Commons Sitting of 15 January 1971

Preamble
The House met at Eleven o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

BUSINESS OF THE HOUSE
The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): With permission, Mr. Speaker, I should like to make a short business statement.
Following the proposal yesterday of the Leader of the Opposition, it has been agreed that the Common Market debate on Wednesday should be extended until 11 p.m.
On Thursday, in addition to the business already announced, there will be a debate until 11.30 p.m. on a Motion on the Industrial Training Levy (Road Transport) Order.

ORDERS OF THE DAY

  ATOMIC ENERGY AUTHORITY BILL
  Considered in Committee.
  [Sir ROBERT GRANT-FERRIS in the Chair]

  ATOMIC ENERGY AUTHORITY BILL
    Clause 1

      TRANSFER OF PART OF AUTHORITY'S UNDERTAKING TO NUCLEAR FUELS COMPANY
      11.2 a.m.
      Mr. Dick Douglas: I beg to move Amendment No. 1, in page 2, line 38, at end add:
      ( ) The Secretary of State shall before the end of the period of one year beginning with the passage of this Act lay before both Houses of Parliament a financial report detailing the valuation of the assets transferred under this section.
      The Chairman: It will be convenient to take at the same time Amendment No. 2, page 3, line 14, at end add:
      ( ) The Secretary of State shall before the end of the period of one year beginning with the passage of this Act lay before both Houses of Parliament a financial report detailing the valuation of the assets transferred under this section.
      Mr. Douglas: On Second Reading, we discussed the method of determining the valuation of the assets to be transferred to the two companies. The Under-Secretary of State for Trade and Industry indicated that he was satisfied with the procedure to be adopted in going to a merchant bank for a valuation. But he was a little more forthcoming than that statement would lead one to believe. He said:
      "I assure the House, however, that we have no intention of concealing anything in this matter and that within the proper and prudent confines of commercial practice we shall be frank with the House as is right when the question of valuation is discussed at a later date."—[OFFICIAL REPORT, 17th December, 1970; Vol. 808, c. 1649.]
      The difficulty is to determine how we can bring to the attention of the House the method of valuation and when the "later date" shall be. Therefore, the intention of the Amendment is to require the Secretary of State to lay before the House a financial report detailing the valuation of assets transferred. That would be only fair because we are transferring to these companies a considerable amount of publicly-financed assets.
      I refer to a time when we were going the other way and we were taking assets into public control. I do not want to accuse right hon. and hon Members opposite of dual standards, but when we were transferring privately-owned assets to the public ownership of the National Coal Board a considerable amount of time and trouble was taken to ensure a proper valuation of assets. Valuation boards were set up to determine the valuation and apportionment of those assets. Large sums, totalling £360 million, I think, were involved. On the occasion of the transfer to public owner ship of the National Coal Board considerable trouble was taken over a period of ten years.
      The point in this Amendment is that the valuation of these assets and the method of approach was included in the

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      Board's annual report. There was, therefore, an opportunity for this House to review the method and approach taken and an opportunity to question and analyse that method. While the party opposite might suggest that while the Bill was generally promoted in the first case by those of us on this side of the House, they have this responsibility in that they are producing an ethos whereby a large number of possibilities are arising, when publicly-owned assets might be transferred into private hands. I am concerned that this principle should not be taken merely as a guide and precedent for future transfers of publicly-owned assets into private hands.
      We from Scotland note in today's Press that some publicly-owned assets in U.C.S. are likely to be transferred once more into private hands. This is not unwelcome. If my right hon. Friend the Member for Bristol, South-East (Mr. Benn) had not taken the action he did when he was Minister there would have been very little of value in those assets. I would like the Minister to tell us where the difficulties arise in making this in formation available to Parliament, either on his own behalf or indicating clearly to the Authority that the method and approach should be embodied in the annual report.
      Mr. Anthony Wedgwood Benn: May I support what has been said by my hon. Friend the Member for East Stirlingshire (Mr. Douglas). He is absolutely right in saying that we are transferring valuable public assets and that this is a matter of public concern. There are other points that I want to put before the Minister. One is that we are transferring them to a company which will be operating under the Companies Act. This is not a transfer to a public corporation subject to the ordinary type of accountability under the Nationalised Industries Committee of the House. Therefore it is necessary for us to be especially careful about the assets transferred. That is the first point.
      The second is that the value of these assets is uncertain. We do not know how valuable they are. As with all in vestment and research, it may be found when it comes to industrial application that much of the money spent does not reflect itself in return on capital. If as
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      we hope and believe these assets turn out to be important—and there is every reason to believe that they will—in terms of winning the enormous market, in conjunction with the Dutch and the Germans, a £1,000 million market of nuclear fuel, it could turn out that the assets are of very great value.
      The House ought to have some bench mark, or guide line, given at an early stage showing what the valuation was so that later when we come to consider the profitability of the company, which we shall gain from the ordinary company reports, we shall have some way of knowing whether this judgment is right or wrong.
      11.15 a.m.
      The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): I would like to make one comment about the wording of the Amendment moved by the hon. Member for East Stirlingshire (Mr. Douglas.) He refers in the Amendment to "assets". What we will be dealing with will be shares. I accept that the shares merely represent the value of the assets, but what we will be considering is not just the assets but such things as property, rights, liabilities and obligations—all those matters which are transferred to the companies under Clause 7 of the Bill. What we are being asked to debate is how the shares of the company will be valued. There would be no disagreement with that.
      The right hon. Member for Bristol, South-East (Mr. Benn) and the hon. Member for East Stirlingshire (Mr. Douglas) raised the point of principle that just as under nationalisation Governments have tried to pay fair prices for shares which people have bought, so in a case of this sort fair prices should be paid for assets transferred from the public to the private sector. There are differences between the two operations. In this case it is an entirely voluntary transaction, if it takes place, between a willing buyer and a willing seller. In such a case, the value which can be put on the shares is to some extent limited by what the buyer is prepared to pay. There is, as it were, a market value.
      With nationalisation, in most instances, not all, a compulsory purchase system is used and therefore an arbitrary decision

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      has to be made as to what price the State will pay for shares it compulsorily purchases from other companies. It is not the same point. What we are here looking for is to make sure that the price that can be obtained for the shares will be fair and reasonable. This will be conditioned by what the companies who might buy the shares are prepared to pay. In the Second Reading debate on 17th December my hon. Friend the Minister for Industry said that, in conjunction with the Atomic Energy Authority, the Government proposed to commission a merchant bank to advise on the problems of valuation and capital structure and that we proposed to follow a similar course with regard to the radiochemical company. I undertook to consider what further information should be made available to the House in this respect.
      In response to the hon. Gentleman's request, I will give him a little more information about how the Government intend to go about the valuation of these shares. I have already explained that the Government favour private participation in the fuel company from an early date and preferably from the outset, provided that satisfactory agreements can be reached on the terms and price of shares. Subject to the provision in the Atomic Energy Authority Bill for the retention of a public majority shareholding, the financial aims of the Government are twofold.
      First, the maximum realisation from the public investment in the nuclear fuel business must be obtained and secondly there must be the maximum contribution by private interests to the future financing of the business. The Government and the Atomic Energy Authority are there fore seeking advice from the merchant bank on four aspects of the question. First is the possible approaches to valuation and determination of a price for the shares; second is the desirable capital structure of the company and form of private participation, bearing in mind the need for further substantial investment and that there should be maximum incentive to increase the profitability of the fuel company.
      The third aspect on which we are seeking advice is the extent and nature of the interest in participation in the fuel company. The fourth point is the
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      amount of finance likely to be forth coming from private participation, both initially and subsequently. I may add that the Government do not rule out the possibility of a public issue of shares at some stage. In providing advice on these questions the merchant bank will have available an assessment of the financial performance of the trading fund by a firm of outside accountants. Similar advice will be sought on private participation in the radiochemical company.
      When this expert advice has been provided the Government and the authority will consider it, but before final decisions are reached the House will be given an opportunity to consider the Government's intentions. The advice which the Government will receive will, of course, be confidential, but there is no doubt—and I give the House this assurance—that full information will be given as soon as decisions have been made. It is right and proper that the extent of ownership of different companies and the prices paid for the shares should be made public at some stage. This is in keeping with the undertaking that I gave on Second Reading that the maximum information would be made available to the House, which the House can, if it wishes, debate or treat in any other way.
      In the light of the undertakings that I have given, I do not think that there is any need to include these Amendments in the Bill. We have given an undertaking that this information will be made available in due course. I do not think that it is necessary for the hon. Gentleman to press his Amendment to the point of a Division, because what he requests will be done in the most convenient fashion, and it would not seem to us necessary to build the two Amendments into the Bill.
      Mr. Benn: I have no complaint about the Minister's proposal for calling on a merchant bank for a valuation, because I am sure that that is right, but I was a little uneasy when the hon. Gentleman said that this was unlike an act of public ownership because in this case it was a transaction between a willing buyer and a willing seller. The hon. Gentleman lives in a world of laissez faire, where willing buyers meet willing sellers in a state of perfect competition.

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      We are talking about public assets acquired by means of enormous sums of money voted by Parliament. We are talking about something abnormal and distinct from the ordinary market. We are talking about co-operation between the public sector and the private sector. We are talking about the relationship between different countries and a new company being set up. We are talking about patents which will have to be valued betwen ourselves, the Dutch and the Germans after we know the value of the particular centrifuge technology, and it has no relationship to the world of which the Minister spoke.
      However, as the Minister said, there will, in due course, be an opportunity to consider the Government's policy on this matter when the valuations are completed, and I accept that it is unnecessary to press the Amendment to a Division.
      Mr. Douglas: I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 1 ordered to stand part of the Bill.
      Clause 2 ordered to stand part of the Bill.

    Clause 3

      EXCLUSIONS FROM TRANSFERS IN RESPECT OF PATENTS AND OTHER INDUSTRIAL PROPERTY
      Question proposed, That the Clause stand part of the Bill.
      Mr. Airey Neave: Before the Committee agrees to the Clause, I should like to raise one or two points and ask a few questions on the general aspects of the provisions of the Clause which exclude patents and other industrial property.
      It is generally accepted that the value of a patent, or licence, or industrial property agreement depends on the flow of information on improvements and new developments that can be presented. This was previously done by the Atomic Energy Authority in regard to the patents that it held or still holds, and which will not be transferred under the Bill. The generation of new developments and new
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      improvements will become the responsibility of the fuels company being set up under the Bill. If the fuels company wishes to grant an additional licence to another company, what will happen? Will it need to sub-license the Atomic Energy Authority's patents which are excluded under the Clause, other than for those things which are transferred?
      These patents will be excluded. Will the company need to sub-license atomic energy patents, because there is no provision in the Bill for that? Is there anything else that my hon. Friend would like to say about the position of industrial property excluded under the Clause?
      Sir Harry Legge-Bourke: Perhaps I ought to declare a mild interest, in that I am a vice-president of an organisation called the Institute of Patentees and Inventors. It does not bring me in any money, but I take a great interest in the whole question of patent law.
      What I am a little uncertain about is whether the Report of the Banks Committee—which has yet to be debated, and we have yet to know what the Government's policy is about it—which has looked into the whole question of patent law will eventually, in any way, affect the Clause. I think that we have to read the Clause also in the light of Clauses 7 and 11, in that in Clause 7 we have a valuation of what is transferred, and in Clause 11 we have the provision about shares in the companies, and that harks back to some extent to the discussion that we have just had.
      I feel that a situation could arise in future—and this is what I asked the Minister to consider—in which it might be in the national interest for the sale of the patent rights to take place but, as I see the Clause as drafted, it could happen that that would be forbidden. It is therefore worth considering that we may have to amend the Clause when we have fully considered the Banks Committee's Report and when we have a better idea of how the new independent company will operate. I put this to the Committee as a possible future warning, rather than as a demand this morning.
      Mr. Ridley: My two hon. Friends have touched on a very complicated part of the

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      Bill, namely, the treatment of patents and other industrial property rights as dealt with in the Clause. This is one of the more difficult parts of the Bill. Unlike nearly all the other activities of the Authority which have to be divided between the new companies and the authority, there are no separate holdings of patents which can be identified as belonging to the trading fund. It has proved impracticable to divide the authority's patents between it and the new companies because it has been found impossible to devise a system of allocation. It has therefore been decided that for the present the best solution is to leave all the patents with the Authority, but to require it to make available to each company such facilities and information relating thereto as is considered necessary to carry on effectively the undertakings transferred under the Bill.
      My hon. Friend the Member for Abingdon (Mr. Neave) will realise that this gives the Authority the job of conducting considerably tricky negotiations, and the A.E.A. will license to companies on the usual licensing terms any patent which it thinks to be necessary to pass on to the two companies. It will, however, retain ultimate control of the patents or industrial rights, and therefore whether a patent can be sold or leased by one of the companies to a third company which is not concerned in the Bill will be a matter for the Authority which still owns the property. It will be possible for that to happen in the case where the Authority considers that there is no other patent being sold or leased to a third party but, on the other hand, control will remain with the Authority if it is thought to be necessary.
      My hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) referred to the Banks Report. The Government have not completed their consideration of this report, but I accept what he says, that depending on the conclusions on the report it may be necessary to look at this matter again. Perhaps I might leave the matter by telling my hon. Friend that I am grateful to him for his warnings, but that at the moment I do not think that any action arises, and that we shall continue to watch the point that he has made.
      11.30 a.m.
      Mr. Benn: In some cases the patents involve extremely sensitive technologies. There is a worldwide anxiety about the spread of nuclear weapons, and centrifuge technology is part of it. I hope that the Minister will not want to leave the House with the impression that it is simply a matter of patent law that remains to be settled. This is really a central question involving our relationships with Governments with whom we have had dealings in the nuclear field, notably the Americans, and our new partners, the Dutch and Germans.
      I appreciate that the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) has taken much interest in patent matters. I would point out that this moves into a separate and more sensitive area. Since important public comments have been made about the centrifuge arrangement which suggest that it has raised public anxiety, perhaps the Minister will say something before we pass from the Clause.
      My other question arises from the fact that we cannot know the value of the patents in respect of the arrangements with the Dutch and the Germans until we have compared our methods. I know nothing about the way in which they are operating their centrifuge. This is a kind of dance of the seven veils, where gradually each veil is removed as we get closer. The valuation of patents can be properly completed only after the centrifuge has reached its final stage of development. If the A.E.A. patents are the best ones it means that our input into the centrifuge arrangement is much more valuable than anybody else's. If the Dutch ones are better the question will be looked at differently.
      Under the centrifuge arrangements public money will be put into research in connection with new patents. Nobody thinks that the new company can survive on its own without public money, but research is very expensive, and therefore we have agreed internationally that there will be a diminishing subsidy until the company becomes liable on its own. Assistance can be given in respect to certain patents which will lead to the further patents, but that assistance will have to come from the taxpayers' resources. Therefore, the Minister should say more than he has said in response

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      to his hon. Friend the Member for the Isle of Ely, who talked properly in terms of patent law.
      Mr. Ridley: I believe I said that the control of these patents rested with the A.E.A. My hon. Friend the Member for Abingdon (Mr. Neave) might have been thinking of patents which have no security or nuclear significance, but those which have will remain in the control of the A.E.A. I have already given an assurance that extremely sensitive information could not get out of the hands of the A.E.A., and into the hands of persons who should not possess it, through this means.
      The right hon. Member for Bristol, South-East (Mr. Benn) is right in saying that the evaluation of patent or any other property rights is an extremely difficult matter. That is why, at the beginning of my reply to the first Amendment, I said that all these factors must be taken into consideration, and that the Government's intention was to place a valuation on the whole bundle, as opposed to trying to evaluate the various aspects of it. It is impossible to say at present what will be the value or the success of any given process, including the gas centrifuge. Although we are all hopeful and optimistic, it is not possible to say that in 10 years' time it will have earned such-and-such a profit or will have shown such-and-such a return. Therefore, any valuation of the process in this way must be speculative, and extremely difficult.
      Furthermore, from a valuation point of view it would be wrong to try to separate out the gas centrifuge from the other activities of the fuel companies. Therefore, our only means of tackling the question is to value the total bundle of activities of the fuel company—and that will depend upon what people are prepared to pay for it as well as what we are prepared to sell it for. Therefore, in this matter there is great need for independent assessment, as far as possible, from the merchant bank.
      I take the right hon. Gentleman's first point, that new research may be done by the A.E.A. which will lead to new patent rights being exploited by this or some other company in some other field of the A.E.A. 's activity. One would expect that in that case suitable agreements would be negotiated between the
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      A.E.A. and the company using the patent rights. But it is asking me to crystal gaze too much to predict what inventions will be made, what they will be worth, who will be exploiting them, and how they will be valued at some future date. The intention—and there is a later Amendment dealing with this—is that any facilities or research or further services provided by the Authority to any of the companies in the future will be paid for on a proper arm's length relationship, and on a basis of true valuation. We do not intend that the public should in any way lose the investment that it has put into research, provided that that research turns out to be successful. With those assurances, I think that the right hon. Gentleman may feel that his points have been met.
      Question put and agreed to.
      Clause 3 ordered to stand part of the Bill.
      Clause 4 ordered to stand part of the Bill.

    Clause 5

      POWERS OF THE SECRETARY OF STATE IN RELATION TO TRANSFERS UNDER SS. 1 AND 2
      Mr. Neave: I beg to move Amendment No. 8, in page 6, line 42, at end insert:
      'or
      (c) requiring subsidiary companies to be established within any field he may consider desirable'.
      At first sight this Amendment does not seem to have very much to do with the Secretary of State. In fact, I put it down in order to raise the whole question of the position of private companies coming into the company that is to be set up under the Bill. The Memorandum of Association of British Nuclear Fuels Limited does not cover the point, although it might be said that as to the setting up of operational subsidiaries it is covered under the Companies Act. The point is worth raising.
      The memorandum of association does not go further than to say that the company may acquire and hold an interest in other companies and enter into any arrangements with other companies. Some people feel that although some private companies may subscribe to the whole

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      range of activities in the fuel cycle others will be more interested on a selective basis, in employing their special technical skills in the fuel company, and it may be difficult for them financially or technically to contribute to the whole fuel cycle operation, which could be affected in the future by the centrifuge programme and the possible separation off of the enrichment programme.
      There is a possibility that many companies will have only a small interest, but they should nonetheless be encouraged to join in this fuel company. Their financial contribution could be quite small. I envisage that some companies may want to deal only in enrichment, and may merely wish to employ their special skills in fuel element manufacture, reprocessing, and electricity generation. Is there any reason why the fuel company should not set up operational subsidiaries? At present it is not apparent that there is any reason why it should not do so.
      I raise this question because the whole fuel service has so far been conducted by the production group and, as was said in the Second Reading debate, that group has done admirable work in that direction. But what happens if the centrifuge project goes ahead and the enrichment process is separated off into a European company, as I believe is envisaged? If the management of the British company has the power to create operational subsidiaries there is no need for the Amendment, and no need to give the Secretary of State special powers under subsection (4), but if my point is sound I hope that my hon. Friend will make certain comments and accept the Amendment.
      Mr. Ridley: I am grateful to my hon. Friend the Member for Abingdon (Mr. Neave) for raising this point. It enables me, perhaps, to clear up the doubt in his mind as to whether British Nuclear Fuels Limited will be able to establish subsidiaries and to participate in other companies. Article 11 of the draft memorandum of association covers this point, since it says:
      "To acquire and hold interests in other companies and to enter into any arrangements with other companies which may seem to advance the interests of the Company upon such terms as the Company may decide."
      The sort of things that my hon. Friend was envisaging in relation to the en-
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      richment or the centrifuge part of the business would be perfectly practicable and legal under Article 11.
      I think that my hon. Friend will agree that it would be wrong for my right hon. Friend the Secretary of State to take power to direct the companies to set up subsidiaries, which is the power that he very kindly proposes to give my right hon. Friend. I am certain that my right hon. Friend would not wish to interfere in the commercial decisions of the new companies as to whether they should or should not set up subsidiaries. I am certain that my right hon. Friend would feel that it is better to leave these matters to the commercial judgment of the company entirely.
      We are, of course, satisfied that control of any sensitive matter is adequately covered by other aspects of the Bill, so I hope that, with the assurance that the company has the power to do it, my hon. Friend will agree that it would be wrong to give the Government powers of direction in the matter. I therefore hope that what I have said will make my hon. Friend feel that his point is covered.
      Sir H. Legge-Bourke: I am grateful to my hon. Friend the Member for Abingdon (Mr. Neave) for raising this point, because it has extracted from the Under-Secretary a very important statement, quoting the draft article in the proposed Memorandum of Association.
      As a former member of the Select Committee on Science and Technology which reported in October, 1967, on this matter, I feel that what we are discussing now goes a long way to meet our recommendations in paragraphs 149 and 150. In paragraph 149, after talking about the nuclear boiler structure which we pro posed, we went on to say:
      "… the nuclear industry would still require an organisation capable of preparing nuclear fuel, enriching it and fabricating it into the shapes and sizes demanded by the designers and also equipped with the facilities for processing irradiated fuels."
      We then recommended a new British fuel supply and manufacturing company.
      But in paragraph 150 we said something else:
      "Your committee are not in a position to suggest in detail the constitution or functions of such a company. They consider, however, that it should be read to propose suitable

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      arrangements for co-operation with other European firms. For example, British fuel enrichment technology and the facilities at Capenhurst might well be offered on mutually agree able terms to foreign fabrication companies who might find it uneconomic to establish their own enrichment plants."
      I hope that my right hon. Friend and my hon. Friend will consider my point, that there may come a time when, in the best judgment of the company which we are setting up, it would be desirable for a subsidiary to be set up which did not happen to be operating in or based on the United Kingdom. We have to consider that it is highly likely that the Government's opinion would be very important indeed before that was approved.
      While I entirely accept my hon. Friend's argument—I welcome his saying it—that the last thing which the Secretary of State visualises is intervening in the proper internal administration of the company, I hope that we shall recognise that it may be in the interests of that company for a foreign subsidiary, working on a trans-frontier basis, to be set up; in that case, I imagine that the Secretary of State's opinion would at least be called for.
      Mr. Ridley: If I may reply to the point which my hon. Friend just raised, there is no reason at all why the fuel company should not engage in arrangements or agreements with foreign companies. With the powers which are proposed to be given to them under the memorandum of association, it will be enabled to do anything like that which it thinks fit.
      It is right to point out that the Government, through their majority shareholding, have adequate powers to prevent its doing anything which would be thought not to be in the national interest. I am sure that that is the right way around this matter—that the Government should have a negative power of control, but not use positive weapons to force the companies to do things which they believe to be against their commercial interests. I can assure my hon. Friend that the point which he has in mind, with which I entirely agree, is covered by this legislation.
      Mr. Neave: My hon Friend's reply will be an encouragement to private industry. It will now be clear that British Nuclear Fuels Limited will be responsible for
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      matters of this sort, and it will not be a matter for the Secretary of State, and that Article 11 of the draft Memorandum of Association means that the fuel company could set up operational subsidiaries in selected areas. This is the point that I wanted to raise. In those circumstances, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 5 ordered to stand part of the Bill.
      Clauses 6 and 7 ordered to stand part of the Bill.

    Clause 8

      EMPLOYEES IN TRANSFERRED PARTS OF UNDERTAKING
      Question proposed, That the Clause stand part of the Bill.
      11.45 a.m.
      The Minister for Industry (Sir John Eden): Since the Second Reading, I have had further discussions with the staff side of the Authority. I promised that I would look further into some of the points which they made to me, and I gave an undertaking to the House that I would consider closely some of the representations which hon. Members have made. This Clause gives me a chance to say something on one of the points which have been raised.
      The effect of subsections (3) and (4) is to ensure that the staff who are transferred to the companies by subsection (1) are employed by the companies on terms and conditions as near as possible equivalent to those which they enjoyed in the Authority immediately before transfer. There is, from then on, an interim period, from the time of transfer until, in accordance with the next Clause, the negotiating machinery has been established and new terms and conditions of employment have been negotiated.
      In my discussions with the staff side and in correspondence that I have had, it has become clear that they still feel a certain amount of concern that, during this interim period, the staff in the companies might be in some way worse off than had been the intention of the Bill. They particularly asked that the staff in the companies should benefit from any

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      improvements in terms and conditions during that interim period which might affect staff still remaining in the Authority.
      The staff side went even a little further than this and suggested a more permanent link. They wanted to try to establish some form of permanent link between the terms and conditions in the companies and those existing in the Authority at any time in the future.
      I have given careful thought to this and my hon. Friend the Under-Secretary of State replied to this point on Second Reading. He said then that, in the Government's view, it would be inappropriate. I have considered the matter further, and I must still hold to that view. A permanent link of this kind would not, I think, be possible. I endorse what was said in reply to a similar point by Lord Delacourt-Smith on Second Reading in another place, and I commend hon. Members to read the OFFICIAL REPORT of that reply, which they will find in column 345 of the issue dated 14th April, 1970.
      He then made it clear that in his view—and obviously, at that time, in the view of the then Government—while he thought it was right that the short-term position should be catered for as far as possible, particularly in the interim, he believed that it would not be proper to try to give a set of guaranteed terms and conditions by linking them to what might obtain in the Authority in the long-term. The major point was that, after the interim, it would be replaced by adequate effective negotiating machinery.
      On the question of a temporary link, an assurance has already been given that for a reasonable interim period any changes in Authority pay and conditions that would have applied to the staff concerned had they remained in the Authority will be applied to them, from the same effective date, except to the extent that the managements and staff representatives may otherwise agree.
      This was intended to cover the period until negotiating machinery in the companies was well established and procedures had been agreed, which would have included arrangements for arbitration. It was accepted that this interim period and this process of establishing the machinery would take about one year. If by any
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      chance it took longer, then it was accepted—indeed, this has already been accepted—that a further limited extension of that undertaking could be discussed.
      This seemed to me to be a reasonable assurance, but I have looked further into the matter and I am informed that to ensure that ample time is available for the negotiation of appropriate changes in conditions of service, the prospective managements of the companies are now prepared to replace the previous assurance—that is, for one year—by an undertaking that the link with A.E.A. pay will, if necessary, be maintained for up to two years from the appointed day. I have no reason to doubt that by then not only will the negotiating and arbitration agreements have been concluded, but that most, if not all, of the companies' terms and conditions will have been agreed, and I feel that that guarantee to the staff side will ensure that its best interests are looked after.
      Mr. Benn: I am grateful to the Minister for that statement, but he will appreciate that my hon. Friends and I will wish to examine it more closely, as no doubt will the union side.
      It is right that I should point out at the outset that when the I.P.C.S. came to see us and asked for a definite assurance that everything would be exactly as it would have been had they remained in the A.E.A., we felt unable to give that assurance, first of all because it seemed that to have done so would have introduced too rigid a position, and, secondly, because it was felt that as they were in a growth business, they should be able to do better than had they remained in the A.E.A.
      Although some disappointment was expressed by the union at that time, I am sure that it broadly accepted our view that what it required could not be done; though an assurance was given that there would be a maintenance of A.E.A. conditions until new machinery was introduced.
      There are really two interim periods. One is the interim period between the transfer of the people from the A.E.A. to the new company, before new negotiating machinery is set up, during which time, I understand, they will be getting any improvements in A.E.A. conditions

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      negotiated by their representatives in their old capacity. Have I understood the Minister aright? The second interim period is the one which will occur after the negotiating machinery has been set up, but before that machinery has led to the actual agreement being reached under it in relation to terms and conditions. This second interim stage is equally important to the staff side because one could find that one was left with new machinery but no agreement under it.
      Although I do not raise this point in a controversial spirit, I must point out that the provisions of the new Industrial Relations Bill relate very much to this issue. The staff could find itself left for some time with a large number of people with negotiating machinery but no agreement under it at a time when even verbal agreements—this will apply if the Industrial Relations Bill is passed—would be legally enforceable, and this could present considerable difficulty.
      It sounds as if the Minister has gone as far as he could in this matter. However, I do not like the idea of a time-scale in terms of years or months. One hopes that this will be concluded much more quickly. Two years should cover these two interim periods and, subject to my having understood the Minister's remarks correctly, I trust that he will allow me to return to this matter at a later stage or, if necessary, have it raised in another place. On that understanding, I will not press the issue.
      However, I must point out, in connection with our discussion about the transfer of assets, patents and so on, that we should never lose sight of the fact that the real assets being transferred here to the company are the people. They are infinitely more valuable than anything else. After all, they made the patents.
      In all modern industry, and particularly in this one, it is the quality of the minds of the people and the sense of security that they have that is of paramount importance. In so far as the Minister appears to have met their anxieties, I express my gratitude to him, subject to my returning to the matter, if necessary.
      Mr. Neave: As I have a considerable interest in staff matters in the Authority, I would like to know, since my hon. Friend referred to arbitration agreements, whether there will be provision for arbitration on any new superannuation
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      scheme which is written into the fuel company scheme. I was not clear from my hon. Friend's comments what the position will be in regard to arbitration agreements. In other respects I welcome everything he said.
      Sir J. Eden: I absolutely echo the sentiments of the right hon. Member for Bristol, South-East (Mr. Benn) when he said that the most valuable assets of all are the human assets. Without these the company would have no future at all. I assure him that this is fully endorsed and understood.
      I believe that the point he made is fully met in the form of words I used. I appreciate that he will wish to have a chance to examine my remarks. It is the intention to extend the period of guarantee, as it were, from one to two years, and by that time it is believed that not only will the machinery be established but that the terms and conditions will have been agreed. This is the spirit which lies behind my remarks.
      I assure my hon. Friend the Member for Abingdon (Mr. Neave) that there is machinery for arbitration in respect of superannuation, but it may be more appropriate for me to answer his question more fully when we debate Clause 9 stand part.
      Question put and agreed to.
      Clause 8 ordered to stand part of the Bill.

    Clause 9

      MACHINERY FOR SETTLING TERMS AND CONDITIONS OF EMPLOYMENT
      Question proposed, That the Clause stand part of the Bill.
      Sir J. Eden: The question of superannuation has caused a certain amount of concern, along with some other matters which have been raised with me by the Authority staff side and discussed on Second Reading. There was the question of machinery for settling terms and conditions of employment and the question of interchange between the staff of the companies and the staff of the Authority.
      When we debated the last Clause I said, in reply to a question by my hon. Friend the Member for Abingdon (Mr. Neave) relating to superannuation, that I would deal with it more fully on

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      Clause 9 stand part. On reflection—and I apologise for misleading him—it would be more appropriate if I dealt with the matter when we come to Clause 20 stand part, and I hope that my hon. Friend will agree to my adopting that course.
      12 noon.
      This was the further point raised on the question of interchange. The staff side said that they had felt for some time that the interchange of staff between the companies and the Authority would be hindered unless recruitment by the companies was preceded by some form of special "trawling" of vacancies created by the Authority or by the companies. I understand that the companies are likely to fill their vacancies in this way if the Authority has known surpluses of staff, but not otherwise.
      This is not a matter which affects the actual text of the Bill, and I shall probably have to consider the matter a little further than I have done already in order to see whether there is any way to meet the anxieties of the staff on this point. I therefore wish to give the staff the assurance that I will write to them as soon as possible, and certainly before the Bill reaches its Committee stage in another place.
      In meeting this point now, I want simply to echo again the views expressed by the right hon. Gentleman on Clause 8 when we are considering the formation of companies arising out of very real growth points in the Authority's activities. Although I accept that there are grounds for anxieties in particular circumstances, I feel that we have every reason for feeling assured that the prospect of redundancies is, to put it at its lowest, very unlikely.
      Question put and agreed to.
      Clause 9 ordered to stand part of the Bill.
      Clauses 10–12 ordered to stand part of the Bill.

    Clause 13

      LIMITS ON PAYMENTS UNDER SECTIONS 11 AND 12
      Mr. Bruce Millan: I beg to move Amendment No. 3, in
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      page 13, line 31, leave out '£50' and insert '£70'.
      The Chairman: With this Amendment we will take Amendment No. 4, in page 13, line 31, leave out '£75' and insert '£100'.
      Mr. Millan: Yes, Sir Robert. If I may say so, I think that that will be very convenient.
      We are here dealing with the limit of payments by either the Secretary of State or the Atomic Energy Authority for shares issued by the company and loans that may be made by the Secretary of State. The Labour Government's Measure which preceded this Bill, and which was in all major particulars exactly the same as the Bill, had limits in respect of the Nuclear Fuels Company of £70 million, first of all, and of a sum not exceeding £100 million, with the additional safeguard in the latter case of an Order by the Minister concerned. The Bill reduces the limits to £50 million and £75 million respectively.
      When one compares the present Financial Memorandum with that of the previous Measure, one sees that the limits expressed in Clause 13 are in each case described in exactly the same way:
      "The upper figure in each case represents the maximum amount each company is expected to need to raise from the Secretary of State or the Authority in respect of its capital requirements for the first five years after the transfers."
      That is the wording of the present Financial Memorandum, and in the previous Measure the description of the limits in Clause 13 was in exactly the same terms. Yet we now find that the Labour Government's figures of £70 million and £100 million have been reduced to £50 million and £75 million respectively. The effect of these Amendments, which are probing Amendments, would be to reinsert the limits set out in the previous Bill.
      There are, presumably, two possible reasons for the reduction: either the Government have recalculated the likely total requirement of the company concerned over the next five years and have decided that the total requirement is lower than that calculated by the previous Government, or they have come to the conclusion that the total requirements are the same but that the amount of money

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      likely to be contributed by private enterprise over, perhaps, the next five years is greater than had been calculated, say, nine months ago, so that the call on the Treasury either directly or through the Authority is likely to be correspondingly reduced. There is, however, nothing in the Bill to tell us how the change in the figures has been arrived at; whether it is for the one reason or the other, or a mixture of both. We are entitled to be told by the Minister how these figures have been arrived at.
      There is in any case bound to be a certain amount of anxiety about these figures, because when dealing under a previous Amendment with the question of the valuation of the assets the Minister also made the point that the question of the extent of private participation in the new companies would be referred to the merchant banks. This is, presumably, not just for the initial stages but is something which will also have some effect on the development of the companies over the next two or three years.
      When we talk of private participation, I suppose that we are dealing with not only with the initial establishment of the company concerned but with what is likely to happen in regard to the balance of private and public participation over the next five years. Am I right in understanding from what the Minister previously said that the Government are by no means certain of what the ultimate extent of private participation will be over, say, the next five years, so that there must be a certain element of estimating or guessing, as it were, in regard to the present limits? If the Government will say that that is so, and if the Minister will also say that there is no question of the Government's cutting down in any way what they think the total requirements of the company will be over the next five years, it will be some assurance to at least this side of the Committee.
      In looking at these limits, what we would like to be assured of particularly is that if the Government's calculations as to the likely needs for finance over the next five years prove in the event to be under estimates there will be no reluctance on the Government's part
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      about making additional finance available if necessary by taking additional legislative powers. In other words, we would like to see this reduction to be taken as indicating that the intention of the Government will be to make the necessary funds available to the new company.
      Obviously, the extent to which the new company will require additional funds will depend not only on private participation, but on its own success, its profitability, the extent to which it can expand its business, and so on. We want to be assured that if the company is successful, as we believe it will be, and if that success requires additional finance from the public as well as from private enterprise, the reduced limits shown here carry no implication that the Government will not be forthcoming in making public moneys available. If we could get that assurance I would not myself consider that the present limits, since they are bound to involve a considerable amount of estimation, were in themselves absolutely important, but before passing from the Clause we should like the assurance for which we ask.
      Sir J. Eden: I readily assure the Committee that there is no intention on the part of the Government to be parsimonious towards the companies. The reason for the lower figures is absolutely the same as I tried to make clear on Second Reading, namely, that we expect au earlier and reasonably satisfactory degree of participation from the private market which will make it possible for these figures to be reduced at this stage.
      The amounts cover all that is likely to be invested in or loaned to the two companies. Orders raising the limits from the lower figure to the higher figure specified in each case are governed by subsection (3). The upper figure in each case represents the maximum amount each company is expected to need to raise from the Secretary of State or from the Authority in respect of its capital requirements for the first five years after the transfers.
      In the case of the Nuclear Fuels Company the figures are lower than those in the Bill presented by the Labour Government. This is because of our hope and belief that there will be a significant

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      financial contribution from the private sector at an early date. Although the figures quoted in this subsection are no more than upper limits, it was considered that the figures quoted in the previous Bill should be reduced to reflect our expectation that the companies will be able to secure this greater degree of contribution from the private sector. These figures cover both the position of the Secretary of State and of the Authority and it will be perfectly possible for the Secretary of State to take up further share subscriptions on behalf of the Government and also to ensure that in that way the public interest is preserved.
      In the case of loans, any Government lending to either company will be made only by the Secretary of State. The source of the loans will be the National Loans Fund and the Secretary of State is the only authorised channel for such loans. So the limit provided for in subsection (2)(b) applies only to the Secretary of State.
      The limit as regards shares does not include the shares issued to the Authority under Clause 7—that is, those issued in consideration of the transfers effected by the Bill. Similarly, the limit as regards loans does not include any of the sum, which is expected to be about £42 million at 31st March 1971, which is treated as loan capital of the trading fund, and the liability in respect of that will be treated as debts from the companies to the Secretary of State under Clause 5(3).
      I can assure the hon. Gentleman that we will be watching the position closely as this proceeds and, if we have to do so, will not hesitate to return to the House of Commons, but I do not expect that we are likely to be in that position, because of our very firm belief that there will be adequate availability of capital from other sources.
      Mr. Millan: In view of the assurance given by the Minister, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 13 ordered to stand part of the Bill.
      Clause 14 ordered to stand part of the Bill.

    Clause 15

      POWERS FOR AUTHORITY TO PROVIDE SERVICES AND FACILITIES FOR THE COMPANIES
      12.15 p.m.
      Mr. Douglas: I beg to move Amendment No. 5, in page 14, line 26, at end add:
      ( ) The Authority shall include in its annual report to Parliament details of the services or facilities provided to the companies under this Act.
      The Minister covered the point which it is desired to raise by the Amendment when he indicated that it was possible that this type of negotiation between the Authority and the companies would be conducted at arms' length and that in some way we would receive information about the services and facilities provided by the Authority under the Bill when enacted.
      I would expect that the Authority, in its annual reports, would present to Parliament information regarding the type of facilities and services provided, but I would like that to be put beyond reasonable doubt. I would expect that the Authority would accept the intention that Parliament should receive this information, but intention is not enough and, as we are dealing with a new situation, the Bill should include some strictures on the Authority to bring before Parliament, in its annual report, this type of information.
      With the new structure which is coming into being, we are not clear what the rôle of the Authority will be for research and development in the future. The Government may want to take some time and let matters settle to see what will develop. I want to see it clearly stated in the Bill that the Authority shall have the responsibility of indicating in its annual report what facilities and services it is providing to the companies, because, although the companies will be carrying on research and development work, I should imagine that the Authority's services will be called on to a considerable extent by the companies, and Parliament should see the details of this and have some idea of the valuation that we would want to put on different services.
      I trust that the Minister will be his usual forthcoming self and accept the Amendment.
      Mr. Ridley: I can give the hon. Member for East Stirlingshire (Mr. Douglas) the assurance which he seeks. It is the Authority's duty to behave commercially in any aspect of its business concerning the outside world, which the Fuels Company will be when it is set up. The Authority is required to behave at arms' length in relation to anything which it sells to or buys from other companies. There is no doubt that this is where its duty will lie.
      As to ensuring that this is what happens, which is the object of the Amendment, there is no reason why the Authority should not publish this information in its annual report. I can assure the Committee that it will do so when the time comes. I do not think that it is necessary to write this instruction into the Bill. If we were to start writing everything into a Bill of this sort, we should make a Bill impossibly complicated and by implication things which were left out might be assumed not to be duties upon the Authority. Therefore, it is unnecessary to accept an Amendment to impose this duty upon the Authority. I assure the hon. Gentleman that the in formation will be given in the annual report.
      There is the further safeguard that the Authority's affairs are subject to audit by the Comptroller and Auditor-General and to scrutiny by the Public Accounts Committee; so there is an automatic means of ensuring that what the hon. Gentleman and the Government require, which is that services should be provided at economic cost and charged accordingly, will happen, because there would be awkward questions to answer by both the Comptroller and Auditor-General and by the Public Accounts Committee if it was thought that it was not so.
      I therefore hope that the assurance that I have given, together with the safeguards which I have indicated, will convince the hon. Gentleman that the point he has in mind is accepted by the Government, although an Amendment is not strictly necessary.
      Mr. Douglas: In view of the assurances given, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 15 ordered to stand part of the Bill.

    Clause 16

      TREATMENT OF TRANSFERRED ASSETS FOR PURPOSES OF INVESTMENT GRANTS
      Mr. Douglas: I beg to move Amendment No. 6, in page 15, line 4, at end add—
      ( ) As soon as practicable after the appointed day the Secretary of State shall lay before both Houses of Parliament details of the total amount of investment grant made to the Authority in respect of the assets transferred to the companies under the Industrial Development Act 1966.
      On Second Reading, the Minister for Industry said that this Clause might not be appropriately worded, and my purpose in moving this Amendment is to seek clarification from the Government as to whether the present wording is to stand or whether the Government propose to move an Amendment in another place. If the wording as it stands is adequate, that might satisfy the Committee, However, if it is proposed to alter the Clause in another place, we in this Chamber shall lose an opportunity of eliciting from the Government a clear indication of the import of the change from investment grants to tax-based incentives.
      Also, we wish to have from the Government an idea of the value of investment grants going to these two companies. The investment grants to be transferred act as an underlying basis upon which the two companies will become competitive in international marketing terms. I do not want to go over the ground which we covered on Second Reading, but I am still not satisfied that the change from investment grants to tax-based incentives affords necessarily a desirable basis on which to found a company of this kind. The Minister may say that we are not really founding a company, but the general tendency here is to look at the tripartite agreement and to try to read, as it were, between the lines, noting that our partners on the Continent might have been more favourably disposed to this type of co-operation were it based clearly and firmly on an investment grant procedure rather than a tax-based incentive procedure.
      I am not happy that the transfer from investment grant to tax-based incentive is conducive to the long-term future of these companies, and neither do I think that the change is necessarily conducive to

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      the betterment of British industry in general. However, in the present context, the Amendment would require the Secretary of State to give us the information called for. If the Minister assures the Committee now that that type of information will be part of the Authority's report to which we referred a few minutes ago, I should be prepared to accept that, but I look forward to hearing what he has to say.
      Sir J. Eden: I am obliged to the hon. Gentleman the Member for East Stirlingshire (Mr. Douglas) for moving this Amendment and giving me an opportunity to refer to what I said on the subject on Second Reading. As he said, I thought at that time that it might be necessary to bring forward a Government Amendment at this stage. As he recognises, this would be necessary to take account of the change in the system of investment inducements from grants to allowances and to ensure that in the transfer of assets from the Authority to the companies those which attract investment payments do in fact receive them when transferred into the new ownership.
      Unfortunately, I am not yet in a position to bring forward an Amendment to this Bill such as I thought might be necessary. The matter still requires further consideration. However, as the hon. Gentleman realises, there may well have to be other legislation, and I do not think that it would be sensible at this stage to try to anticipate exactly the terms in which we shall deal with the changes relating to investment inducements. On the present Bill, there has been no attempt to take account of the possible effect of the proposed legislation relating to investment inducements, and, in fact, that Bill has not yet been drafted. It would not be right, or, indeed, possible, to try to anticipate its precise terms now.
      However, if, when the new investment inducements Bill has been drafted, it appears that this Clause will no longer have the desired result of enabling the companies to receive all the investment grant which would have been payable to the Authority after the appointed day in respect of the assets transferred, an appropriate Amendment to the relevant Clause in that Bill will be made.
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      We are trying here to ensure, in a rather complex piece of machinery, that the assets transferred, in so far as they attract grant, still receive that grant even though they have been transferred to the companies. In practice, what we are dealing with is the trading fund, and the trading fund as a whole is to become the companies.
      As regards information about the amount involved, this will become available through the publication of the Authority's own accounts, in which it would refer to the total amount of investment grant actually claimed. In so far as the Authority refers to the total of investment grant claimed, it is, in fact, referring to the trading fund which is the part out of which the companies are being created.
      I apologise if I have made the matter appear more confused, but I hope that what I have said will enable the hon. Gentleman to withdraw his Amendment.
      Mr. Douglas: In view of the assurances given, I beg to ask leave to with draw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 16 ordered to stand part of the Bill.
      Clauses 17 to 19 ordered to stand part of the Bill.

    Clause 20

      PENSION SCHEMES
      12.30 p.m.
      Mr. Neave: I beg to move Amendment No. 7, in page 19, line 10, at end insert:
      'and
      (c) immediately after 1st April 1969, being an employee of the Science Research Council, was engaged in research in astrophysics at the Authority's laboratory at Culham or at any Science Research Council establishment (notwithstanding that such a person while in the employment of the Science Research Council may cease to be engaged in such activity)'.
      This is not the first time I have moved an Amendment of this character to a Bill of this kind. The last occasion was in 1965, when, supported by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke); I moved a similar Amendment to the Science and Technology Bill in January of that year. I

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      contend that the same principle applies in respect of this Measure.
      Subsection (6) says, after certain references to persons who are to join the new companies:
      "any such scheme may also apply to any person employed by the Science Research Council who (a) immediately before 1st April 1969 was an employee of the Authority engaged in research on astrophysics at the Authority's laboratory at Culham in the county of Oxford, and (b) on that date became an employee of the Science Research Council."
      This provision is inserted in a rather curious way since it makes no reference to new entrants. This was nearly the same position as that in which we found ourselves when staff employed at the National Institute for Research in Nuclear Science were transferred to the Science Research Council in 1965.
      The principle was then established. Although my Amendment was rejected in this House on that occasion, it was agreed to in another place and was agreed to when the Lords Amendments came back to this House, when I was then supported by my hon. Friend the Member for the Isle of Ely and by hon. Members on both sides of the House. Therefore, I contend that the principle regarding superannuation of the staff in a case of this kind has been established.
      It was supposed as a result of the acceptance of that Amendment to the Science and Technology Bill in 1965 that it would cover future recruits not only to the Rutherford Laboratory but also to the Daresbury Laboratory in relation to the Science Research Council. In fact, the Government have chosen only the Rutherford Laboratory in this respect. One of the arguments was that that laboratory was only a short distance from Harwell—over the wire, so to speak—and that some people were doing the same kind of work.
      However, this is not a satisfactory reason for turning down other claims to be included in the Authority's pension scheme. It is curious to find this problem cropping up again in the Bill, but it still remains important. Even though the number of persons referred to in the Amendment are small, the point of principle should be seriously considered by the Government. They will not be following logically the main Act since, although the Atomic Energy
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      Authority Bill with which we are now dealing is important, it is a subsidiary Bill to the main Science and Technology Act, 1965, which deals with superannuation questions. If the present subsection (6) becomes law it will prejudice any future decision about Daresbury, a decision which has yet to be taken. That is a serious consideration.
      There is no reason why staff who work at Culham and who are employees of the Science Research Council should not be covered by the same wording; that is to say, as new entrants. I do not claim that this is an identical situation with the N.R.N.S. staff being transferred to Rutherford Laboratory but it is similar. Therefore, it is departing from principle to leave the wording of Clause 20 as it is.
      I hope that my hon. Friend will consider this Amendment seriously and will accept it. I hope that, if necessary, it will be pressed in the same way as was the Amendment moved to the Science and Technology Bill of 1965, which was eventually agreed by both Houses.
      [Miss HARVIE ANDERSON in the Chair.]
      Sir J. Eden: My hon. Friend the Member for Abingdon (Mr. Neave) gave notice during the debate on Second Reading that he would seek to move an Amendment of this kind. I would say at the outset, before dealing with the technical details, that it would be difficult to accept the wording of the Amendment as it now stands. None the less, I am sure my hon. Friend would most wish me to speak to the spirit of his observations rather than to the detailed wording.
      Subsection (6) enables the Authority to retain in its pension schemes the staff working on astrophysics who were transferred from the Authority's Culham Laboratory to the Science Research Council on 1st April, 1969. This transfer was undertaken voluntarily on the part of the people involved, and as one of the terms of their transfer they were given an undertaking that they could remain in the Authority's pension scheme. It is now suggested that by analogy with the provision in paragraph 4 of Schedule 3 to the Science and Technology Act, 1965, any staff recruited to work for the Science Research Council at Culham after 1st April, 1969, should be

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      entitled to join the Authority's pension scheme.
      I believe that the reason why the previous Government accepted the Amendment to which my hon. Friend referred to the Science and Technology Bill in 1965 was that it was thought there was some force in the argument that the Rutherford Laboratory, a large laboratory adjacent to Harwell, would be seriously handicapped in recruiting technicians if it were not able to offer the Authority's pension scheme to new recruits as well as retaining it for its then existing staff. The Authority's pension scheme is contributory, and there are certain advantages in that gross salaries are also higher in certain respects than in others.
      The same difficulty about recruitment is not envisaged at Culham. This is the first assurance I should like to give my hon. Friend. The number of staff employed by the Science Research Council there is about 30. The annual recruitments needs are very small indeed. The Council does not foresee any difficulty in filling future vacancies at Culham. I understand that no difficulty has been encountered in recruiting sufficient staff to the Council's Laboratory at Daresbury which, like Rutherford Laboratory, was transferred from the National Institute for Research in Nuclear Science to the S.R.C. Unlike new recruits to Rutherford, those to Daresbury have not been offered the opportunity of joining the Authority's pension scheme.
      It is not normal practice for the staff of one employer to be covered for superannuation purposes in the scheme of another employer. This is why the Amendment presents certain difficulties which I am sure are fully recognised by my hon. Friend. The principle is departed from in cases where people are transferred with their work, as in the general provisions of subsection (1) of the Clause and in the specific provision covering staff at Culham in subsection (6). The further exception to this principle in the Science and Technology Act, 1965, was made in recognition of a potential difficulty about recruitment to the Rutherford Laboratory.
      The same practical consideration does not apply at Culham, and there are not very strong grounds for departing from the principle. The difficulties which were
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      expected in the case of Rutherford are not expected in this case. Rutherford drew on Harwell for its recruits. In the case of Culham, the recruits are more likely to come from the universities, and the situation is not comparable. The interests of the staff will be cared for in other ways.
      Sir H. Legge-Bourke: As my hon. Friend the Member for Abingdon (Mr. Neave) pointed out, I supported him on an earlier Amendment to the Science and Technology Bill on 15th March, 1965, on a similar matter to this one.
      The Minister gave his reason for the previous Government's acceptance of the Amendment in another place, but my guess is that the biggest reason for the Government's changing their mind at that time was that they were scared stiff of Lord Bridges. It was Lord Bridges who persuaded Lord Snow to accept the change on behalf of that Government. Unfortunately Lord Bridges will not be with us now, but the Bill has yet to go to another place.
      My hon. Friend the Minister is, to some extent, concerning the view of those most likely to be affected, telling the Institution of Professional Civil Servants to go and suck eggs. He has had a very full letter from Mr. Lyons, of the Institution of Professional Civil Servants, dated 31st December, of which he was kind enough to send me a copy.
      Two questions arise. First, does the Institution represent the feelings of those most likely to be affected better than the Minister? I should have thought so, as a rule. Second, has the Minister taken account of the point which the Institution pays particular attention to, in that what the Government are doing here is, by a piecemeal method, changing a principle?
      At present the Government are able to extend the existing proposals under the old Act to the Daresbury Laboratory people at any time. The I.P.C.S. is trying to get the Government to extend it to the recruits to the Daresbury Laboratory. By rather an underhand method we are destroying that priniciple which the Institution is seeking to get implemented. In the light of what the Minister has said—he has obviously given Mr. Lyons' letter careful consideration—we must hope that when the Institution has commented on his observations this morning he will not rule out the possibility, when the Bill is

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      in another place, of the Government trying to meet the wishes of the Institution more than he has been able to meet the request of my hon. Friend the Member for Abingdon today.
      Mr. Neave: I was disappointed by my hon. Friend's reply. There was a clear principle established here. It is not fair to say that it was because a very small number of staff were involved. We are dealing with an important principle, which concerns my constituents. New recruits to astrophysics at Culham are on a different pension scheme to those there before 1st April, 1969. That is one of my objections to the decision taken by the previous Government before the Amendment came down from another place and was accepted here.
      It may well be true that the influence of Lord Bridges had a lot to do with that. I hope that a successor to him will be found. I should like to do my best in the intervening time to persuade my hon. Friend that he is not right about this. We had a situation, in the case of Rutherford and Harwell, where people were doing similar work separated only by a barbed wire fence, and in the case of Culham, which is not far away and which is controlled by the A.E.A., people are being sent to do astrophysics work who, as the new recruits to the S.R.C., will be under the Civil Service pension scheme and not the A.E.A. pension scheme. They are divided from the others by the arbitrary date which appears in the Bill. That is entirely wrong.
      Sir J. Eden: I am sorry that I was unable to satisfy my hon. Friends in my earlier remarks, and I will give close further consideration to what they have just said.
      In response to my hon. Friend the Member for Isle of Ely (Sir H. Legge Bourke), who talked about a principle, it is as well to recognise that the principle involved is that when the Government agree to especially favourable treatment for staff transferred from one part of the public sector to another, or outside the public sector, the treatment should be confined to the staff affected by that transfer. The 1965 Amendment did not itself establish a principle. It was a breach of the principle to suit the particular circum stances at that time.
      I have carefully studied the relevance of the circumstances now to what took
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      place then at Rutherford to see whether they justify a similar breach in that principle, and I do not think that they do. If there are any further points which my hon. Friends or the I.P.C.S. would like to put to me, I shall see that they are considered during the later stages of the Bill in another place.
      Amendment negatived.
      12.45 p.m.
      Question proposed, That the Clause stand part of the Bill.
      Mr. Benn: On the question of superannuation, the anxieties of the Institution of Professional Civil Servants could be totally set on one side if the Minister were prepared to say categorically what I am sure is in his mind, that in the event of disagreement about pension schemes he would be prepared to appoint an arbitrator. In effect, the Minister has indicated that he thinks it right that the new companies should have their own pension scheme. It is not mandatory, but his view is that it is right. I share that view, not only because companies as important as these ought to have such schemes, but because of the importance attached to them by the staff and their importance in the success of the companies.
      The Minister has also accepted, as I understand it, that if these schemes are introduced by the new companies he will satisfy himself that they are good schemes. If the Minister wishes to satisfy himself that a scheme is a good one, he will take advice, and since the object of satisfying himself that they are good schemes would be to satisfy the staff, he would obviously want to get somebody to advise him who is acceptable to the staff. That is so near to having an arbitrator that I should have thought that he might have gone as far as the union wants; namely that he should accept publicly some responsibility for ensuring that the schemes are satisfactory and that the man who advises him is himself acceptable to the staff. The Minister has seen the staff recently on this matter. As I understand it, this is the only remaining point at issue. It is such a small point that I hope the Minister will be ready on this occasion to go as far as the union wants and give the House that assurance.
      That is the only point I wanted to raise about the pension scheme, and I think I have shown the importance of it.
      Mr. Neave: The Minister said that he would reply to my question about arbitration. The companies may introduce their separate superannuation schemes. I should like to know whether he considers that it should be mandatory on them to do so. But if one of those schemes seems less satisfactory to the staff than the existing one, what is the position about arbitration?
      I gather that the Minister suggested to the staff side that he had no objection to appointing an independent adviser here, but the question of superannuation arrangements seems a little complicated. Who is to act as arbitrator in the event of dissatisfaction about a new scheme before it has been introduced? I raised this point, possibly at the wrong moment, and my hon. Friend said that he would reply to it.
      Sir J. Eden: I am grateful to the right hon. Member for Bristol. South-East (Mr. Benn) and to my hon. Friend the Member for Abingdon (Mr. Neave) for giving me the opportunity to refer to these matters and to enlarge on certain under takings or assurances which I have already sought to give to the staff on this point.
      The Bill does not provide that the companies must set up their own scheme. It may well be that my enthusiastic sup port for the belief that it will be desirable for them to establish a scheme led me on Second Reading to give too much emphasis to this matter. The option is left open to the companies. It is unlikely that during the earlier part of their existence they will wish to become engaged actively in the preparation of their own schemes. They will probably have many other matters of a more pressing nature to which they will necessarily have to attend. It is right that the Bill should provide for the companies to have their own schemes if they wish. It would be wrong to deny them that freedom.
      The question of the rôle of the Secretary of State under subsection (4) has been raised. There are two points. First, if and when the companies decide to set up their own schemes, they will be established only after negotiations between the companies and their staff representatives. That is absolutely right and proper. It is hoped that the employees will transfer voluntarily and willingly from the
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      Authority's scheme to a company scheme. In practice, by the time the Secretary of State makes an order under subsection (4) directing that the Authority's pension scheme shall no longer apply to any employee of one of the companies, all the employees of the company may already have voluntarily transferred to the company scheme. This is what we hope will happen.
      The second point has been highlighted by the observations made today. Before an order is made under subsection (4) the Government will certainly consult the staff and the trade union representatives of the company, so that the Secretary of State will be aware of their views on whether the company scheme, taken as a whole, is any less favourable for the people involved than the Authority's scheme. If there is difficulty in reaching a conclusion on this matter, the Secretary of State will be willing to consider seeking independent, authoritative and expert advice.
      The staff side asked me particularly—and it has been repeated today—whether the Government would take account of any strong representations which the staff side might wish to make about the source of that independent advice. The Secretary of State, in the sort of circumstances I envisage, will be bound to take account of any such representations, although the final decision about to whom to turn for advice must rest with him.
      That is as far as I can go to meet the point. First, there will be provision in the event of the staff experiencing difficulty in accepting that the terms and conditions of the proposed scheme meet the terms and conditions of the scheme of which they are then members; and, secondly, if the Secretary of State, to whom the staff side would be bound to turn, feels that it is right and necessary to call for independent advice, which in order to determine the merits of the scheme, he would wish to do, he will bear fully in mind any representations about the source of that advice which the staff side might wish to put to him.
      Question put and agreed to.
      Clause 20 ordered to stand part of the Bill.
      Clauses 21 to 25 ordered to stand part of the Bill.

  Schedule

    SCHEDULE TO BE INSERTED AS SCHEDULE 1 TO NUCLEAR INSTALLATIONS ACT 1965
    Question proposed, That this Schedule be the Schedule to the Bill.
    Mr. Benn: I wish to raise a small point about the provision that the Minister can lay upon the company certain conditions with respect to national security. It is not a very complicated point and the Ministers need not worry that I shall probe the matter too deeply.
    There are two requirements under the Schedule. One is as to safety. As one would expect, the company has to ensure that its operations are safe and it has to pay for that itself. But, in view of the sensitive technologies involved, there are other considerations in respect of which the Government say national security must be met and the Minister can lay down conditions which the company must follow. This is a matter of considerable international interest. In those cases, the Government pay because these matters are dealt with, not for commercial reasons or for reasons which apply in the normal conduct of business, but because of the big national and international security interests.
    I see from page v of the Explanatory and Financial Memorandum that the cost of security directions is not expected to exceed £100,000 a year. In the Bill which I introduced last year the figure was £200,000. Anyone reading the Bill might be led to the conclusion that the Government have decided to cut the amount involved in national security from £200,000 to £100,000. I do not know whether that is right. It may be that on further examination national security requirements are not thought to be onerous in financial terms and that we do not need to allow for more than £100,000. Perhaps the Chancellor of the Exchequer, in the summer, decided that every Department had to find some way of making savings and a notional saving in the public expenditure survey figures of £100,000 was worth making to make it look better.
    Whatever the reason why the figure of £100,000 was inserted, all that I ask the Minister to do is to say how important he regards national security provision and
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    that whatever sums are necessary to secure it will be paid by the Government and reimbused to the company.
    Sir H. Legge-Bourke: The only point which I wish to raise arises from paragraph 3(2) of the Schedule.
    A great principle in the House is that all Members have equal rights. From time to time it has been considered whether members of Select Committees who want to visit certain establishments should be given special rights which are not shared by all hon. Members. The Select Committees have generally set their face against that because they feel that once we depart from the principle that all hon. Members have equal rights we shall land ourselves in great trouble. For this reason, presumably, the Select Committee which dealt with defence research was kept away from Aldermaston at one time because in order to look inside one had to have security clearance, which would have put one in a privileged position.
    We are now moving into a time when there will be a new type of creature in this field. It will be partly Government-owned, partly privately-owned and operating in a highly sensitive area. Has my hon. Friend given any thought to the position of Members of this House, particularly those who have been members of the Select Committee on Science and Technology and who have taken a great interest in the whole question of atomic energy particularly in relation to the power supply of this country? Will they be able, in the ordinary way, to adopt the procedure hitherto adopted, or would it be a question of the company deciding whether we can get in? Non-Government participating companies have some times set their faces against Members of Parliament rambling around their re search departments, and sometimes I do not blame them. We should know what is to be the attitude of these new companies.
    Will there be the normal procedure, or will there be the procedure whereby it will be open to the company to decide whether to resist an attempt by Members of Parliament to get inside? My own feeling is that this is too important for us not to continue the procedure which would normally apply to Government research establishments.
    1.0 p.m.
    Sir J. Eden: To answer the point of the right hon. Gentleman the Member for Bristol, Southt-East (Mr. Benn) first, this is not part of the Government's attack on public expenditure. The difference in the two figures is simply due to the fact that the Ministry of Defence will be paying for that aspect of the work which applies to it. It will therefore carry its proportion of the cost on its Vote.
    I sympathise with the point raised by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) having in the past, as an opposition Member and a Government back-bencher, sought to gain entry for perfectly normal and proper purposes to an establishment. It was sometimes difficult because, understandably, one was limited in the amount of access to matters of a specialised and secret nature.
    Since these companies will have information of a specially sensitive kind we have to exercise a great degree of caution. Subsection (2) of paragraph 3 refers to the right of entry. I am sure that when it comes to be established the fuel company will adopt a sensible policy towards the visits of hon. Members. When it comes to operating this Schedule and assessing what persons should and should not enter the premises referred to, I am certain that the companies will wish to adopt as expansive and welcoming an approach to hon. Members as is possible within the confines of the Official Secrets Act.
    Schedule agreed to.
    Bill reported, without Amendment.
    Motion made, and Question, That the Bill be now read the Third time, put forth with pursuant to Standing Order No. 55 (Third Reading), and agreed to.
    Bill accordingly read the Third time, and passed.

    WATER RESOURCES BILL [Lords]
    Order for Second Reading read.
    1.5 p.m.
    The Minister for Local Government and Development (Mr. Graham Page): I beg to move, That the Bill be now read a Second time.
    This is a Bill which seeks to do something that I am sure Parliament intended to do and thought it had done in 1963. By the Water Resources Act, 1963, Parliament created, in Section 3(1), the river authorities and it transferred to those authorities the functions relating to land drainage, fisheries, river pollution and similar river-controlled matters previously held by the river boards. Those transferred functions come in Section 5 of the 1963 Act.
    Parliament also created new functions for river authorities which come under Section 4 of that Act. I must read Section 4 to show what was done in that time. Section 4 reads as follows:
    "… it shall be the duty of each river authority … to take all such action as they may from time to time consider necessary or expedient … for the purpose of conserving, redistributing or otherwise augmenting water resources in their area, of securing the proper use of water resources in their area, or of transferring any such resources to the area of another river authority."
    Those were the new functions, as opposed to the transferred functions in existence before the 1963 Act. In short, all that Section 4 did was to say to river authorities, "You can build and own reservoirs". For that purpose they would need to acquire land and carry out engineering and building operations to construct a reservoir.
    Section 67 of the 1963 Act gave the Minister, now the Secretary of State for the Environment, power to give a river authority power to acquire land compulsorily and to carry out the necessary engineering and building operations. The newly-created river authorities, if they wished to exercise the new functions given to them, would apply to the Minister for the necessary authority.
    What Parliament said to river authorities, loud and clear, was, "If you want to exercise these new functions and to build the reservoir, then you have to justify yourselves before the local people.

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    If anyone objects you will not get away with it without a public local inquiry. You must bring the matter before the local people and justify the case there."
    This provision comes about by Section 67(2), which applies Schedule 8 of the Act. That Schedule lays down a formidable procedure through which a river authority must go before the Minister will give it the necessary order to carry out construction works. Schedule 8 provides for the publication of the draft Order notice to those affected and, if the Minister receives an objection which is not withdrawn, then a local inquiry under paragraph 6 of Schedule 8.
    There is where we were on 31st July, 1963, when the Act of that year was passed. We had created river authorities, given them transferred functions, given them new functions, and said to them, "If you want to exercise these new functions by carrying out some work, by building a reservoir, or carrying out engineering and building works, you must have a local inquiry first and then the Minister will, if he is satisfied, give you the necessary authority".
    Under the 1963 Act the Minister—and perhaps I ought to use the phrase "Secretary of State" as he is now the Minister—does not have to bring that authority before the House. The Water Resources Act, 1963, has an elaborate Section—Section 134—about which Ministerial Orders should and which should not be subject to parliamentary procedure. It is quite clear from that Act that at that time Parliament gave its mind to this matter and decided that a reservoir Order did not need to be brought before the House, provided that the authority had gone through this procedure of a local inquiry first, and what could be more straightforward than that?
    But then some clever lawyer came along—and I can say that now that I am out of the profession—and said that Parliament had failed to cover all the necessary operations. He said that the Secretary of State can give a river authority the power to do these engineering and building operations, that is to say, give it power to build a reservoir and even to put water in it, but the 1963 Act does not give the Secretary of State power to give the river authority power to get the water out again. What a deliciously Gilbertian situation! A
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    river authority can put water into a reservoir but it cannot discharge it from the reservoir. The Secretary of State can authorise a river authority to acquire land, even to the extent of laying pipes from the reservoir, but not to pass the water through those pipes.
    This is not quite such a technical matter as it sounds when one says it in that way. We have deemed it necessary to make certain by the Bill what rights to discharge water there are vested in river authorities when they wish to discharge the water from their reservoirs.
    There are a number of different types of water conservation schemes involving discharge of the water into rivers and streams which river authorities have either already embarked upon or are likely to embark upon in the near future. The three principal types are regulating reservoirs, the transfer of water from one river system to another, and augmenting river flows with underground water.
    The first of those, regulating reservoirs, are usually in the upper reaches of a river, and they store peak flows and release them back into the river at times of low flow to sustain abstractions downstream. The second kind of discharge is when one is transferring water between river systems, intending to help those systems which are short of water. The third type, augmenting from underground strata, can be used in suitable cases like a regulating reservoir to augment rivers at times of low flow.
    In all those cases the regulated or augmented flow of the river may exceed its natural flow at certain times and, except with the simple regulating reservoir, the quality of the additional water may also be different from that of the river into which it is discharged, if only to the extent that it may be harder or softer water.
    These schemes will generally be beneficial, but it is always possible that some riparian owner may say that his interest has been adversely affected, and the risk is that if in those circumstances a riparian owner sought an injunction from the courts the river authority would not under present law be able to rely on the Secretary of State's Order for its defence, because the power of the Secretary of State to make an Order compulsorily authorising the building of works does not extend to authorising the discharge of water

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    from those works. In other words, it is possible for a river authority to obtain an Order authorising it to acquire land to build a reservoir, but it can then be restrained in law from discharging water from those works and the whole object of the scheme can in that way be frustrated.
    Because of this state of the law river authorities have during the past few years abandoned the procedure which Parliament wanted them to adopt in 1963—the local inquiry and the Ministerial Order—and in place of that they have brought to Parliament Private Bills to give them the necessary power in this one small item of discharging water from the reservoir, and they have decided that if they had to bring a Private Bill before the House for that one small function they should include in that Bill all the functions which they are required to carry out.
    Hon. Members will know that the Private Bill procedure is extremely expensive. Individual interests, local interests and amenity society interests can petition against the Bill in this House and in another place. They can have two bites at the cherry, but for the ordinary local objector this procedure is quite prohibitive by reason of its formality and expense. The Bill will make that Private Bill procedure wholly inappropriate in future for giving powers to river authorities to build their reservoirs and conserve their water.
    If the House accepts the Bill, all the necessary powers will be given by the Secretary of State's Order, and that comes about by Clause 1(1) which says:
    "If it appears to the Minister that it is appropriate to make an order under this section with a view to facilitating the performance by a river authority of any of their new functions, he may on the application of the authority make an order authorising the authority, subject to compliance with such conditions (if any) as may be specified in the order, to discharge water into any inland water or underground strata."
    That fills a gap which was left in the 1963 Act, and it goes a little further in protecting local interests, because subsection (2) of that Clause says,
    "The provisions of the Schedule to this Act shall have effect with respect to applications and orders under this section."
    and when one looks at paragraph 2 of the Schedule one sees there set out a whole
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    list of things which must be put in the notice to be made known to the public when a river authority wishes to proceed in this way. There is a greater protection to local interests in the Bill than was given in the 1963 Act.
    I have spoken so far of local interests in particular, because I think that in most cases this is what we in the House would wish river authorities to do before they are given powers. We would wish them to justify themselves to the local interests who are particularly concerned. I am sure that the case can better be argued by the people on the spot than by how ever brilliant an advocate amongst hon. and right hon. Members of this House.
    Mr. James Scott-Hopkins: In the parent Act of 1963 provision was made for local public inquiries to be held. Can my hon. Friend tell us where those provisions are repeated in the Bill, which is an amending Measure?
    Mr. Page: Yes. Paragraph 4 of the Schedule provides that paragraphs 3 to 6 of Schedule 8 to the prinicipal Act are introduced into this Schedule. Paragraph 6 of Schedule 8 to the principal Act provides for local inquiries to be held if the Minister has received objections which have not been withdrawn.
    I have spoken of local interests which should be satisfied at local inquiries. We have also recognised that there are amenity interests in which Parliament should have an opportunity to become directly interested.
    Clause 2(4) provides that
    "The power to make orders conferred by the preceding section shall be exercisable by statutory instrument and
    (a) a statutory instrument containing an order under that section authorising the making of discharges of water at, or of discharges taken wholly or partly at, a place which, on the date when the order is made, is within a National Park or an area of outstanding natural beauty shall be subject to annulment in pursuance of a resolution of either House of Parliament".
    So although, in general, the Bill carries out the law as it was intended to be in 1963—local inquiry and Ministerial Order without bringing them before the House—in cases concerning a reservoir or pipes in a national park or an area of outstanding natural beauty the Orders can be raised in the House by the normal procedure of putting down a Prayer against them.

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    I must emphasise that we are not necessarily saying that no more reservoirs will ever be built in national parks or areas of outstanding natural beauty. Every proposal must be examined in the light of the circumstances of the case. There are some areas in national parks which would be ruined by reservoirs, but equally there are others where the construction of a sympathetically-designed reservoir would enhance the quality of the landscape.
    The Government recognise, in this subsection, that in the past for one reason or another Parliament has had a direct control over water schemes—even if in recent years this has been largely due to an omission from the 1963 Act—and that Parliament has shown a definite interest in proposals affecting national parks or places of outstanding natural beauty. We have therefore accepted that Parliament should continue to have some say in this special category of case, and that with cases of this sort more care than normal should be exercised in reaching a final decision.
    This is a small but important Bill, designed to remove an omission in the 1963 Act. The proposed procedure will give opponents of a scheme an opportunity to object and the right to have their objection heard by an inspector, who will then report to the Secretary of State. Before the Secretary of State makes any decision on applications for orders authorising the discharge of water from reservoirs he will be in possession of all the relevant information on the issues involved. Furthermore, in national parks and areas of outstanding natural beauty a further safeguard will be provided by the negative resolution procedure of the House.
    Any Bill dealing with new reservoirs is liable to attract the criticism that the Government should be thinking less about reservoirs and more about other forms of water conservation, such as barrages and desalination. A wider criticism of a small Bill of this sort might be that we should be thinking of a national water plan, and that no new reservoirs should be authorised pending, perhaps, a decision on a national water plan. I seem to recall having said that sort of thing in the past, from the Opposition Dispatch Box.
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    I can assure the House that research is being carried out into the alternatives to reservoirs, and even within the Bill some alternatives to reservoirs are contemplated, namely, transfers from one river basin to another and the artificial recharging of aquifers and underground strata. The studies being undertaken by the Water Resources Board in connection with desalination and the various estuarial proposals, together with their regional studies, when completed and brought together into a national study, will provide a comprehensive framework for planning the use and development of water resources in England and Wales.
    The regional studies already completed for the South-East and the North, and the one coming along for Wales and the Midlands, together with the more detailed surveys by river authorities of the requirements and resources of their areas—as provided for in Section 14 of the Water Resources Act, 1963—go a long way towards the formation of a national plan. I look forward to collecting this information in the not-too-distant future into a plan which we can bring before the House and say, "This is the way we intend to proceed in the conservation and supply of water for England and Wales."
    This little Bill does not pretend to be anything more than the restoration of a procedure that Parliament fully approved in 1963, and I hope that it will be accepted as such by the House.
    1.27 p.m.
    Mr. Denis Howell: I am glad to follow the Minister from these benches in giving a general welcome to the Bill, but I wish to take a little further some of the points that he made in the closing stages of his remarks. The House must face the fact that a critical situation exists in respect of the supply of water in many parts of the country, especially the industrial parts of Yorkshire and the eastern regions. It is verging upon the ludicrous that in a country completely surrounded by water, and with an average rainfall of 18½ ins. per annum, we should from time to time experience drought, with considerable difficulties, in various parts of the country. That is the essential point to which the House must address itself. The public will not much longer tolerate such a situation, and I hope shortly to mention

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    some ideas that I think should be examined in this connection.
    I served on the Standing Committee that considered the Water Resources Bill 1963, and I entirely agree with the Minister that nobody on that Committee ever got anywhere near thinking that this situation was being left open. River authorities and statutory water under takers were given the responsibility for building reservoirs and collecting water, and there was no doubt in anyone's mind about their rights to discharge that water either into a river system—so that it could be picked up and used elswhere when needed—or into pipes or water undertaking works. In that context the Bill is necessary, and I am obliged to the Minister for the clear way in which he explained its provisions. Certainly, we on this side accept what he said about the necessary safeguards for objectors.
    An Amendment was made to the Bill in another place which we now see in Clause 2(4). I imagine that this will need some tidying up and I should be grateful if that could be confirmed. What Parliament was trying to do in another place was ensure that if it were proposed to build a reservoir in a national park or a place of outstanding natural beauty, that should be subject to a special procedure of this House. We would not object to that proposal, the principle of which the Government accepted elsewhere, but it has been put to me—I am not sure whether this is right—that, as the wording now stands, any water originating in a place of national beauty or a national park, although collected elsewhere, would have to be subject to this procedure.
    Mr. Scott-Hopkins: A good idea.
    Mr. Howell: It is an impossible idea, since it would completely nullify the objects of the 1963 Act. There is hardly any water anywhere in the country which does not originate in a national park or a place of outstanding natural beauty. Even if it were collected at the Bristol Channel or on Humberside, people would insist on this special procedure. I cannot believe that that is what the House intended or that it makes sense. I hope that there is nothing in this argument, but if there is, I hope that the Minister will put the matter right.
    Mr. Scott-Hopkins: I do not understand why the hon. Gentleman is making
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    such a fuss. What is wrong with Parliament using the negative procedure for Statutory Instruments, which is all that this subsection does? If the hon. Gentleman's interpretation is right, every Order would have to come before Parliament: that is the only difference, and that is a good thing.
    Mr. Howell: Having been in the position of the Minister twice last year dealing with these matters, I do not think that it is as sensible as the hon. Gentleman believes. As the Minister fairly said, a Bill like this is very expensive to operate and bring to fruition. The period of gestation is remarkably long. I understand that, from the time that people conceive the idea of a new reservoir, because of an approaching shortage of water in an important industrial city, going through all the procedures—without trouble and with general agreement—to the time when they plan, survey and build the reservoir and it is actually operating, seven years can elapse.
    Those of us who took part in the similar proceedings last year found that a large number of hon. Members, quite properly, have strong feelings about a specific proposal. We all know that this is not the sort of matter on which governments wish to put on the Whips, nor does the Opposition—
    Mr. Robin Turton: The Labour Government did last time.
    Mr. Howell: I said that the Government do not want to do this, but they find themselves in difficulties. This is pre-eminently a matter on which hon. Members should be left to make a judgment. But when hon. Members throw out a Bill, despite all the cost and work which has gone into it, they are not applying themselves to the overall consequences of their action.
    I am not complaining about some of the decisions, some of which I advised the House against taking, last year. Unfortunately, it took one at any rate against my advice, but I am always prepared to accept that the collective wisdom of the House is greater than my individual wisdom, although I may have doubts about that proposition when it happens.
    Therefore, it has to be someone's job to consider the overall position, which is

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    why I am opposed to this negative procedure. I believe that the responsibility for seeing that there is an adequate water supply must rest upon those who also have the power to pass on that water supply to our large cities and conurbations. That proposition is unassailable, but I agree that it follows from that that our present procedures are inadequate.
    I had much more sympathy with the Minister when he said that there should be a national plan. It will be recalled that, with the Calderdale Scheme, the Derwent proposals and, at the end of last year, the Plymouth and South-West procedures, as well as the case of the Dowlais Valley—in which I understand that the Secretary of State for Wales refused permission even for a survey to ascertain the suitability of the site there for construction—there are at least four occasions in the last 12 months when Parliament, reflecting the growing awareness in the country on questions of environment, has succeeded in rejecting specific proposals.
    I want to turn now to the serious situation facing the whole country. This is an opportunity for the House to assess the general situation. There is a growing need for water supplies. The rate at which our society is using and absorbing water is colossal. I do not think that there is anything particularly wrong, although, as I said, since we are an island with a heavy rainfall, and are surrounded entirely by sea, I suppose it reflects upon us as a community if we manage, under any circumstances, to organise a shortage of water, as we do from time to time.
    The responsible authorities have been drawing the attention of the House and the Government to the situation over a period. As recently as July 1970, the British Waterworks Association, which represents all the water undertakers of the country—I had better declare an interest, since I have the honour to be a vice-president of that body—sent the Minister its assessment of the serious situation. They believe—I have examined the figures which they have put forward and I share their concern—that, by 1973, there will be a critical situation in some areas.
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    What is the Minister's assessment of this situation? Does he share that concern? Will the survey of the Water Resources Board or the national plan to which he referred enable the country to meet this situation by 1973?
    The national demand for water continues. Indeed, the demand is continuing to grow by, it is estimated, 100 million gallons a year, which represents a total of 6,000 million gallons a day by the year 2000. Put more simply, in 30 years time every man, woman and child in the country will be using 100 gallons of water a day. That is the size of the problem which faces the water industry, local authorities and the Government and it must be solved if we are to meet the demands of the domestic householder and industry.
    Mr. John Farr: Is the hon. Gentleman aware that, no doubt inadvertently, he may be misrepresenting the position slightly? It does not mean that the amount of water about which he has spoken must be new water. If replacement and reuse schemes are encouraged, much of that 100 gallons per capita could be water that has been used before, but such schemes must be encouraged.
    Mr. Howell: I was about to deal with that an I agree that reuse is an important matter. I see the right hon. Member for Thirsk and Malton (Mr. Turton) in his place. He has often spoken on this subject and I accept that too much water is frequently used and wasted; for example, it is said that on many occasions we use twice as much as is necessary to flush the toilet.
    While reuse schemes are to be encouraged, I doubt whether such economies will provide the quantity of water we will need. It is regrettable, but people will continue to waste water. There are many additional requirements for water as society becomes more affluent. Dishwashers, washing machines and more homes being equipped with bathrooms all means more water being demanded. As, by 1975, we clear the slums in my city of Birmingham, more water will be needed because those who live in the 20,000 houses in the area without baths will be able to join their fellows in having a daily bath.

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    I am all in favour of reuse schemes and urging people to economise in the use of water—though this cannot be done by legislation; one cannot legislate against personal habits—but I do not think that any such schemes will significantly alter the picture.
    The purification of used water to make it fit to be used again involves huge capital sewage works which I believe, will prevent any Government from committing themselves wholeheartedly to such schemes. The whole essence of my case is that we do not have the time to go in for those developments if we are to meet the growing demand for water.
    I was referring to the increased demand that will occur in the coming 30 years. It is interesting to consider the extraordinary situation which arose in Ipswich last year. Independent investigations carried out in February, 1970, showed that there might be a serious shortage, amounting to about 8 million gallons a day by 1980 and 24 million gallons by 2001. Ipswich has only seven inches of rainfall a year compared with the national average of 18½ inches.
    By last summer, only five months after those investigations, a serious situation had already arisen. Ipswich had already exceeded its available capacity by 1½ million gallons a day, and statutory restrictions on the use of hosepipes had to be introduced. On some occasions people were unable to obtain water from their taps and they were obliged to use standpipes.
    I am glad to see my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) in his place. He has often drawn attention to the critical situation in Yorkshire, and the crux of my case is that we do not have time to build the sort of installations that are often referred to if we are to meet the demand that will arise in the coming years.
    As the Minister said, some people put their faith in desalination. When I was in office I took some interest in this development, which offers hope for some areas, particularly those which have a large influx of visitors at holiday times and require additional amounts of water in the summer months. These areas probably would not justify the huge capital sums involved in providing large addi-
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    tional quantities of water throughout the year. However, I do not believe that desalination could prove the sort of solution that many people expect of it.
    Guernsey and Jersey are doing it and experiments are going on on the East coast, but consider the cost. Water taken from the sea must be treated and desalted before it can be put into the national system. Water obtained from normal sources can go into the national system extremely cheaply. Indeed, we are able to obtain this wonderful commodity for between 3s. and 5s. per 1,000 gallons in the normal way. I am advised that to collect water from the sea, desalt it and transport it into the national system costs about 15s. per 1,000 gallons, and I can not see the public accepting that.
    There is really no shortage of water in Britain. There is plenty of it and at this time of the year it is overflowing our reservoirs. If, however, we have one of our occasional fine summers in a few months' time, we will be running into difficulty.
    Nor has the problem of water anything to do with the ownership of water undertakings. In the past my hon. Friends have been guilty of concentrating too much on this aspect, which is nothing like as important as questions concerning responsibility for the supply and transportation of water. Getting the water we need from point A to point B is the crux of the problem and it is no one body's overall responsibility to do that.
    I am attracted not so much by the national plan—though I agree that one must have a national plan before a satisfactory system can be evolved—as by the proposition that we should have a national grid system for water. If we can give the Central Electricity Generating Board the responsibility of ensuring that electricity is available wherever it is needed. I cannot see why we cannot do the same with regard to water.
    Mr. Michael McNair-Wilson: But are there not rather different physical circumstances to deal with in moving water throughout the nation as opposed to moving electricity?
    Mr. Howell: The physical circumstances are different but the principle is the same. If there is a lot of water surplus in Scotland and Wales—and we are one island, after all—and a shortage in

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    Devon or Cornwall, it should not be beyond the wit of man in 1971 to move that water from the area of surplus to the area of shortage. It would be possible if it were someone's responsibility to ensure that the water was moved in that way. At present that is no one's responsibility.
    In the light of that situation, the Bill is a welcome step forward, because it enables water to be put into our rivers. Let me use as an illustration, the River Severn. Water collected in Wales is being put into the Severn at a determined rate and taken out for use many miles further downstream where it is needed; it could go on almost to Bristol, and there tapped for use in the South-West.
    It is interesting to note that the grid method is now being used in California, where water is being transported for distances of over 500 miles from places of plenty to places of shortage—and I need not remind hon. Members that Glasgow and London are nearer than 500 miles to each other. If we had regional undertakings, with a central body having the authority to say that water should be released from one part of the country into another—brought gradually across the country—either by river or by a piped system, it would make a great deal of sense.
    I am delighted to know that the Chairman of the Scottish Water Development Board has recently very wise and fairly said that he and his colleagues on the Board whose responsibility it is to collect water in the Scottish Highlands would be delighted to supply it to other parts, and particularly to England. I suggest that it is typical of the Scots that they, having supplied us with all our whisky over all these years are now prepared to let us dilute it at a reasonable profit to the Scottish economy. No one could reasonably object to that. If Wales were to adopt a similar policy I am sure that she would find it of great help to her economy. The good will and the means of dealing with the present situation are at hand.
    I know that we shall be told that the cost would be astronomical, but we are not suggesting that such a service should be provided overnight. Such a big task would need a phased construction programme. But when considering cost let us think of those great pioneers who built
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    our existing water supply system. In the City of Birmingham, Joseph Chamber lain and the Chamberlain family—and it is a hallowed name here, I know—had the foresight to build a tremendous water undertaking. We owe our present wonderful pure water system to people like that, who were about 50 years ahead of their time. Manchester owes a similar debt to her pioneers. The fact remains that when those undertakings were started everyone complained about the cost. The citizens of Birmingham said of Joseph Chamberlain and his colleagues all those years ago just the sort of thing that is now likely to be said of a national grid system but, looking back, we rejoice at the wisdom of those great men.
    It is Parliament's responsibility to provide for the future. As I have said, I do not believe that the ownership of undertakings is as important as many people think, but what is important is that an organisation should be set up, or the Water Resources Board should be developed even further and given the responsibility and the power to move water from one part of the country to another. We want to ensure that our recurring debates on the subject will no longer be necessary, because only exceptionally would additional reservoirs be needed if our existing adequate supplies of water could be transported as I have suggested. It is because we on this side believe that the Bill goes some way to making such a state of things possible, that we welcome it.
    1.56 p.m.
    Mr. R. H. Turton: This innocuous-looking Bill, presented for Second Reading on a quiet Friday at the close of Conservation Year, deserves more scrutiny than it has received from my hon. Friend and from the hon. Member for Birmingham, Small Heath (Mr. Denis Howell). The fact is that it provides that in future no reservoir shall ever be built under the Private Bill procedure; that the only method of objecting to a reservoir being built, however unsatisfactory it is regarded by the people, shall be under the procedure of public local inquiry and ministerial Order. The change is justified by my hon. Friend on the score of cheapness—cheaper for the river authority, cheaper for objectors—but economy purchased at the expense of justice can be a very poor bargain.

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    One has to look at the matter in the setting of our recent experience over reservoir Bills. The hon. Member for Small Heath pointed out that the last three reservoir Bills brought before the House—the Calderdale Water Bill, the Yorkshire Derwent Water Bill and the Plymouth and South-West Devon Water Bill—were rejected. The House refused a Second Reading to the Calderdale Water Bill, and in the two other cases a Committee of hon. Members found that the Preambles had not been made out. So it is now being sought to prevent public feeling over reservoir Bills being expressed under the Private Bill procedure.
    One has to make certain deductions from the unfortunate experience of reservoir Bills in recent years, and the first deduction is that Parliament has at last awakened to the needs of conservation. European Conservation Year has a great deal to do with it. The second deduction is that there is very strong public disapproval of the river authorities' piecemeal approach to the solution of the problem of water deficiency and of the absence of a national policy for the supply and more economical use of water.
    I listened with great interest to the hon. Member's description of the growing use of water—the increasing number of cars; the increasing number of people having baths. Surely the car and the person can be washed in the same water. Why are certain water undertakings using and re-using their water while other water undertakings consider that every item of water for every purpose must be used once and then sent to the sewage plant or into the sea? It is vital that the House should encourage statutory water undertakers to find ways of re-using their water.
    The hon. Gentleman dismisses this as too expensive. Why is it done in one part of the country and not in others? The plans for reservoirs come from areas where there are backward statutory water undertakers. Water authorities are proliferating schemes for the drowning of the countryside by small reservoirs which they must admit will in a very few years be inadequate to our needs.
    The serious consideration is that which the hon. Member for Small Heath touched on, although he seemed to regard it as
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    beyond the bounds of possibility. Parliament and the people demand that our water problem should be tackled by desalination plants, by water grids—there I agree with the hon. Gentleman—by barrage schemes, and by drawing on our ground water reserves, and that the senseless waste of water must be stopped.
    It seems that the encouragement that the Bill will give to the cheaper and quicker procedure—the removal of reservoir schemes from close examination by the House—will have the effect that river authorities will be encouraged to embark on small, inadequate plans and not tackle the major problem.
    I do not know where the hon. Gentleman got his figure of 15s. per 1,000 gallons of desalinated water. All the evidence I have received and my knowledge of what is being done in America and in the Caribbean on desalination experiments make me believe that the hon. Gentleman's figure is completely out of date. That figure applied three or four years ago. Now people are talking in terms of 6s. to 8s. per 1,000 gallons of desalinated water.
    Mr. James Johnson: I should be delighted to be told of a scheme which has got the price of supplies of desalinated potable water down as low as 6s., 5s. or 4s. a gallon. The right hon. Gentleman questions the figure mentioned by my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell), but can the right hon. Gentleman mention a scheme which is at present functioning at figures as low as those?
    Mr. Turton: Israel is certainly doing it. Jersey is doing it. It is being done in Antigua and in Florida. Those are the four schemes that I know of. I am ready to give the hon. Member for Kingston upon Hull, West (Mr. James Johnson) further details.
    Mr. Denis Howell: I am sure that the House would like to take this point up. Most of the schemes which the right hon. Gentleman has mentioned are for places where the water is needed and used very near the point of desalination. My point concerned the added cost, according to my information, in addition to the figures the right hon. Gentleman has mentioned of getting the water in considerable

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    quantities to places where it is needed. If we are dealing with a country as a whole and urban areas, the cost of transportation, so to speak, must be added to the cost the right hon. Gentleman has mentioned.
    Mr. Turton: Certainly, and there is the hon. Gentleman's water grid. The hon. Gentleman talked with great sympathy about the problems of the hon. Member for Kingston upon Hull, West. Hull is itself on the sea or on an estuary. Many problems of water deficiency arise where problems of long carriage from a desalination plant are not involved. However, I want to keep to the problem of the Bill rather than expand on the more interesting problem of water deficiency, on which the hon. Member for Small Heath concentrated.
    It is significant that the Bill has been introduced at a time when Parliament is waking up to the problem and when the country has demonstrated its impatience with the present piecemeal, short-term policies. I know full well that this is a left-over from the previous Administration. The real putative father of the Bill is the hon. Member for Small Heath, and he more or less admitted paternity. The Bill reduces Parliament's power over conservation. It transfers the power from Parliament to the Minister and the Executive.
    My hon. Friend the Minister for Local Government and Development will say, "That is all right. That is what Parliament intended to do in 1963. It was only through a muddle on the part of Parliament that it did not happen." That may well be. Times have changed greatly since 1963. There is in the country generally a greater alertness to the problem of the environment and a greater determination on the part of the people not to have their countryside despoiled without having recourse to Parliament. Next, there is a far greater suspicion of bureaucracy now than there was in 1963.
    Before we substitute this change we must be satisfied that the substitute tribunal proposed by the Bill will be as democratic as Parliament and that all those who have an interest in the matter will continue to have the right to object, to appear before the tribunal, and to receive an impartial hearing.
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    I shall be corrected if I am wrong, but, as I see it, the new procedure will be that the river authority will apply for an order, the Minister will make the order, the local people will object to the order, then the Minister will appoint one of his own staff to hear the objections—
    Mr. Graham Page: The Minister will not make the order at the stage stated by my right hon. Friend. The river authority will put before the public a draft order at that stage.
    Mr. Turton: In that case, it will be the river authority's order until after the public local inquiry?
    Mr. Graham Page: Yes.
    Mr. Turton: I am obliged. That is what I wanted to have cleared up. In that case, the obvious first question is: who will preside over the inquiry? It was suggested in another place that the man who will preside over the inquiry will he a water engineer employed by the Minister. As I see the picture generally of these reservoir Bills, bearing in mind the three I have mentioned, the objections will not be mainly or even substantially on engineering grounds; it will be on the ground that the land proposed to be drowned should be used for agriculture or it will be on grounds of amenity.
    I believe that a water engineer will not be well qualified to determine the issues raised by the objection. I recognise that a water engineer would need to sit and hear the inquiry in some form, but I think that the right procedure at these public local inquiries would be to have an impartial person not employed by the Minister, assisted by assessors who are engineers or planning advisers.
    I hope that the Minister will reconsider this. I know that he can point to the procedure under the 1963 Act, but there is a growing feeling in the country that since 1845 the whole system of compulsory purchase has removed the protection of the citizen from the justices, as it was then, and from Parliament to the more partial judgment of an official defending his Minister's decision. In general, the country looks with suspicion on the great increase in the powers of administrative tribunals. The Bill deprives the citizen of his remedy in Parliament—in many other Bills he has been deprived of his

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    remedies in court—and he is receiving a mere shadow of justice in these more bureaucratic substitutes.
    I should like to ask my hon. Friend the Minister five questions to clarify some of my doubts about the procedure under the Bill, so that we may know clearly what it does. Will there be power in the Ministerial order to repeal existing Acts of Parliament? If so, will Parliament have the right to question the order? My understanding of the Bill is that it will enable the Minister or the river authority in its draft order to repeal an existing Act. As I read it, however, there will be power in those cases to use the negative procedure under Clause 2, which, for some reason, the Hon. Member for Small Heath found so objectionable. I think that he was confusing it with the Private Bill procedure.
    Secondly, will the orders contain financial powers to charge those who receive no benefit with a share of the cost of the work that is authorised? Will they, therefore, be charging orders against which those who will derive no benefit but who live in areas which lose their water to the industrial areas elsewhere have no remedy, and will the charge be imposed by order rather than by Act of Parliament? This would be a form of taxing the citizen not by Parliament but by Ministerial order.
    Thirdly, will there be any geographical limitation on the right to object? I listened carefully to my hon. Friend the Minister when he dealt with this matter. Perhaps inadvertently, he divided the local objector from the amenity association and said that the local objector could use the public local inquiry, whereas for the amenity association we are providing the procedure of Clause 2(4) I hoped that my reading of the Bill was right, that all people would be able to object at the public local inquiry whether they resided in or outside the locality. It would be perfectly right for example, that the Ramblers' Association, the members of which do not live in the area and who may have their headquarters in London, should be able to object to a Ministerial order because it affected their liberty to enjoy the quiet of the countryside.
    Fourthly, how are the public local inquiries to be conducted? Will oppor-
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    tunities be afforded to objectors to cross-examine witnesses for a river authority? We are destroying the Private Bill procedure, which enables those who object to cross-examine carefully the grounds which the river authority has put forward for the building of the reservoir and its discharge. It seems to me important that those who object to any construction or discharge should have the same powers of cross-examination as they now have under Private Bill procedure.
    My final question is whether the Minister will be bound to accept the report of his inspector. This could be taken both ways. It is a matter which we have frequently dealt with in other directions. When dealing with the objection of those who live near a proposed reservoir and its construction, it would be far better if we could get a form of impartial hearing and a Minister who would then be bound by the impartial decision of the inspector or of the judge who held the inquiry. The procedure would be removed from the administrative tribunal.
    I see difficulties in that in view of the recent Report of the Roskill Commission, but we ought to be clear about it; otherwise what will be the use of a public local inquiry? If a Minister appoints his own officer to hold it, and the officer may be well satisfied that the objection is sound but the Minister can overrule him, what will be the advantage of the public local inquiry? The fact that there is no recourse to Parliament is a very great weakness.
    I hope that my hon. Friend will answer these questions. He will, I hope, realise that there is deep concern at the probable consequences of the Bill. I know that, on a quiet Friday like this, the Bill will receive a Second Reading today, but I hope and trust that before the Report stage it will have been greatly improved in Committee.
    2.18 p.m.
    Mr. William Whitlock: I welcome the Bill and I welcome the attention which the Government have given to bringing forward this Measure, for which, as has been pointed out, the previous Administration made preparations and commitments.
    As the Minister has pointed out, there is undoubtedly a defect in the Water Resources Act, 1963, whereby that Act

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    cannot be used for the purposes for which it was intended concerning water discharge. That defect made it necessary to proceed by Private Bill procedure for the discharge and river-regulation element of water conservation programmes.
    I wish to speak about the Private Bill procedure to spotlight its defects, and, therefore, the necessity for the Bill. The Private Bill procedure is time-consuming and expensive for those who have to participate, and it is thus difficult for people or bodies with limited funds to take part in it. It is liable to produce, as I shall show, a flat rejection rather than a detailed appraisal of the merits of a Bill. Under the Private Bill procedure the scope for amendment of a Bill is limited and the procedure shuts out the possibility of a public inquiry. Under the procedure for obtaining Ministerial Orders, on the other hand, there is full provision for the giving of notice and the making and consideration of objections.
    In contrast to the procedure by way of Private Bill, the public local inquiry which would he made possible under the proposed procedure will provide local interests with a more accessible and congenial forum in which to express their comments and concern, and that forum will be made available to them more cheaply in the sense that they will not have to bring to London and retain here, as they do under the Private Bill procedure, cohorts of learned counsel and experts of one kind and other.
    I wish to talk of my one experience of sitting on a Committee on an unopposed Bill. I was greatly shocked by that experience. It was a Water Bill, the Second Reading of which had been carried by a substantial majority in the House. I was one of the five Members from the Committee on Unopposed Bills appointed to consider that Bill.
    I shall preface my comments on what happened by a reference to Erskine May, page 951, in which a distinction is drawn between the Second Readings of Public and Private Bills:
    "… a public bill being founded on reasons of state policy, the House, in agreeing to its second reading, accepts and affirms those reasons; but the expediency of a private bill, being mainly founded upon allegations of fact, which have not yet been proved, the House, in agreeing to its second reading, affirms the principle of the bill conditionaly, and subject to the proof of such allegations before the committee."
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    On that occasion, the five members of the Committee had, therefore, to be satisfied that the allegations of fact in the Preamble to the Bill were well founded. In the usual way, we listened to the learned and expert evidence which was brought before us. We cross-questioned people in the usual way, and we then turned to deliberate on the Bill and all that had been put before us. But that deliberation was very brief and completely inadequate. It was quickly apparent that there was a division of opinion about the principles of the Bill and not about the facts put before the Committee. But the Chairman ruled, in accordance with Standing Orders, that those who had voted in the House on the Second Reading could not vote in the Committee at the end of the consideration of the Bill. Since three of the five members had voted on the Second Reading, only two were able to vote on the Bill at that stage. The two who had not voted on Second Reading included the Chairman, and, as the House knows, in that situation the Chair man has a vote and a casting vote.
    Thus, at the very outset of the Committee's deliberations, the decision of one man was bound to prevail, and the future water supply of millions of people would be determined by how that man recorded his vote.
    Mr. John Wells: If I remember aright, the hon. Gentleman used to be a member of the Whips' Office. The selection of Members to serve on Committees on Private Bills is almost entirely at the discretion of the Whips' Office.
    Mr. Whitlock: No.
    Mr. Wells: I am dealing with fact, not fiction. Assuming that what I say is true—hon. Members on both sides will bear me out—all the hon. Gentleman's allegation now shows is that, at the time of the events of which he has just given his short history, the Whips' Office was negligent in doing its duty.
    Mr. Whitlock: The hon. Gentleman is entirely wrong. The composition of a Committee which sits on an unopposed Private Bill is determined by the Office of Ways and Means.
    I was saying that one man's view prevailed on that Committee, and water supplies vital to the people of the area concerned were determined by him.

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    The situation was made all the more bizarre as the Chairman happened to be an hon. Member for one of the Ulster constituencies who so passionately and so frequently complains in the House when we turn our attention to Northern Ireland.
    I protested strongly in that Committee about the nonsensical and undemocratic procedure which took place. I gave notice that I should do my best to raise the whole matter on the Floor of the House. But, such is our procedure, I found that, once a Bill has been thrown out by the Unopposed Bill Committee, it is then dead. So the Bill was killed by one man.
    I turn again to Erskine May and repeat the relevant words:
    "… the House, in agreeing to its second reading"—
    that is, of a Private Bill—
    "affirms the principle of the bill conditionally, and subject to the proof of such allegations before the committee."
    Those who voted against the Second Reading obviously did not affirm the principle of the Bill, and obviously they could not go on to consider the allegations of fact which were adduced before the Committee. But, surely; those who affirmed the principle of the Bill still had to be convinced of the allegations of fact.
    Mr. Farr rose—
    Mr. Whitlock: That was their task, and, surely, they should have been able to vote.
    Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. I am sorry to interrupt the hon. Gentleman, but we ought not to go into too detailed an explanation of the procedure on Private Bills, at least not without coming back frequently to the subject of the Bill before us. I hope that the hon. Gentleman will assist me.
    Mr. Whitlock: In deference to you, Mr. Deputy Speaker, I shall accede to your request and cut short my remarks. I think that I have said enough to show that the Private Bill procedure on important matters like this is not the right kind of procedure for us to adopt. It is nonsensical and undemocratic in so many ways, and such obvious hazards as there are under that procedure should not be
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    brought into play on vital matters such as the water supply for large parts of the country.
    For those reasons, and for other reasons which have already been put by hon. Members on both sides, I support the Bill and hope that it will have a Second Reading.
    2.28 p.m.
    Mr. James Scott-Hopkins: As my hon. Friend the Minister said, this is but a small amending Measure, but the problems and questions lying behind the introduction of a Bill of this sort are of enormous importance. Over the years when I have been dealing with constituency problems in Derbyshire and in Cornwall, and in other capacities, too, these problems have caused me more worry and anxiety than many other matters seemingly of graver import. Questions such as whether agricultural land is to be flooded, whether men's livelihoods are to be taken from them, and so on, present problems of acute anxiety which are among the gravest with which we have to deal.
    There is no doubt, as the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) said, that there is a growing national shortage of water. There was in the days when I had some small responsibility for these matters, and it has increased enormously since then. The figures which the hon. Gentleman gave regarding the position in 1980 are, I am sure, absolutely right, or, if anything, they are underestimates.
    The problem of water shortage is of particular concern in our industrial areas. My constituency is in almost complete countryside, but close to it, within only a few miles, is one of the heavy industrial belts of Derbyshire and Nottinghamshire. The demand for water from areas such as Ilkeston in Derbyshire is large and is growing, particularly from industrial areas such as Birmingham and Manchester. This demand can only be met from areas such as the one I represent. Lovely parts of the country such as Derbyshire, the Peak District, Devon and Cornwall are being faced with demands for water from industrial areas which at the moment can only be met by flooding large tracts of land for reservoirs.
    The 1963 Act, which I was in some part responsible for taking through this House, went some way to solve some

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    of the problems which have been raised by hon. Members during this short debate. It was then the intention to establish a Water Resources Board which would have responsibility for co-ordinating supplies of water throughout the country. There was then mention of a national grid for water. I believe that the reason no further progress was made on that suggestion at the time was the huge cost of the project, which would still be the case today. I agree with my hon. Friend the Member for Thirsk and Malton (Mr. Turton) and the hon. Member for Small Heath that such a scheme will be essential in the near future. The sooner we begin to lay plans for a national grid so that water may be switched from Scotland, Wales or Cornwall, and the Peak District if necessary, to areas where there is a shortage the better.
    At the time of the 1963 Water Resources Bill we had no idea we had left a loophole. The intention was to give power to the river authorities to acquire land, to build works and to discharge water for the purposes set out in that legislation. If we had known that the present situation would arise, we would of course have done something about it. I think that in 1963 it was right not to make provision for the Minister when making an Order to seek approval, either by affirmative or negative Resolution, of the House. If that Bill were now before the House, starting from scratch, I doubt whether the House would accept that procedure without a provision for the Minister to come before the House with his Order.
    The whole climate of public opinion over the last seven years has changed. The public is much more aware of conservation and of the needs of agriculture. The public would now demand of hon. Members as their representatives to see that there was a procedure under which Parliament at least had a say in what was going on. I would ask the Minister to look at the whole way in which the legislation is now being used and to say how it will be affected when this Bill is enacted. This was the reason that I intervened in the speech of the hon. Member for Small Heath to ask what were his objections to extending Clause 2(4) to a wider field than that to which at the moment it relates. I see no reason why it should not be wider.
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    My hon. Friend the Member for Thirsk and Mahon was quite right. We are now abolishing the system under which river authorities have had to promote private Bills. Although I do not go all the way with the remarks of the hon. Member for Nottingham, North (Mr. Whitlock)—and indeed I was not on the Committee to which he referred—I agree that the proceedings were cumbersome and expensive. Since the proceedings took place in London, local people were excluded from the opportunity to give evidence; they were either not able to do so or did not understand that they would have to come to London. It was expensive and there was no local public inquiry.
    Mr. Farr: May I correct my hon. Friend on that point? There was a local public inquiry, in addition to the proceedings on the Bill in this House. In fact, the river authority conducted the inquiry and met all the local residents publicly on several occasions.
    Mr. Scott-Hopkins: That is correct. The local inquiry was held by the river authority but it had behind it no force of law. The real guts of the examination, as my hon. Friend knows since he took part in some of these matters took place upstairs, in Committee where learned counsel pleaded their case and were able to cross-examine. However, this is a costly and cumbersome procedure.
    If we are to abolish the present system, then if we cannot persuade the Government to be more flexible in their attitude in regard to negative procedures before the House, other than where national parks or places of outstanding natural beauty are concerned, we must certainly seek to persuade my hon. Friend that, where inquiries are held and Ministerial Orders are not to be subject to procedures in this House, there must at least be a right to cross-examine witnesses at a public inquiry. There also needs to be a procedure under which the Minister will have to think very carefully before overruling an independent chairman of a public inquiry in his recommendation. If he wishes to override such recommendations, he should give reasons to the House for so doing. If that matter were provided for, I would be prepared to accept the provisions of the Bill.

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    Subsection (4) (a) provides for a Statutory Instrument to be prayed against where such orders relate to a national park or an area of outstanding natural beauty. I hope that we may have an assurance from my hon. Friend that when such a procedure is not followed, then safeguards will be provided and he will come to the House to explain why he refuses to accept the recommendations of the independent chairman. If we could also be assured that witnesses will be allowed to be cross-examined at the public inquiry, then I would be satisfied. If my hon. Friend is not able to give such an assurance, then we shall seek to move Amendments in Committee to extend the Statutory Instrument procedure in subsection (4) (a) to cover all Orders made by the Secretary of State. This perhaps would be a difficult procedure to adopt and my hon. Friend may be reluctant to advise the House to agree to it, but unless such a course is followed I do not believe that the public interest will be properly safeguarded.
    This matter has caused me great anxiety over the years. Areas of great beauty in the middle of Derbyshire are liable to be flooded and many people in surrounding areas may lose their livelihood. People will lose their livelihood and their land. They will be paid compensation, but this is not enough and never is when one has lived all one's life, and one's family before, in that area. These are grave matters. I accept that we have to have more water as we are facing a shortage of it. It is of overriding importance that there should be sufficient water resources.
    There are two prongs to the Bill. First, every possible effort must be made to conserve what water there is and to reuse it as much as possible. I was told that every ounce of water drunk in London had been through somebody else's system four times before it was drunk. But let us do everything we can to reuse water in every possible industrial and domestic way, and to start building a system whereby we can switch water by pipeline from one area to another. Let us do this quickly, and let us make the Water Resources Board take the responsibility for doing so.
    Second, let us see that there is accountability, to the House and to the public, which can be seen and by which people
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    can have the opportunity to object, to cross-examine and to see that they have been fairly treated before their livelihood and future are endangered by whatever may be done about reservoirs and covering land with water. If my hon. Friend will give those guarantees, I shall be happy to accept the Bill as it is.
    2.45 p.m.
    Mr. James Johnson: I am sorry that the Father of the House, the right hon. Member for Thirsk and Malton (Mr. Turton), is unable to be in his place—I understand why—for we are old antagonists in the matter of the conservation and supply of water. I enjoyed his speech. He is always a most thoughtful speaker. As when we clashed over the Farndale Reservoir Bill, it is the old tale of the city, or town and county, the cities of Kingston upon Hull and Sheffield combined with Barnsley, and the amenity and desires which the right hon. Gentleman wants for the hinterland behind.
    When I find the senior Member of the House pleading for impartiality by commissions and inquiries and naming a certain commission, I wish also that he would name other commissions, such as the Wilberforce Commission, about which we on this side have certain feelings, and the Roskill Commission.
    The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) opened up the debate wide indeed. He spoke about the importance of the future supply of water and about the need to conserve it. We tend to think of camels, the Sahara and the Aswam Dam. It is shattering to hear about places like Ipswich. This land, which is an island with a latitude of about 40° with a westerly wind belt and all the moisture picked up in condensation off the Atlantic, has insufficient water. We have to talk in terms of this nature about water supply and the need not only for household water but water for industry. I speak in the sad light on the defeat of our Bill a few months ago. Yorkshire and Humberside badly need water for industrial purposes. My city and North Humberside is now qualified for intermediate status. A large national firm, which shall be nameless, was coming to Hull in 1962. It would have made an enormous difference to our economy. Unfortunately, it did not come to Hull

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    because there were inadequate supplies of water.
    I will not say how bad the Government are, but they have given us this week two good bits of fare in our diet, the Oil in Navigable Waters Bill, which we welcome, and now this Bill.
    We on Humberside welcome the new procedure which the Minister is incorporating in the Bill. I speak on behalf of all Yorkshire and Humberside Members, particularly Hull, Sheffield and Barnsley, when I welcome the Bill. Our town clerks welcome it, and the Yorkshire Ouse Authority welcome it. It gives them power to do what they were thwarted in doing some weeks ago. When I think of all the time, money and inconvenience spent in getting ourselves shipshape for this, and then to be turned down in the Committee upstairs—
    Mr. Scott-Hopkins: Surely all the people mentioned by the hon. Gentleman in Sheffield, Barnsley, and so on, and the hon. Gentleman himself, would not object to the Order which would flow from the Secretary of State coming before the House under the negative procedure?
    Mr. Johnson: I will come to that later. I know what is in the mind of the hon. Gentleman. May I just proceed on the matter of what happened on the Farndale Bill, or Derwent Water Bill, and why we feel to incensed about that? The facts have been related by my hon. Friend, who was a member of that Committee. We accept the time, inconvenience and expense, and even inadequate procedure in the House. But who thwarted us in the Bill? I can be blunt about this after a lapse of time. We have been told that because some hon. Gentlemen voted on the Floor of the House that they were thought to be committed and therefore they could not vote in that Committee, and we were left with a Chairman who had two votes, as was so vividly told by my hon. Friend the Member for Nottingham, North. Sir Knox Cunningham—I can name him now—who sat for a constituency in Northern Ireland, took exception to any of us here attempting in any way to even influence the course of events there. Yet he was able to deprive Humberside, Yorkshire, Sheffield, Barnsley and elsewhere of the water they needed badly. In my view this is a complete perversion of procedure
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    and against all the ethics of the House. I hope that the Minister will convey my appeal to the Leader of the House that he should look at this sort of procedure upstairs when we have these contentious Bills.
    Mr. Deputy Speaker (Sir Robert Grant-Ferris): The hon. Member for Kingston-upon-Hull, West (Mr. James Johnson) ought not to look at it now too much.
    Mr. Johnson: I humbly apologise. I could not applaud more the local inquiry. Local farmers can come along, with little expense. The local Press attends. It is an honest, decent and clean way of getting local people on the spot to burst out and explode on matters which concern their families and homes, within a few hundred yards of the proposed reservoir. No one can complain about this. Never mind haggling about procedures in the House.
    Suppose that there is enormous local feeling, as there is in the South West of England, Scotland and North-East Yorkshire, about amenities and natural beauty. Clause 2(4) provides that an order affecting
    "a National Park or an area of outstanding natural beauty shall be subject to annulment in pursuance of a resolution of either House of Parliament."
    Farndale was a classic example. Even if the local population feels aggrieved, the right hon. Member for Thirsk and Mahon and his colleagues can come to the House and get a second bite, or a second fight, as the case may be. I yield to no hon. Member in my desire to see daffodils on a hillside and to have the opportunity of going on beautiful walks with my wife in North-East Yorkshire. There is scope in the Bill for anyone locally to pursue his battle or objection on the Floor of the House.
    I believe that even in national parks, which have wonderful amenities, with daffodil walks and the like, a reservoir can be sympathetically designed in these enlightened and modern days. It can enhance the beauty of the landscape and at the same time help those of us in Hull who have our living to make and give jobs to our people. The Humberside can have its industry and water supply. People in Hull like daffodils. It is complete nonsense to think that only farmers—I will not call them peasants—and

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    people who make up rural populations desire to see beautiful landscapes. We like to go for walks in the hills, although lazy people take a car.
    This is a joint effort. No one, in European Conservation Year, has a monopoly of fine sensibilities. We have a common heritage let no one say, "I stand for amenity and beauty and those philistines in Hull merely want more and more water". We are all in this battle together. We all want to ensure that we have the quickest and most efficient procedure to satisfy the needs of everyone.
    I support the Bill. It is a big step forward, and the sooner it is on the Statute Book the better.
    2.53 p.m.
    Mr. John Farr: I welcome the Bill to a certain extent, but I have one or two objections to it, chiefly concerning the way in which sections of it remove from parliamentary scrutiny some of the precautions which we had before new reservoirs were erected in the country. It is true that in another place Lord Molson and others were successful in adding Clause 2(4)(a) to the Bill, which provides certain safeguards to the provision of new reservoirs in areas of outstanding natural beauty and in national parks, but I am not altogether satisfied with this insertion by the Lords in the Bill.
    I wish to deal with my objections to the Bill as framed, and in particular with my concern that if it reaches the Statute Book valuable powers which Parliament possesses, and which it needs in the 1970s, will lapse. I should like alterations to be made to the Bill before its passage is concluded.
    Until 1963 reservoirs and constructions and works of this nature were decided under the special parliamentary procedure. But the Water Resources Act, 1963, did away with the special parliamentary procedure, which called for a committee of members on both sides of both Houses to meet to discuss the merits of the Bill which was presented by the proposers. This procedure worked fairly well until 1963. It was apparently the intention of the Government of the day that the provision of new reservoirs should be made by Ministerial Order. As we have heard, something went wrong,
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    and this Bill is apparently designed to enact in 1971 the wishes of the 1963 Parliament.
    Since 1963 there have been several examples of Private Bills being introduced. My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) mentioned the last three which came before the House, all of which were rejected as not being satisfactory. I remember the Empingham Reservoir Bill, which was passed and accepted as necessary in Rutland, and the Farndale Reservoir Bill, which after careful consideration by a Committee over three full days, and after the hearing of expert witnesses from Yorkshire who presented their case very carefully, was not accepted by the Committee.
    The hon. Member for Kingston upon Hull, West (Mr. James Johnson), who was not a member of that Committee, and the hon. Member for Nottingham, North (Mr. Whitlock), who was on the Committee, both criticised the conduct of the Committee. They suggested that it was improperly conducted. In view of what you, Mr. Deputy Speaker, said a short time ago, I shall not go into that matter except to correct a misapprenhension. I was one of the five members of the Committee, and, as the hon. Member for Nottingham, North will confirm, three of them, after hearing all the evidence over three days, were opposed to the Bill. There was no question of the Chairman having to make a decision which overruled the wishes of the majority of the Committee. Three of the five members, including one Labour Member, thought that the preamble had not been proved.
    Mr. Deputy Speaker: I do not think that we should pursue this matter. We should keep strictly to the Bill. Several other hon. Members wish to make a contribution.
    Mr. Farr: I agree, Mr. Deputy Speaker.
    Mr. Whitlock: I do not wish to pursue this matter, but the hon. Member stated that I had said that the Committee which considers unopposed Bills was improperly conducted. I did not say that, as HANSARD will prove. I said that the procedures are such that they make a nonsense of the consideration of important Bills and one man can get a Bill thrown out.
    Mr. Farr: Another point is that it is said that if we substitute the present Private Bill procedure, which may have its defects, with a system of local public inquiry the people who live in the affected locality will get something that they do not possess now. That is not strictly true. The Farndale Reservoir scheme had a public inquiry conducted on the spot by the clerk of the local river authority. Everyone who livid on the spot had the opportunity of putting their fears to those who were hoping to build the reservoir. It is wrong for Parliament to lose the power of scrutiny, of saying "Yea" or "Nay" for new reservoirs, because there are larger issues which may be decided by Parliament and which may not be seen from the depths of some Yorkshire valley. The local issues will be dealt with by the inquiry held on the spot but there are many larger national issues which are the proper concern of Parliament and it is right that we should have the opportunity to discuss the provision of new reservoirs.
    The Bill has had added in another place Clause 2(4)(a) which gives the House of Commons the power to debate an Order which may be introduced if the new reservoir is to be established in a national park or in what is called an area of outstanding natural beauty. This is an additional help but I do not think that it will be effective. We should not simply single out these areas and let other parts of the country have new reservoirs placed upon them without any recourse to Parliament.
    It has been suggested by the Minister that we are enacting the 1963 wishes of Parliament. I would point out that that was eight years ago, three Governments ago and three Prime Ministers ago. Many new Members have entered the House since, and they may have different views. This Bill was drafted by the Opposition in February last year, and the then Minister of Housing and Local Government said that he hoped to introduce it in the summer. It seems that it is a fag-end that we picked up from the Socialist Administration without any amendment or improvement.
    What steps have been taken to sound out the current views of Parliament on this matter? Has my hon. Friend satisfied himself that the House is prepared to abandon all forms of control for the
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    provision and siting of new reservoirs, at any rate outside national parks and areas of outstanding natural beauty? Is he absolutely sure that this policy will not slow to a halt the already snail-like progress of schemes for alternative ways of obtaining water? For instance, does he think that the schemes referred to fairly recently on the reuse and purifying of water are likely to be pursued with as much energy now that, if the Bill goes through, local water authorities can obtain new reservoirs? Are schemes for the desalination of seawater likely to be pursued with the same energy if the Bill becomes law?
    What has happened to the Wash and Morecambe Bay barrage schemes? Have the Government decided whether they will carry out a feasibility study for the Wash barrage scheme, and, if they have not, when are they likely to take a decision? Many people are concerned to be told about this scheme; even if it were decided upon now it would be no help for 10 years. We were told that 10 years ago and we still have not got the go-ahead for the feasibility study. My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton), with whom I know the House will sympathise in having to absent himself to attend his dentist in Harley Street, particularly asked me to raise this point with the Minister and to press for a short statement in his winding-up speech on our plans for the Wash Barrage feasibility scheme.
    Is it not also a fact that in these local inquiries, which apparently will take the place of Parliament's guidance and control over these matters, the presiding officer will be a representative of the Ministry or of the Secretary of State for the Environment who will report back to the Secretary of State? If this is the chain by which the procedure is to be completed, at no time will the advice or the views of the Ministry of Agriculture be sought or be brought into account.
    I said earlier that I should like to explain why Clause 2(4)(a) is inadequate. It gives a slight added protection in areas of outstanding natural beauty and in national parks by providing that an order proposing a new reservoir shall come before the House but I fear that that will make it more likely that water undertakers will avoid these areas and

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    instead steer their new projects to areas outside those places. This is more likely to result in the use of good agricultural land for reservoirs than would otherwise be the case.
    The Bill as it stands is neither one thing nor the other. It would be better without Clause 2(4)(a) than with it, but it would be better still if, instead of that Clause, there were a Clause establishing once again the special parliamentary procedure which would apply to all reservoir schemes, wherever they were situated, so that Parliament could conduct the scrutiny which I believe the 1971 House of Commons feels it should conduct.
    3.07 p.m.
    Mr. John Wells: I shall confine myself to two main aspects of the Bill. The first of these no hon. Member has touched on so far, and it is the way in which the Bill will impinge upon the duties of the British Waterways Board. The board is under the ministerial jurisdiction of my right hon. Friend the Secretary of State for the Environment, and, therefore, under the same umbrella as the Bill, but one must remember that in the past the board has been vitally affected by many Private Bills brought forward by various river and other water undertakings, and the interests of the board may well be overruled by the new procedures set out in the Bill.
    To give examples of what I mean, I must quote certain recent Private Bills which have come before us. For instance, in the Trent and Lincolnshire Water Bill the proposal originally was that the contribution of the British Waterways Board to that Bill would be met by the payment to the board of, I think, about £250 for the inconvenience and extra costs that it suffered as a result of works required of it on the Fosdyke Navigation. As a result of deliberations in Committee in the other place, the sum that was finally pitched upon to be paid to the board was £7,500, when the original proposal had been £250. That wide discrepancy between the proposed and the actual was the result of deliberations of and bargaining by agents and their learned counsel both in private and before a committee of one or other House of Parliament.
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    The fact remains that under the old system, however, unsatisfactory that was—and there have been many speeches today indicating the unsatisfactory nature of it—the interests of the British Waterways Board could be properly protected. I therefore appeal to the Minister to ensure that before the Bill goes to Committee he will view the legitimate interests of one of the nationalised industries under his umbrella with a view to ensuring that its interests are properly protected.
    I tentatively suggest the insertion of a new Clause 3 providing that if any dispute should arise between any authority and the British Waterways Board the Minister should act as arbiter. At the moment no arbiter is announced or provided for, although disputes undoubtedly exist. Under Section 91 of the Water Resources Act, 1963, provision is made for the Minister to act as arbiter. I urge on him the propriety of seeing that all authorities under his jurisdiction, whether they be nationalised boards, water authorities or other bodies, have fair play at his hands, and accept him as arbiter in the event of dispute between them.
    It is interesting to note that in the case to which I referred, concerning the increase from £250 to £7,500, the waterway involved was the Fosdyke Navigation, which so far as I know was dug out by slave labour during the Roman occupation of this country. It seems a far cry from that day to this.
    I now turn to my agricultural anxieties about the Bill. These have been well dealt with by my hon. Friend the Member for Harborough (Mr. Farr) in his grumblings about Clause 2 (4). All those who have listened to the debate are acutely aware of the dangers that we shall run by doing away with the parliamentary sanctions available under existing legislation. Although the public inquiry is convenient to local people, and is very much cheaper—and always appears to be fair and above board—it is a sorry thing to remove parliamentary sanctions.
    The provisions contained in Clause 2(4) will mean that a water undertaker that wants to build a reservoir—and the Swyncombe Reservoir, promoted by Plymouth and South-West Devon, immediately springs to mind as an example—swill think very long and cold about submitting itself to the new procedure. It would

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    much rather go outright for ruining agricultural land than come into a national park or an area of outstanding natural beauty, if only to save itself bother and cost. It is desirable that all reservoirs, wherever built, should be subject to the negative Resolution procedure, as was well outlined by my hon. Friend the Member for Harborough.
    My hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins)—I am sorry that he has momentarily had to leave his place—when dealing with the reviewing committee referred to "the Minister's inspector's report." He corrected himself and referred to "the report of an independent chairman". My hon. Friend's thinking is exactly the thinking of so many of us—that these departmental tribunals, which are on the increase, in which some minion of the Minister is both judge and advocate, are very un desirable. Although we all appreciate the cumbrousness and difficulties of the old parliamentary procedure—
    Mr. Denis Howell: This is the second or third time today that this has been mentioned. Like the Minister, I have had some experience of inspectors. I am sure that the hon. Member for Maidstone (Mr. John Wells) and others do not intend to reflect upon the absolute integrity of those inspectors. In my experience and the experience of most of those who have dealt with these matters, we as Ministers rarely see them. I do not think that I met one inspector in my time as Minister. But one is impressed by their painstaking way of doing their duties and producing their reports. Whoever appoints them should have a man of integrity, and that is what we get under our system. Although the hon. Gentleman may wish to criticise the system, I hope that he will not reflect on the integrity of Ministry inspectors.
    Mr. Wells: I will not follow the hon. Gentleman, because he is completely out of order. We are discussing independent chairmen, not Ministerial inspectors. Frankly, I do not go along with him, but I do not want to get into trouble with the Chair. Many of these Ministerial inspectors may be admirable and honourable and upright men who have never taken a bribe in their lives, but they live in a narrow and blinkered world. Far from having the unbounded admiration for them which the hon. Gentleman has
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    expressed, I would only point out that he represents a party which believes in more bureaucracy, and I represent a party which believes in less bureaucracy.
    Under Clause 2 (4) there is a grave risk that agricultural land will be more, rather than less, prejudiced. The hon. Member for Kingston upon Hull, West (Mr. James Johnson) made the valid point that it is possible nowadays to design a reservoir with sympathy for the surrounding countryside. Those of us who are interested in getting people into the countryside—his must include the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), who used to hold the humorous post of Minister for Sport—must approve of a sympathetically designed resevoir on Dartmoor or any other remote area, without great offensive works sticking up above the dam when they can be tucked discreetly beneath or well screened by trees. If it were possible to get river authorities and water authorities to consider siting reservoirs on the best possible site and not put before them the extra hurdle of Clause 2 (4) it would be to our great national advantage.
    The hon. Member for Nottingham, North (Mr. Whitlock) made an unwarranted attack on our former colleague, Sir Knox Cunningham. I appreciate that he was speaking to show up the absurdity of the Private Bill procedure, but I deplore an attack on a former colleague. I believe that when the hon. Member reads his speech he may have second thoughts.
    3.19 p.m.
    Mr. Michael McNair-Wilson: I must first declare an interest in that the company of which I am a member is retained by the Association of River Authorities.
    This debate has naturally concentrated on the question of whether the Bill will deprive the House and, therefore, the people of control over something which could affect their amenities, whether it be the countryside or an area of great natural beauty. In fact, the Bill does no more, as the Minister said, than regularise a situation which I am sure the architects of the 1963 Water Resources Act would have wished to include had they thought about it more carefully.

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    Considering the paraphernalia and rigmarole which river authorities have had to follow in initiating Private Bills and getting them through the House, this Measure will result in a considerable financial saving to them and will speed up the way water is made available.
    This Measure is, of course, about water for people and industry. While we may get steamed up at the thought of losing areas of countryside, of agricultural land and of natural beauty for reservoirs, and while we may feel that there must be some other way of finding the water we need, the fact remains that there is no other way of doing so at present. Unless we intend to limit people in the amount of water they have, we must accept that reservoirs will he required and that we shall lose certain areas for that purpose.
    The Bill concentrates on regulating reservoirs and deciding how the water should be taken to maintain the flow of rivers, to ensure that the flow is never less than it should be and, to put it another way, to support the level of abstractions. The Bill will allow discharges to be promoted by Ministerial Order, resulting in more abstractions being possible than would otherwise have been the case. That is the technical result of the Bill. In fact, it will do no more than change a procedure which would otherwise have had to be adopted by the Private Bill method.
    I would like to think that the Bill will mean the more economical use of water, in that water will be drawn off only when a river's flow requires support. I was largely in agreement with the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) when he spoke about water care. He spoke of 100 gallons per day per person being required within 30 years. I was going to say that the present demand is 35 gallons per person per day and that it is likely to be doubled by the year 2000. Whichever figure is correct, the amount of water demanded will be enormous and we must somehow meet the demand.
    This is, therefore, not just a question of the availability of water, as the Minister recognised, although perhaps this is the limitation of this Bill, despite the fact it calls itself the Water Resources Bill. We must ensure that water is used to the best advantage, and on this point
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    I find myself parting company from the hon. Member for Small Heath because I do not believe that we can be profligate about the way it is used.
    We cannot say that everybody must be encouraged to have a bath a day. This may seem a small and silly point, but it is relevant to our thinking on this issue. In the same way, people should not be encouraged to clean their cars daily, water their gardens regularly or have swimming pools as a matter of course.
    When conservationists and others refer to the cost of meeting the demand for water, the only way really to count the cost is to ask whether water has not become too cheap a commodity and whether we do not take too much for granted the precious thing it is. We tend to think that it is always there, because nature intended it to be there, and that we need only turn on the tap for it to flood out.
    As for any attack that might be made on river authorities or, by inference, on the Minister, why should it be assumed that the river authorities are vandals, that they care nothing about the countryside and that we alone care? The people I have met in the river authorities give me no reason to think that they care any less about this problem than I do. Nor do I believe that they look upon reservoirs as an easy way out. They know, and we appreciate it although we do not always admit it, that there is no other way out. They have to meet the ever-increasing demands made on them, and they must find new sources.
    Talk about ground water or transfer schemes as being able to fulfil this need is not realistic, any more than is talk about desalination. Various figures have been bandied about today but the report on the Jersey scheme shows that the cost is so enormous as to make desalination not a practical proposition, and the Water Resources Board has turned desalination down as being uneconomic. The same goes for barrage schemes. These would be a marvellous alternative if they existed, but none exists at present. We cannot, therefore, just ask: "Why not have a barrage scheme?" Even to say that is to presuppose that the technical

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    problems involved can be overcome almost at the blinking of an eye, when almost exactly the opposite applies.
    It has been said, and headlines have told us, that the country is beginning to face a water shortage. Only this week, referring to London's water supply, the headlines simply said: "Water needs: no cheap way out." That headline emphasised the fact that there is a limit even to the number of reservoirs we can have and to the amount of money we can spend on finding new sources.
    Therefore, perhaps widening the debate a little, I plead with my hon. Friend to appreciate that a very strong case must be made out for a different approach to the use of water. We have to educate people to realise that they and they alone have the solution of water supplies in their hands.
    We have talked about domestic use; but by the same token we should talk about industrial use. Industry must be made to be more water conscious, even if we have to use financial compulsion to achieve that end. It is a curious irony that fresh water which may flow from the reservoirs into the river at so much cost can so quickly become polluted and dirtied beyond the use of human beings and has then to be treated again before it returns to anything like its original state. That is a fantastic waste of one of our great national assets. If by this small Bill we are now merely regularising the situation, and adding something which perhaps should have already been provided, we should look forward from it to the whole concept of future water supplies, and how we can use water far more economically and sensibly and with far less destruction than is now the case.
    3.29 p.m.
    Mr. David Knox: I am glad to have the opportunity to speak in this debate, because this problem affects my constituency. A number of investigations at present being undertaken into the possibility of regulating reservoirs have caused considerable alarm to people in my constituency, as such reservoirs would affect their livelihood, their homes and their farms. Indeed, they would affect the entire basis of life in these areas.
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    I think that, on balance, we should support the Bill, though I must make it clear that it is only on a balance of the arguments. There are advantages and disadvantages. I readily accept that the Bill with its order-making proposals, has advantages over Private Bills not only from the point of view of Parliament and of promoters of schemes, but also from the point of view of many constituents who may wish from time to time to raise objections.
    From Parliament's point of view the advantages are fairly obvious. First, there is the time factor. Each water Bill requires several days of the time of the House. Several schemes are put forward each year. This takes up a lot of Parliamentary time. As we are reminded every Thursday, parliamentary time is valuable. So the provisions of the Bill will help in this respect.
    Secondly, there is an advantage for Parliament, in that most of the aspects in the Bills that have come forward so far have been of peculiarly local interest. True, broader issues have arisen, but it is difficult to see how any Member representing a constituency in Central Scotland or in the South-West or even in London could become tremendously interested in a scheme to promote a reservoir in North Staffordshire. In some respects such Members may be inclined not to take a great deal of interest in them. If similar schemes were coming forward in their constituencies, I do not think that I should be terribly interested. In considering the existing Private Bills, Parliament tends to spend a lot of time looking at something in which there is not national interest.
    However, it must be recognised that the Bill involves a reduction in Parliament's powers; it involves the passing of some power from Parliament to the Executive. As my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) and my hon. Friend the Minister have said, under the Bill Parliament will be able to reject a scheme in a national park or in an area of outstanding natural beauty. Although either one or both of these categories would take good care of any scheme in my constituency, this is a rather unsatisfactory procedure, for the good reasons advanced by my hon. Friend the Member for Maidstone (Mr. John Wells). I therefore ask the Minister to

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    give serious consideration to extending this essentially negative procedure to all schemes. With respect to the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), I do not believe that this will involve any substantial increase in the time factor in promoting a reservoir.
    I turn to the advantages and disadvantages from the objectors' point of view. This is the point which is of particular interest to my constituents and myself. Obviously, there are advantages to objectors in terms of the cost factor. The order-making procedure as outlined in the Bill will enable small people to oppose reservoir schemes much more easily and at much less expense than under the existing Private Bill system.
    Equally, it will be much easier for objectors to state their objections in the very much less formal and less terrifying atmosphere of a local inquiry than before a Parliamentary Committee. There is also the convenience factor. The fact that it is a local inquiry will enable them to attend regularly at no great expense and without coming to London. This is a real advantage from the point of view of an individual who wishes to object to such a scheme.
    However, it would be wrong not to accept that the public have certain doubts about public inquiries. They have a feeling, rightly or wrongly, that inquiries of this nature tend to be biased in favour of the Establishment—and in this case the Establishment would be the authority promoting the scheme.
    Part of the trouble arises, as my right hon. Friend the Member for Thirsk and Malton and my hon. Friend the Member for Maidstone said, because the most likely person to preside over a public local inquiry would be a water engineer —someone who has devoted his life to the provision of water, someone who no doubt technically knows a great deal about water and has a great deal to contribute on the subject of water engineering.
    But is such a person the best person to pass judgment on environmental factors? Is such a person the best person to pass judgment on agricultural matters? I think not. I therefore ask my hon. Friend the Minister to consider requiring that a county court judge or similar person should preside over inquiries of this
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    nature. That might go a considerable way to allaying the real fears which people, in my constituency and elsewhere, have about this question.
    I turn briefly to the Schedule and, in particular, paragraph 3(b), which states that when people request information about applications for orders under Clause 1, the river authority may require those persons to pay what is called a "reasonable charge" for being so notified. Is this really necessary? Should people have to pay for being notified that their land or their homes may be flooded? In any event, what is a "reasonable charge"? I hope that my hon. Friend may have second thoughts about this. It is not asking very much that people, particularly those directly affected by schemes of this sort, should be notified free of charge of what is likely to happen to their homes and property. It is not enough simply to say that in the fullness of time compensation will be paid.
    I come now to a more general aspect behind the Bill. I am not opposed to its basic principles—on balance, I come down in favour of it—but I have one or two comments concerning the broader question of water. I have no particular objection to the construction of reservoirs in steep, rocky valleys with no good agricultural land and little natural beauty, at least in the lower parts of the valley. Indeed, in such circumstances the construction of a reservoir may well improve the scenery and provide recreational facilities which did not previously exist.
    I take strong exception, however, to the flooding of areas of gently undulating countryside containing good agricultural land and areas of great natural beauty. In such areas, reservoirs do not improve the scenery. They waste the already scarce agricultural land and they probably reduce—they certainly do not add to—the recreational facilities. Today, however, there are more and more proposals for regulating reservoirs in such areas. In some places, great mud banks will be visible in previously beautiful countryside whenever there is a dry spell.
    In my constituency, two such schemes are being investigated by the Trent River Authority in the Manifold Valley and in the Hamps Valley and two other schemes are being investigated by the

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    Mersey Weaver River Authority at Rushton and Rudyard. I understand that all these schemes will be subject to the provisions of the Bill if it is passed. All four sites involve the flooding of good farming land. All four involve the spoiling or the changing for the worse of places of great beauty. Even if the schemes are not proceeded with following the present investigation, it is obvious that unless we can do something about this in the longer term, sooner or later they will be subject to a real threat and reservoirs will be constructed.
    I hope, therefore, that when my hon. Friend the Minister replies, he can reassure the House that the Bill is being brought forward to deal only with immediate water problems. When they are real and urgent, I would not deny their necessity. I was glad that in his opening speech—and I hope that in his reply he will reiterate this—my hon. Friend gave some assurance that to deal with the longer-term problem, investigation into matters like desalination, estuary barrages, and so on, will be undertaken with considerable vigour. I hope that some of the proposals which have been suggested by the hon. Member for Birmingham, Small Heath and others will also be pursued with considerable vigour, because these surely must be the sources which are expected to meet our rapidly rising demands for water in the middle and more distant future.
    3.40 p.m.
    Mr. Graham Page: May I have the leave of the House to speak again to answer the questions put during the debate and comment upon the many constructive proposals which hon. Members have made, which may improve the Bill as it goes through its later stages.
    First, I join my hon. Friend the Member for Walthamstow, East (Mr. Michael McNair-Wilson) in asking the House not to judge the Bill upon some assumption that all river authorities are villainous vandals. They are boards composed of human beings, as we are in this House; they have just as much regard, I am sure, for amenities as we have and would not wish to be looked upon as vandals when they propose the conservation of our water supply in this country.
    Next, I touch on the second overall point, which was raised by my hon. Friend the Member for Leek (Mr. Knox)
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    when he said that the Bill, so it is alleged, will reduce the power of Parliament. I ask the House to remember that Parliament has already vested in the Secretary of State the duty to secure an effective water supply, and in so doing it gave him these powers of Ministerial Order in 1963, which should now be made completely effective. I recommend any hon. Member who queries the definite statement of Parliament putting this duty on the Secretary of State to read Section 1 of the 1963 Act.
    I come now to the shorter points which have been raised. I say "shorter", but they may none the less have as much importance as the more substantial points. My hon. Friend the Member for Maidstone (Mr. John Wells) spoke of the British Waterways Board and all other authorities having fair play. I refer him to Section 91 of the 1963 Act which gives exactly what he was asking for in the law as it stands at present.
    The hon. Gentleman the Member for Birmingham, Small Heath (Mr. Denis Howell) asked whether Clause 2(4) would be redrafted. For several reasons, it has to be redrafted, not in order to remove it but to make it effective and unambiguous. I shall look into the point which he raised.
    The hon. Member for Small Heath raised the question of ownership of water undertakings, saying that this was not of great significance, that what we were concerned about was the conservation of water, and it did not really matter to whom it all belonged. I think it important that we should have the ownership of the undertakings right, and we expect to receive in a week or two the report of the Central Advisory Water Committee on the ownership and structure of administration of water undertakings. I hope to be able to announce to the House the Government's views on that report as soon as possible.
    Mr. Denis Howell: I welcome what the hon. Gentleman has just said, but may I just explain the point which I made, lest it was not entirely clear? I meant that we had tended in the past—I include my right hon. and hon. Friends here—to concentrate too much on the question of ownership. That is important, but, in my view, it is nothing like as important as the question of supply and distribution.
    Mr. Page: Yes, the hon. Gentleman is perfectly right there. It has been said several times in the debate that we must subject all these Orders to Parliamentary procedure. I say again that that was not thought necessary in 1963, and the basis for proceeding by Ministerial Order to carry out the responsibilities put on the Secretary of State—or the Minister, as he then was—appears in the very first Section of that Act.
    Like the hon. Gentleman the Member for Kingston upon Hull, West (Mr. James Johnson), I feel that the local inquiry is the important thing. There, it is a matter of local pleading by the people who will be most seriously affected. There, the local evidence can be brought forward in a formal or an informal manner as is done at these inquiries. The one inquiry of which I know which preceded a Private Bill, the Farndale inquiry, came nowhere up to the standard of the inquiries which are set up by the Ministry. It was, after all, only an inquiry held by the river authority and thrown open to the public for a time.
    Mr. Turton: There was in fact no public inquiry. There was an informal meeting between the river authority and a few people who live in that particular dale.
    Mr. Page: That is what I thought was the position. It has been said that this Bill would prevent public feeling being expressed. But has public feeling been expressed under the private Bill procedure adopted over the past few years? The hon. Member for Nottingham, North (Mr. Whitlock) showed the nonsense of that procedure on one occasion. In the three instances which have been mentioned the procedure provided by this Bill would have been just as effective as the Private Bill procedure in allowing the House to take a decision.
    The Yorkshire Derwent Farndale scheme went to an unopposed Committee. There were no petitions before that Committee from the general public or from anybody interested in the scheme, and the Committee rejected the Bill. Farndale is in a national park. If an Order is made in respect of that, it can come before the House on the negative procedure. Exactly the same thing applies to Swincombe, which is in a national park and also will come under the procedure
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    in Clause 2 (4) of the Bill. Calderdale is in an area of natural beauty—although it is not specifically designated as such—which was the basis of the whole argument on Calderdale. Therefore, when any important amenity occasion arises the proposed procedure will allow the House to have a voice.
    My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) asked who would preside over a local inquiry—would it be a water engineer? The answer is not necessarily. It would be an inspector of the Ministry or an independent inspector. In our Department at present we have two sets of men as inspectors. It may be that one of those will sit, with a water engineer as an assessor. In technical cases a water engineer would be the inspector, sitting with a planning assessor. It is for the Secretary of State to decide the form of the inquiry, but whatever it may be it will be held under one of those inspectors, whose impartiality is unchallenged outside the speeches which I have heard in the House today.
    I was distressed when it was said that these inspectors would defend the Minister's decision. The Minister has not made any decision before the public inquiry. Sometimes he does not agree with the inspectors; in about 5 per cent. of cases on which an inspector reports the Secretary of State finds himself not in agreement with his inspector's report. When my hon. Friend the Member for Harborough (Mr. Farr) spoke of these inspectors as minions of the Minister, he cannot know their great impartiality and conscientiousness.
    Mr. Farr: I did not make any such reference.
    Mr. Page: I beg my hon. Friend's pardon for attributing those words to him. Perhaps they were said by my hon. Friend the Member for Maidstone.
    My right hon. Friend the Member for Thirsk and Malton asked me five questions on inquiries. He asked whether the inspector would have power to re peal existing Acts of Parliament. The answer to that is "No", he will not. He then asked what were the financial powers to charge those who receive no benefit from what is being constructed —I believe that he was asking whether there would be any financial implications in the Order itself. The answer

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    again is, "No"; these Orders will not deal with that side of the matter at all. Charging is governed by Section 58 of the 1963 Act and is within the hands of the river authorities. Thirdly, my hon. Friend asked if there were any geographical limitations on the right to objections at these inquiries. No, certainly not. Anybody can turn up at the inquiries, and if they have a relevant objection they can be heard. The fourth point, which was also raised by my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins), was as to whether there would be cross-examination at these inquiries. There will be cross-examination. They are searching inquiries in which anyone who has to put a case, as the river authorities will here, has to stand up to cross-examination on that case. If ever an inspector's report which showed that he had not allowed cross-examination came to the Department, it would go back to him for the whole inquiry to be reopened—if any member of the inquiry had not already taken it to the High Court. Thus I can give a definite assurance that cross-examination will occur at these inquiries if the objection is relevant to the point of the inquiry.
    The fifth point was as to whether the Minister would be bound to accept the recommendations of his inspector, and again the answer is "No". The Secretary of State has the final responsibility here. The inspector's report finishes with recommendations. The Secretary of State has to consider the whole report, the findings of fact, the conclusions from those facts and the recommendation of the inspector. On planning inquiries, for example, as I have said, about 5 per cent. of the inspector's recommendations are not accepted.
    My hon. Friend the Member for Derbyshire, West asked whether the Minister would be obliged to report to the House if he disagrees with the inspector. The practice is that the Minister's decision letter is published. A copy is sent to the national Press, and to anybody concerned in the inquiry. The whole matter is made completely public. Thus anybody can see, if they are interested in a case, whether the Secretary of State has agreed with his inspector or not, and any right hon. or hon. Member of the House can raise the matter in the ordinary way in the House, by Parlia-
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    mentary Questions, by early day Motions, Adjournment debates and so on. It is the responsibility of the Secretary of State, and it is his responsibility to the House.
    My hon. Friend the Member for Harborough asked several questions. In particular, he asked what steps I had taken to sound the current views of Parliament. That is what I am doing today. More than that, the Bill has already been through another place and has received the debate there and the publicity of that debate. My hon. Friend asked if I was sure that this would not halt the other ways of obtaining water. I tried to assure the House, when I proposed the Second Reading, that this would not be the case, and that we hoped to go forward with an effective national policy as soon as we had collected the many regional studies which were being made. My hon. Friend also asked whether the view of the Minister of Agriculture, Fisheries and Food is taken into account. I can assure him that in all these cases, planning, roads, and reservoirs, that I am never left in any doubt of what my right hon. Friend the Minister of Agriculture thinks about the land which it is proposed to take. We always have a report on the agricultural value of the land.
    As the hon. Member for Small Heath said, we have a critical water supply situation on our hands. He expressed it very well by saying that we are completely surrounded by water and have a heavy rainfall and that in those circumstances we should be able to provide water for ourselves by barrages, desalination or other schemes. These matters are being studied. The Wash report is receiving careful study now. The Water Resources Board proposed that there should be fresh water storage in bunded reservoirs and that there should be a study on that. The estimated cost is £1·1 million. We must carefully consider this matter before spending that amount of public money.
    The result of the Morecambe study is expected this year. We are studying the question of the reuse of water. There are problems of retreatment. The study on desalination is already continuing. One or two figures have been mentioned in the debate. The one which I recollect is the cost in the Channel Islands of desalination, which is producing water at 10s. per thousand gallons. So that the

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    situation does not look very hopeful, but I do not abandon the idea.
    There is a growing demand and need for water. I accept, by and large, the Water Resources Board's assessment as quoted by the hon. Member for Small Heath. I would not commit myself to figures or dates. But the matter is serious and urgent.
    The Bill gives legality to a more economical use of water, but it does not deprive us of the benefit of all the other matters which are under careful study. We are a nation of washers, splashers and flushers. There is no bottomless well of supply. I admit that at present it is rather a wishing well, but I am determined that it shall, as quickly as possible, become a systematic, scientific and sufficient supply for this country.
    Question put and agreed to.
    Bill accordingly read a Second time.
    Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

    HOUSE OF COMMONS (SERVICES)
    Ordered,
    That Mr. Selwyn Lloyd be discharged from the Select Committee on House of Commons (Services) and that Mr. William Whitelaw be added.—[Mr. Rossi.]

    SALE OF GOODS (GUARANTEES AND WARRANTIES)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Rossi.]
    3.58 p.m.
    Mr. Greville Janner: I am very happy to have the opportunity to ventilate in the House a matter of concern to anyone who buys an expensive piece of equipment, from a refrigerator to a car, as well as to buyers of more modest household appliances. I refer to documents which have become common and which are known as guarantees or warranties but which generally guarantee only trouble to the purchaser and warrant only legal difficulty. These documents are designed not for the protection of the purchaser but
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    for the protection of the manufacturer or, in some cases, the dealer. I wish to draw attention to the way in which the public can protect its own rights and the manner in which the Government could, if they wished, exercise their administrative powers and protect the consumer.
    There is already adequate protection for the public if only the public knew it and the manufacturers did not abuse it. Under the Sale of Goods Act, passed as long ago as 1893, a person who buys goods of any sort is entitled to goods which are of mechantable quality. If they are defective, the goods may be returned and all money paid claimed. The buyer can claim what he has paid or he can keep the goods and claim damages to put himself in the same financial position as he would have been in had the goods not been defective. But this powerful protection—
    It being Four o'clock, the Motion for the adjournment of the House lapsed, without Question put.
    Motion made and Question proposed, That this House do now adjourn.—[Mr. Rossi.]
    Mr. Janner: This powerful protection will apply only in the absence of some agreement to the contrary. It would be surprising if those who knew their rights ever agreed to the contrary, and knowingly and willingly gave up those rights, so a subtle procedure has been evolved, whereby people not only give up their rights without realising what they are doing but do so in the earnest belief that they are acquiring new rights.
    They are offered guarantees or warranties and they believe that these documents confer rights upon them. So ingrained is this belief that they now go to manufacturers, or usually to dealers who trade in shops or sale-rooms and say, "Do you offer a guarantee? Is this car guaranteed? Do you guarantee this secondhand vehicle?". If the answer is "Yes," the purchaser is happy, and if it is "No", he will not buy. Exactly the opposite should apply. When buying a car or anything else, one should say, "I presume that this is not guaranteed, because if it is, I will not buy." If a guarantee is provided, it should be regarded with considerable suspicion.

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    I have been provided with a number of guarantees. I should like to pay a tribute to the Consumers' Association and particularly to Mr. David Tench, for the great assistance which I have been given. This association has achieved double importance since the sad demise of the Consumer Council. I have also had guarantees shown to me in my constituency, and have, of course, acquired some in the course of my own purchases.
    In general, it is fair to say that the worst offenders are those provided with radio and television sets and high fidelity equipment. I will give some examples. Normally, the Sale of Goods Act rights may last for six years, if one can prove that the goods were not all right when they were bought. Guarantees are nearly always limited to three, six, or 12 months.
    I have here a guarantee from a highly reputable company, the British Radio Corporation, which is typical. It says:
    "This guarantee is given in lieu and excludes every condition or warranty whether express or implied not herein expressly stated, strictly subject to the terms and conditions overleaf."
    It is not an addition to the Sale of Goods Act rights but instead of them.
    What does this guarantee give? It says, among other things, that the company and recognised radio dealers are entitled to recover the labour costs involved in removing and replacing components supplied or repaired under the guarantee. If a radio or television set breaks down because it is defective, the purchaser is entitled, unless he has given his rights away under some spurious guarantee, to claim not just the cost of the part needed to replace it but the price of the labour. There may be only one tiny, worthless screw embedded somewhere in the set which causes the manufacturer or dealer to have to put it right—but that is all that one is reimbursed for under the guarantee. Labour costs are recoverable.
    An even worse one is from Sony (U.K.) Limited, which steps into the breach right from the start and says:
    "In substitution of any statutory or other warranty or condition, express or implied, Sony U.K. Division guarantee this unit for 12 months."
    It says in part that the goods must be returned, carriage paid, to the dealer. Why should this be? Under the Sale of
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    Goods Act, the purchaser would not have to pay the cost of return.
    It also says that the company's decision will be final in the event of dispute—an attempt to oust the jurisdiction of the courts. It adds that the dealer who sold the goods will observe these conditions and has a claim to charge for labour and the cost of packing and despatch. There is no reason why a consumer who knows his rights should pay for the labour.
    Here is another typical exclusion clause:
    "This guarantee does not cover, (i) fuses, (ii) lamps, (iii) batteries, (iv) stylii, (v) damage resulting from incorrect installation, (vi) consequential damage.
    (b) This Guarantee excludes (i) valves, (ii) Videcon tubes, (iii) Video Heads these being covered by a separate 90 day guarantee, (iv) Cathode Ray Tubes, which are covered by a separate 12 month guarantee."
    In other words, there is precious little left in the set which is covered by the guarantee which provides so very much less than the protection available under the Sale of Goods Act.
    Pye Radio is a first-class firm. But, in most other cases one has to return the guarantee for it to be effective but not with Pye, which says:
    "The guarantee is automatically effective … You do not have to return the form."
    Then it says:
    "That all labour involved in servicing, packing, etc., and all carriage costs will be chargeable to the purchaser or hirer"
    There is no reason why anyone should accept that whether legally that would have the effect that the manufacturer hopes one doubts but, however that may be, it is not a term which should be included in the clause.
    Rank, Bush, Murphy Limited is very similar. It says that every labour cost involved in service, packing, and so on, will be chargeable to the purchaser or hirer. Fidelity Radio says:
    "We reserve the right to charge for labour and carriage."
    Crown Radio says:
    " … the claimant is liable for expenses incurred through packing, cartage and labour associated with the repair."
    The Bosch guarantee does not cover a long list of things, and then it says:
    "The costs of labour, packing and carriage arising through the implementing of this guarantee are chargeable to the customer …"

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    Hanimax has the same exclusion of consequential losses and says:
    "The customer will be required to meet the labour charge involved in the location and replacement of any faulty part …"
    It is true that many manufacturers will go far beyond the terms of the guarantee, but if that is so, they should not include such terms in the document itself.
    Perhaps I may now give some example relating to freezers, refrigerators and deep freezers. I think it is fair to say that these are random examples. There may be others that are worse, and some that are better. I have seen one from Kelvinator which excludes
    "Loss or deterioration of food arising from any cause whatsoever".
    which means that a person can buy one of those freezing units and fill it with food costing £100 but if the unit is defective, with the result that the deep freezer stops working and the food is ruined, the owner has no claim against the firm for a replacement of the goods. By that one stroke the firm has removed a vast amount of statutory protection, or so it hopes.
    Another guarantee is from Ross Electronics which limits protection to 90 days, which is very different from the Sale of Goods Act protection which could last for six years.
    Cars provide the most common example of all. For new cars manufacturers have been adapting and improving their warranties, but still one finds an exclusion in the B.L.M.C. guarantee because it says:
    "The Seller gives this Warranty in place of all warranties, conditions and liabilities whatsoever implied by common law, statute or otherwise"
    and a person is better off with his common law rights.
    The trouble originates in that trade from the order form because the standard order form which is provided by the Motor Agents Association Ltd. says:
    "… the Seller undertakes that he will ensure that the pre-delivery work specified by the Manufacturer or Concessionaire is performed and that he will use his best endeavours to obtain for the Purchaser from the Manufacturer or Concessionaire the benefit of any warranty or guarantee given by him to the Seller or to the Purchaser in respect of the goods and such undertakings are given and accepted instead of and expressly exclude any other guarantee or condition or warranty as to quality or fitness for any purpose."
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    Anyone who signs that form is agreeing that the rights and the duties of the dealer shall be limited to obtaining the so-called benefits of the manufacturer's guarantee or warranty and nothing else.
    On the other hand, there are those who provide excellent guarantees. In general these people are retailers, but I have found a manufacturer who is an exception to that usual, unhappy rule. That is the Frigidaire division of General Motors, which provides a guarantee that states:
    "These warranties are in addition to the buyer's statutory and other legal rights which are not diminished in any way by acceptance of these warranties."
    I would hope that that wording would be adopted by all manufacturers—I am sure that General Motors would not worry very much about copyright—because it provides additional rights.
    Then we come to retailers. Messrs. Boots give a guarantee that states:
    "In the unlikely event of any defect appearing within this period"—
    —that is, the period specified—
    "Boots will either repair or replace"—
    the projector, in this case—
    "at their discretion, free of charge."
    In these guarantees there is no question of any exclusion of other rights that anyone has. Another retailer—Curry's—provides a guarantee that states:
    "This guarantee is in addition to the buyer's statutory and other legal rights, which are not diminished in any way by this guarantee."
    The London Electricity Board's guarantee states:
    "This guarantee is, of course, without prejudice to your statutory or common law rights."
    Raleigh Industries, which manufactures bicycles, has a guarantee that states:
    "This guarantee is alternative to any rights in law."
    There is no legal need for manufacturers to present documents which are alternative. There is no law which requires them to do so. There is, equally, no law of any sort that would prevent their placing before the public documents which they call guarantees or warranties but which, in fact, remove the public's rights.
    What can one do? There are many answers to that question. The first lies in the hands of the purchaser. A purchaser is not bound to accept a guarantee.

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    Before he does so he should read it through extremely carefully, to make sure that he understands what it is about and that it does not take away his rights. If it does, he should refuse to buy under the terms of the guarantee. If the seller does not wish to sell him the car—or whatever the article may be—without a guarantee, the prospective purchaser can go down the street and easily find some other seller who will be only too pleased to do so.
    If the purchaser does accept the guarantee he should read it through carefully and should cross out those parts of it of which he does not approve, initial the changes, and make a copy—if he can—before sending it to the manufacturer who, with any reasonable good luck, will file it. If it is ever produced against him the buyer will be able to show that he has at least made a sensible attempt to vary the terms of the arrangement. Best of all, the customer should regard all these documents with extreme suspicion.
    What, then, can the Government do? Within the Government's administrative powers, and without any additional legislation, I urge them, first, by all the ways open to them, to inform the public of their rights and to publicise the fact that buyers are protected by the Sale of Goods Act, that they need not give away their rights, and that they should not do so. Secondly, I urge the Government to inform manufacturers who produce these spurious guarantees and warranties that unless they take some steps to remedy the situation the Government may have to look to other means of protecting the customer.
    I would hope that the Government's influence with manufacturers would be such that manufacturers would be encouraged to follow the lead given in the extremely satisfactory and helpful guarantees that I have quoted, in that way avoiding any necessity for discussion or legislation, which cannot be referred to in an Adjournment debate.
    I thank those retailers who go beyond the terms of guarantees or warranties, often because their customers come back furious because they cannot get the results they want from the goods they have bought, and insist upon having things put right. Many retailers find that they have to step in when manufacturers refuse to
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    act in respect of their guarantees. There are also those manufacturers who are retailers, who market their own brand goods. There is a considerable and healthy trend in this direction. Among the names of those providing guarantees without any document are Marks & Spencer, Sainsbury's and people of that calibre. They produce and sell goods without any guarantee or warranty other than the fact that their label or mark is upon them. The public learns to recognise and to trust the name. If something goes wrong the goods are taken back and there is no question of the buck being passed from the retailer to the manufacturer.
    One way and another the documents I spoke of earlier, in their small and unpleasant way, impinge upon the lives of us all at some time. If we knew and understood our rights we would be unlikely to give them away. As it is most people do not understand them and do give them away unknowingly and in the belief that they are acquiring a benefit. It is not only that these documents are taking away rights, they are doing so in the guise of conferred rights. I hope that the Government will take energetic administrative steps which will draw the attention of the public, the trade and the manufacturers to these documents so that legislation will not be necessary. If it is, then on some future, appropriate, occasion, I will continue respectfully to press for it.
    4.17 p.m.
    The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): The hon. Member for Leicester, North-West (Mr. Greville Janner) has raised a matter of considerable importance and interest. He has done a service to bring to the attention of consumers the true nature of the guarantees about which he has been talking. I admire his persistence in trying on three separate occasions, in respect of other Bills going through the House, to raise this matter, and I am glad that within the rules of order I can now deal with the matters which he has brought before us.
    He is quite right in saying that the consumers' protection lies in the Sale of Goods Act, 1893, and that his rights here lie against the seller from whom he has contracted to buy and not necessarily the

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    manufacturer who may not have been the person from whom he has actually bought the goods. He also has rights in tort, but I do not think it necessary to go into the legal position in any detail. As the law stands, there is nothing to prevent commercial concerns from insisting that they will only deal on terms which exclude any responsibility which might arise from the provisions of the Sale of Goods Act or the law of tort.
    Some exclusions may or may not be accompanied by the assumption of some different liability under the terms of the guarantee and the terms of the liability may be assumed on terms which exclude recourse to the courts or arbitration of any sort. The hon. Gentleman quoted examples of that type of guarantee. The customer is often too weak vis-à-vis the manufacturer either to be able to understand fully the implications of what he is signing or, even if he does, to do very much about it, because he may want to buy the goods and not be able to change the conditions upon which they are being sold.
    The hon. Gentleman went a little far in saying that in all instances these guarantees are taking away valuable rights and giving nothing or very little in return. They of course give a quick and easy remedy to the aggrieved under the terms of the actual guarantee, and it must be remembered that to take legal proceedings under the Sale of Goods Act is a cumbersome, slow and possibly expensive method of obtaining redress when defective goods are supplied.
    It is not quite fair, therefore, to say that in all cases the customer is the loser. He may be able to get a quick remedy through the guarantee, perhaps easier in some cases than if he had recourse to the Sale of Goods Act and the law as it stands.
    There is, nevertheless, general recognition that the real issue is not whether the consumer recognises that in some circumstances the firm holding out some sort of guarantee with one hand is taking away his basic legal rights with the other. The fundamental question is whether it is right for anyone to take those rights away from the consumer by the so-called exclusion or exemption clauses to which the hon. Gentleman referred.
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    The balance of opinion is clear—that it is not right that such exclusion clauses should be allowed. The Molony Committee which investigated these matters from 1959 to 1962 was firmly of the view that it should not be possible to exempt consumer contracts from the Sale of Goods Act, as were the two Law Commissions which considered this matter and reported in 1969. It is almost fair to say that few people are not of the opinion that it should not be possible to exempt contracts from the common law in the way the hon. Gentleman described.
    There are, however, some complications about it, because, although it is common ground that at least the consumer should be protected by it not being possible to exempt contracts from the common law and the Sale of Goods Act, there are difficulties to which attention was drawn by the Law Commission. First, should the exemption clauses purporting to exclude the Sale of Goods Act conditions be confined to consumer sales alone? That Act applies to all sales, and there is the question of commercial sales, sales at auctions and sales of second hand goods. There is also the question of whether the Act should apply automatically in all cases or whether it should be right to allow exemption clauses to apply.
    Further, there is considerable discussion and argument about what is the best way to amend the relevant sections of the 1893 Act, which are Sections 12 to 15. These deal with description, merchantable quality and reasonable fitness, and the issues here are not agreed. Indeed, on the question of the extension of exemptions to auction and commercial sales, the Law Commission was split equally, five members either way, showing that there are thorny problems surrounding this whole matter.
    It is not possible, therefore, simply to say that there should be legislation to protect the consumer from the Sale of Goods exemptions. We must legislate wholly or not at all in a matter of this sort. It would make no sense to provide now that Sections 12 to 15 should not be excluded without, at the same time, making whatever changes to those Sections as may be necessary to ensure that the rights that are conferred, and the

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    circumstances in which they are conferred, are expressed in terms appropriate to present-day needs. Indeed, in some respects such changes are an essential adjunct to non-exclusion.
    Nor can we make these changes without regard to the question of how, whether and to what extent exclusion is to be restricted in the case of consumer sales and auction sales. One has to be sure that the whole of the package is basically right before altering an Act which is, after all, at the heart of our civil law of contract.
    The hon. Member wants the Government to embark on a sort of propaganda campaign. He thinks that it is the Government's duty to inform the public of their legal rights. He has made a very good start himself this afternoon, and I hope that the public will hear something of what he has said, but I respectfully point out that it is really not the best thing to rely upon Government exhortations and publicity, which are much more likely to reach those who are aware of the law and who are in a knowledgeable position than they are to reach those who may be most likely to be ignorant of the law, and therefore most gullible on such a matter as this.
    Nor do I think that we can make very good progress simply by telling firms that they have, so to speak, to be good boys and to adopt the type of guarantee which the hon. Member commended. There are many reasons for saying this could be difficult. First of all, very often it is the manufacturer who issues the guarantee whereas it is from the retailer that the purchaser purchases the goods. There-
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    fore whatever pressure may be brought to bear upon manufacturers might well have no effect on the retailer, who is perfectly able to insert exclusion clauses in contracts which he makes with his customers. So the manufacturer's good intentions could be frustrated by his retailers.
    Secondly, I do not think that it would be right to pursue this question too far, because Government by exhortation, so to speak, always has the effect of persuading the honourable to change their ways but leaves the way open for the less honourable to continue what is, we all agree, an undesirable practice. I am sure that it is better to take action which is fair to all and which means that everyone has to do the same thing, otherwise unfair competitive advantages might be given to one group of people rather than to another.
    For these reasons I feel that not only would it be better to deal with the problem in the whole as I have described, but better to make the position entirely clear. Although it is taking time—and I apologise to the House because it is taking such a long time—we hope that one day we will be in a position to bring forward legislation to deal with the matter. What I can assure the House is that the problem is very much in the mind of the Government, and that they are anxious as anyone else to see that it is settled by sound reforming legislation, and as quickly as may be.
    Question put and agreed to.
    Adjourned accordingly at twenty-eight minutes past Four o'clock.