 700 infected cattle had to be slaughtered. When the area of about 500 acres was cleared of badgers the infection ceased immediately. Following a series of clear tests the farm was given a clean bill of health by the Ministry of Agriculture. He says:

"Now restocking of the empty setts with badgers is taking place with the blessing of the farmer and the careful monitoring of the Ministry of Agriculture, which throughout has shown great consideration not only for the health of livestock but for the welfare of the wildlife".

I notice from replies to questions that something like £1½ million has been paid out in compensation. That money paid out represents a large number of cattle who have suffered in much the way that I have quoted tonight, and suffered a great deal. If my noble friend had been in charge of the situation would he have said, "Well, I recognise that something should be done, but until we are sure as to how we can get rid of these infected badgers with no suffering whatsoever the thing must be left"? I do not know what would have happened to our herds in that situation.

It has not been just a matter for the Minister of the day to decide what action he shall take, because he has had a lot of expert advice in addition to that of the noble Lord, Lord Zuckerman, and I think it would be helpful if I just put on record the reply to my noble friend on a Question in your Lordships' House on 14th July of this year, at column 452, about the composition of the Advisory Panel. I shall not mention names but it is important to know what organisations they represent. The composition of the Advisory Panel on Badgers and Tuberculosis includes members of the British Veterinary Association, the National Farmers' Union, the Country Landowners' Association, the RSPCA, which I think is an important point, the Fauna and Flora Preservation Society, the Mammal Society, the Universities Federation for Animal Welfare, and expert on the diseases of wildlife, an eminent authority on badgers, a member of the Transport and General Workers' Union, the Nature Conservancy Council, a general medical practitioner and expert on badgers, the Royal Society for Nature Conservation, and a microbiologist from Middlesex Hospital. That is a formidable gather- ing of experts and people representing all interests; nature as well as conservation, as well as animal welfare. We are indebted to them and indeed others who have given advice on this matter. They have met on five occasions since January 1981, the last time being on 1st July this year.

I do not think I need say anymore about this because Lord Zuckerman's contribution is one which I am sure will be accepted by all Members of the House. We are grateful to my noble friend for having raised this, and I hardly need to assure him that we all share the concern about this matter. In Government problems come along on which one hopes on occasion you would not have to take a decision. During the whole period under review, from Governments of both parties, we have been seeking all the advice we can to check on methods as to whether they are humane and to see whether there are alternative methods which might be even more humane. I think the Minister was right to suspend the present procedure until he has more assurance. I hope, as I am sure we all do, that something will come along soon which everyone can accept.

We would be wrong to be selective about this and say that we ought only to be concerned about the badgers who have TB and pay little regard to those who can get TB—the clean badgers, and there are many more of them, and also of course our dairy herds. My noble friend has rightly raised this matter, of which the gassing of badgers is only a small part. The other larger part concerns the many more clean badgers and the massive number of cattle who are threatened. We welcome this opportunity to enlighten the House and indeed the country about what steps are being taken, because we all share the dilemma and concern of the general public that something shall be done as soon as possible to make sure that the risk of contamination from some badgers does not spread the suffering to much wider areas.

My Lords, before my noble friend rises to reply, may I say that something has recently been said about the areas concerned. Like the noble Lord, Lord Houghton, I am not an agriculturist but I am devoted to wildlife and to the prevention of cruelty to animals. The only case of bovine tuberculosis of which I have heard recently in our neighbourhood was in cattle imported from Ireland. I should like to ask my noble friend whether there is any limit in terms of region, or latitude, and whether badgers in Scotland are just as likely to be infected as are badgers in southern and warmer areas?

My Lords, like the noble Lord, Lord Bishopston. I also should like to thank the noble Lord, Lord Houghton of Sowerby, for having asked this Question. It gives me an opportunity to explain the position as it is, and it is an important Question. The noble Lord said that he had put this Question down in July and it was fairly emotionally charged, and if he had rewritten it he would have used more modest words. I am bound to say that he had three months in which to rewrite his Question, and if he did not rewrite it I am bound to answer the Question which was put on the Order Paper.

In that Question he refers to the,

"thousands of badgers gassed since 1975 under the requirements of the Ministry of Agriculture".

He refers to the,

"massive cruelty inflicted upon an otherwise protected species of wildlife."

These are strong words, and I accept that the noble Lord would modify them. But those are the words he used, and the words of the Question that one has to answer. I take them very seriously. Everyone knows Lord Houghton's intense interest in the protection of animals, and he is not alone in this. I want to see animals protected, and I have no doubt that every other noble Lord does too. Whatever the critics may say, the Ministry of Agriculture sets great store on the preservation of wildlife.

I agree with the noble Lord, Lord Bishopston. I did not think that my noble friend Lord Lindsey and Abingdon's description of badger baiting which was done only 100 years ago was particularly helpful. We have moved on since then, and people's opinions have changed a great deal; and if we are to talk about conservation, or anything like that, people's opinions have changed monumentally over the last seven years. Although my noble friend said that some people consider that badgers are diseased animals and should be put down at all costs, I do not think that is a fact. Certainly it is not the experience I have had. The noble Lord, Lord Houghton, is entirely right to say that the badger is liked and that the gassing of badgers is bad for Government. Indeed, I would not take any exception with him over that. Of course people do not like it. People have disliked it and, as he rightly said, they have demonstrated against it.

My officials at the Ministry of Agriculture do not like doing it either. The gassing of badgers does cause revulsion. It goes without saying that the officials of the Ministry of Agriculture, under the instructions of my right honourable friend the Minister—and, indeed, of his predecessors who belonged to the party of the noble Lord, Lord Bishopston—did not undertake these operations without very good reason, and I shall take this opportunity to tell your Lordships exactly why badger control was, and remains, necessary; and I found the speech of Lord Bishopston particularly helpful when he said it was a difficult problem for any Minister. Any Minister can act only on the advice he has, and when one is talking about diseases, whether of cattle or human beings, he can act only on scientific advice, and it must be the best advice. He cannot act on his own opinions, however strongly he may feel, or on his own sentiments, because once one starts going down that road on matters of disease, one really loses credibility. My right honourable friend and the noble Lord, Lord Bishopston and his right honourable friend before him, acted, I believe, on the best advice they had.

In the 1930s, and even 30 years ago, tuberculosis was still a serious problem in this country, with 50,000 new cases in human beings every year. A substantial proportion of those cases arose from the tuberculosis organism which infects cattle. In the 1930s nearly one in three cattle were infected. Nowadays, tuberculosis is no longer the fearful scourge it was. It is uncommon in human beings, and in cattle only one animal in every 5,000 is now found to have any infection—as I say, compared with one in three in the 1930s—and those one in 5,000 we soon wipe out.

Fifty years ago we began a voluntary programme to eradicate this disease from cattle. Thirty years ago the eradication from cattle was made compulsory by law. In 1960, we were able to declare ourselves virtually free of bovine TB. That was a great achievement. Now, we regularly test the adult population of over 5 million cattle and any reactor animal is slaughtered as soon as it is detected. That means that few, if any, cattle get beyond an early stage of the disease. This is the only safe method and it is used by all developed countries. We should he failing in our obligations, both domestic and international, were we to do otherwise.

Nevertheless, despite that, there are still sporadic outbreaks, as with any other disease which has been removed. But it is no longer endemic. With few exceptions, these sporadic outbreaks have been confined to some parts of the South West. There, there is 10 times as much bovine TB as in the rest of the country—one reactor in 500 instead of one in 5,000—and while that is still very small, it is far too big. Tuberculosis could still be transmitted through milk to those who live and work on farms there. What is more, this higher level of infection could soon spread to neighbouring herds and to other parts of the country, to which the noble Lord, Lord Houghton, referred.

It is a fact that badgers can, and do, harbour bovine tuberculosis and their connection with the disease is inescapable. Ministry scientists did not just jump to the conclusion that badgers were the culprit after finding just one carcase with TB. They examined many diseased badger carcases and studied the way in which the disease developed and where it occurred before reaching a conclusion. Indeed, there was criticism at the time that they were far too cautious about a conclusion which had long been obvious to many paople.

So the evidence accumulated. There is a very strong geographical correlation between outbreaks of the disease in cattle and the presence of diseased badgers, and I must tell my noble friend Lord Ferrier that, so far as I know, there is not an association between TB of badgers in Scotland and TB of cattle in Scotland. Badgers, when diseased, can excrete vast quantities of TB organisms, particularly in urine and pus, from bites or wounds, and so they can contaminate pastures. Cattle and badgers share the same pastures and the possibility of cross-infection is obvious.

The noble Lord, Lord Houghton, insinuated that possibly badgers get tuberculosis from cattle, a criticism I have frequently heard. However, the possibility that cattle could spread the disease to the badger or other cattle is considered to be extremely small, as cattle are regularly tested for the disease and reactors to the test and contacts are removed and slaughtered. The regularity of testing is such that in almost all cases the disease is discovered before it has developed to an infective stage, and any cattle sold prior to a test which reveals infection in the herd are immediately traced to their destination, check tested and, if necessary, slaughtered. So I really think that the possibility, so often put, that cattle give the disease to badgers is in fact not so.

I am bound to say that I was not altogether impressed with the connection between outbreaks of tuberculosis in badgers and TB in cattle until I went to the South West and saw the detailed field work, and at that level the connection is remarkably apparent. I believe that most impartial people who study the evidence would be convinced. And in the face of such evidence, no Government could afford to run the risk of not dealing with what is clearly a reservoir of a potential killer disease. It was decided that in order to neutralise the wildlife reservoir of the disease, infected badger social groups and their contacts should be removed, only in those areas where there was an undoubted connection. Of course, it may be that in some cases badgers have been destroyed when, in the full knowledge which we should like to have but which we do not have and which we did not have, that might not have been necessary. But when the eradication of serious disease is involved, we must act quickly and sometimes harshly. So, if it was necessary to destroy badgers in those limited areas, one asks: what should be the method?

Before deciding to use gassing as a means of badger control, the then Government undertook extensive and thorough consultations with a number of bodies: the Nature Conservancy Council, the Mammal Society, the Council for Nature, the Royal Society for the Prevention of Cruelty to Animals, and people eminent for their work in badgers. There was unanimous agreement among those consulted—and they were people who were, by nature, expected to want to protect badgers—that gassing was undoubtedly the most humane method of killing badgers. That was exactly the advice contained in the Scott-Henderson Report of the Committee on Cruelty to Wild Animals issued in June 1951. All the evidence was that gassing was the most humane method of destruction. We have always tried to operate on the smallest possible scale where badgers have to be destroyed.

My noble friend Lord Lindsey and Abingdon said Ministry officials in the field had shown themselves not open to conviction about the role of badgers and bovine TB. All I would tell him is that in every investigation on each outbreak of the disease we have examined every other possible source of infection before even considering the possibility of badger-bourne infection.

I would remind your Lordships that the total of gassing operations has not been large. A map showing the total extent of the operations has been placed in the Library of your Lordships' House, and it shows that only about 4 per cent. of the land area in the Ministry's South-West region has been covered by these operations, and this is only three-quarters of 1 per cent. of all the land in England alone—not Great Britain; just England.

So I really do not think that it is right for the noble Lord, Lord Houghton, to say that this is an exercise that will exterminate the badgers. It really is not. The noble Lord described the Government as being the executioner of the species. I realise how strongly he feels, but, with the greatest of respect to him, I must say that such phraseology does not measure up to the facts. The operations have been carried out in only a very limited area, and only in those places where the badgers themselves have tuberculosis, or are suspected of having it.

I am bound to tell your Lordships that, despite the evidence about the involvement of badgers with the disease, despite the advice that was given about the humaneness of gassing, and despite the Government's statutory duty to eradicate tuberculosis from cattle, vociferous criticism still came from certain quarters.

When my right honourable friend the Minister came into office he decided to have the whole subject re-examined, because he wanted to make sure that the policy was right. He wanted a very eminent person to do this. So he appointed the noble Lord, Lord Zuckerman, whose presence tonight and whose contribution to the debate was very substantial and, if I may say so with all humility, very important. The noble Lord is president of the Zoological Society of London, he was president of the Fauna and Flora Preservation Society, and he is a very enminent person in this field. My right honourable friend asked him to carry out an independent review of the whole question. While that was being done, my right honourable friend stopped the gassing of new setts and in so doing permitted badgers which possibly had the disease to continue to spread it. The noble Lord, Lord Zuckerman, concluded that the evidence involving the badger was overwhelming and that the only policy was to destroy badgers where they were known to be infected or in contact with infection. So gassing was resumed.

In the course of his inquiry, the noble Lord, Lord Zuckerman, paid particular attention to the question of the humaneness of gassing. He discussed the issues specifically with the Consultative Panel on Badgers and Tuberculosis, and it gave him the advice that there was no more humane or efficient method of badger control than gassing. Of whom does the panel consist? It consists of representatives of the Royal Society for the Prevention of Cruelty to Animals, the Universities Federation for Animal Welfare, the Royal Society for Nature Conservation, the Fauna and Flora Preservation Society, the Nature Conservancy Council, the Transport and General Workers' Union, the British Veterinary Association, the National Farmers' Union, and the Country Landowners' Association, as well as four individuals who are eminent in the fields of badger and wildlife disease studies. That is not exactly the village darts team, but rather a very eminent and respected body of people.

Their advice was that there was no more humane or efficient method of badger control than gassing. Nevertheless despite that assurance, the noble Lord, Lord Zuckerman, penetrated further. He decided to recommend yet a further check, and he advised that further inquiries should be carried out; in particular, inquiry into what concentration of gas in the air of the sett would be needed to kill the badgers both quickly and humanely. The necessary work was therefore commissioned to be done by the Chemical Defence Establishment at Porton Down, and its report has been placed in the Library of the House. In passing I would mention that the Chemical Defence Establishment based its work mainly on ferrets and involved only a very few badgers. Even in this crucial work every effort was made to avoid killing badgers, as scientific advice was to the effect that ferrets would give a very good indication of what might happen in badgers. But of course the ironical part is that ferrets had to die in order to find out the information to protect the badgers.

The results from the experiments suggest that, if badgers are to be killed in one minute, then 2,000 parts per million of gas is needed in the air of the sett, and that the corresponding figure for five minutes is 882 parts per million, and for 25 minutes it is 194 parts per million.

I am hound to tell your Lordships that those results were unexpected, and they were unexpected in what was then the present state of informed opinion, which was based on investigations over a number of years into the toxicity of hydrogen cyanide to a very wide variety of animals. The results indicate that the response to cyanide of the badger is different from that of other animals. The reasons for the difference are not understood. However the results imply that there must be doubt as to whether all the badgers in a gassed sett die quickly, and therefore whether they die humanely. That is because the levels of gas in a sett are in general lower than the new experiments show to he necessary.

I must emphasise that the results do not suggest that thousands of badgers have died painful, miserable deaths from starvation or from asphyxiation. That is the interpretation of the noble Lord, Lord Houghton, and he is perfectly entitled to it. What the results do is to cast doubt on what had been thought about the speed of death and the after-effects for those badgers which do not die. My right honourable friends the Minister of Agriculture and the Secretary of State for Wales decided that they could not afford to be doubtful in such a matter, and accordingly they suspended gassing as a means of badger control on 26th June this year.

Of course a new method of control has to be substituted for gassing, and the Ministry has resorted to live trapping. The decision was taken by my right honourable friend on the unanimous advice of the consultative panel. It agreed that it was necessary for control measures to continue, and it was satisfied that live trapping was a practicable and humane method of control. Live trapping also has the advantage that carcasses become available for scientific investigation, and the panel has urged that every effort should be employed to use this material to advance scientific knowledge of the subject—and this we are doing.

The noble Lord, Lord Houghton, asked whether the use of snares would be a possibility. We are discussing with the consultative panel on badgers the question of how best to operate live trapping, and we shall discuss with the panel the use of snares. On top of all of that a very wide variety of interested organisations have been invited to give their views on methods of controlling tuberculosis in badgers. The new main method of control will be reappraised once this advice has been received and has been considered. Our methods of control will be kept under continuous appraisal.

The noble Lord, Lord Houghton, is worried about gassing, and he is worried that gassing has been wrong—a policy that has been continued not just by the present Government, but by our predecessors, who of course came from the party opposite. I am bound to say to the noble Lord, Lord Houghton, that I make no apology for what we have done. We have acted, as did my right honourable friend's predecessors, to protect human health and to protect animal health. We acted in the best of faith with the information which was available to us. As can happen in any aspect of life, further research has shown up unexpected facts which have cast doubt on the basis for our actions, and even contradicted our assumptions and our knowledge. That is what research often does, and that is the purpose of further research. We can only try once more to find the best method of control in the light of the knowledge which is available to us.

I know that this is a matter of great concern, and I would remind the noble Lord, Lord Houghton, that apart from anything which the Government may do on research, the Consultative Panel on Badgers and Tuberculosis has endorsed the Ministry's major research programme. On certain aspects of the research close liaison has been established with the Middlesex Hospital in London; the Department of Pure and Applied Biology; the Imperial College, London; the Chemical Defence Establishment at Porton Down; the Universities of Reading, Exeter and Surrey; and the National Environment Research Council, through its Institute of Terrestrial Ecology. So there is quite a lot going on for the badger.

I would conclude with the penetrating observations of the noble Lord, Lord Zuckerman, in his report—for which, if I may, I would add my personal and modest word of thanks and appreciation, because it was a remarkable report and easily readable. He said this:

"I am confident that the Ministy's policy does not constitute a threat to the survival of the species in the United Kingdom. Indeed, the very high prevalence of tuberculosis in the badgers of the South West seems to me to be a far greater threat, for if the disease were to take hold in badgers in other areas of the country, there is no saying what the consequences would be, not only so far as the transmission of tuberculosis to cattle is concerned but also as they relate to the survival of the badger in our country".

Then, in his recommendations the noble Lord concluded—and I quote his words:

"the spread of tuberculosis among badgers now implies a major hazard in their survival".

Tuberculosis is bad for humans, it is bad for cattle, and it is had for badgers themselves. It is our intention to continue to eliminate this disease in the most humane and reasonable manner that is known.

My Lords, before the noble Earl sits down, may I ask him one question? I should just like to reiterate that I—

My Lords, with the greatest respect to the noble Earl, I think he is in fact out of order because he has spoken once already, and the convention is that that is sufficient for all noble Lords.