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Lord Clinton-Davis: My Lords, the liaison, in so far as it occurred in the past at the monthly meetings and so on, is now at an end. What we are talking about is a different commitment altogether with different responsibilities, which I have, I hope, outlined satisfactorily to this House this afternoon, if not to everyone's satisfaction. I am sure that my right honourable friend the Chancellor will not fail to see the Bank of England officials from time to time but the formality of those meetings and the way they are conducted will now be different. I think this is a better way to proceed than the situation over the past two or three years when the previous regime obtained.

The Earl of Balfour: My Lords, is it the idea of Her Majesty's Government to make the Bank of England more independent, rather like the Bundesbank appears to me to be independent of the German Government?

Lord Clinton-Davis: My Lords, the proposals that we have for so-called "independence" are not necessarily akin to those of the German Bundesbank. This is a British solution for British needs, as, I hope, I purposefully said at the very beginning. What I do not want to do is to ignore the experience of others; we can always learn from them and it is to be hoped that they might even learn from us.

Address in Reply to Her Majesty's Most Gracious Speech

Debate on the Address resumed.

6.40 p.m.

The Earl of Arran: My Lords, for a few minutes in today's debate on the gracious Speech I should like to dwell on regional development agencies and to make specific observations for the south west and in particular for Devon and Cornwall; Devon being the county in which I live. In so doing I declare an interest in that I am a director of South West Enterprise, which is a company established as a private sector joint venture promoting business and economic development in Devon and Cornwall.

Let me first say that I welcome the Government's initiative to combine environment, transport and regions into a super ministry, also encompassing local government, regeneration and planning. I also welcome the proposals to centralise these key functions while at the same time devolving decisions on economic development

as stated by the Deputy Prime Minister.

The environment, transport and the regions are components which fit together well in laying the foundations for wealth creation and competitiveness. We need development agencies which can combine the

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wide range of activities currently undertaken by many central and local bodies. It is to be hoped that that will lead to a much improved cohesion between functions and a much needed focus on the solutions which will really make the difference. But crucially, it will enable local communities to identify far more closely with what is being done to enhance their businesses and their own communities. Local identification is essential. Economic development occurs locally--in the factory, in the office, on the farm--where value is added and jobs are created.

The Government may wish to consider further how a regionally run agency can improve upon centrally run agencies in the development of local communities. For example, consider the south west region where I live. The distance between Gloucester in the north and Penzance in the south is 220 miles. Compare that with London to York at 212 miles, London to Manchester at 203 miles and London to Carmarthen in west Wales at 217 miles. The administrative city of the south west is Bristol, which is 194 miles from Penzance and 125 miles from Plymouth. At 120 miles, London is closer to Bristol than Bristol is to Plymouth.

How should a regional development agency in Bristol address local issues and build local identity and, as the Deputy Prime Minister has said, evolve decisions

    "to the level that matters most"?
How should that happen in Devon and Cornwall?

The last Government recognised the economic and geographic differences which exist between the northern part of the south west region and Devon and Cornwall. And thus the government office for the south west was initially established in Bristol, but in recognition of the demand for a presence in Devon and Cornwall, the previous government established a second site in Plymouth. That met the need for local access, information and decisions. That achieved a local identification with government services and meant that people in Devon and Cornwall did not have to travel to Bristol. I ask that the present Government not only maintain that position, but go further and create an executive development agency for Devon and Cornwall.

Earlier this year South West Enterprise published a prospectus entitled Turning Around the Westcountry Economy containing proposals for a development agency for Devon and Cornwall. In a recent survey of the business community in Devon and Cornwall undertaken by Ernst & Young, 83 per cent. of respondents favoured a single development agency for Devon and Cornwall. There are sound business and economic reasons for Devon and Cornwall having its own development agency.

If one compares the regions of the United Kingdom, the south west ranks highly in terms of both income and earnings and ranks third overall of all United Kingdom regions on the basis of 24 key economic indicators. But these south west economic indicators in reality completely mask the local economic difficulties faced by Devon and Cornwall. Of the seven counties in the south west, Cornwall ranks seventh in terms of earnings and income--that is to say, last--and Devon sixth and fifth respectively.

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A recent review of the prospects for the south west economy published by the Plymouth Business School stated,

    "There is an extreme economically depressed area extending roughly west of a line from the east of Exmoor on the north coast to the west of Exeter on the south.

    There is a further deterioration once the Devon border is crossed into Cornwall.

    Just how far Cornwall is behind is explained by the fact that there is a 15.6% differential in GDP per head with Devon, while the figure for the most prosperous South West county, Wiltshire, is nearly 60% above the figure for Cornwall".

Nobody pretends that economic development is easy, but the Government's proposals potentially make it much easier. We would expect, quite understandably, a regional development agency based in Bristol to give an emphasis on exploiting the existing and increasing opportunities in the north of the region. Indeed, Bristol is now providing the bulk of services for the new manufacturing investments in South Wales and the second Severn crossing has opened up a huge swathe of land for business and industrial development with immediate proximity to the M.4 and M.5 for manufacturing and distribution.

Given their economic circumstances, Devon and Cornwall need an executive agency of their own. Indeed, there is one--young, experienced, but lacking government financial support--the Westcountry Development Corporation. This is a partnership between the local private sector, the local authorities and the local TEC. It is a self-help partnership. It has a regional economic development strategy. We have been developing our own opportunities and building on our own strengths.

As an example, I take just six of the major capital business projects currently in progress in Devon and Cornwall. Together these six projects require £299 million. Most of that funding is already in place, but some is not. Of the funding that is in place, the ability to create jobs has been limited by the current constraints placed on funding. These six projects should between them create 2,650 short-term construction jobs and 6,750 long-term manufacturing and service jobs.

The Prime Minister has made a pledge in another place to reduce unemployment. Indeed, in the Western Morning News he was also quoted as saying,

    "Our New Deal for the young unemployed will help to get 250,000 under-25s across the UK off benefit and into work. That represents direct help to nearly 6,500 young people in Devon and Cornwall".

We already have plans in Devon and Cornwall which will deliver more than 9,400 jobs. It will not be easy. However much government assistance is given for training and the re-motivation of the long-term unemployed, these jobs will not appear without the support of the private sector. In an era of continuing restraint on local government expenditure, these jobs will have to be created by and within the private sector.

As I have already said, South West Enterprise is a private sector joint venture promoting business and economic development and represents almost 14,000 businesses in Devon and Cornwall including the major utilities, banks, manufacturers, services and representatives of the CBI, the NFU, the Federation of

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Small Businesses and the South West Chamber of Commerce. We ask that we work together through the Westcountry Development Corporation to create jobs in Devon that are genuine and lasting and will lead to a sustainable and competitive local economy that can make a full contribution to the United Kingdom in global markets. There is nothing incompatible between a Devon and Cornwall agency and the Government's present proposals. What matters most is the focus on local economic need.

We would welcome a partnership with the Government whereby we work together to reduce long-term unemployment in Devon and Cornwall, thereby helping the Government to deliver their pledge to reduce the overall level of unemployment in the United Kingdom.

6.50 p.m.

Lord Borrie: My Lords, it was commonly said of reports of Royal Commissions and other government-appointed committees that they mouldered on the shelves of Ministers and over time gathered a great deal of dust. I was especially pleased by a number of items in the gracious Speech and the speech of my noble friend this afternoon that related to lifelong learning, individual learning accounts and a more sensitive and efficient system of loans for university students. I also welcomed her comment on regional development. All those themes featured in Opposition-appointed commissions on which I had the honour to serve, namely the Commission on Social Justice and the Regional Policy Commission. I am also delighted that four brand new elected Members of the other place served on those commissions, three Labour and one Liberal Democrat. I know that they will be as pleased as I am that, instead of gathering dust, our work has already borne fruit and provides a source of analysis and proposals which is useful to the Government which has just been formed.

The creation of the combined Department of the Environment, Transport and the Regions is, in my view, a policy that results from a proposal by the Regional Policy Commission. I am delighted by that instant creation. I am also delighted to hear that the last speaker, the noble Earl, Lord Arran, approves of the creation of that department. In my congratulations to my noble friend on her appointment I am also able to add my thanks. When in opposition in her previous incarnation as chairman of the trustees of the Institute of Public Policy Research a certain amount of funding for our commission was helpfully provided.

The proposal to create regional development agencies for England on the model of the Scottish and Welsh development agencies is part of the Government's intention to devolve power outwards from Whitehall and promote economic and social regeneration particularly of the weaker and poorer parts of the country. I was fascinated to hear the close analysis of my noble friend Lord Rogers of Riverside in his delightful and excellent maiden speech. He pointed out that social regeneration of some of the poorer parts of the country required architects, social workers and those who planned for economic development. Today, sometimes in close geographical proximity to one another, one sees prosperity and comfort on the one hand and poverty and

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despair on the other. I believe that the economic success of the United Kingdom as a whole must ensure that all regions of the United Kingdom join in that progress, because, if any region under-performs, the UK as a whole is not maximising its economic potential.

Three years ago the previous Government set up 10 regional government offices. They were intended to remove to the regions decisions upon policies such as business development, training and regeneration. One of their key functions is to administer the single regeneration budget, which integrates government funding for the regeneration programme. They are staffed by officials from the DTI, the Department for Education and Employment and the now combined Department of the Environment, Transport and the Regions. Two of the regional directors have been officials of an office with which in the past I have been concerned: the Office of Fair Trading. I have reason to believe therefore that those directors are of high quality. Surely, that is something on which we can build.

The creation of those offices was a definite move in the right direction. I congratulate the former Government upon their creation. It may be that one of the motivations for their creation was to head off pressure for more genuine regional government, but today, with another government, we stand in a different position. We can use those government offices in the regions as a starting block on which to build. It can give them a closer focus and enable them to remedy what I believe is their democratic deficit. I believe that they need staff from a wider range of government departments than at present so that they include, for example, people from the Department of Health, the Ministry of Agriculture--which has cropped up a few times in the debate this afternoon--and the Home Office. Those departments have relevance to the economic and social policies that the regions require. The closer focus will come from those officials if they now owe primary loyalty to the new department. Their accountability to one of the principal Ministers in the present Government--namely, the Deputy Prime Minister as head of that department--will give them a closer focus. They will work closely with the new regional development agencies that will be appointed from a wide range of appropriate regional interests.

As to the democratic deficit, a start can be made by building on elected bodies, through elected councillors in all local authorities in the region, coming together as consultative chambers to link the agencies and regional government offices with local communities. I believe that the noble Earl, Lord Arran, regards that as a system to ensure that the individual communities in the 10 regions of England are brought closer together.

What will the regional development agencies be doing? I believe that they will promote economic and social regeneration, develop regional priorities, help small businesses and be a very strong focus to attract inward investment. My noble friend the Minister referred to attracting inward investment. I hope that they will also boost indigenous investment in those regions. I am sure that there is no conflict on that point. They

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will bring together a number of disparate relevant bodies at regional and local level and be a one-stop executive arm of the regional chambers.

The noble Lord, Lord Wade of Chorlton, referring particularly to the North West, spoke of the undue profusion of bodies at the present time. If one is to reduce profusion in the City of London and the financial sector, as one heard in the government Statement this afternoon, one should also think of the profusion of bodies elsewhere, for example in the regions. I suspect that the White Paper on the agencies will concentrate on the merits of decentralisation and devolution from Whitehall. Clearly, it is vital that the regional development agencies are seen as strong co-ordinating bodies adding value to the regions' economic development, not just adding another layer of bureaucracy between local authorities and other local agencies on the one hand and London and Whitehall on the other.

Following recent local government reorganisation under the previous government and the creation of a larger number of unitary local authorities, many of them quite small, in my view some functions are now too widely dispersed and the public are perhaps less well served than they should be. I think particularly of the control of trading standards and the enforcement of high standards of consumer protection. I declare my interest as an honorary vice-president of the Institute of Trading Standards Administration.

To be fully effective, local authority trading standards departments need to have a certain amount of political clout, particularly when dealing with larger businesses which have a national basis. They need a minimum of different, specialised skills, especially as regards the ramifications of some of our more modern laws such as the Consumer Credit Act. Unfortunately, a side effect of recent local government reorganisation has been the break-up, the dispersal and the dissipation of many trading standards departments among a number of smaller authorities.

It occurs to me--this may not be the perfect analogy--that trading standards bodies should be looked at more like police forces. Surely no one today in the modern world would think of increasing the number of separate police forces and splitting up their specialist detective and forensic staffs among a number of bodies. It would reduce their effectiveness to do so. It may be that, as regional government, regional development agencies and regional chambers develop, some functions now in the hands of local authorities, as well as those in the hands of central government, should be regionalised. The public would benefit from a viable regional trading standards service, and in the case of Wales and Scotland, perhaps, from a national service in each of those nations.

I see that as complementing decentralisation from Whitehall. Devolving to the regions may make more sense than devolving to local government. It is, for example, commonly thought by consumer bodies that the Office of Fair Trading should devolve some of its powers to combat rogue traders who blatantly and regularly cheat the public. In principle, that is right,

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but it may not be sensible to devolve trading standards departments that, as a result of recent local government reorganisation, and as at present constituted, may be unduly small and poorly resourced. Their responsibilities would be better placed on the regions.

7.2 p.m.

Lord Hooson: My Lords, it gives me particular pleasure to know that the noble Baroness, Lady Hayman, is replying to the debate because I remember her in my latter days in another place when she came in as a young, and, if I may say so, attractive Member. It is reassuring to know that this evening she will reply. She is still young and attractive, but she is also an expert on many matters, although not, I regret to say--as far as I am aware--on the particular matter that I intend to raise.

    "The language of politics is the language of priorities",
as de Juvenel said. My fellow countryman, the late Nye Bevan, purloined that statement, without attribution of course, saying:

    "The language of Socialism is the language of priorities".
Whichever it is, the gracious Speech spells out this Government's priorities. When I read and heard it, I became aware of one glaring omission which is one of the greatest challenges facing the Government; that is, to deal with the matter which has exercised this House, the other place and the media more than almost any other subject over the past two years: the consequence of the BSE crisis.

It is a real test of the Government's resolve. It is a real test of their approach to Europe. It is a real test of their ability to deal with a highly bureaucratic and extremely wasteful system. The noble Lord, Lord Carter, is not in his place. I wish that he were, because when I read of his appointment, I am sorry to say that although I believed that he would be a first-class Whip for the Government, I thought that he was needed on the Labour Benches in the Ministry of Agriculture, because of all people on the Labour Benches, either here or in the other place, he seemed to have a greater grasp of the realities of agriculture than anyone else.

We have rightly criticised what has been the gross mishandling of a crisis. If people want to inform themselves more about the crisis they can do so partly in summarised form in the April edition of the Parliamentary Review, which contains a good article by Professor Sir Richard Southwood who chaired the Department of Health and MAFF working party on BSE from 1988 to 1989. He said:

    "Simple sound bites have fanned the anxieties of the European public which has signalled through its shopping habits its lack of trust in all those involved. Farmers who have never had a BSE case, having kept their animals on grass, or have lived in a country effectively free of the disease, have cried out at the injustice of it all. In Brussels and Westminster the issue has become a handy weapon for political in-fighting".
That is true. The review contains other articles.

In February this year the report of the temporary committee of inquiry of the European Parliament into the handling of BSE was published. This evening I do

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not want to go into the dreadful mistakes made in the past. Mistakes were made everywhere. Mistakes were made in this country and in Europe. It is a fair summary to say that we must take the major portion of the blame for what happened, but let us look at its consequences, and how one deals with it in the future.

The cost last year to the Exchequer of unbudgeted finance resulting from the crisis was over £1 billion. It may be possible for the Government to tell us this evening what has been the total cost to this country's budget. Let us also take the cost to the EU budget to which we are subscribers. That has been immense.

The outcry on the continent was enormous and was reflected in shopping habits, as it was in this country when the possible link with the human disease was discovered. People do not realise that beef consumption declined all over Europe and in the USA, but the decline was much greater in Germany, for example, than it was here. It decreased by over 50 per cent. in Germany. Oddly enough, farmers are complaining today about the importation of beef from Germany. If you buy in a supermarket in this country you are likely to be buying imported German meat. It is meat that they cannot sell in Germany. It is cheaper to buy German beef than British beef in this country. Farmers are naturally complaining about that.

I wish to come to the present problem. The cost to our relationships within Europe was enormous. The recriminations were great. What are we going to do about it? We need to restore public confidence throughout the entire continent of Europe. I am convinced that it will need to be a European effort and not just a British effort.

The first thing the Government should do is to take the initiative in co-ordinating all the research that has been done and to finance further research. It is no use trying to hide this problem under the carpet. I am a farmer; I have disclosed my interest on many occasions. I have a pedigree Welsh black herd, which is my pride and joy. I have reared it for nearly 35 years now. I have never had a case of BSE. Nevertheless, there are problems even in a herd such as mine. If a calf dies, I have to buy one from outside. It is difficult to obtain a calf from a single suckling herd, unless you can find twin calves and obtain one of those. You must be assured, for example, that the calf you are buying is from a BSE-free herd, and so forth.

I used to check with the Ministry of Agriculture on any calf or heifer I bought in order to discover whether they were BSE-free. A fortnight ago my farm bailiff was going to buy a calf and I telephoned the ministry to check. I said, "Look, this has been warranted free of BSE from a BSE-free herd and so on. Can I check up because I have the reference number of the herd?". I was told by someone at the ministry, "We are not allowed to give that information now. It is an invasion of privacy". It had been giving it to me throughout the previous year. Which side is it on? That appears to be extraordinary advice at the present juncture but it illustrates one of the problems in tracing animals that may have BSE.

The problem extends throughout Europe. A friend of mine was recently in Portugal and he brought back documents which the French Government were

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promoting. The French beef industry has also been hit, but it was trying to sell its beef in Portugal. It was putting out propaganda documents illustrating how the French system of recording--ear tagging and so forth--was co-ordinated with passports and was foolproof. It is not foolproof at all and is probably akin to our system.

Our system is not foolproof because we have not had practical people dealing with it. We put ear tags into the ears of calves. My poor calves have two or three ear tags by the time they have every one that is required. But ear tags can come out. Unscrupulous people can and do remove the ear tags and replace them with others in order to mislead the public. The amount of graft and waste of public money that has occurred during the BSE crisis needs investigation. I am not suggesting that it should be done immediately, but I believe that the Government should, first, co-ordinate the research to ensure that the public know where they stand. Secondly, they should have a European effort to clear up the BSE crisis, which has affected the whole of Europe. We must all co-operate and there must be an acknowledgement that we as a country have been at fault. Perhaps the Government could indicate whether they broadly accept the findings of the temporary committee of the European Parliament, which was very impressive on the subject. By and large, it blamed not only this country, where it put the majority of the blame, but the Commission and the Council, too.

Furthermore, it is important for us to appreciate that we will not satisfy the public until we can ensure that every animal which has any possibility of contracting BSE is traceable. I am told that the only way to do that is by electronically implanted ear tags. They go under the skin and there must be transponders at abattoirs and markets to interpret them. Such a system could be applied throughout Europe. It would be costly but it would be effective. At present, every country within Europe is trying to compete with the others, saying, "Our beef is better. We have a better traceable system". If ever there were a case for Government initiative it is now and on this subject.

That is one of the real trials for the Government. They inherit the situation. When the Conservatives were in power the Labour Party was very vocal about their handling of it. It is now up to the Government to take up the challenge and to be really effective. Ministers have said, "This is a time for action. The rhetoric is over". Of all the challenges facing the Government, the test will be on European co-operation and on their ability to get our partners in Europe to work together. The Government must realise that if they want money for education it is no use having this crisis continuing for another two years taking funding from the Treasury. It will be a real test of leadership and resolve. I wish that the expertise of the noble Lord, Lord Carter, were available to the ministry.

7.15 p.m.

Lord Elis-Thomas: My Lords, I am pleased as always to follow my noble friend Lord Hooson and in particular to thank him for emphasising the BSE crisis. If anything caused those in the agricultural community

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to defect from the Conservative Party, as they did in large numbers in Wales and other agricultural regions, it was this issue. I see my noble friend Lord Geraint nodding, which means that it must be true.

It is crucially important that the whole issue is taken out of the area of concern and misrepresentation into the area of objective evidence about the quality and standard of beef production throughout the European Union. We have been encouraged by the press reports of a positive attitude towards our new agriculture department and I hope that that can be pursued.

I wish to follow in particular the issue of sustainability and the related issue of subsidiarity that have been touched on throughout today's debate. They are closely linked. It concerned me very much, as I know it did the noble Lord, Lord Beaumont of Whitley, and my noble friend on these Cross- Benches, Lord Moran. By the way, these Cross-Benches seem to be a larger part of the furniture than they were in the previous Parliament. I am nearly on the Labour Benches. As both noble Lords mentioned, on the first day's debate on the gracious Speech there was concern about the lack of a clear environmental agenda from the Government. That mirrors the anxieties of some of us during the election campaign. Although some of us in the minority parties were given good marks by various members of the environmental movement as regards our treatment of green issues, that was not reflected in the major general election debate. I believe that the issue of a dirty planet is much more important than the issue of clean living on the part of individual politicians. It seemed to me that the issue of sleaze applied individually appeared to be much more important than the issue of planetary sleaze throughout creation.

Therefore, we need to refocus on the issue of broader morality and concerns. We need to look to the incoming Government for a clear agenda on energy policy. As has been mentioned, their early decisions on VAT appear to be going against the whole drift of green taxes and taxes on energy consumption. I can understand why they made those decisions, but it is important for them to respond in other ways as regards eco and green taxation. They need clearly to address the issue of alternative energy and to look at the particular damage that is inflicted on the environment, not so much by wind energy, although clearly that is a sensitive issue in landscape terms, but on the exploitation recently announced in Wales of large tracts of countryside for open-cast mining. We always need to take an environmental approach which is deep rather than superficial and to ensure that we have an energy strategy which deals not only with landscape aspects but with the real cost benefits for the environment in the broadest sense of the activity that we pursue.

No clearer example could emerge now of the need for sustainability than in the whole debate about water. Water has been a political issue in the area that I come from for many years because of the flooding of the reservoirs in the 1960s. It was clearly understood that there was a water resources issue at that time. Now we realise that the extent of wastage of existing supplies is a very clear example of a lack of a sustainable distribution network. It is no use talking about

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transferring water across river basins, with all the ecological damage that that can do to habitat and so on, while we are still seeing a massive loss of water through leakage. I was very pleased that Mr. John Prescott is taking a lead on that issue and I wish the Government well in ensuring that there is a sustainable water strategy.

But they must have also a sustainable strategy in that other area of much-needed integration; that is, public transport. Again, we need to look at the whole cost-benefit of our activity in that area. I know that criticising the private car is regarded as dangerous politically, but it is high time that we took on board the kind of vision that we heard in that most wonderful and stimulating maiden speech from the noble Lord, Lord Rogers. His vision of the ecological city reminded me of some visions of the heavenly city. But at least that vision presents us with an alternative to the kind of cities that most of us have to live in in any part of this Kingdom or Europe these days. Therefore, we need to look at bus and rail co-ordination and the integration of public transport. Again, that is an issue which relates to subsidiarity because those integrated transport networks can be delivered only at the city level, at the village or county level.

Another aspect which the noble Lord emphasised strongly is that the obverse of the over-developed and degraded city is the damaged countryside. If we do not take on board the issue of revitalising cities and redeveloping within cities, that poses a tremendous threat of overspill and suburbanisation to the countryside. The conservation of the countryside is but the other side of the coin to the conservation and regeneration of cities. If the Government can take on board that strategy, clearly they are becoming a little greener.

In some other areas of policy which are for debate today we have seen progress already. I congratulate the new Minister responsible for education at the Welsh Office, Mr. Peter Hain, on his announcement last week about nursery vouchers. By deciding on an early abolition of nursery vouchers in Wales, the Welsh Office is only doing what some of us in this House told the previous Government to do in that Division that we had on nursery vouchers; namely, to take it out of the Bill because it was not relevant. I am pleased that the incoming Labour Government have taken that point on board and have acted upon it.

I hope that they go beyond that to ensure that there is a positive partnership between local government, the local education authorities and the Welsh Office in other aspects of education policy. We heard very clearly from the right reverend Prelate the Bishop of Ripon the importance of the funding of further education as being the part of educational life which touches most people, whether in the form of initial training or for returners in the continuing model of education. Clearly we need to plan and resource much more effectively the continuing education structure in Wales among local authorities, the Welsh Office and the existing funding council.

But neither do we wish to see a further centralisation of local government functions away into non-departmental public bodies--and I declare an interest as chairman of

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one of them--nor do we wish to see a transfer of powers up from or across from Welsh local government to the proposed Welsh assembly.

That brings me to the other issue of local or national government in the gracious Speech; that of the referendum. I do not wish to use my ammunition--that is rather a military metaphor for someone linked with the peace movement--too quickly on this issue because it seems to me rather weird, when I read the schedule to the Bill before the other place, that whereas the Scots seem able to answer two questions, the Welsh are only able to answer one, albeit in two languages. That is a conundrum to which we shall return.

It seems to me that the Government have had some clear warnings on this issue already in this debate. We had that most excellent speech in yesterday's debate from the noble Viscount, Lord St. Davids. I am in danger of inviting him to join a newly formed Plaid Cymru group in this House. But he is clearly telling the Government that he sees that even within the Conservative Party in Wales now there are those who see the logic of a quasi-federal, legislative and fiscal solution to the Wales issue rather than the status quo or the option offered at present in the assembly.

Not only that, we had the endorsement by the noble Lord, Lord Thomas of Gresford, yesterday. There have also been other endorsements outside this House. I understand that the noble Lord, Lord Griffiths of Fforestfach, has announced his conversion on this matter. That was in the Western Mail, so it may not be entirely accurate. If so, he is doubly welcome because he was a leading adviser to the Conservative Government in the very dark days, although he did some sterling work on education policy in those dark days. If he now sees clearly that there is an argument for not only a Welsh assembly but one with clear fiscal and legislative powers, then he is welcome.

Also welcome is our friend and colleague in another place, Sir Wyn Roberts, the recently retired Conservative Minister of State. He is probably the longest serving Minister in the history of any department in this Kingdom, and certainly in the history of the Welsh Office. He is adopting a very interesting position. If I understand it correctly, he would say yes to a Welsh assembly with fiscal powers but he would vote no to present government policy. If he were voting in Scotland, I presume that he would vote "Yes" once and "No" a second time. I am sure that we shall have an opportunity to hear further from him about his position.

I mention all that because it is important that the Government should realise that they have an opportunity here to operate by a greater consensus in Wales than they have sought already. If they were to put two questions on the referendum paper, it would ensure that 80 per cent. of the Welsh electorate--that is, the Liberal Democrats, the Plaid Cymru vote and the Labour vote--would have an opportunity to vote for options which reflect the policies which were canvassed at the election. That would be a very simple issue to tackle and it would be an indication of co-operation and integration.

We have had these public invitations, again in the columns of the Western Mail, from Mr. Ron Davies, Secretary of State, and again from Mr. Peter Hain this

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morning, calling for an inclusive style of politics in Wales, an end to confrontation and an end to the over-domination by old Labour and so on. If they are serious about that, there is one simple way to achieve it; that is, to give us two questions, obviously in two languages. In that event, in Wales we could all feel confident in voting for options which should not pose any difficulty for the Government because clearly they would have a more obvious test of Welsh opinion and they could legislate in response to that referendum.

Having said all that, I am a born-again realist on this issue. We have been here before. It is clearly an issue on which all of us involved in the politics of Welsh devolution must be prepared to compromise. I am prepared to make my historic compromise in supporting the Government's assembly, but with the one obvious condition that the Government's party also supports that assembly. It did not happen last time, comrades and friends. It must happen this time.

Having said all that, I also wish well the noble Baroness, Lady Hayman, because we are of the class of '74, although I was in slightly earlier. I look forward to hearing her response to all these questions when she stands up.

7.29 p.m.

Lord Butterworth: My Lords, I bring the debate back to education and to higher education and universities in particular. The gracious Speech promised a positive response to the recommendations of the Dearing Committee. We should recognise that the recommendations of that committee are likely to be very different from the recommendations of the Robbins Committee. Dearing has been given only a year in which to report and the committee did not enjoy the kind of support staff which the Robbins Committee had. That was a very formidable support staff under Sir Claus Moser, on whose research the Robbins Committee was able to rest its conclusions. Dearing must be a different kind of report.

The core of the problem for Dearing is that student numbers have gone up by over 50 per cent. since 1989 and ought to continue to expand if higher education is to deliver the highly skilled and flexible workforce needed to compete in the global economy.

The CBI has called for the age participation rate to rise from the present 31 per cent. to 40 per cent.--a rise which is by no means unrealistic when one realises that it is already at 40 per cent. in Scotland. However, universities are grossly underfunded and with unit costs falling by over one third since the 1980s, further expansion is impossible without a reform of the financial mechanism. Whatever Dearing reports will require legislation and cannot therefore be effective before the year 2002. In that case, some safety net must be provided from this year's PESC round onwards until the new scheme can be introduced, if the university system is not to be irreparably damaged.

Perhaps I may now turn to another area of concern to universities; namely, research. Research is the powerhouse which creates excellence in universities and

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enables departments to achieve an international reputation. A crucial factor is what is known in the trade as, the QR or research element in the recurrent grant. The recurrent grant which universities receive from the funding councils, and this research element, is based upon the ratings which departments achieve in the research assessment exercise.

The Committee of Vice-Chancellors and Principals and the Committee of University Chairmen are both greatly concerned that the Dearing Committee might recommend that the QR funding line should be transferred from the funding councils to the research councils. That would complete the destruction of what is known as "the dual support system". Research councils are inevitably project-oriented and rightly so, but the research funds which universities receive from the funding councils, and which they can apply as they think fit, enable them to do so much more than could be done through the bureaucracy of the research councils. For example, the training of young scientists. Those who are not sufficiently senior to apply to research councils for their own grants are often provided by their universities out of the dual support system with the research infrastructure that they need in terms of library resources, computer facilities, equipment and, occasionally, very modest funds.

The dual support system gives the university a flexibility, enabling a comparatively small amount of research money to be deployed with maximum efficiency. The dual support system has given United Kingdom universities a head start over their colleagues in other European universities. The dual support system ensures that teaching and research are considered and planned together with all the benefits that that implies for the quality of the university system.

After Dearing, the Government will need to consider the relationship between higher and further education where the overlap of function is increasing. If entry to higher education is to be expanded, new areas for recruitment must be tapped and one obvious area is further education. The expansion of higher education in my time has done little to improve access to universities by social classes IV and V. Universities have continued to draw their students from the middle classes. The prospect of courses starting in further education and being completed in higher education is attractive to those of radical inclination.

Perhaps your Lordships will forgive me if I recount the experience of my old university, the University of Warwick. A few years ago the university entered into an arrangement with nine local colleges for a 2+2 degree in which the colleges taught the first two years like a US community college, after which the students sat an appropriate examination which provided a diploma. At that stage, students could exit if they so wished or they could transfer to the university. It has proved to be a great success. Over 80 per cent. of the students are women, mostly in their late 20s or early 30s, many of them are one-parent families with the majority being severely economically disadvantaged. Very few of them have ever held regular employment and hardly any have any qualifications post-GCSE or CSE, some not even that. Yet these students have had an extraordinary

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record, gaining degree qualifications of similar quality to those obtained by the normal A-level entry. Many have obtained employment in the community--career possibilities which would not have been remotely possible without the 2+2 degree programme. Some of them have stayed on for research, while others have studied for further professional qualifications.

The programme works well, partly because of the close relationship between the university and the colleges through our Community University Board. The only real problem has been student financial support. I clearly cannot go into the detail this evening, but the difficulty has not arisen through students being unable to cope academically; difficulties have arisen when students have had to give up social security support for the exiguous student maintenance grant plus the student loan. That was especially the case with one-person families. In my view, the only solution is to allow mature students over the age of 25 to continue to receive social security benefits after they become students. That would be a wise investment, enabling so many of them eventually to obtain productive and useful jobs. Because these students have taken the opportunity which the 2+2 programme offers, their families--and especially their children--should not be more disadvantaged than they would have been had their parents not opted to become students.

My final point relates to a neighbouring field. Continuing education is suffering today disproportionately because of the impact of the funding cuts. Continuing education happens to receive its funds from a series of different authorities and the convergence of their separate and uncoordinated financial cuts can be disastrous for continuing education. Of course, not only does continuing education receive funds from higher education units, it also receives them from local education authorities. Moreover, the outcome, so far as concerns continuing education, of the changes to the demand-led element of further education has yet to be clarified, but it threatens to have a negative impact. Again, when the jobseekers allowance scheme is too rigorously applied, it sometimes forces the students into low paid and inappropriate jobs without the possibility of completing their courses. This random damage now being done to continuing education by different agencies is in practice a far cry from the hopes for life-long learning expressed in the gracious Speech.

7.40 p.m.

Lord Northbourne: My Lords, I wish to repeat the comments of the noble Baroness, Lady Brigstocke, that important objectives in education have been achieved during the period of the Conservative Government. I do not wish to argue the case. However, I support the noble Baroness in suggesting that we should build on what has been achieved. I am happy that that appears to be new Labour's plan.

The main purpose of my short intervention is to talk about the under-fives, and in particular to praise the document produced by Mr. David Blunkett before the election. If I had made a wish list of all the things that I wanted new Labour to say regarding the under-fives, I could not have done better myself. If the noble

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Baroness will assure me that all these issues will be pushed through in the first 12 months, she will have my 100 per cent. support. If not, she may find me yapping--or even snapping--at her heels.

I wish to raise one important issue on which I have a query. On page 10 of a document involving the legal framework, a unified early years service, it states in the third paragraph that at national level they will bring responsibilities for childcare and education under the DfEE establishing an early years unit to plan and develop services. I have no problem with the childcare element, although I regret to say that it is in the equal opportunities department of the DfEE. While I have had some assurances from the department that that is not so, it gives the wrong image as though childcare were concerned only with equal opportunities for women rather than indicating that the outcomes are important for children. The plan for an early childhood unit may overcome the problem.

I am more concerned about the education of the under-fives. What does the word "education" mean? Does it simply mean nursery schools and pre-nursery education; or does it include the enormously important element of a child's learning in the family? The document states:

    "Fifty per cent. of all learning takes place in the first five years of a child's life, much of it within the very early years".
That is fairly commonly accepted wisdom although I find it hard to understand how anyone can know whether a child's education is comparable, for example, with education at university.

The commonly held wisdom is that half the child's education takes place before the age of five. Much of that learning takes place in the home because even a child in a nursery school is in the school for only between 8 per cent. and 12 per cent. of the total day. For the first three or four years he or she is not in nursery school. The parents, or surrogate parents such as the grandparents, are a child's first educator. Sometimes, often through no fault of their own, parents do not manage to make a good job of that education.

If it is true that 50 per cent. of the child's learning takes place mainly in the home in the first five years, is it not strange that the responsibilities of the Secretary of State for Education start only half way through the child's learning programme when the child goes to school? I very much hope that the phraseology in the document means that education in the home, and therefore support for parents, with preparation of parents for the education process, and education for parents at other stages of their lives, will be part of the responsibilities of the Secretary of State for Education and Employment.

I wish to see a seamless robe of educational provision and support from the first day of a child's life through to the day when the child leaves school and on into further and higher education and life-long learning. I believe that that seamless robe should be the responsibility of one Secretary of State. If not, the process will fall into a black hole as at present. At the moment about six weeks after a child is born the health visitor makes her last visit. As the front door shuts on

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that last visit, the parent is terribly alone. There are voluntary organisations which seek to fill that gap. Three years ago I was instrumental in forming the Parenting Support Forum. We now have some 450 members or organisations working in the field of parental support. But that is a drop in the ocean when considering all the under-five year-olds in the country.

The cost of children who fail is enormous. Yesterday I visited a school for emotionally and behavourially disturbed children in Ramsgate. The Kent County Council pays £720 a week for education and residential care. That is £37,500 a year. If we could reduce--as I am perfectly sure we could--the number of children who suffer from emotional and behavioural disturbance by giving them a better chance in that first 50 per cent. of their learning time, it would be an enormously worthwhile investment by any standard and would probably save the taxpayer money.

I repeat this. If we really want to ensure that as many children as possible are able to complete successfully the first 50 per cent. of their learning at home so that they can be successful in the second 50 per cent. of their learning at school, one Secretary of State must be charged with the responsibility of fighting for the system in the Cabinet and the Treasury to ensure that occurs. I hope that the noble Baroness will tell me that that is what the form of words means. If not, I should be grateful if she would draw the comments that I have brought before the House to the attention of her right honourable friend.

7.48 p.m.

Lord Berkeley: My Lords, we have had a wide ranging debate. I congratulate my noble friend Lady Blackstone not only on her appointment to ministerial office but also on how well she covered such a wide range of different subjects. It will not surprise noble Lords to learn that I intend to talk about the quality of life in urban areas and about traffic congestion, and perhaps to suggest a few solutions to an intractable problem about which a few noble Lords have spoken.

First, I congratulate the Government on the creation of the joint Department of the Environment and Transport. It indicates the seriousness with which they regard the issue that they have appointed the Deputy Prime Minister to lead it. They give the department strong devolutionary presumptions and intentions, as the noble Lord, Lord Elis-Thomas, said.

In the Labour Party manifesto there was a commitment to improve public transport and to promote walking and cycling in a nationally integrated transport policy. The noble Baroness has outlined three environmental Bills, which are most welcome. No transport legislation is referred to in the gracious Speech. I do not regret that because by encouragement and a little budget reallocation, to which I shall come later, the Government can do a great deal significantly to improve the quality of life in our towns and cities, and to persuade us that we can live with the benefits of the motor car without having our lives totally controlled by it. Lord Rogers of Riverside, in an excellent maiden

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speech, gave us an inspiring vision of what city life might be like. However, a radical change in how we approach transport policy is required if that is to be achieved.

We must begin with the concept of an integrated transport policy. I recall that when we sat on the opposite side of this Chamber we were often sneered at by the party then in government, who said that the phrase "integrated transport policy" means nothing. I believe it means a great deal. We debated an element of it a few months ago in relation to the report of the UK Round Table, Making Connections. It is quite clear to me what an integrated transport policy means. It means having clean, safe, affordable public transport services; good connections between modes--bus, train, walking, cycling and car parking; trustworthy travel information, regularly updated, and the ability of the information systems to cope when something goes wrong, so that the public have confidence in that ability. It does not mean a war on the private car--far from it. An attractive public transport system is the carrot to encourage people to leave their cars at home sometimes, not to stop owning them.

It also means addressing the land use planning problems. Over the years the previous government encouraged many out-of-town shopping and office developments, often near motorways, most of which could not be reached other than by car. Too late, the then Secretary of State for the Environment, Mr. John Gummer, reversed the trend and discouraged such developments. But many planning permissions are still outstanding. Developers can take them up, I believe for a period of 10 years. If they are prevented from doing so, the local authority, and possibly the Government, could be liable for millions of pounds in claims. It is a terrible legacy.

The car must retreat from the absolute domination of our towns and cities that it often enjoys today, preventing as it does buses and taxis, which carry many more people within a unit of road space, from operating effectively.

We need the integration of underground, trains, buses, coaches and taxis to work so that they operate in a co-ordinated manner. That cannot be done with the severe traffic congestion that we see in London and many other large cities and even small towns.

But most of all a real change of culture is required, change that is discernible to the average voter and change which the Government can, and I hope will, set about implementing with the enthusiasm, energy and commitment that we have already seen in other elements of policy. This involves a programme of educating the public; information about the benefits; and action to start quickly.

Such a policy must begin at a local, devolved level. There must be an element of local control within a broad policy framework. I welcome the commitment to an elected authority for London with strategic responsibility for transport. I welcome all the other devolutionary measures. I hope that we can then arrive at a situation whereby local authorities, whatever their size, ranging from--one must not call Scotland or Wales

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a local authority, but an authority devolved from Westminster--have real responsibility for spending some of their budget rather than the 10 per cent. that most authorities control at the moment.

Traffic congestion is here and is getting worse. There is only so much road space available--certainly in urban areas. It is inconceivable that many new road schemes will go ahead, since we have already seen the serious environmental disbenefit that they bring. As the House will recall, some years ago the Department of Transport published some maps (admittedly illegible) showing solid congestion in 15 years' time for most of the day on the motorways between Preston, Bristol and Maidstone. It does not take much to imagine that situation.

Professor Tony Ridley spoke to Members of both Houses at a meeting I attended in the Palace of Westminster a few months ago. He explained that there were three possible means of avoiding gridlock--build more roads to satisfy the unrestrained demand; introduce telemetry to allow vehicles to travel more closely together; or introduce traffic restraint. One or two members of the Conservative Party in another place disagreed with him. They said, "I require to drive my car everywhere". But most people understood that the problem was there and had to be solved. We have only to remember the occasion a few months ago when a lorry which was too high for the Dartford Tunnel hit a protecting bridge ahead of it and closed most of east London for six or seven hours. There was complete gridlock.

I suggest that the only course for the Government, and one which is in line with their transport and environmental policy, is restraint on the motor vehicle to allow the roads to be used by those who cannot use an alternative. That means that there must be a carrot. Where is that carrot? The most important question is: do we need to do the journey at all? Are the shops, work or school just round the corner, close enough to cycle or walk? Again it is a matter of planning, a matter of environment and transport working together.

Why not walk or cycle? Great strides have been made by Sustrans, with its millennium bid, on cycle paths and other means. But at present pedestrians and cyclists are squeezed off the road to an unacceptable degree. We have only to look at Whitehall. There are two times four lanes of traffic, usually solid, and a small pavement. There is not even a bus lane in each direction. Why can the queue not go somewhere else? It is rather a novel solution, but why should not buses be allowed in the Mall and the Royal Parks and cars be restrained? Buses carry many more people for the same amount of road space. We have to get away from the very wrong, socially divisive idea that buses are only for people who do not matter and cars are for those who do matter.

I have spoken before on the subject of bus lanes. We now have intermittent purple stretches of road punctuated by side turnings, usually blocked with a car in them, stopping the progress of the buses. The legislation already exists for continuous bus lanes and yellow boxes and could be enforced. I hope that the Government will take this matter up and show a great

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deal more enthusiasm for the idea than did the previous Government. It could be extended to other cities. At present some bus companies are talking about two-hour delays on some routes. How can a service be run for passengers in a situation like that?

There are other schemes. A very interesting one has just started in Edinburgh. I believe it is the brainchild of Councillor David Begg, a transport convenor on the city council. It introduces a range of measures to reduce the demand for the car and neighbourhood car-share schemes. Should we not have shop deliveries at night on main roads? Lorry drivers like to drive at night on the motorway, so why should they not deliver at night, thus reducing congestion on the main roads in the daytime? That seems a pretty obvious solution.

I have given merely a few examples. But would such a series of policy initiatives have public support? In the past year or two I have seen the motoring organisations, the AA, the RAC, the Road Haulage Association and the Freight Transport Association, all saying that they support restraint of the motor vehicle. Perhaps I may quote the recent study commissioned by Transport 2000 examining the barriers to transport use and identifying the areas where change is needed. There are two interesting statistics. The report states that,

    "nine out of ten people think that public transport is an important or extremely important part of community life, but more than six out of ten do not really like using it as it now is ... a third of those surveyed are likely to respond positively to real improvements ... more than half will change if they face restrictions on car use".
That is a blueprint for quality public transport.

Public transport is presently at a low point. There are delays, poor quality and little information. People use the car because they prefer it. That is fine if they have one. If they do not have one, however, they suffer seriously. The distances between home and school, shops or places of work mean that one has to travel more and more. Because most people use their car, there is little demand for public transport, and therefore little supply, since the market does not demand it. We see more and more arrogance and selfish behaviour on the roads.

The Government are committed to an integrated transport system and to encouraging public transport. There are many good examples on the Continent and in the UK. There is much to do, but the thinking electorate is already persuaded--in spite of the best efforts, frankly, of 18 years of Tory rule. The costs are small compared with building motorways. Let us not forget that a couple of months ago we had a Question in the House when the previous government cancelled the entire £44 million allocated to non-package small works budgets for the current year--cycle lanes, bus lanes, safer routes to schools and so on. It was only £44 million for the whole of England and Wales and it was cancelled because road schemes had overrun their budgets. Even up to the end of the last administration, roads came before London Transport--which desperately needed the money--and other public transport such as walking and cycling. In my view, Labour has a clear mandate and I know that it can and will face the challenge and introduce the packages of measures to encourage public transport.

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I conclude by congratulating my noble friend Lady Hayman on her new appointment and look forward to hearing what she has to say at the end of the debate.

8 p.m.

Baroness Thomas of Walliswood: My Lords, I start where the noble Lord, Lord Berkeley, left off by congratulating both the noble Baronesses, Lady Blackstone and Lady Hayman, on their appointments. Perhaps I may say how delighted I and many others have been to see the large number of Labour women MPs who have been elected. I also take this opportunity, although this is not quite the right place, to record my thanks to Lady Seear, who encouraged me and many other women to play a part in public life.

I turn to the subject of today's debate. Like the noble Lord, Lord Berkeley, I welcome the weight which the Deputy Prime Minister gives to the environment and the appointment of a Minister for Transport in the Cabinet. But in contrast to other Ministers, they have said little or nothing about their topics. Perhaps the airwaves have been crowded by others. I saw a suggestion in the press that Mr. Prescott was considering the introduction of motorway tolls. Such a scheme might help to finance the Government's other policies, but it would be a disaster for the environment because of the diversion of heavy traffic on to unsuitable roads. I very much hope that that suggestion was not true.

Similarly, there was nothing in the Queen's Speech about transport, yet the Labour manifesto, in a ringing endorsement of the party's duty to act now to protect the environment, stated that:

    "a sustainable environment requires above all an effective and integrated transport policy at national, regional and local level".
Amen to that! But some of the building blocks of such a policy surely require legislation. For example, how can the rail regulator be given extra powers without parliamentary sanction? Without such additional powers, how can targets for switching freight and passengers from road to rail be achieved?

Our belief is that existing franchises should be lengthened in order to encourage investment in improved rolling stock. If the Government share that ambition, will it be one of the responsibilities of the new rail authority foreshadowed in the manifesto? Again, how can such a rail authority be created without legislation? I fear that legislation is required for certain purposes and that it will be delayed.

In preparing this speech, I considered asking 26 different questions. However, the Minister will be glad to know that those are the only two questions I shall ask. The rest of my speech will be given to a random selection of contemporary examples of the kind of decisions which will tell us how the Government's mind is working.

For example, a current issue is the launch by Railtrack of the consultation process on Thameslink 2000. I am very much in favour of enabling additional north/south linkages to be made across London without changing trains or stations. In particular, I support improved rail access to London's airports. Nevertheless, at peak hours

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the main purpose of the lines will still be to bring commuters into London. It is rather disconcerting, therefore, to find that as a result of £600 million of investment, there will be no new trains serving central London. Indeed, there may be fewer trains accessing Charing Cross and Cannon Street. Furthermore, trains from northern commuter towns such as Stevenage, Luton and Bedford will terminate at Farringdon, requiring commuters into the City to change onto the tube at Moorgate. One is bound to ask whose needs, the commuters' or the companies', have determined the detailed configuration of the investment.

The Government may share those doubts. If so, or if they have ambitions to assert the public interest in relation to this or other rail construction projects, it will be interesting to see what means they use to achieve those ends.

While on the subject of London, unfortunately the noble Lord, Lord Rogers of Riverside, is not in his place but I wish to congratulate him on his brilliant presentation of the ideal city. Like others, I heard his Reith lecture, which crystallised for me something that I have been saying in a simplified form ever since: if London does not work, then the whole of the south-east of England does not work. It is amazing that the first time I said it, people looked at me in astonishment and thought: "What on earth is she talking about?" But gradually over the years the idea of London working properly as a place where people want to live and work and the importance that that has for the counties surrounding London has come to be supported by more and more people.

As regards transport across and within London, I congratulate the Government on their opposition to the privatisation of the London Underground. However, I note with interest that the 1996 Digest of Transport Statistics shows that in the 10 years or so up to 1995 motoring costs have remained stable or perhaps even fallen, relatively speaking, while the costs of travelling on London Transport have gone up by 38 per cent. In the fight to encourage people to transfer from private to public transport in urban centres--an objective which we support--a key determinant will be the methods which the Government use to counteract the price disadvantage of public transport over the use of the private car.

In addition to what the noble Lord, Lord Berkeley, said on the subject of transfers, there is the problem of trying to persuade adults who have never used public transport to do so. Most people in this Chamber have grey or greying hair and we probably used public transport in our youth. We may still use it today. I exclude my noble friend Lord Tope, and one or two noble Lords on the Benches opposite who do not have grey hair.

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