Commons Sitting of 30 March 1979

Preamble
The House met at Eleven o'clock

Preamble
PRAYERS
[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS
  GAIRLOCH PIER ORDER CONFIRMATION BILL
  Read the Third time and passed.
BILL PRESENTED
  REPRESENTATION OF THE PEOPLE BILL
  Mr. Secretary Rees, supported by Mr. Michael Foot, Mr. Secretary Morris, Mr. Secretary Shore, Mr. Joel Barnett, and Mr. Brynmor John, presented a Bill to facilitate polling on the same day at a general election and district council elections; and to postpone certain parish or community council elections: And the same was read the First time; and ordered to be read a Second time upon Monday next and to be printed. [Bill 131.]

  BUSINESS OF THE HOUSE
  Ordered,
  That, in the case of the Legal Aid Bill [Lords], the Pneumoconiosis etc. (Workers' Compensation) Bill, the Carriage by Air and Road Bill [Lords] or the Ancient Monuments and Archaeological Areas Bill [Lords], if a Bill be committed to a Committee of the whole House, further proceedings on that Bill shall stand postponed and that as soon as the proceedings on any Money Resolution come to by the House in relation to a Bill have been concluded, this House will immediately resolve itself into a Committee on that Bill.—[Mr. Foot.]
  Ordered,
  That in respect of the Representation of the People Bill, the Pneumoconiosis etc. (Workers' Compensation) Bill, the Carriage by Air and Road Bill [Lords] and the Ancient Monuments and Archaeological Areas Bill [Lords], notices of Amendments, New Clauses, and New Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Mr. Foot.]
  Ordered,
  That Standing Committee B be discharged from considering the Arbitration Bill [Lords], and that the Bill be committed to a Committee of the whole House.—[Mr. Foot.]
  Ordered,
  That Standing Committee A be discharged from considering the Leasehold Reform Bill, and that the Bill be committed to a Committee of the whole House.—[Mr. Foot.]

MERCHANT SHIPPING BILL
As amended (in the Standing Committee), considered.
Mr. Speaker: I should inform the House that I have accepted two manuscript amendments in the name of the Government.

MERCHANT SHIPPING BILL
  New Clause 3

    NAVIGATION ON RIVER THAMES
    'Any person holding a waterman's and lighterman's licence issued under the Port of London Watermen and Lightermen By-Laws 1965 or any amendment thereof should not lose any existing right.'.—[Mr. Alan Lee Williams.]
    Brought up, and read the First Time.
    11.9 a.m.
    Mr. Alan Lee Williams: I beg to move, That the clause be read a Second time.
    Mr. Speaker: With this we may discuss amendment No. 55, in schedule 2, at end insert
    "except where the ship is under the navigation of a person holding a waterman's licence issued under the Port of London Watermen and Lightermen By-Laws 1965 or any amendment thereof'.
    Mr. Williams: I should like to declare my interest. I am a freeman of the Company of Watermen and Lightermen. I am both a licensed waterman and a lighterman, though I have never worked as a waterman and I have no financial interest in this matter.

    771
    As the Minister knows, in Committee there was considerable discussion on the rights of watermen. An amendment was moved, and subsequently withdrawn. Because of the speed of events in the last few days we have to move amendments at short notice. I understand the pressures of the moment, and I shall be brief. Nevertheless, I am raising a point on which I want solid assurance. My hon. Friend the Member for Newham, South (Mr. Spearing) is of the same view.
    Watermen have certain pilotage rights which go back almost to Roman times. Those rights are enshrined in many statutes. In the nineteenth century there were more statutes and discussions in Parliament about the rights of watermen and lightermen than about any other group. I wish to maintain these ancient rights. It is not just a matter of sentiment, tradition or history; it is question of working watermen.
    As my hon. Friend the Minister will appreciate, at present about 700 men, freemen of the Company of Watermen and Lightermen, are working in one form or another as watermen. Some are dock pilots—sometimes nicknamed "mud pilots"—and some are simply men who are mooring or unmooring ships. In addition, a number of lightermen work in both roles—sometimes they are watermen and sometimes they work as lightermen.
    Traditionally the lightermen have manned the pleasure craft on the River Thames. A few years ago Trinity House, which is responsible for pilotage on the Thames, tried to assert its right to put pilots aboard pleasure boats on the Thames. Admittedly, that was back in the 1950s and that attempt was successfully resisted. Trinity House has not attempted to reassert its alleged rights in that direction.
    I wish to protect the right of watermen and lightermen without reservation. The Port of London Authority is responsible for licensing watermen and lightermen under a special arrangement with the Company of Watermen and Lightermen. The Authority is, therefore, responsible for the licensing of watermen who handle the ships going in and out of the enclosed docks in the Port of London.
    These men are highly qualified. There has always been a traditional argument
    772
    about the competence of the master mariners who are employed by Trinity House and the competence of the watermen. No serious doubt about the competence of watermen and lightermen has been raised by any shipowner. Many of the lightermen and watermen have served seven years, as I did. During that time one works exclusively on the Thames, and acquires a knowledge of the river from its landward limits to Teddington. One gets to know the river better than anyone else who uses the waterway.
    Until recently a number of ships went through the bridges delivering coal to the power stations. These were the so-called "flat irons". Watermen pilots navigated them through the trickiest parts of the Thames, through the bridges. They were highly qualified men. That is also true of the watermen who moor and unmoor ships. The training for those jobs used to take seven years. It now takes five years, because the school leaving age has been raised.
    One cannot argue about competence. The lightermen and watermen are as competent as the master mariners. I know that my hon. Friend the Under-Secretary of State for Trade appreciates that, because he has held a number of important meetings with the interested parties. I understand that he is sympathetic to the watermen and lightermen. That sympathy is recognised by the watermen and lightermen, who are not suspicious of him.
    Nevertheless, we are dealing with legislation, and the rights of watermen and lightermen should be enshrined in legislation so that they are totally protected. I understand that in the last few weeks there has been discussion between all the interested groups in the London Pilotage Committee. The watermen are not members of that committee, but I understand that the possibility of their inclusion is being discussed. The London Pilotage Committee is responsible for licensing pilots. It is connected to Trinity House.
    If certification is left to the London Pilotage Committee there may be an unfair weighting against the watermen. May we have an assurance that this deficiency will be removed?
    I move the new clause in a spirit which I hope will enable my hon. Friend to give a total assurance. There is no room for compromise. The rights of watermen

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    and lightermen must be completely protected under the Bill, so that the disputes that have gone on for too long between them and the Trinity House men are settled for ever.
    11.15 a.m.
    The Under-Secretary of State for Trade (Mr. Clinton Davis): The House is indebted to my hon. Friend for speaking with a personal authority, which is most useful. He speaks with passion and conviction about the role of his colleagues, the London watermen. I understand why he does not want the watermen to lose any existing rights as a result of the Bill. However, his new clause is unnecessary. There is nothing in the Bill that will cause the watermen to lose any existing rights.
    We have had many debates on this topic. My hon. Friend is worried about the way in which the Bill impinges upon the operation of passenger launches on the River Thames. Theoretically, the Bill could allow the local pilotage authority to bring passenger launches under compulsory pilotage. I have given extensive assurances that we shall not make an order or confirm byelaws which have that effect unless there is abundant evidence that the launches are being navigated unsafely. There is not a scintilla of evidence to suggest that.
    We have taken power to repeal section 32(2) of the Pilotage Act, which makes dock pilotage non-compulsory, but we have no intention of exercising that in London unless there is agreement between all the parties. I have said that to the parties concerned. Even if section 32(2) were repealed there would have to be a pilotage order to include the docks, and that would have to be agreed with the watermen. I stress the necessity for that consensus.
    I turn to the question of shifting work. The watermen can shift ships from berth to berth on the river under byelaws which are protected by section 32(1) of the Act. This is unchanged by the Bill.
    Not only is the new clause unnecessary; it is undesirable. It would entrench the right of watermen at the time when we are hoping that real progress can be made towards integration of the dock and river pilots on the Thames. That would be beneficial. It would be a major step towards solving the centuries-old conflict
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    between the two groups. I do not want to disrupt that progress.
    I held a meeting this week with all the pilotage interests on the Thames. There was some difficulty before the meeting. That was why I held the meeting under my chairmanship. We agreed to set up a liaison committee under the chairmanship of an official in my Department to examine how progress can be made towards ultimate integration. That is the right way to proceed. The inclusion of watermen on the London Pilotage Committee is on the agenda.
    I fully understand my hon. Friend's plea. Although I would not dream of saying this in many other respects, I think that I speak on behalf of all interests in the House when I say that nobody is prepared to allow the interests of the watermen to be set aside or to be unreason, ably prejudiced.
    Mr. David Hunt Mr. David Hunt (Wirral) indicated assent.
    Mr. Davis: I believe that the progress that we have made in the formation of the liaison committee represents a desirable move towards ensuring those objectives. I hope that in those circumstances my hon. Friend will not press the matter.
    Mr. Nigel Spearing: The House will be obliged to my hon. Friend the Minister for the way in which he has responded to the points raised by my hon. Friend the Member for Horn-church (Mr. Williams). Unlike my hon. Friend the Member for Hornchurch I do not have a professional background in this matter, but my constituency includes the Royal group of docks and the headquarters of an organisation called Transport on the Water, which champions the cause of water transport.
    I am grateful for what my hon. Friend the Under-Secretary said, but will he reply to two further points? I do not think that he referred to amendment No. 55, which is being discussed with the clause, which adds the words
    'except where the ship is under the navigation of a person holding a waterman's licence issued under the Port of London Watermen and Lightermen By-Laws 1965 or any amendment thereof'.
    My hon. Friend said that the new clause was unnecessary. What is his view of the amendment?

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    I wholeheartedly agree with him that the establishment of the liaison committee may well go a long way to resolving the difficulties. It would be wrong for the House to be under illusions as to the difficulties that now arise, however. With fewer and bigger ships coming into ports, and with the reduction in the number of up-river vessels, there is perhaps less scope now for pilotage. In these circumstances, as is always the case with a reduction of employment opportunity, the pressures are greater than they would otherwise be.
    In giving his verbal assurances my hon. Friend the Under-Secretary said that the agreement of the watermen would be required, or would be obtained before any change was made. He has not, however, given any assurance about their representation on the London Pilotage Committee. It was set up about a year ago and is the local pilotage authority under the 1913 Act. It consists of three elder brethren from Trinity House, one representative from the Port of London Authority, one from the Medway Port Authority, one from Harwich, five ship owners and five pilots.
    If my hon. Friend is so optimistic—I should like to share his optimism—that the interests of watermen will be safeguarded, would it not be useful, if he cannot give an absolute assurance, to say that it would be right and proper for the watermen to have at least one representative on that committee? This is particularly important since its functions will be entrenched and perhaps made more important by the enactment of the Bill.
    I hope that my words will not only reinforce the comments of my hon. Friend the Member for Hornchurch but will impress upon the Under-Secretary that there needs to be some deed as well as some word if the full and ancient rights of the watermen and lightermen of the River Thames are to be protected.
    Mr. Clinton Davis: It would be wrong for me to pre-empt the considerations of the liaison committee on the future position of the watermen. However, it has been agreed in the memorandum of understanding, which was reached some months ago, that once concrete progress was made towards the integration of these services, the watermen should be represented on the London Pilotage Commit-
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    tee. That is spelt out in the memorandum.
    I have been considering in detail the other matter to which my hon. Friend the Member for Newham, South (Mr. Spearing) referred. I do not think the amendment is necessary to safeguard the watermen's position, for the reasons that I have adduced. Section 32 (2), in effect, says that pilotage is not compulsory within an enclosed dock, but in addition to that the docks and other closed works are excluded entirely from the London pilotage district by the terms of the pilotage order for London. So before the docks could be brought into the pilotage system a new pilotage order would have to be promoted. The Department is already committed in the memorandum of understanding—a tripartite memorandum involving the London Pilotage Committee, the watermen's representatives and the Department—not to make an order which has the effect of integrating the watermen and the pilot services unless that has been agreed in advance by the parties.
    I think that that should satisfy my hon. Friend's requirement in this regard.
    Mr. Alan Lee Williams: With the leave of the House I shall reply to the debate. In view of the assurances given by my hon. Friend the Under-Secretary, which confirm my understanding of the memorandum of understanding, I am satisfied that the watermen will receive the necessary protection required. I wish to remind my hon. Friend that this matter has considerable support on the Opposition Benches, and in that respect I congratulate the hon. Member for Wirral (Mr. Hunt) for speaking about it in Committee. My hon. Friend should therefore bear in mind that this issue is broadly accepted on both sides of the House. I am grateful that he has accepted the spirit of the clause, and in view of that I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

  New Clause 4

    AMENDMENT OF S. 634 OF MERCHANT SHIPPING ACT 1894
    'In section 634 of the Merchant Shipping Act 1894 (which provides for superintendance and

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    management of the aids to navigation) the following subsection shall be inserted: —
    "Notwithstanding anything to the contrary in this Act, any person or body of persons responsible for the operation of an offshore structure within the prescribed limits, shall be deemed to be a local lighthouse authority having authority over all lighthouses, buoys and beacons, maintained on or positioned so as to mark any part of a structure or its associated works except for any lighthouse, buoy or beacon which a General Lighthouse Authority maintains.".'.—[Mr. Ridsdale.]
    Brought up, and read the First time.
    Mr. Julian Ridsdale: I beg to move, That the clause be read a Second time.
    I wish here to pay tribute to my hon. Friend the Member for Wirral (Mr. Hunt), who led our side in the Committee stage on the Bill and who proposed this new clause at that time.
    It is a technical clause. It relates to radio aids. The general lighthouse authorities have made an excellent contribution to international thinking on electronic aids for the mariner. If responsibility for electronic aids is rested with the GLAs, as the legislation always intended, the mariner and not the taxpayer will pay for them. That will be generally acceptable these days, when people feel that no further burden should be put on the taxpayer.
    As my hon. Friend the Member for Wirral said in Committee, it is not proposed that the GLAs should take over all functions currently carried out by the Government in respect of navigational aids. The proposal applies only to those directly concerning the mariner. That would include the siting of transmitters, the receiving of information concerning interruptions and inaccuracies and informing users of them, contributing, with the Admiralty Surface Weapons Establishment, to monitoring devices, and the approval, with the Home Office, of navigation and other matters.
    Mr. David Hunt: I wish to support my hon. Friend the Member for Harwich (Mr. Ridsdale), and in doing so to congratulate him on once more raising this matter which is of considerable importance to Trinity House. Let me pay a compliment to him, as I did in Committee, for so eloquently and effectively representing the case of Trinity House. It is a fine, great national institution, which
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    has always had as its primary objective the safety of the public and of the mariner. Therefore anything that it has to say, even on this technical matter, must be very carefully considered. That is why we proposed this clause in Committee and why we once more support it.
    There is no doubt that the 1894 Act, and section 742 in particular, has not stood the test of time and that there is need to amend it to ensure that it is brought up to date. With those few words, I strongly support my hon. Friend.
    11.30 a.m.
    Mr. Clinton Davis: This matter was examined with fairly close scrutiny in Committee. I explained then why I felt that there was no need—indeed, I thought it undesirable—for the general lighthouse authorities to be local lighthouse authorities. I said that this was a matter of protection of the general lighthouse fund, for which my Department is responsible and which is financed by ship owners. My Department and the General Council of British Shipping are satisfied that there is in practice no threat to the fund in the present situation.
    What is the problem? There is a fear that the general lighthouse authorities are not sufficiently able to carry out their superintendence and management duties in relation to offshore structures, and they might therefore, they say, be held liable if an accident occurred due to a defective light. But there are ample arrangements already for inspecting the light on offshore structures—I have set them out before and I need not rehearse them now—and to have additional inspections by the GLAs would merely duplicate arrangements and would, I think, be entirely superfluous.
    In these circumstances, I hope that the hon. Member for Harwich (Mr. Ridsdale) will be prepared to ask leave to withdraw his new clause. However, I think that it may be helpful—I suggest this, although you have not grouped my manuscript amendment for debate at the same time, Mr. Deputy Speaker—if I add a few words at this point. It may shorten the debate dater.
    The manuscript amendment that I shall seek to move later would, in effect, give the Secretary of State power, by order, subject to the affirmative procedure, to extend the jurisdiction of the general

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    lighthouse authorities over new navigational devices. At present, the GLAs have vested in them the superintendence of lighthouses, buoys and beacons. The definition of buoys and beacons already goes very wide, but it does not necessarily cover the most modern area coverage aids to navigation and is unlikely to cover completely new devices.
    I said in Committee that we did not believe that the GLAs should have responsibility for hyperbolic aids, such as Decca. The ship owners share that view, which I still maintain. But the general lighthouse authorities believe—I have some sympathy with this—that they should not be wholly deprived of the opportunity to participate in the forefront of new technology on navigational aids. The amendment which I shall move will allow each case to be considered on its merits. The House will have a role to play, and obviously no order could be made or would be made without extensive prior consultation with ship owners, the GLAs themselves and any other interested parties.
    I hope that, against that backcloth, the hon. Member for Harwich—I recognise that he is rightly concerned about the matter and has, I think, some personal expertise—will think it appropriate to ask leave to withdraw his new clause.
    Mr. Ridsdale: In view of the Minister's comments and explanation, together with his foreshadowing of the manuscript amendment to be moved later, I beg to ask leave to withdraw the motion.
    Motion, and clause, by leave, withdrawn

  Clause 1

    CONSTITUTION OF COMMISSION
    Mr. Ian Lloyd: I beg to move amendment No. 1, in page 1, line 6, leave out from beginning to the end of line 31 on page 15.
    Mr. Deputy Speaker: With this we may consider amendment No. 43, in schedule 1, page 58, line 2, leave out from beginning to the end of line 25 on page 65.
    Mr. Lloyd: Until a moment ago, it was not clear to me that my amendment
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    was to be called, and I am glad to find that it has been. Perhaps I may start by referring to my interest in this matter. In the past when speaking on shipping matters, I have always found it necessary and wise to declare an interest, and on this occasion, too, I declare the same interest though I think that it will soon become clear that I am not speaking in any sense on behalf of or defending the interests which I happen to have in the shipping industry.
    Second, I feel that I should at the outset say whether I have any competence to speak on questions of pilotage. I fear that my competence is very limited. My most professional experience of Pilotage is as a pilot of aircraft, not of ships, although I suppose that, as the owner of small craft. I have piloted small craft into more ports and harbours in the United Kingdom than have probably quite a number of professional pilots who have piloted vessels year in and year out into two or three particular ports and harbours. Perhaps I have some slightly exceptional personal knowledge of what I am talking about in that context.
    However, my purpose in moving the amendment is to refer to what I can only describe as the ominous opening sentence of clause 1, and all my amendments would, of course, turn on the question whether clause 1 was accepted ultimately as part of the Bill. Clause 1 (1) provides that
    "There shall be a body corporate, to be called the Pilotage Commission."
    It is to that proposal that I shall direct most of my remarks.
    In his interesting contributions to the debate in Committee, my hon. Friend the Member for Wirral (Mr. Hunt) pointed out that there have been two previous occasions when the House of Commons was asked to establish a corporate body in this field. They were interesting occasions. The first was in 1836, and that failed. The second was in 1911, and that also failed, although it took a few years to do so. Today, we are asked to consider this proposal again in what I am sure will be regarded as quite exceptional parliamentary circumstances.
    The objects of the corporate body, as I understand them, are essentially to give advice. One is not told a great deal about the sources or directions of that

    781
    advice, but the questions to which I particularly address myself are these. First, does such a body exist already? Second, is its advice freely available? Third, is its advice qualitatively deficient in any sense? Fourth, is it based on representative experience?
    I believe that those questions should have been asked much more rigorously than they appear to have been in the Standing Committee.
    My hon. Friend the Member for Wirral said—I was interested to hear it, because I strongly agree—that he had a natural reluctance to counternance the establishment of further quangos, and he coined the expression "quasi-quango". I should not describe this organisation as a quango. I should describe it—if I may coin the term—as a "quago", a quasi-autonomous governmental organisation, which is a slightly different thing. But its parentage is somewhat dubious. One could describe it as being by ACOP, the Advisory Committee on Pilotage, out of SCOP, the Steering Committee on Pilotage.
    I should regard that, as I say, as a somewhat dubious parentage. It was, I think, once said of the Duchess of Buckingham that she was the natural daughter of the wife of James II, who was herself the natural daughter of someone else—a somewhat unnatural succession of events. But this proposal in the Bill seems to be even more unnatural in many ways.
    My hon. Friend went on to say—I fear that this is where I must take issue with him on an important aspect—that the proposal came with the blessing of the industry, albeit reluctant in some quarters. This is one of the reasons why I suspect the Bill's parentage, by ACOP out of SCOP and with the blessing of both Front Benches.
    My second reason for doubt is that I regard this as something of a "Q" Bill. Like a Q ship, it slips through unseen in the dead of night, and a Friday morning immediately before a Dissolution and general election I regard as being precisely the equivalent of dead of night. Once on the statute book, this apparently innocuous measure, this measure which is said to have the agreement of so many people in so many parts of the country, will be found to be as deadly as a Q ship
    782
    and, when the sides drop down, its full armament will be revealed.
    I turn immediately to the question of reluctant blessing. When these proposals were first announced, Trinity House was reported as follows:
    "Costly, largely unwelcome, and unnecessary—that is how Trinity House views plans for a Central Pilotage Board for Britain."
    The report in the press cutting that I have here went on to say that
    "emphasis is placed, in our view incorrectly, on the unanimity of the report and it is stated that its recommendations are substantially agreed by the Government, with only minor reservations."
    It went on to report Sir David Tibbits, the most recently retired deputy master of Trinity House. In a letter to me Sir David stated:
    "I think the first paper explains pretty well the problems which we have had. You could not know, however, the conditions under which the Steering Committee on Pilotage were set up. Pilotage has always been a controversial and difficult subject because there are so few marine pilots relatively (between 1600 and 1700) and every one of them is an individualist otherwise he would not be a pilot in the first place. The role of the Pilotage Authority, whether Trinity House or the many others in the big ports around the coast, is that of administrator, always under pressure from the four vested interests in marine pilotage. These are respectively the ship owner, the ship's master (whose responsibilities are not necessarily the same as his owner's, although this requires explanation); the port authority: and finally the pilots. I always sum this up by saying that if all four are satisfied, and are complaining about the Pilotage Authority"
    —there was a great deal of evidence of that in Committee—
    "all is well and running smoothly. As soon as any of the protagonists run into difficulties, they then gang up if they can, with the Pilotage Authority for help in dealing with the other three, or two, whatever the case may be."
    In the same letter he stated that
    "One last point which we find most unsatisfactory is the claim on the part of the Minister of State … that the SCOP report was unanimous. This is not true, although we all signed it, some of us under protest. Many of the members of the SCOP committee signed as individuals and in no way committed their authorities. This particularly applied to Trinity House, the United Kingdom Pilots Association and the General Council of British Shipping. We were informed that our organisations would have two months in which to state any views that they might have on the SCOP report and that they would be taken into account when proposing the views on marine pilotage. This was in the Secretary of State's preamble but has never been acknowledged, nor have the

    783
    letters which we have all written been answered. The Honourable Company of Master Mariners, who were not signatories, are particularly incensed that their own representation has been ignored. For this reason alone, I trust that any effort to slide through pilotage legislation, possibly attached to a merchant shipping Bill, should be contested if possible."
    I regard that as damning evidence.
    Mr. Robert Adley: Will my hon. Friend tell us the date of that letter?
    Mr. Lloyd: Yes, March 1976.
    I give another example of the attitude of those who are likely to be affected. I shall not name the individual concerned, as I consider that it would not be fair to do so. However, he is a senior marine superintendent. He states:
    "Whilst Trinity House and the Elder Brothers are essentially benevolent they are not good at public relations."
    We know that. He continues:
    "This may be due to the fact that the Elder Brothers, which are the Board, are either senior naval officers or masters from the Merchant Navy.
    Technically this is excellent, but they tend to paint a rather autocratic picture. These are not autocratic times and many practical people connected with the sea and ports consider that to keep abreast of the times it would be better if the Board of Trinity House was reconstituted on a wider base to include capable persons from other walks of life.
    To sum up. I do not think Trinity House as constituted would be acceptable as a national pilotage authority but reconstituted on more democratic lines could be a sensible compromise."
    That, as most of us know, is precisely what Trinity House endeavoured to do when it set up its own advisory committee to provide all concerned with the advice that the new centralised State organisation is supposed to give.
    11.45 a.m.
    I quote another source, which is equally authoritative and which I think the House should hear. It was written after Trinity House had proposed its new committee. The letter reads:
    "Thank you for this most interesting paper; I am glad to see that Trinity House has taken such a positive step. Generally speaking, I am in total agreement with all that they write. On grounds of economy and efficiency the introduction of a national body would be a retrograde step. All pilotage authorities demand a degree of local administration (utilising persons with a firm knowledge of the
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    local conditions etc.) and the Sub-Commissioners of Pilotage attached to Trinity House are ideal in this respect."
    The letter goes on to suggest that
    "it would be inappropriate for this Commission to have executive or legislative powers—it should be purely advisory."
    To that extent, and to that extent only, a condition has been met.
    My hon. Friend the Member for Christ-church and Lymington (Mr. Adley) asked for the date of the letter written by the most recently retired deputy master of Trinity House. I shall now quote from the Deputy Master of Trinity House, whom I telephoned last night to discuss this issue. The deputy master expressed to me last night his continuing concern about pilotage measures. In a document produced not long ago he stated:
    "In this way, we believe, that by co-ordination"
    —he is referring to the Trinity House proposal—
    "with the Department of Trade, the Trinity House Pilotage Advisory Board could achieve the primary objectives of the SCOP report while maintaining our usual Trinity House open door policy' on personal matters.
    This approach is most desirable in dealing with specialist marine pilots who shoulder great responsibility and who do a job of work under often very trying conditions, with a record of safety and service second to none. Their self-employed status must be respected. The Advisory Board will not supplant local pilotage sub-commissions or interfere with the valuable contribution they make to day-today running of pilotage services.
    In summary, by making this initiative, we in Trinity House wish to avoid a costly, largely unwelcome and unnecessary upheaval of setting up a Central Pilotage Authority as recommended by SCOP, with the inevitable added bureaucracy that would go with it So often these days we see bureaucracy take the reigns and lose the common touch. Let us have no 'Folly at the helm and wisdom under the hatches' where marine pilotage is concerned."
    We have seen a certain amount of folly at the helm, and perhaps too little wisdom under the hatches.
    Mr. Arthur Blenkinsop: Is the hon. Gentleman aware that many of us on both sides of the House have met Trinity House representatives and have had discussions with them? They have submitted papers and various proposals. None of them has suggested the root and branch alteration and opposition that the hon. Gentleman is advancing.
    Mr. Lloyd: I am interested to hear the hon. Gentleman say that. I have recited what I have been told as recently as last night. I have referred to the information and written comments that I have had in my file for some time. I shall be interested to know whether the situation has changed so dramatically that the organisations involved are no longer in opposition. However, if that were the position, my own opposition would not be diminished, for the reasons that I am about to put before the House.
    Mr. Ridsdale: I have had close conversations with Trinity House representatives and with the pilots. In my opinion, which is based on the conversations that I have had, my hon. Friend is putting a slant on these matters, which he is using for his own argument and which is not the fact.
    Mr. Lloyd: Naturally I pay attention to what my hon. Friend says. I spent most of the night reading most of the reports of the proceedings in Committee. I have read the full debate on the subject. Despite what my hon. Friend says, I am not moved from my opposition to the proposal to set up a completely new centralised Government organisation to do something which for centuries has been most adequately done by Trinity House. That is a proposal that I am not prepared to support. I shall develop that argument in relation to clause 1 and the rest of my amendments.
    Mr. Deputy Speaker: The House has before it amendments Nos. 1 and 43. Did the hon. Gentleman refer to new clauses?
    Mr. Lloyd: No. In speaking to my amendment, I am proposing that the clause should not stand part of the Bill. I think that that is an argument that I am entitled to deploy.
    Mr. Deputy Speaker: Yes.
    Mr. Lloyd: It seems that every quango, every nationalised industry and every State body corporate is supposed to have proper safeguards and a proper balance. Safeguards and balance are supposed to be the main objectives of the new body. That is dubious in two respects.
    I do not think that safeguards and balance are necessarily undesirable objectives. They are obviously desirable
    786
    in almost any form of organisation. However, there is no evidence that the safeguards, balance and representation already provided in the institutions and machinery of Trinity House—an organisation about which I have seldom, if ever, heard any substantial or serious criticism—would necessarily be improved merely by establishing a central Government organisation.
    I turn specifically to the question of Trinity House. I regard this as a wholly successful and efficient private organisation. There is no doubt of that. Let us look at its history. I do not want to extend this too far. Many hon. Members will remember that a very great parliamentarian, the late Sir Winston Churchill, addressed the Elder Brethren of Trinity House on important occasions during the war. It seems that this organisation reflects the best of British tradition. It is representative, authoritative and non-subsidised. It carries out its purposes and functions in a wholly pragmatic way. It deals with the problems of pilotage and has done so for four and a half centuries without any difficulty and with great success. Despite this, we propose in the Bill a modification of this organisation—almost as if to say that if we cannot compete with it, we must legislate.
    For these reasons, we should reject clauses 1 to 13. The argument is not that some should be represented on Trinity House—I understand that—but that Trinity House should be represented. The words "properly represented" do not enhance the objective of this new centralised Government organisation. My hon. Friend the Member for Harwich (Mr. Ridsdale) said in Committee that we must be careful not to create a body with extensive powers. It seems to me that we have done just that. He said, in an interesting speech with which I agreed, that we must beware of centralising. But what is that if it is not a centralised body? He said—and I agree entirely—that the whole objective was to ensure the safety of navigation.
    That brings me to a central point. What evidence do we have of a serious deficiency in the safety of navigation which is due to the failure of the present pilotage authorities—either Trinity House or the autonomous pilotage authorities—to perfom their duties properly?

    787
    There have been navigational disasters which were wholly associated with the vast increase in the amount of shipping, much of it oil. However, I do not believe that there is any direct or specific proof of correlation between what may be an increase in navigational disasters and the deficiences of those bodies presently responsible for them. What evidence is there that this is attributable directly to pilotage authorities? I believe there to be none.
    My hon. Friend the Member for Tyne-mouth (Mr. Trotter), in an equally interesting speech, said that the House had not been involved in this matter for 60 years. I was delighted to hear that. I hope that this House will not be involved in the matter for another 60 years. In the present organisation of Trinity House and pilotage in this country, we have wholly adequate and successful organisations. We do not need backdoor nationalisation of pilotage. We do not need a Bill of this kind to be rushed through today. Although it may have been discussed in detail upstairs, there is unlikely to be the opportunity for the full discussion that it deserves downstairs.
    My hon. Friend the Member for Essex, South-East (Sir B. Braine) said that the Committee was there to voice the public interest. So is the House. The public interest now suggests that the move towards more collectivism, centralism, Government organisation and public expenditure is something from which the people of this country now wish to retreat. I may have to qualify that judgment in four weeks' time, but that is my judgment at the moment. If that be true, is this the time, the occasion and the purpose when we should continue this move towards Government organisation, more public expenditure, more centralism and quangos? My view is that this is not the occasion.
    Mr. David Hunt: I am grateful to my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd) for raising the issue of pilotage. Undoubtedly, he feels strongly on this matter. It is better that he expresses those views in the debate so that we may take account of them and seek to answer them. We are well
    788
    aware of his expertise in the matter. I agree with him that Trinity House represents the best of British tradition. It is composed of men of great experience and expertise who perform an unpaid, vital task for the country. In agreeing with him on those matters, I point out that Trinity House has, in my hon. Friend the Member for Harwich (Mr. Ridsdale), a fine exponent and advocate in Committee. We spent eight morning sittings in Standing Committee going through the pilotage provisions line by line with constant contributions from my hon. Friend, who sought to ensure that the Committee was aware of the vital role that Trinity House played. May I reply briefly to some of the points made by my hon. Friend?
    My hon. Friend the Member for Havant and Waterloo referred to substantial objections that Trinity House put forward to the SCOP report. We are dealing with a situation that goes back a long way. My hon. Friend the Member for Henley (Mr. Heseltine) set up the SCOP committee in September 1973. Since then there has been the most extensive debate on these important issues on both sides of the House. The SCOP report was greeted with some hostility. Mr. David Tibbits signed the SCOP report. Nevertheless, there was a great deal of indignation about its provisions. Those were strongly taken into account. I assure my hon. Friend that if we were dealing with pilotage provisions based on the SCOP report they would not be greeted with approval by the Opposition. Neither, I imagine, would they be met with approval by Government supporters. What happened then was that the ACOP committee sat. I do not think that my hon. Friend paid sufficient tribute to the work of Captain Mason, the elder brother of Trinity House, who sat on the ACOP committee and put forward strongly the views represented by my hon. Friend this morning.
    Eventually, we were presented with pilotage provisions based on the ACOP report. We have taken immense trouble—that is recognised by Trinity House—to consult Trinity House on every possible occasion. We have had tremendous help over the past few months, especially from the deputy master, who came to the

    789
    House to address a meeting of the Conservative shipping committee. I cannot remember whether my hon. Friend was present on that occasion. He dealt convincingly with the major point of difficulty, the advisory nature of the commission. We argued that we saw this commission as an advisory body. Unfortunately, our amendments were defeated in Committee. However, I hope that it will be the next Conservative Government who will administer and set up the commission. Indeed, the matter is still in the hands of Parliament under clause 4(2), which lays down the further functions given to the Pilotage Commission.
    Mr. Ian Lloyd: What advice, quantitative or qualitative, can the Pilotage Commission give—either to the Secretary of State or any other interested party—that is not already available in superb quality from Trinity House?
    Mr. Hunt: My hon. Friend should not get the impression that it is Trinity House versus the Pilotage Commission. The continuing expertise of Trinity House will be available through the commission, but it will be joined by other important elements in the shipping industry in combining to give that advice. That is surely the most important point. I hope that Trinity House will be playing the most important part within the new commission.
    12 noon
    During the extensive consultations that we have had, it has never on any occasion—this was reinforced by my hon. Friend the Member for Harwich—been put to us that Trinity House wishes to oppose this part of the Bill. Indeed, I spoke to the deputy master yesterday—albeit at an earlier hour than my hon. Friend—and he made very clear to me that the last intention of Trinity House was to sabotage the provisions of the Bill.
    There are 12 fears which have been put to us by Trinity House, and I have had a number of meetings since we finished the Committee stage on 15 March. I have answered some of those. The deputy master believes that I have, and he has confirmed it. Much will depend on the way in which the commission is set up.
    Although my hon. Friend may decry the consensus, there is no doubt—this
    790
    has been made quite clear by the United Kingdom Pilots Association and by the pilots themselves—that this is a package deal which has been agreed to unanimously by all members of the Advisory Committee on Pilotage, including Captain Mason. I pay tribute to the members of ACOP and, indeed, to SCOP for the very effective work they did. I also pay tribute to Trinity House and to the General Council of British Shipping, the Association of Pilotage Authorities, the British Ports Association and the unions, including the Transport and General Workers Union, the Merchant Navy and Airline Officers' Association, the pilots' organisations and all the smaller groups which have been discussing this matter with us. This package deal was agreed by that Committee, composed of shipowners, pilots, pilotage authorities and ports.
    Mr. Ian Lloyd: My hon. Friend referred to the conversations that we both had with Captain Wingate. It was made very clear to me by Captain Wingate that he has no wish or intention to sabotage the whole Bill, and neither have I, but it was made abundantly clear that he would welcome any move to delete the pilotage clauses. I am sure that he would confirm that. As for package deals, obviously all these issues represent compromises between various interests. It is always so. But within the total package I would like to think that there was sometimes a greater recognition of one organisation that is never represented when package deals are concluded, and that is the public interest.
    Mr. Hunt: I hope that we have always had the public interest in mind when we have been considering the setting up of the commission. I am sure that, on reflection, my hon. Friend would recognise that, in particular, as he has read the proceedings in Committee. I would, however, like to support him on one matter, and we made this point in Committee. We would have much preferred to see a separate pilotage Bill. I have always felt—and I have made this point several times to the Minister—that it would have been far better to amend the Merchant Shipping Act 1911 by a separate pilotage Bill, but it must be recognised that we have been considering this matter since at least 1973. We have a consensus now and we must be very

    791
    careful not to lose it, because it is a vital consensus.
    I am sure that this is not the last occasion on which we shall be discussing pilotage, because we now have a number of things to do over the establishment of the commission as soon as the new Parliament is convened. I have expressed the view that we need a consolidating pilotage Bill. Some of the provisions have been rather piecemeal and I would like to see an opportunity provided to discuss a new consolidating Bill at an early opportunity. I understand that work is going ahead on that at the moment.
    I hope that my hon. Friend will accept from me—and from my hon. Friend the Member for Harwich, who intervened—that at no stage has Trinity House wished us to remove clauses 1 to 13. That has never been communicated to me. I am sure that, on reflection, nobody would put that forward, for we should then lose what I believe to be a vital consensus, which not only has the interests of the industry at heart but also has the interests of the public and the safety of mariners paramount in it.
    Mr. Clinton Davis: The hon. Member for Havant and Waterloo (Mr. Lloyd)—in the days when I was in that area the constituency was called Portsmouth, Lang-stone—has made a very robust attack on the whole concept which has been supported basically by each side of the House and by the industry as a whole. I was referring previously to hyperbolic aids. The hon. Gentleman seems to think that he can use hyperbole to aid his argument, and that is what has happened throughout.
    There has been a tremendous measure of development since the SCOP report. We have had the ACOP report. I join the hon. Member for Wirral (Mr. Hunt) in the praise he offered to the members of each committee. They performed an invaluable service in scrutinising, with the greatest possible care, all the arguments which have to be adduced in this important area. I do not think that the hon. Member for Havant and Waterloo gave proper credit to those who were involved and provided this invaluable service, nor do I think, with respect—perhaps this is an inappropriate time at which to say it—that he paid proper
    792
    credit to his hon. Friend the Member for Wirral, who led the Conservative side on this matter with some considerable distinction, if I may say so. He scrutinised these matters and gave them careful consideration. It is quite wrong to suggest that the Committee bypassed this matter and did not give it the consideration it deserved.
    There is a history now of years of consideration. The hon. Member for Havant and Waterloo exaggerated the position; in fact, so much so that he destroyed his own case. I will put one question back to the hon. Gentleman. Against that background of consideration, does he think that there is unanimity for the view that the status quo should be supported? That is a question to which he did not address his mind. I can tell him that there would be no unanimity for that. That, in my view, is a conclusive argument against his denunciation of the considerations which have been given to this matter.
    Mr. Ian Lloyd: I was not suggesting for one moment that there was unanimity for the proposition that the status quo should be maintained. What I suggest is that a combination of organisations, Trinity House and the other pilotage authorities, which over a period of four and half centuries have managed to deal with the evolving status quo, are quite capable of doing so again without its being necessary to establish a new governmental organisation.
    Mr. Davis: There is a need, however, to enrich advice from time to time, to expand on it, and to benefit from the help of others who have a contribution to make. I do not believe that there is a monopoly of wisdom in this regard or, indeed, in any other field that one cares to name, whether it is politics, the law or anything else. That is the point that the hon. Gentleman singularly fails to acknowledge.
    This is not a quango, either. My hon. Friend the Member for St. Ives (Mr. Nott) said clearly on Second Reading that this is not a quango. This is an organisation which is supported financially by the shipping industry. I shall not go into all the ridiculous arguments about dubious parentage and all that stuff. The hon. Member for Havant and Waterloo can, if he wishes, buttress his arguments in

    793
    that way. There is no great bureaucracy here. We are talking about a membership of a maximum of 15, including the chairman. What huge bureaucracy is that? The industry is prepared to bear that.
    I believe that the sort of precedent that was established through the composition of ACOP—well-balanced geograpically, well-balanced in its composition in terms of membership, and well-balanced in the wide variety of types of pilotage organisation represented there—constitutes a useful precedent on which we can now build.
    I make no criticisms of Trinity House, but there is a time when we have to change and enlarge our experience. It was not possible to satisfy everybody—of course it was not.
    As the hon. Member for Wirral said, this is not a package deal. What the provisions do is modernise pilotage, provide for self-regulation of the industry, greatly improve our compulsory pilotage arrangements, and set up a new well-informed body to advise all interests on further modernisation of the industry. As a result, I believe that this will contribute massively to safety around our coasts. I believe that the credibility, which will depend upon retaining a consensus for this Pilotage Commission, will enable the Pilotage Commission to establish itself as an authority that will not fail because of the rather dubious precedents that the hon. Member for Wirral brought into aid. As I have said before, this will be a very real contribution to the objectives that I imagine the overwhelming number of hon. Members wish to see achieved.
    Amendment negatived.
    Mr. Stephen Ross: I beg to move amendment No. 2, in page 1, line 13, after 'pilots', insert
    '(who shall occupy at least six places on the Commission);'.
    I do not wish to hold up the Bill any longer than necessary, because I accept that all sections of the industry wish to see it enacted and on the statute book before this Parliament dissolves. However, it is the duty of hon. Members at least to take note of the further representations received from pilots. I am particularly concerned with that, because I have a number of pilots in my constituency.
    794
    I read the report of the Standing Committee and I should like to remind the Minister that towards the end of that debate he said that he did not want to hasten into any ill-considered draft clauses, that this was a matter that could be dealt with on Report, and there would be time to deal with it. Those were his words.
    I realise that there is not much time left but I also realise that there was general agreement on both sides of the Committee that there certainly should be a substantial pilotage representation on the commission. I believe that the figure of three was agreed to be too low and an amendment was put forward in which the figures of 5 and 7 were mentioned. It was said that 7 was too high and 5 was too low. I have suggested the figure of 6, and all I can ask—and I ask both Front Benches to consider this—is whether the Minister and the Opposition spokesman can give an undertaking to pilots this afternoon that a figure of 6, as I have suggested, is in the mind of both parties, whoever actually implements the Bill.
    Mr. Clinton Davis: The objectives of the Pilotage Commission, as distinct from local pilotage committees, will be of a wide-ranging nature, reflecting the broad, national pilotage interests. It is right, therefore, that the membership of the commission should reflect the varying interests that will define objectives. There must be a balance. I spoke about that in the last debate. I also spoke of the geographical balance that needs to be maintained. However, the balance must enable the wide-ranging interests of the industry as a whole to be reflected.
    In Committee I quoted ACOP as an example that could be built on in this respect. What it did was to have an independent chairman, four pilot members, three ship owners, three from the ports—one of whom is also chairman of the local pilotage committee—and two from pilotage authorities. What happened was that a slight edge was given to the pilots because of that composition. I believe that that was right. However, I believe that six pilot members would be too many. I think that it would unbalance the commission. Moreover, it would be difficult to achieve the delicate

    795
    numerical balance that would be necessary for the commission, bearing in mind the criteria to which I have already referred.
    12.15 p.m.
    I therefore firmly resisted defining precise numbers for the representation of each interest, because it would remove the degree of flexibility that is needed to attain the balances of which I have spoken. I say to the hon. Member for Isle of Wight (Mr. Ross) that I believe that that view is still correct. If we unbalanced it in the way suggested by the hon. Member, there would be considerable pressure to make the Commission a much more bureaucratic organisation, with a larger membership. I hope that the hon. Member accepts that the ACOP precedent is one that it would be right to build on.
    At this juncture, it would be quite wrong for me to appoint the chairman of the Pilotage Commission. If Parliament had sat for several more months, one would, of course, have been under a duty to do that, but I believe that it is wrong to do that, because we must not pre-empt the role of the next Labour Government and the next Labour Minister in this matter.
    Mr. Adley: We cannot wait for the next 20 years.
    Mr. Davis: No, no—just four weeks. Having said that, I hope that the hon. Member for Isle of Wight will think that the arguments that I have adduced are sufficient to urge him to ask leave to withdrew the amendment.
    Mr. Blenkinsop: I want to intervene only very briefly, because I raised this matter in Committee. Like the hon. Member for Isle of Wight (Mr. Ross), I am concerned about the position of pilots. I believe that all of us felt that three was too few on the ground of trying to ensure geographical representation. This was the issue that many pilots put to me very strongly indeed. If we can be assured that the number will be more than three, we can accept the position as it stands in the Bill.
    Mr. David Hunt: I believe that I had a question addressed directly to me by the hon. Member for Isle of Wight (Mr.
    796
    Ross). I should just like him to know that I wish we had the benefit of his experience on the Committee, because I am aware of his expertise in these matters, and also because we would have defeated clause 31 had he been present at an earlier stage.
    I know the arguments put forward extremely cogently by the hon. Member for South Shields (Mr. Blenkinsop) in Committee. I also pay tribute again to my hon. Friend the Member for Harwich (Mr. Ridsdale), who has put considerable pressure on me on this topic. I cannot possibly bind my future hon. Friend the Minister who will be implementing these provisions. Without that commitment, I can say that we realise the vital importance of ensuring that pilotage interests are substantially safeguarded.
    Mr. Stephen Ross: I do not wish to hold up the proceedings one minute longer. We heard the earlier remarks of the hon. Member for Havant and Waterloo (Mr. Lloyd) about the role of Trinity House. In my speech during Second Reading—I know the hon. Member for Harwich (Mr. Ridsdale) made the same point—I said that I was disappointed that Trinity House had not played its role. I realise that it was because of the opposition of pilots, and not the members of Trinity House, that this particular measure had not come forward.
    However, I make the plea that I believe that it is essential that there should be substantial pilotage representation on the commission, otherwise we would tend to go back to where we were before. I am quite satisfied with the observations that have been made, and I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Clinton Davis: I beg to move amendment No. 3, in page 1, line 15 leave out from first "wide" to "the" in line 17 and insert
    "practical experience of the management of ships;

    (bb) persons appearing to the Secretary of State to have wide practical experience of the administration of pilotage services;

    (bbb) persons appearing to the Secretary of State to have wide practical experience of".

    Mr. Deputy Speaker: With this amendment we may take Government amendments Nos. 4 and 5.
    Mr. Davis: We have already had a long debate on this subject and I gave some indication of my views in Standing Committee. I do not think it is necessary, therefore, for me to rehearse the argument.
    Amendment agreed to.
    Amendments made: No. 4, in page 2, line 1 leave out"the Secretary of State shall" and insert
    "it shall be the duty of the Secretary of State to appoint as members of the Commission at least one person from each of the categories of persons mentioned in paragraphs (a) to (bbb) of this subsection and to ".
    No. 5, in page 2, line 2 leave out from "Commission" to end of subsection and insert—
    "(2A) It shall be the duty of the Secretary of State—

    (a) before appointing as a member a person in any category of persons which is mentioned in paragraphs (a) to (bbb) of sub section (1) of this section, to consult on the appointment such persons as the Secretary of State considers are representative of the persons in the United Kingdom in the category in question;

    (b) before appointing as a member a person in the category of persons which is mentioned in paragraph (c) of that subsection, to consult on the appointment—

    (i) such persons as the Secretary of State considers are representative of the persons in the United Kingdom in all the categories of persons mentioned in the said paragraphs (a) to (bbb), and

    (ii) such other persons, if any, as he considers appropriate;

    (c) before appointing a member to be the chairman of the Commission, to consult on the appointment such persons as the Secretary of State considers are representative of the persons in the United Kingdom in all the categories of persons mentioned in the said paragraphs (a) to (bbb).".—[Mr. Clinton Davis.]

  Clause 4

    FUNCTIONS OF COMMISSION
    Amendment made: No. 6, in page 5, line 9, leave out
    "incidents over which they have no control or of ".—[Mr. Clinton Davis.]

  Clause 5

    ANNUAL REPORT
    Amendment made: No. 7, in page 5, line 27, at end add
    "and it shall be the duty of the Secretary of State to lay before Parliament copies of each
    798
    report of which he receives a copy in pursuance of this section.".—[Mr. Clinton Davis.]

  Clause 6

    REVIEW OF PILOTAGE SERVICES AND NON- COMPULSORY PILOTAGE AREAS
    Amendments made: No. 8, in page 7, line 1, leave out
    '(to be laid before both Houses of Parliament)'.
    No. 9, in page 7, line 5, at end add
    'and it shall be the duty of the Secretary of State to lay before Parliament copies of any document he receives in pursuance of paragraph (b) of this subsection'.—[Mr. Clinton Davis.]

  Clause 7

    PROCEDURE CONNECTED WITH MAKING AND COMING INTO FORCE OF PILOTAGE ORDERS
    Amendment made: No. 10, in page 7, line 13, leave out
    'the administration of'.—[Mr. Clinton Davis.]

  Clause 8

    COMPULSORY PILOTAGE
    Amendments made: No. 11, in page 8, line 11, after ' words"', insert
    (disregarding any increase in the dues attributable to failure to comply with the requirements of bye-laws in force in the district about requests for pilots)'.
    No. 12, in page 8, line 43, leave out second 'a' and insert 'first'.
    No. 13, in page 8, line 45, leave out 'as a' and insert 'first'.
    No. 14, in page 9, line 9, leave out 'port authority' and insert
    'body managing or regulating the port'.
    No. 15, in page 9, line 27, leave out from 'section' to end of line 44 and insert
    'and either—

    (a) the master of the ship has not complied with the requirements of byelaws made under this Act, by the pilotage authority for the district in question, about requests for pilots; or

    (b) a licensed pilot of the district has offered to take charge of the ship,

    then, subject to the following subsection, the master of the ship shall be guilty of an offence and liable on summary conviction to a fine not exceeding whichever of the following is

    799
    the greater, namely, one thousand pounds or double the amount of the pilotage dues which would have been payable in respect of the ship if it had been under the pilotage as so required and, where the master has not complied as aforesaid, if he had so complied.
    (5) It shall be a defence in proceedings for an offence under the preceding subsection to prove that on the occasion to which the charge relates the ship was being navigated in the pilotage district in question only so far as was necessary to avoid serious danger to the ship.'.—[Mr. Clinton Davis.]

  Clause 9

    PILOTAGE CHARGES
    Amendment made: No. 16, in page 10, line 29, at end insert—
    '(aa) the charges for the services of a pilot, in a case where the master of the relevant ship has not complied with the requirements of bye-laws made under this Act by the authority about requests for pilots, may be greater than, but not more than one and a half times, the charges for those services in a case where the master has so complied;'.—[Mr. Clinton Davis.]

  Clause 10

    REFUSAL AND CANCELLATION OF PILOTAGE CERTIFICATES
    Amendment made: No. 17, in page 13, line 41 at end add—
    '(3) The Secretary of State may, by an order made after the expiration of the period of ten years beginning with the date when this section comes into force, repeal subsections (1) and (2) of this section; and such an order may contain such transitional provisions as the Secretary of State considers are appropriate in connection with the repeal.'.—[Mr. Clinton Davis.]

  Clause 12

    PILOTS' PENSION SCHEME
    Amendment made: No. 18, in page 14, line 31, at end add—
    '(3) The Commission may establish and maintain a scheme under which payments may be made for the purpose of compensating pilots and their assistants for loss of employment or reductions in earnings suffered by them in consequence of incidents over which they have no control.'.—[Mr. Clinton Davis.]

  Clause 13

    MISCELLANEOUS AMENDMENTS ETC. OF PILOTAGE ACT 1913
    Amendments made: No. 19, in page 15, leave out lines 6 and 7.
    No. 20, in page 15, line 8, leave out 'Section' and insert 'Sections 20(4), 36(2) and'.
    No. 21, page 15, line 10, leave out 'Five hundred' and insert 'One thousand'.
    No. 22, in page 15, line 30, after 'pilot' insert
    ', in a dockyard port within the meaning of the Dockyard Ports Regulation Act 1865.'.
    No. 23, in page 15, line 31, at end add
    '; but nothing in this subsection shall be construed as derogating from any immunity which affects a ship apart from this subsection.'—[Mr. Clinton Davis.]

  Clause 16

    APPLICATION OF SCHEDULE 3 TO INTER NATIONAL CARRIAGE BEFORE COMING INTO FORCE OF S. 14(1) AND (2) AND TO DOMESTIC CARRIAGE
    Amendments made: No. 24, in page 17, line 18, after 'to', insert
    ', and to matters connected with,'.
    No. 25, in page 17, line 33, after ' to', insert
    ', and to matters connected with,'.—[Mr. Clinton Davis.]

  Clause 20

    PREVENTION OF POLLUTION FROM SHIPS ETC.
    Mr. Clinton Davis: I beg to move amendment No. 26, in page 20, line 35, leave out 'any of the purposes aforesaid' and insert
    'the purpose mentioned in that subsection'.
    Mr. Deputy Speaker: With this we may take Government amendments Nos. 27 and 28.
    Mr. Adley: My remarks are perhaps more in the nature of a point of order than a debate on this amendment. I should like to refer briefly to clause 20. Would it be for the convenience of the House, Mr. Deputy Speaker, if we reserved our comments in general terms on some of these clauses until Third Reading, because I am perfectly happy to do so if that is acceptable?
    Mr. Deputy Speaker: That is absolutely in order.
    Amendment agreed to.
    Amendments made: No. 27, in page 21, line 2 leave out 'any of the purposes' and insert 'the purpose'.
    No. 28, in page 21, line 3 leave out 'any of those purposes' and insert 'that purpose'.
    No. 31, in page 22, line 23, after 'subsection', insert
    ', or the Order extends only to a territory mentioned in subsection (3)(e) of this section'.—[Mr. Clinton Davis.]

  Clause 25
    UNAUTHORISED LIQUOR ON FISHING VESSELS
    Amendment made: No. 32 in page 29, line 40, after 'under', insert 'paragraph (a) or (b) of'.—[Mr. Clinton Davis.]
  Clause 31

    PROHIBITION OF TRANSFERS
    Mr. Clinton Davis: I beg to move amendment No. 33, in page 38, line 27, leave out Clause 31.
    Mr. Deputy Speaker: With this we may take Government amendments Nos. 39. 40 and 42.
    Mr. Davis: It is perhaps appropriate that at this stage I mention that in the wider interests of securing this Bill—I am grateful for the help that the Opposition have offered in this respect—the Government felt that it was necessary to make this concession by deleting clause 31. We in no way resile from the propositions that we advanced in Committee. We think that it is a mistaken judgment on the part of the industry, the General Council of British Shipping and the Opposition to take the view that they have, but there is a genuine disagreement among us. However, the overwhelming and paramount necessity is to get the Bill. Therefore, we have made this concession, but we reserve the right to come back to it when we next form a Government.
    Amendment agreed to.

  Clause 35

    REPEAL OF SPENT PROVISIONS OF MERCHANT SHIPPING ACT 1894
    Mr. Clinton Davis: I beg to move as a manuscript amendment, in page 42, line 35, at end add—
    '(3) the Secretary of State may by order provide that references or a particular reference to a buoy or beacon in Part XI of that Act shall be construed as including, in such circumstances as are specified in the order, equipment of a kind so specified which is intended as an aid to the navigation of ships.'
    I have already addressed the House on this matter, and I have nothing to add to what I said on that occasion.
    Amendment agreed to.

  Clause 36

    AMENDMENT OF S. 503 OF MERCHANT SHIPPING ACT 1894 ETC.
    Amendments made: No. 34, in page 42, line 39, after ' to ', insert
    ', or loss of or damage to any property of.'.
    No. 35, in page 43, line 8, after 'to', insert
    ', or loss of or damage to any property of.'.—[Mr. Clinton Davis.]

  Clause 42

    LIABILITY OF CARGO OWNERS IN EVENT OF POLLUTION, ETC.
    Mr. Clinton Davis: I beg to move amendment No. 36 in page 50, line 30, leave out Clause 42.
    Mr. Adley: I shall again reserve most of my remarks until Third Reading, but in regard to this amendment there was a vote of ten to two in Committee, when all Back Benchers combined to try to impress upon both Front Benches our strong feelings on the question of pollution and responsibility of the oil companies.
    I well understand the position in which the House finds itself. It is with the greatest reluctance that I agree to this amendment, but having given up almost a day of busy engagements I feel that I would not do myself justice if I did not comment on this amendment before we come to Third Reading.
    Mr. Clinton Davis: Every hon. Member knows the hon. Gentleman's strong feelings on this matter. I appreciate the concession that he has made. I have already adduced the arguments as to why it was not possible to accept clause 42 as it stood. I happen not to have secured the assistance of even my hon. Friends on that occasion, save my hon. Friend the Member for Newton (Mr. Evans), who was my Whip. I appreciate very much the fact that the hon. Member has made this concession in the wider interests of the Bill as a whole.
    Amendment agreed to.

  Clause 46
    OFFENCE IN RESPECT OF DANGEROUSLY UNSAFE SHIP
    Amendment made: No. 37, in page 54, line 13, leave out 'ensured' and insert ' were appropriate to ensure '.—[Mr. Clinton Davis.]
  Clause 48
    OFFENCES BY OFFICERS OF BODIES CORPORATE
    Amendment made: No. 39, in page 55, line 12, leave out', 31(7)'.—[Mr. Clinton Davis.]
  Clause 49
    POWER TO EXTEND ACT TO CERTAIN COUNTRIES ETC.
    Amendment made: No. 40, in page 55, line 38, leave out ' 31,'.—[Mr. Clinton Davis.]
  Clause 51

    ORDERS AND REGULATIONS
    Amendments made: No. 41, in page 56, line 18, leave out ' or 8(5)' and insert ', 8(5) or 10(3)'.
    Manuscript amendment, in page 56 line 18, after ' 8(5)' insert ' or 35(3)'.
    No. 42, in page 56, line 24, leave out ' 31(1),'.—[Mr. Clinton Davis.]

  Schedule 1

    FURTHER PROVISIONS RELATING TO CONSTITUTION ETC. OF PILOTAGE COMMISSION
    Amendments made: No. 44, in page 58, line 6, leave out '2 and' and insert '1A to'.
    No. 45, in page 58, line 8, at end insert:
    '1A. A person shall not be appointed as a Commissioner and a Commissioner shall not be appointed as the Chairman for a term of more than three years: but a person may be re-appointed as a Commissioner and a Commissioner may be reappointed as the Chairman on or after the date on which he ceases to be a Commissioner or, as the case may be, ceases to be the Chairman.'.
    No. 46, in page 59, line 11, leave out ' deliberation or '.—[Mr. Clinton Davis.]

  Schedule 2

    MISCELLANEOUS AMENDMENTS OF PILOTAGE ACT 1913
    Amendments made: No. 47, in page 60, line 37, leave out 'and (l)' and insert '(l), (m) and (p)'.
    No. 48, in page 61, line 15, at end insert—
    '(aa) before the word "mate" wherever it occurs there shall be inserted the word "first";'.
    No. 49, in page 61, line 31, leave out 'and' and insert
    'but nothing in sub-paragraph (a) of this paragraph affects the validity or prevents the renewal of.
    No. 50, in page 61, line 32, leave out
    'sub-paragraph (a) of this paragraph'
    and insert
    'that sub-paragraph'.
    No. 51, in page 61, line 34, leave out
    'shall cease to be in force on that day'.
    No. 52, in page 61, line 35, at end insert—
    '(2) In section 23(3) (which provides that a pilotage certificate shall not be in force for more than one year but may be renewed annually) after the word "may" there shall be inserted the words "if held by the master or first mate of a ship".
    (3) In section 23(4) and (5) (which refer to pilotage certificates for masters and mates and for more than one ship of substantially the same class) before the word "mate" wherever

    805
    it occurs there shall be inserted the word "first" and after the word "class" there shall be inserted the words"and registered as mentioned in paragraph (a) in subsection (1) of this section." '.
    No. 53, in page 61, line 40, at end insert—
    '(2) In section 27 (which provides for complaints to the Secretary of State about a pilotage authority's conduct in connection with pilots' licences and pilotage certificates and examinations for them) after subsection (1) there shall be inserted the following subsection—
    (1A) The Secretary of State may—

    (a) before he considers a complaint as required by the preceding subsection, ask the Pilotage Commission for its advice on the complaint; and

    (b) when considering the complaint as so required, have regard to the Commission's advice on the complaint.'.

    No. 54, in page 62, line 38, leave out 'five hundred pounds' and insert—
    'one thousand pounds in the case of an offence under paragraph (b) of this subsection and five hundred pounds in any other case.'.
    No. 56, page 62, line 47, at end insert—
    '(3) Without prejudice to the generality of subsection (2) of section 54 of this Act, an order in pursuance of that subsection which brings into force the preceding subparagraph or Schedule 7 to this Act so far as that Schedule relates to section 32(2) may provide that it shall come into force in relation only to such pilotage districts as are specified in the order.'.
    No. 57, in page 64, line 20, after 'words" ', insert—
    "(disregarding any increase in the dues attributable to failure to comply with the requirements of byelaws in force in the district about requests for pilots)'.—[Mr. Clinton Davis.]

  Schedule 6

    ALTERATION OF PENALTIES
    Amendments made: No. 58, in page 88, line 4, column 1, leave out '(1)' and insert'(11)'.
    No. 59, in page 92, line 38, at end insert—
    '9A. In section 667(3) of the Merchant Shipping Act 1894 (under which a person who fails to comply with a notice to extinguish or screen a light which may be mistaken for a lighthouse is guilty of a common nuisance and is also liable to a fine not exceeding £100) for the words from "a common nuisance" onwards there shall be substituted the words "an offence and liable to a fine not exceeding one thousand pounds".'.
    No. 60, in page 93, line 3, at end insert—
    '10A. Subsection (4) of section 724 of the Merchant Shipping Act 1894 (which provides
    806
    that a surveyor of ships who receives unauthorised remuneration in respect of the duties he performs under that Act shall be liable to a fine not exceeding £50) shall be omitted.'.
    No. 61, in page 93, line 21, at end insert—
    '12A. In Schedule 1 to the Merchant Shipping (Load Lines) Act 1967 (under which any of the following offences, namely, an offence under section 284 of the Merchant Shipping Act 1894 of carrying passengers in excess, an offence under section 21 of the Merchant Shipping Act 1906 of not complying with provisions requiring a passenger steamer to be surveyed and to have a passenger steamer's certificate and an offence under section 12(3)(a) of the Merchant Shipping (Safety Convention) Act 1949 of going to sea without appropriate certificates, is punishable on summary conviction with a fine of up to £1,000 in some cases and £400 in others)—

    (a) in column 3 of the entry relating to the said section 283, for the word "£400" there shall be substituted the word "£50,000"; and

    (b) in column 3 of the entries relating to the said sections 21 and 12(3)(a), for the word "£400" there shall be substituted the word "£1,000".'.

    No. 62, in page 93, line 42, at end insert—
    '15A. In subsection (9) of section 14 of the Merchant Shipping Act 1974 (under paragraph (a) of which a person who fails to provide information as required by that section is liable on summary conviction to a fine not exceeding £400 and under paragraph (b) of which a person who provides false information is so liable), for the word "£400" there shall be substituted the words "£500 in the case of an offence under paragraph (a) of this subsection and not exceeding £1,000 in the case of an offence under paragraph (b) of this subsection ".'.
    No. 63, in page 94, line 46, after 'conviction', insert'—
    (a)'.
    No. 64, in page 94, line 47, at end insert
    'in the case of an infringement of Rule 10(b)(i) of the regulations set out in Schedule 1 to the Collision Regulations and Distress Signals Order 1977 (duty to proceed with traffic flow in lanes of separation scheme); and (b) to a fine not exceeding £1,000 in any other case ".'.
    No. 65, in page 95, line 43, leave out paragraph 9.
    No. 66, in page 97, line 18, leave out paragraph 16.
    No. 67, in page 98, line 17, leave out paragraph 20.
    No. 68, in page 99, line 23, leave out paragraph 25.—[Mr. Clinton Davis.]
    Order for Third Reading read.—[Queen's Consert, on behalf of the Crown, signified.]
    Motion made, and Question proposed, That the Bill be now read the Third time.
    12.31 p.m.
    Mr. Adley: I think that it would be fair to describe progress this morning, certainly in the last 15 minutes, as breathtaking. However, I do not apologise to the House for wanting to take a few minutes to discuss on Third Reading, as briefly as I can, a number of the matters that were discussed in Standing Committee, particularly with reference to the new clause dealing with pollution.
    The Minister rightly said that he himself and his Whip were the only two members of the Committee who, at its last sitting, actually voted against the insertion of what was new clause 13 and which was until very recently clause 42.
    Perhaps the Minister will not mind if I quote the words of his Whip. The hon. Member for Newton (Mr. Evans) said:
    "May I make it clear that my hon. Friends do not have a free vote, but I suspect that they are going to exercise one."—[Official Report, Standing Committee D, 15 March 1979; c. 748].
    The fact is that those of us who were members of the Standing Committee which considered the Bill were, I think, representing the views of very many hon. Members in wanting to insert into the Bill a clause on pollution, putting the responsibility for causing the pollution on the oil companies. We wanted to do that in Committee, because we wanted the opportunity to debate this matter in relation to the Bill.
    Unfortunately, the recording in Hansard of the votes cast is not quite accurate but, as I have said, there was a vote of 10 to 2 in favour of the new clause.
    I should like to record that my hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth), the hon. Member for Southampton, Test (Mr. Gould), the hon. Member for Berwick and East Lothian (Mr. Home Robertson), my hon. Friend the Member for Tyne-mouth (Mr. Trotter), the hon. Member for Gravesend (Mr. Ovenden), my hon. Friend the Member for Eastleigh (Mr. Price), the right hon. Member for Western
    808
    Isles (Mr. Stewart), the hon. Member for Ipswich (Mr. Weetch) and the hon. Member for Liverpool, West Derby (Mr. Ogden)—representing all parts of the United Kingdom and both of the main parties in the House, and including the Leader of the Scottish National Party—felt sufficiently strongly to bring this situation about.
    However, as the Minister has said, today the House is confronted with a very unusual situation. Really, we have a pistol at our heads concerning the Bill. I make no complaint about that, but for those of us who supported the new clause the choice is to accept its removal or to face the possibility of losing the entire Bill. I do not believe that any of us who served on the Committee could contemplate taking such a chance. The fact that both the Government and the Opposition Front Benches are now, I believe, opposed to the spirit of the new clause—or, if not to the spirit, to the letter—does not one whit deter me from believing that what we were trying to do is right and that at some future stage the House will have to return to this matter and place on the statute book, if necessary, something which is more effective than present legislation in ensuring that the oil companies are forced to bear more of the the responsibility for pollution than they do at present.
    I know that the Minister has received very substantial representations in the last couple of weeks from the oil industry about the new clause. I am also equally aware that my right hon. Friend the Leader of the Opposition has received strong representations against the new clause. The fact is that that new clause ruffled the feathers of some fairly big birds.
    The Minister suggested that my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd) had used some hyperbole. I hope that the Minister will not take it amiss when I say that most of the big birds to which I have referred have been used, in relation to oil pollution, to dropping their droppings where they have chosen in the past. That is a situation, I think, up with which the people of this country are not prepared to put indefinitely.
    Mr. Clinton Davis: I do not want to make a long speech about this matter later. It would not be possible, anyway,

    809
    with the pressure that I have on my side from the Whip. However, let me say that the representations were not exclusively those of the oil companies. We had representations from the British Shippers Council, which was very concerned indeed about the ramifications and repercussions of the new clause on its interests worldwide. We had representations from the Institute of London Underwriters, on behalf of the London marine insurance market, and so on. Therefore, the pressure was not exclusively from the oil companies.
    Mr. Adley: I am perfectly well aware that there has been a substantial effort by a large number of—perhaps I may use the term—vested interests, of one sort or another, to have the new clause removed from the Bill. I am not suggesting that it is only the oil companies. I suspect that quite a lot of it has to do with the drafting of the new clause.
    I am well aware—it was quite clear all the way along—that that new clause would never have survived in the form in which it left the Committee. But, in view of what the Minister has just said, I think that I am entitled to remind him and the House of one or two of the comments, not of myself—that would be immodest; everyone knows that I am a very modest fellow—but of a few other hon. Members.
    The hon. Member for Ipswich said:
    "I should like to have a brief word about the new clause, as my name is down in support of it. I strongly support the principle behind it, and I associate myself with the spirit in which it was moved by the hon. Member for Christchurch and Lymington (Mr. Adley)."
    The right hon. Member for Western Isles said:
    "The Government's acceptance of the new clause would concentrate the minds of the oil companies—BP and others—on the necessity to see that their cargoes were carried in vessels that were as safe as possible through having properly certificated officers and being property maintained."
    My hon. Friend the Member for Hertfordshire, South-West, in supporting the new clause, said:
    "There are important insurance relationships and obligations between them, but there should be a clear responsibility upon each. In that area my hon. Friend has done great service concerning the effects of pollution for which we are all grateful."
    810
    The hon. Member for West Derby, offering his support, said:
    "The ultimate responsibility has to be with the oil companies."—[Official Report, Standing Committee D, 15 March 1979; c. 736–9.]
    My hon. Friend the Member for Harwich (Mr. Ridsdale) spoke succinctly and briefly in favour of the new clause.
    I do not believe that I would be doing my duty to those hon. Members on both sides of the Standing Committee who supported me there if I did not put on record, as a marker for a future date, our strong feelings that what we were trying to do with that new clause was to enshrine the principle that the polluter pays.
    I accept what the Minister has said—that had the wording of the new clause reached the light of legislative day, it would have caused not only consternation but a good deal of confusion. However, as I said in Committee, I regard it as an opportunity to discuss the matter on Report—although I am now doing so on Third Reading, and I make no apology for it.
    I also make no apology for warning the Minister and the House that the House will have to return time and again in the future to the question of liability for coping with the effects of pollution. The action taken by the parents living near the Westway, to which I referred in Committee, who have succeeded in obtaining the right to take to a higher court their case against the oil companies as the causers of lead fume pollution, is an important milestone in the way in which these events will have to be looked at by both the courts and the House of Commons.
    We hear today about a serious escape from a nuclear power station in the United States. I do not think that anyone will seriously blame the manufacturer of the chimney as the vehicle by which that pollution reached the atmosphere. The case I deployed in Committee was that we should not be satisfied merely to consider the carrier of the oil as the main person at whom we should point the finger of blame when the pollution reaches, our shores, our coastline, or even our sea.
    The Minister and hon. Members referred at great length in Committee to the role of IMCO. We have paid tribute

    811
    to IMCO. I repeat the view I expressed in Committee that the European Community represents a useful forum through which the member countries of the EEC can see that IMCO legislation is implemented. It is possible that the future accession of Greece and Spain to the EEC will have a singularly beneficial effect on legislating to ensure that those two countries play their part, as we are doing, in ensuring that ships are up to standard and that crews behave in a way that will, as far as possible, prevent pollution. Greece has a particularly bad record in these matters.
    It is a pity perhaps that Liberia is not a candidate for EEC membership. I would like to lay before the House some research that I did not mention in Committee. It deals with six of the most recent appalling tanker disasters that have occurred in Europe, starting with the "Torrey Canyon". This was a ship owned by the Barracuda Tanker Corporation on charter to BP and registered in Liberia. The"Amoco Cadiz"was owned by Amoco Transport Company on charter to Shell and registered in Liberia. The "Eleni V" was owned by M.J. Vardinoyannis and registered in Greece, on charter to Chevron Oil. The"Christos Bitas", owned by Zephyr Shipping Company, was on charter to BP and registered in Greece, and the "Urquiola" was owned by Navira Santa Catalina with a cargo, I believe, in the ownership of BP, and registered in Spain. Most recenly, last month, there was the "Andrios Patria", which has again brought misery to the little Spanish community of La Coruna. It was owned by Seas Transportation Corporation of Piraeus and registered in Greece.
    All six vessels were on charter, each to a well-known international oil company, which more than justifies the proposition we have put forward in the new clause that the owner of the oil should be firmly identified as someone who should be made to pay his full and fair share of any of the cost of dealing with pollution.
    Flags of convenience are called flags of convenience because they are flags of convenience. I do not propose to spend more time on that argument.
    I turn briefly to two other aspects of the Bill on which I have received representations from my constituents and
    812
    others. One of these matters which, I know, concerns my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) is the question of penalties on masters. These have been increased for certain offences. It is not a matter of increasing the penalties as such but of making powers available to magistrates' courts, rather than to Crown courts, for the simple reason that some of the people appearing on these charges may be foreign citizens. As the Minister cogently told the Committee, those foreign citizens could easily skip bail if they were awaiting a hearing before a higher court. It would be improper for this House to legislate in a different way for British citizens and for non-British citizens. Powers have been taken in the Bill to detain in this country and deal summarily with those who stand charged with serious pollution offences.
    I strongly support what the Government are doing. But the proposal needs to be explained on the Floor of the House so that British masters will not suddenly become fearful that they will find themselves faced with a threat from the courts that has not previously existed.
    I am sorry that the Committee failed to accept another amendment, which I moved in Committee, to align the penalties for pollution on both sides of the English Channel. The amendment would have aligned our legislation with that of the French. The Minister expressed concern that we might lay ourselves open to retaliation. I was totally unconvinced by what he said then, and I have since consulted with EEC officials. I understand that what the French have done is not considered to be contrary to the Treaty of Rome. I strongly support what the French Government have done. I hope that I am wrong in expressing my fear that rogue masters will choose to sail up the British side of the Channel rather than the French side because the penalties may be less on this side. I am sure that that is a practice that my hon. and learned Friend the Member for Dover and Deal would not wish to contemplate.
    This is a long-awaited Bill. A great deal of work has gone into it. My hon. Friend the Member for Havant and Waterloo expressed reservations about the pilotage aspect of the Bill. Having served on the Committee and also having a number of pilots living in my constituency,

    813
    it is not my impression that they are as fearful or as hostile to the proposition in the Bill as my hon. Friend intimated. He did a service by making his speech today, but I am happy with the pilotage aspects of the Bill. I am sorry that we have lost clause 42. I understand why it has happened. I think we are doing the right thing today by ensuring that the Bill is given a Third Reading at the earliest opportunity.
    12.47 p.m.
    Mr. Blenkinsop: I intervene only briefly in this debate. This is almost certainly the last speech that I will make in the House, as I am leaving—of my own volition, I may say. There should be no misunderstanding.
    There is no measure of more consequence to large numbers of my constituents than this Bill. I pay a sincere tribute to the Minister for the enormous amount of work he has done, not only in relation to this Bill but in preparation for it over long and, I am sure, wearying negotiations and discussions with the large number of interests involved. It was pleasant in Committee to see the inter-party argument that it was possible to develop, leading, from time to time, to a certain amount of cross-voting as well.
    The pilotage provisions are important, not only for my constituents who are pilots but in the longer term for establishing better safety conditions. Although differences of view have been expressed to me by pilots and others, there is no doubt about their general welcome for the broad principles and outline that has been laid down in the Bill. They are anxious to start operating its measures.
    I do not want to lose sight of that important section of the Bill, which has been of much concern to the Minister—the provisions with regard to seamen, discipline and safety at sea. This section of the Bill takes those in the dangerous occupation of working at sea nearer to the protection provisions that exist for jobs on land.
    This has been our long-term objective. To have made a considerable step forward—I will not say that we have solved all the problems—is of enormous significance to large numbers of my constituents who work at sea. I doubt whether there is a family in my constituency that
    814
    does not have someone involved with the sea in one way or another.
    It is particularly pleasing, as I said on Second Reading, that at this moment one of the few major seafaring teaching and training institutions in the country—the marine and technical college of South Shields—is at last getting some of the extra equipment for which we have fought and have wanted so badly. The simulating machinery is now being provided at considerable cost to the local authority, which shows the authority's concern. I am happy that that should have coincided with the passage of the Bill.
    There are major provisions in the Bill to enable us to play our proper part in a full international examination of these problems. Whatever we do will be limited unless we can secure the active operation of many of these proposals on as wide and international basis as possible.
    On all these grounds, I welcome the Bill. Both the Minister and hon. Members opposite—I would hate their contribution to go unrecognised—have done an enormous amount of hard work. I am delighted that the Bill will reach the statute book before this Parliament ends.
    12.52 p.m.
    Mr. Ridsdale: Most of the points that I wanted to raise have already been covered in the debates on the amendments and new clauses. However, I pay tribute to my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) for the new clause that he tabled in Committee. Although he has withdrawn it now, it was an important marker for safety. Although the big guns have been out, I congratulate him on having brought forward that safeguard which may be valuable in the future.
    I pay tribute to both Front Bench spokesmen, who have assiduously and tenaciously worked for the Bill's success, and particularly on the way in which they have looked after the pilots' interests. The Bill affects the livelihood particularly of pilots—self-employed, independently-minded and tenacious people. If the pensions position can be underlined, I shall certainly support the motion for Third Reading.
    12.53 p.m.
    Mr. Ian Lloyd: The Minister need not be concerned: my sense of hyperbole has been completely overwhelmed by the scintilla of consensus which emerges so clearly from the Front Bench speeches. One can understand in some ways why that should be so.
    I was very pleased with the assurance by my hon. Friend the Member for Wirral (Mr. Hunt) that the pilotage provisions to which I took some exception and on which I commented earlier would be the subject of early review in the next Parliament. When that happens, we can of course consider them carefully again.
    I very much regret that the hon. Member for South Shields (Mr. Blenkinsop) is leaving our deliberations. He and I have sat through many debates together, in Committee and in the Chamber. His contributions have always been sane, civilised and courteous. We have always enjoyed them and we shall miss him when he leaves.
    My hon. Friend the Member for Christ-church and Lymington (Mr. Adley) expressed his proper concern about maritime safety and drew our attention to ghastly and conspicuous tanker disasters. They are so visible: when they occur, they are national and international news, and the consequences are known to everyone. We must recognise, in legislation of this kind and probably other legislation which will follow it in the next decade, that total safety is not attainable. One is always following what the statisticians call an asymptote—one approaches 100 per cent, but never ultimately reaches it.
    There is a grave danger that we shall say that we must have 100 per cent, safety in all conditions and circumstances, whether with great tankers on the high seas or with methane carriers or whatever. I fear that if we impose too stringent conditions, we ourselves shall then have to face and present to those whom we represent a clear equation composed of the availability of energy and the risks and consequences which society must be prepared to accept, given the best technology of safety which is available, if that energy is to be delivered. I see no way of escaping that dilemma.
    816
    There is a challenge to the human race in dealing with its problems of energy supply. Whether we are talking of safety in the coal mines, on tankers on the high seas or in nuclear power plants, there is a clear obligation to use the best technology we have and, if it is inadequate, to develop a better. That in itself is costly and the application of that technology, whether through legislation or through common sense or through the natural self-interest of intelligent and well-run commercial organisations, will always result in considerable cost. It is a cost that we must accept and which we must offset either by insurance on a national scale or by insurance through some other device.
    Mr. Adley: My hon. Friend is right—one cannot legislate against human error—but will he accept it from me that there is clear evidence that the standards which we impose upon our ships registered in Britain are very high, while the standards which appear to be imposed by the Liberians, the Greeks and the Panamanians are not so high? In seeking to ensure that their standards are as high as ours, we should put the onus on them and should not be inhibited, because present evidence—I cited a little this morning—is that it is not British masters in British ships who are having the most accidents.
    Mr. Lloyd: I am obliged. I would find no difficulty in accepting my hon. Friend's prima facie case. My reading on these matters tends to support him. I have made no specific study of the comparable performance of British or other ships but I know from having read the British shipping press in the last week that the British flag is now beginning to be regarded as a flag of convenience because our wage costs are substantially lower than those of Liberia.
    Therefore, we have to be careful. On the other hand, my hon. Friend's general principle is obviously desirable—that we should maintain the best possible standards and try to ensure that all ships trading to and from our shores, of whatever flag, should so far as possible conform to those standards in our, as well as their, interests.
    That brings me to a comparatively minor but not insignificant point—the fines. It is disturbing that we are about

    817
    to pass a Bill which in several places provides for fines on individuals, as opposed to organisations, of £50,000. British courts may or may not impose such fines where serious and obvious neglect is associated with the case concerned.
    I have no doubt that a fine of £50,000 would completely destroy or cripple financially 99·9 per cent, of those who might be involved in judicial proceedings of this kind. That is a considerable new factor which we face in this legislation. I am not sure that there are any other measures on the statute book in which fines of this magnitude have been considered and passed by the House of Commons.
    I should like to quote a comment which was made to me about a week ago:
    "Temperley's Merchant Shipping Acts, Vol. 11, lists 95 offences, carrying fines totalling more than £220,000 on summary conviction with additional fines on indictment and prison sentences of up to two years, to which a shipmaster is exposed under existing merchant shipping legislation. The Merchant Shipping Bill in its present form already seeks to increase that level of fines."
    There is a serious problem here. We may see these consequences emerging as the legislation is applied. However, I express the hope that the courts, in interpreting the Bill and in considering fines of this magnitude, will be careful before using the powers which Parliament has now conferred on them utterly to destroy individuals financially.
    Last, but perhaps not least, I was a little astonished to see that the financial measurement of using gold francs has been rendered obsolete and that in its place we shall have that strange and extraordinary creature known as SDU, which is an international measure of a basket of currencies. I am not sure that that will confer greater stability on the measurement of value which is intended. One can only make a final judgment on that over the years.
    1.2 p.m.
    Mr. Peter Rees: I am grateful for the opportunity of taking part in this debate, particularly as I was not privileged to serve on the Standing Committee which gave the Bill such thorough consideration.
    The Bill is of considerable significance to my constituency, as it is to that of my hon. Friend the Member for Folke-
    818
    stone and Hythe (Mr. Costain), not only because it faces the Channel and is therefore exposed to the full brunt of any accident which may take place but because many of my constituents, like those of my hon. Friend, are intimately concerned with and dependent on the operation of ferries to and from the ports of Dover and Folkestone. I need hardly remind the House, with a certain amount of pride, that Dover is the premier passenger port of the United Kingdom.
    I am sorry that the last stages of the Bill have to be completed in such a hurry. That is not intended as any reflection on hon. Members who served on the Standing Committee. I know that they gave the Bill thorough consideration. Indeed, I pay tribute to my hon. Friend the Member for Wirral (Mr. Hunt), who has always been open to the representations made to him from many quarters and has dealt with them thoroughly and with great courtesy. My constituents owe him a debt of gratitude for what he has so far achieved on their behalf. Indeed, he has been ably supported by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley), who has voiced his concern on many issues of equal concern to Dover and Deal. Last, but by no means least, I know that the Minister has done his best to respond to the legitimate worries which have been put to him. The Bill, in its final form, has reflected his anxiety to achieve a reasonable compromise in many areas.
    In the time available I do not propose to canvass all the issues that have been drawn together and distilled into one Bill. I should have liked to touch on the question of pilotage, because Trinity House is well and ably represented in my constituency. My hon. Friend the Member for Wirral has been in touch with Trinity House throughout the passage of the Bill. Like all compromises, what has been worked out is not entirely satisfactory, but it is broadly acceptable and provides a basis on which to proceed for the future.
    I should like to touch on the question of penalties about which my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd) has expressed concern. I echo the representations which have been made to me on that matter. The Minister has responded to a degree and has dredged out of schedule 6 a range of

    819
    penalties which he was first minded to impose. I appreciate that a balance has to be struck between those who, in the words of the psalmist, go down to the sea in ships and those who contemplate the ruin which can be caused by bad seamanship and faulty equipment. I am not suggesting those are necessarily two separate classes of people. Many members of the MMSA and the MNAOA who live on the coast in my constituency are concerned in both capacities.
    When I first read the Bill I was concerned about its range and scale of penalties. As a lawyer, I know that these are maximum penalties and that it lies in the discretion of the courts to mitigate those penalties. They do not have to impose a fine of £50,000 for every single infraction of these provisions. None the less, these are difficult and delicate areas.
    I pay tribute to magistrates in my constituency who have to grapple with these matters. I think that we should consider whether they should be assisted by assessors. I do not feel that it is right at this stage to hold up the Bill in order to introduce an amendment of this technicality. Whichever party comes to power after the election will have to monitor the implementation of the Bill and see how it works out in practice. I leave for consideration of the House the possibility that in years to come a subsequent Parliament may wish to equip magistrates who are called upon to consider these highly technical offences, which demand great knowledge of the rules of the sea and of seamanship, with the assistance of assessors, such as are to be found in the Admiralty courts in civil cases. That perhaps is for the future.
    There are two areas in which I hope the Minister, even at this late stage, will be able to offer some reassurance. I understand that he is still likely to meet representatives of the MMSA and the MNAOA. All the same, it is important that these matters should be on record. He should state the position publicly.
    The first comment that I wish to make arises on schedule 6, paragraph 5, which refers to prosecution for an infringement of collision regulations under section 48 of the Merchant Shipping Act 1894. I understand that in almost every case a possible prosecution is referred to the
    820
    Department. Therefore, the principles that guide the Department in these matters are of great importance. They will largely, as it were, be the framework within which people operate. It would be to the advantage of the House and of those who are listening to our debate if the Minister would indicate the broad principles which will be applied by the Department in considering whether a prosecution should be brought. For example, in Dover—perhaps I may say this in the presence of my hon. Friend the Member for Folkestone and Hythe, who presided over the Committee with such distinction—the traffic separation schemes and their enforcement are important. As the Minister and the House will appreciate, the ferries operating from Dover and Folkestone have to cut across the lanes.
    Mr. David Hunt: And hovercraft.
    Mr. Rees: Indeed, hovercraft. No doubt my hon. Friend the Member for Wirral will mention hovercraft when he comes to wind up for the Opposition.
    Many delicate questions of seamanship are involved. It would serve to allay the concern which has been generated by the increase in the penalties if the Minister would say something publicly about the way that his Department proposes to proceed under that provision.
    Those whom I have consulted are not over-concerned about paragraph 6, but they would like to know whether it would be an adequate defence to a charge under that provision if a ship were in peril and likely to sink. Would that be an adequate defence for a master who was likely to be charged under that provision?
    Paragraph 11 is accepted as a useful improvement. Presumably in most cases there will be an Admiralty marshal on board any ship which is sought to be detained.
    Finally, I come to paragraph 20. This is of extreme concern to the Channel ports. As I venture to suggest with a modest measure of pride—not that I have noticeably contributed to it—Dover is the premier passenger port in the United Kingdom. The flow of passengers is unremitting throughout the year, and it will be an offence if, unwittingly, a master carries more than the prescribed number of passengers. There is a nagging problem. I understand that any child over the age

    821
    of one is to be treated as a passenger. I also understand that some benevolent companies in East Kent give free passage to children under the age of four.
    I therefore ask the Minister how this provision is to be enforced. Are we to have someone at Dover checking people on and off the ferries? This demonstrates a problem even when intentions are of the best, though we on the Channel coast want the highest standards of seamanship and equipment. If one raises one's sights too high and tries to impose standards which are unenforceable, one brings the law into disrepute and the edifice crumbles. Will the Minister tell us how that provision will be enforced? These may be points of detail and I apologise for taking up time over them, but they are of direct concern to many of my constituents. They were, to a degree, ventilated in Committee, but even at this late stage it would be helpful if we could have an explicit statement from the Minister.
    Subject to that and because I know that the House wants to proceed with other business, I give the Bill a cautious welcome. Much will depend on how it is implemented, though that implementation, dare I say it, will probably be in the hands of someone other than the Minister.
    1.13 p.m.
    Mr. John Prescott: I apologise for not being present at the beginning of the debate. When I left last night for the last meeting of one of my European committees, I did not know that this Bill would be debated. I thought that the debate would be on Monday. I heard about it this morning, and after doing my committee work in Brussels I have managed to make the tail end.
    I am sad that I missed the Committee' itself but I have read the debates, which are interesting. Since I have been here I have sat on Committees dealing with, all the Merchant Shipping Acts. As an ex-seaman these issues are of interest to me. This Bill, with others passed during the lifetime of this Government, has made major advances in the interests of the seafaring community. We are extremely grateful for them.
    As a legislator from 1970 and as a trade union official prior to that, I have
    822
    noticed that this Government have undertaken a considerable amount of consultation. I know, as a result of working with the Minister, that there was, perhaps, a feeling that there was too much consultation. I am glad that the Government persevered with the principle that consultation was vital if we were to get agreement in an area where the conflict of interests is so sharp.
    There seems to have been something of a hiccup concerning the officers in relation to fines. At the end of the day, however, one can see that compromise has been reached and we have arrived at a principle which seafarers have always held concerning discipline that officers should be on a par with seamen. I am on record in this House and outside it as being against the general philosophy that greater discipline means greater safety. To that end, a barrage of laws and fines and penalties were imposed upon seamen. Those laws and penalties were far greater than those applying on other vessels.
    This Bill will take away one element of the paraphernalia of discipline formerly in the hands of skippers. It will enable the industry, in a calmer atmosphere ashore, to determine the disciplinary measures in relation to safety. I agree with the compromise that has been reached, which means that the same treatment will be accorded to officers and sea-seamen alike. For those criminal offences which constitute a threat to the safety of the vessel or the crew, the same fines will be imposed.
    That is a principle that I accept, though I am sorry that the officers did not support us in the past. Certainly the captains have never joined us in our campaigns against the excessive use of penalties and fines, though I excuse the Merchant Navy and Airline Officers' Association from this stricture. They have recently had a more liberal attitude to these matters.
    Mr. Clinton Davis: I think that my hon. Friend is doing less than justice to Captain Lucas, who has led the Master Mariners' Association with great skill and liberalism. I think that there has been a change.
    Mr. Prescott: I accept what the Minister says. I implied no criticism of Captain Lucas. Nevertheless, when I was a

    823
    seaman and during legislation aimed at reforming the penal clauses in the Merchant Shipping Act, we were sorely short of allies. The organisation to which I have referred was not an ally in that fight. However, I withdraw any unintended imputation concerning Captain Lucas.
    The Secretary of State has done more than any other Minister in this Parliament to reform seafaring legislation. Governments can be committed to action, but where substantial reform is involved that action depends on the Minister and whether he is persuaded by argument. My right hon. Friend has always been open to argument, even though he has not always agreed with me. He has been prepared to battle when a just case has been made. We saw that in Committee when he was left on his own to carry on the fight on clause 31. I welcome the Bill, which constitutes a major reform.
    However, the fishermen cannot accept the arguments about drinking and excessive fines, though the Government have heralded another advance by their insistence on the ending of decasualisation in the fishing industry. I hope that the fishing industry will learn from the shipping industry that problems can be solved round the table, ashore, rather than by reliance on the courts.
    With these powers in the Bill there will be no need always to use the courts. I hope that the good sense which has, in the main, prevailed in the shipping industry in the last few years will come in the fishing industry. The fishing industry might look to the shipping industry to see how to solve problems by other than recourse to the courts.
    I welcome the advances made by the provisions for safety. The Bill makes it clear that the Department now has the power to deal with safety. Let us be frank. The safety record among seafarers both in shipping and in fishing could be considerably improved. Now that the Department has the powers, there is no excuse for poor safety precautions. I shall be pressing, whether in Government or in Opposition, to ensure that safety provisions are improved.
    I regret that we have not carried clause 31. I understand the reasons for it. It was requested by the industry, which, in a panic, then asked for it to be removed.
    824
    The argument about, and the definition of, national interest is one which Parliament should reserve to itself. It should not be left to the industry to decide because the industry's definition of the national interest, as I said this week in a controversial speech to a group of bankers, is not necessarily the same as ours. It was identifiable but I think that it is no longer.
    I hope that the Lords do not oppose the Bill. Both sides of the House are now agreed about it. It represents a major reform for our seamen. I am grateful to the Government and my hon. Friend the tinder-Secretary of State for the Bill.
    1.21 p.m.
    Mr. David Hunt: This is a vital Bill for one of our greatest free enterprise industries and one of our largest contributors to invisible earnings.
    When the Bill was introduced we said that it was five Bills in one. That has been at the heart of some of the problems. I pay tribute to the contribution of the hon. Member for South Shields (Mr. Blenkinsop). I praise him for his constant vigilance, not only on behalf of his constituents but in the interests of the shipping industry in its widest context. The industry will be sad that today was his last contribution. I share that sadness.
    The Bill is now four Bills in one. It was not a Freudian slip on the part of the hon. Member for Kingston upon Hull, East (Mr. Prescott) to say that the Minister was on his own on clause 31. That has been our argument. Clause 31 is a piece of Bennery-pokery which was included at the last moment because of the Lib-Lab pact. That clause was totally out of place in a Bill which otherwise represents the good health of the shipping industry. It has met with overwhelming opposition. If it had remained in the Bill, it would have caused serious damage to our international position in the shipping world. At best it would have been unworkable and at worst positively damaging. That clause has now gone. We say "Good riddance" and the shipping industry breathes a sigh of relief.
    I say to my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd) that the provisions of the Bill will be kept under constant review. Under clause 54(2) the provisions of this measure will come into force on such a day as

    825
    the Secretary of State decides. Different days may be appointed for different provisions. It would be helpful for the Minister to indicate whether he proposes to introduce any provisions immediately. I understand that he does not propose to do that.
    There are still some problems that have been mentioned today. The problems of the watermen and harbour craft pose a particular difficulty, but they can be dealt with when the measure has been implemented in ways that do not require amendment to the Bill.
    I pay tribute to my hon. Friend the Member for Harwich (Mr. Ridsdale). Pilots are self-employed. We praise them for their work and we shall ensure that they are maintained in that capacity. I pay tribute to them for the difficult task that they perform in often dangerous conditions.
    I also pay tribute to the unions which have made representations about different aspects of the Bill. We have kept in touch with them. I am talking of the NUS, the TGWU marine officers' section and Harry Frith in particular, who sat through our Committee and who gave us much help, as did the United Kingdom Pilots' Association, the Merchant Navy and Airline Officers' Association and many other groups.
    I turn to a matter which was mentioned by my hon. Friend the Member for Harwich and which concerns my hon. Friend the Member for Folkestone and Hythe (Mr. Costain), who presided with expertise and knowledge of maritime matters over our Committee. He has listened throughout the debate. Both of my hon. Friends are anxious about how tax legislation will affect the pensions of pilots after 1980. The Secretary of State announced a solution on 30 November during Second Reading. My hon. Friend the Member for St. Ives (Mr. Nott) welcomed that statement. I cannot possibly bind the next Conservative Chancellor, but I can assure my hon. Friends that we support the solution suggested by my hon. Friend the Member for St. Ives on Second Reading.
    I turn to the pollution and safety aspects of the Bill. I pay tribute to my hon. Friend the Member for Christchurch and Lymington (Mr. Adley), who has established a reputation in this sphere. We should look back to his now famous
    826
    Adjournment debate on 14 July last year when he put forward his eight-point plan. Clause 42 is a marker and my hon. Friend has been public spirited in the acceptance of the situation.
    I can assure my hon. Friend that that is not an end to the matter. We shall consider his solutions carefully. They have been accepted by no less a person than the President of the European Commission. We shall require extensive consultations on the pollution aspect.
    We were worried about clause 42 as it was. The ship owner should carry substantial liability for oil pollution because he is in the best position to exercise responsibility for safety. The owner of the cargo could be anywhere in the world. The owner of the cargo can change several times during a voyage. It could be like passing the parcel to find and trace the owner of the cargo as defined in the clause. It might also be difficult to exercise jurisdiction over that owner.
    Mr. Adley: My hon. Friend is saying that people who are clever and ill-intentioned can always get round the law. That is true, but our job is to ensure that they cannot. We must stick to the principle that the polluter pays. If we do that, we shall be right.
    Mr. Hunt: My hon. Friend's clause abrogated two international conventions. The oil companies have shown a degree of responsibility. Perhaps my hon. Friend can take credit for that. We now say goodbye to clause 42.
    I turn to the question of fines for pollution. My hon. and learned Friend the Member for Dover and Deal (Mr. Rees) has made constant representations to me and my hon. Friends on the Committee on behalf of his constituents. We have also criticised the Minister for lack of consultation.
    The masters were presented with a list of 18 offences for which there would be a maximum fine of £50,000. We do not like the concept of a magistrates' court being able, without an assessor, to impose such a maximum fine on a master without knowing whether there is insurance. Any magistrates' court can do that, not only the one in the constituency involved.
    We still have reservations. There is still a need for consultation. I join in

    827
    the tributes that have been paid to Captain Lucas of the Mercantile Marine Services Association, who has organised one of the best campaigns that I have known. About 112 of my hon. Friends have written to me or contacted me on this subject, including my hon. Friend the Member for Wallasey (Mrs. Chalker), in whose constituency the association's office is. I also pay tribute to the Merchant Navy and Airline Officers' Association for its part.
    I wait with interest to hear the Minister's response to the point about children under the age of four and what is planned about counting the number of passengers who go on board. Consultation must continue.
    I turn to the question of discipline. The Bill gives statutory backing to an agreement which has been hammered out between all the parties and which came into force on 1 January 1979. It is vital that we pass the Bill, if only for that reason.
    The next part of the Bill concerns a number of international conventions. Again I pay tribute to the work of IMCO. I say all strength to it. It must continue its work, and I hope that other countries will respond with the sense of urgency that we in this country have shown over implementation of those conventions. My right hon. and hon. Friends and I particularly welcome the advance power that is being taken to ratify important conventions in this Bill.
    This is a vital Bill, and that is why we have given the Government the greatest possible encouragement in ensuring that it goes through. I pay tribute to the Select Committee on Expenditure. It published its second report on measures to prevent collisions and strandings of noxious cargo carriers in waters around the United Kingdom. The Committee tabled a number of amendments on matters that it had recommended in its report. I believe that to have been a good step forward on behalf of Select Committees. That is how they should operate, and I am only sorry that lack of time has prevented us from considering their proposals in sufficient detail. I pressed the Under-Secretary in Committee to publish some form of response to the
    828
    Select Committee report, and he may wish to say something about that.
    I pay tribute to all of my hon. Friends who have done a considerable amount of work both in consultation and in addressing themselves to a line-by-line examination of the Bill. I pay tribute to the Minister for all the consultation he has held. Although we have criticised him from time to time, it has been in terms of a counsel of perfection. I pay tribute to him for the way he has always shown a willingness to listen and for having ensured that the Committee and the House have been kept fully informed and to his Department, which has also listened.
    This is a major Bill of considerable significance and we wish it a speedy passage through Parliament.
    1.32 p.m.
    Mr. Clinton Davis: I wish to repeat my expression of gratitude to the Opposition for facilitating the passage of this Bill. They have taken into account a wide-ranging interest. I thank all hon. Members who over the last five years have taken such a profound interest in a matter which is of great significance to this country.
    It is an important industry, for the reasons attributed to it by the hon. Member for Wirral (Mr. Hunt). It contains people who make a contribution to the life and well-being of this country which is, regrettably, all too often taken for granted. We are now making a significant effort to assist them to attain a better standard and better conditions on board the ships that they have to operate.
    I turn now to the speech by my hon. Friend the Member for South Shields (Mr. Blenkinsop). The hon. Member for Wirral rightly paid tribute to my, hon. Friend, who is widely admired on all sides of the House. He has spoken fearlessly on any number of subjects and served in Government with great distinction under Nye Bevan. He has served the Parliamentary Labour Party with particular distinction in shipping matters as chairman of the shipping group for a number of years, and I have had bonds of friendship with him over the last five years.
    I thank my hon. Friend for what he said about me. The House will be a

    829
    poorer place without him. I said in July that I thought then that we had seen positively his last appearance. That turned out to be wrong, and I have a sneaking suspicion that, even though it may not be in this place—and I am not conferring a peerage on my hon. Friend—he will continue to make a powerful contribution to public life.
    The hon. Member for Christchurch and Lymington (Mr. Adley) expressed his strong feeling about clause 42, and he made a big concession on that which I appreciate. Of course, I had to make a concession on clause 31. I regret that I shall have to say something about that—I was not proposing to, but I have been provoked a little. I think that I am entitled at this juncture to say one or two words that may not be completely acceptable in all parts of the House.
    The hon. Member for Christchurch and Lymington must recognise, as I believe he does, that his clause did not deal with a simple matter. The oil companies already carry considerable liability under the International Fund Convention of 1971. The International Compensation Fund has been established recently here in London. It provides £19·5 million as compensation for oil pollution damage in any single incident. The overwhelming cost of funding that money is borne by the owners of the oil.
    We are pressing for that amount to be doubled. It ought to be at least £39 million, but so far we have been unsuccessful. I hope, whichever party is in power after the next election, that we shall redouble our efforts internationally to ensure that the fund is increased as I have indicated.
    I have been pressing the oil companies to ensure that they step up their inspection procedures for the ships that they charter. I believe that they have taken that on board, and it is most important that that should be done.
    We have had our little local difficulties on the question of penalties, but I join warmly with those who have paid tribute to the Mercantile Marine Service Association, the Merchant Navy and Airline Officers' Association, and the General Council of British Shipping for the way in which they dealt with the difficult task of trying to secure a generally acceptable compromise on this issue. I think that we
    830
    have succeeded. I was worried throughout at the inability to bring certain interests, particularly foreign masters and owners, before the Crown courts. It was most important, I thought, not to empower the magistrates' courts to impose only derisory penalties for highly significant offences.
    Let me spell out where the maximum penalty of £50,000 on summary conviction will apply. It will apply to carrying an excess number of passengers. That question will turn on the evidence. It may not be possible in certain instances to establish that fact, but my Department would obviously have to look at the evidence before it embarked upon a prosecution. It will apply to a negligent breach of the rules under the collision regulations—that is, going down a traffic separation scheme in the wrong direction. I should have thought that the hon. Member for Wirral would say that that was not a minimal or unimportant offence. It will apply to failure to go to the assistance of a vessel in the case of a collision. It will apply to the breaching of a detention order. Where a detention order has been made asserting that a ship is unsafe to go to sea, what folly it would be if we were capable of imposing a derisory penalty for contravention of that order. It would also apply to the offence under clause 46 in respect of a dangerously unsafe ship.
    These are important offences, but, if British masters or owners were concerned, so serious would those offences be that I doubt whether we should be content to try them in courts of summary jurisdiction. The provision is, therefore, aimed at those to whom the threat of a trial on indictment might mean nothing since they could easily escape from facing it.
    The hon. and learned Member for Dover and Deal (Mr. Rees) raised the question of the ability of masters to pay such penalties. I remind him, however, that under section 31 of the Magistrates' Courts Act 1952 a court must have regard to the means of a master when it imposes a financial penalty.
    Mr. Peter Rees: Will the Minister be good enough to direct his mind back to two points which I made but with which, I think, he has not dealt? The point that I made about traffic separation lanes is that the ferries operate across

    831
    the Channel. I do not know whether the Minister quite hoisted that point aboard, although I know that he has been down to St. Margaret's Bay. As for the other point—the question of the number of passengers—the Minister may brush it aside and say that it can be taken on the evidence, but does he propose to station someone at Dover to see the people going on and off the ferries? What kind of evidence does he have in mind?
    It is difficult to regulate these matters, and I feel that the Minister could direct his mind a little more closely to such problems. He may say that they are matters of technicality, but they are of great concern in my constituency.
    Mr. Davis: Of course, I shall not establish a bureaucracy in order to satisfy a particular point that I have made, but where it is possible within fairly simple terms to ensure that people are not taken on board in excess of the numbers permitted, we must, surely, take strong account of that. There is a defence, anyway. One has to have regard to all the prevailing circumstances at the time. For example, if a master takes refugees on board a vessel in excess of the permitted numbers, that, of course, has to be permitted. There is a new defence provided in clause 46, which I need not burden the House with now.
    My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has, as I have said before, made a significant contribution to my knowledge about shipping matters, and I am certainly grateful for that. He directed his attention to clause 31. I regret the absence of the clause. I know that the hon. Member for Wirral takes a different view, but it seems to me that he went to extraordinary lengths to defeat it. He did not succeed in Committee. He sent an emissary to Brussels to seek succour and support through the Commission. It is somewhat significant that the Conservative Party, when it comes to deal with Brussels, tends to lie on its back to have its tummy tickled rather than to fight for British interests. But that is something which, no doubt, we shall be talking about in the next few days or so.
    Mr. David Hunt: Do not spoil the atmosphere. This is the Minister's last chance
    Mr. Davis: No, I have not spoilt the atmosphere. I am just having a little bit of fun. The hon. Gentleman spoke about "Bennery-pokery"—a bit from a cutting which he had got into Lloyd's List. It was rather a tired cutting. But, as I said in Committee, it is a bit much to charge the master mariners with Bennery-pokery, or the Merchant Navy and airline officers with Bennery-pokery or, for that matter, the General Council of British Shipping with Bennery-pokery. I am not sure that I altogether understand the hon. Member, but it seems that any mention of the word"Benn"is supposed to be some sort of significant pointer for the electorate.
    The hon. Gentleman knows very well that it was the General Council of British Shipping which urged us to take this action, which said that it was in the interests of the British industry and which said that it was necessary to obtain protection at the time and that the available protections were not sufficient. So I assure the hon. Gentleman that we shall come back to that in the course of the next few weeks.
    I come now to the Bill itself. It enables significant advances to be made in safety and in the reform of working conditions, including an overdue reform in the disciplinary regime which affects seafarers. It puts seafarers, at long last, on a similar basis in so many regards to that of land-based workers, and it removes a number of anomalies which ought to have been removed many years ago. I refer, for example, to the quite unreasonable limitation which was imposed on the amount of damages that could be awarded to someone who was severely injured while carrying out his duties. That has gone and gone for ever, and I am glad to have played some part in its going.
    The Bill enables this country to ratify conventions and protocols on safety and pollution more rapidly than ever before and to bring into force agreements which are reached in IMCO—to which the hon. Member for Wirral paid a thoroughly justified tribute—and, where we have ratified such conventions but there has been undue delay in securing the necessary conditions, to give effect to those conventions.
    While on the subject of IMCO, I should say that it must continue to be

    833
    the cornerstone of the international shipping policy of this country. That has certainly been our policy over the past five years, and it will continue to be so.
    Mr. Prescott: In many of these advances, we are beginning to find that, when we extend them to Northern Ireland, difficulty arises as to the definition of what is the United Kingdom and what is Great Britain, and some of the benefits are denied to seamen sailing from Northern Ireland in British-registered ships.
    I have in mind two cases now, and I am prepared to write to my hon. Friend about them. The latest one is about an unfair dismissal case, and I hope that the Minister, in his last few days—[HON. MEMBERS:" Hear, hear"]—certainly, in this Government, or whoever is returned. If it is not the present Government, I shall certainly be on to the next one to insist that they address themselves to this anomaly, which is denying benefits to a minority of seamen.
    Mr. Davis: I am not sure that I welcome the obituary. My hon. Friend may feel that I have been in this office for a very long time—some, I know, have said "too long"—but I have enjoyed it and I have had help from my hon. Friend, among others. I now understand that I am to get a bit more help in the next few days. But if there is an anomaly which needs to be cured, I feel that obituaries need not be written so swiftly, and I shall deal with the matter certainly in the course of the next three or four months.
    I turn now to the question of pilotage. We have had an interesting debate today, but I believe that overall the Bill will promote important and valuable reforms. Enhanced safety is the key.
    Perhaps I may seize this opportunity to say a word about pilots' pensions, a matter raised by the hon. Members for Harwich (Mr. Ridsdale) and for Wirral. I know that, although the pilots are prepared to accept the Bill, they are concerned that it will now not be possible, as we had planned, to make provision for the safeguarding of their pensions in the Finance Bill this Session, but I give a commitment on behalf of this Government that we shall introduce the relevant
    834
    provisions if we are returned, and I believe that the hon. Member for Wirral would be prepared to give a similar undertaking.
    As we near the end of this Parliament, I wish to say that I have had the benefit of enormous help from the industry. I have had that help from the seafaring trade unions, which have for the first time been brought into international shipping policy, moulding that policy and helping us to do it, and I hope that that will long continue.
    I pay my tribute also to the General Council of British Shipping, which was a little suspicious of me at the beginning, I suspect, but with which I have enjoyed a friendly relationship. I welcome the assistance of both bodies—I have always done so—but, of course, I have had to make the decisions and sometimes they do not please both sides.
    I welcome the support that the Select Committee has given to consideration of so many vital matters. It is now virtually certain that we shall be able to publish our response to the Select Committee on Wednesday. I think that that will be of assistance to the next Parliament.
    I thank all those who have been involved on behalf of the pilotage interests for the care with which they have approached the Standing Committee and the advisory committee. I thank Trinity House, the United Kingdom Pilots' Association and the watermen, with whom, in particular, I have recently had some very useful discussions.
    I had had five years of unstinting help and encouragement. Above all, I have tried to bring together all the interests to enable their individual and joint experience to be fielded on behalf of the Government in being able to speak internationally for a united industry. That has been a valuable contribution. Perhaps it is only a contribution—I know not and it is for others to judge—that I have made as a Minister. However, I am glad if I have done that.
    I thank the House once again for facilitating the passage of what I believe is a momentously important Bill.
    Question put and agreed to.
    Bill accordingly read the Third time and passed.

LEGAL AID BILL [Lords]
Order for Second Reading read.
1.51 p.m.
The Solicitor-General (Mr. Peter Archer): I beg to move, That the Bill be now read a Second time.
I am grateful to all those who have made it possible for the House to consider the Bill before Dissolution. I am especially grateful to my right hon. Friend the Lord President and to the hon. and learned Member for Southport (Mr. Percival). In the near future we shall all be deploying our respective cases on the hustings. I shall try to restrain myself from beginning this afternoon.
The Bill will be welcomed by all those concerned with the administration of justice. After making such progress without controversy, it would be tragic if the Bill were now delayed until time could be found for it in the next Parliament.
We have all known for many years that a number of aspects of our legal aid system are less than satisfactory. The system is no longer wide enough in scope to include many of those whom it was designed to assist in asserting and defending their rights. And there are many who are entitled to be included who may be discouraged from availing themselves of it by reason of the large financial contributions that they are required to make. It is a serious criticism of our law that some of our citizens might be denied justice because they do not have access to advice or to representation in the courts. It is not a question of principle. I know of no one who argues that others should be denied justice. It is merely a matter of resources.
It is true that for the past few years we have been keeping abreast of inflation in relation to the limits of eligibility for legal advice, assistance and entitlement without contribution. That was running to stay in the same place. It did not improve our position, which had already fallen behind when that practice began. However, it would be misleading to say that expenditure on legal aid has not risen. It has been rising alarmingly year by year. That has not represented vast increases in fees to the legal profession; it has represented an
836
increase in the amount of litigation, especially so if we include criminal cases.
When two years ago my right hon. and noble Friend the Lord Chancellor extended the special procedure to all undefended divorces and thus dispensed with a hearing on the granting of a decree nisi, we knew that as a result there would be some savings to the legal aid fund. My right hon. and noble Friend said at that time—I repeated it in the House—that it was hoped that there would be some release of resources for other purposes. We said that those resources would not become available at once because there would be a period when money would continue to be paid out of the fund in respect of work done in the past while there would be no inflow of new contributions. But the time has arrived when some savings have been effected and some resources are available. My right hon. and noble Friend has decided that the first priority is to effect certain improvements to the legal aid system.
The package that is proposed falls into two parts. On 20 March my hon. and learned Friend the Parliamentary Secretary to the Law Officers' Department introduced to the House the appropriate regulations, which increased the eligibility Financial Conditions 1979, which increased the upper income limit for eligibility to legal aid and increased the lower disposable income limit, the limit of entitlement to free legal aid. At the same time he introduced the Legal Aid and Assistance Financial Conditions (No. 2) regulations, which increased the eligibility limits for what has come to be called the green form scheme. The effect of those regulations was to bring about a substantial increase in the number of those entitled to legal aid within the scheme.
The Bill is the second part of the package. It seeks to improve the scheme principally in three ways. First, it seeks to extend the advice and assistance scheme to include assistance by way of representation in certain cases. At present, broadly, there are two schemes. There is one scheme for the provision of advice and assistance and a second scheme for legal representation. That has meant that when a client receives advice and assistance from a solicitor in bringing a matter to court and the question of representation arises in the proceedings,

837
he must make an application for a legal aid certificate under the other scheme with all the consequent delay.
The proposal in the Bill would mean that the solicitor would continue the service he was offering to the client without interruption. It would have a further effect. At present when an application is made for a certificate for representation, the applicant's means are assessed by the Supplementary Benefits Commission. That is a process which itself costs money. It may be worth that expenditure when the proceedings are likely to cost many hundreds of pounds, but when the cost of representation is quite modest it does not make sense to embark on a process of assessment the cost of which may equal the contribution that is being assessed. For advice and assistance a client's means are assessed by the solicitor. That works satisfactorily, especially when small sums are involved.
It is proposed to include representation in that system where costs are likely to be limited. The Bill would empower the Lord Chancellor—I use the term"Lord Chancellor" in the impersonal sense as I am determined not to be provocative—to make appropriate regulations. If it were to fall to my right hon. and noble Friend to consider what regulations should be made, he would propose to begin by making representation available for matrimonial proceedings at magistrates' courts. But that would obviously be a matter for whoever was in office.
The effect of the Bill would be that that sort of representation would require only the approval of the appropriate authority in the same way as expenditure on advice and assistance in excess of £25 or £45, as the case may be. For civil proceedings the appropriate authority is now the area legal aid committee or, for magistrates' courts and county courts, the court itself. But there are proposals to make available to the Lord Chancellor the power to vary this by regulations. That is the first proposal. It is to be found in clause 1 for England and in clause 6 for Scotland.
The second improvement that the Bill seeks to make is to empower the Lord Chancellor to vary the maximum contribution payable by a recipient of legal aid. One of the present shortcomings
838
of the scheme is that those who may be entitled to legal aid are discouraged from litigating by the size of the contribution required of them. The formula is set out in section 9 of the 1974 Act. A calculation is made of the assisted person's disposable income. Broadly, that means his income after deducting tax, rent, mortgage payments, cost of travel to work and other such expenses.
I know that there are those who fully understand the rules for calculating disposable income but, speaking personally, I have never yet met anyone who admits to understanding them.
When the disposable income is calculated, from that figure is deducted the amount of the free limit. The maximum contribution is one-third of the difference. It is one-third of the amount by which the disposable income exceeds the free limit. The Lord Chancellor would be given power in clause 4 for England and clause 9 for Scotland to make regulations to prescribe what the fraction should be which is at present one-third. My right hon. and noble Friend would propose, if it fell to him to make the regulations, to reduce the fraction from one-third to one-quarter. This is in general accordance with the recommendations of the 27th annual report of the advisory committee on legal aid, 1976–77. The recommendation is contained in paragraph 42.
Thirdly, the Bill proposes to confer power on the Lord Chancellor to prescribe different maximum contributions for different classes of cases. That power is contained in clause 4 in respect of England and in clause 6 in respect of Scotland. My noble friend has in mind proceedings such as personal injury cases. In 90 per cent, of personal injury cases, since either there is an order for costs against the other party or there are damages from which the costs may be found, the contribution is ultimately returned to the assisted person. It seems to be a waste of time and money solemnly to collect the contribution and ultimately return it.
Mr. John Prescott: I am interested in that point. One of my constituents was awarded £70,000 damages. However, it was found that the legal aid system had first claim on the money as the person whom the damages were found against could not afford to

839
pay anything towards the damages. I wonder whether there is any possibility of assisting such unfortunate cases who have damages properly found by the courts but who find that the legal aid system has first claim on the limited income available to pay for such damages.
The Solicitor-General: I am aware of the tragic case that my hon. Friend has in mind. We are paying attention to see whether something may be done to help the assisted person in that class of case. Such provision is not included in this Bill. It if were sought to include it, there might be some difficulties at this late stage in the life of Parliament. However, I shall bear the matter in mind in the next Parliament. If it falls to me to have any powers in the matter, it will not be overlooked. The charge to which my hon. Friend referred is retained within the framework of the scheme as amended by the Bill, although there are amendments to it under clause 5.
At present the prospect of making a substantial contribution may deter people from bringing proceedings. My noble Friend envisages that the power may be used to vary the contributions in personal injury cases, in the categories to which I referred.
I have referred to clauses 1, 4 and 6. I do not propose to delay the House by referring seriatim to each clause. But, I shall refer to clause 2, which empowers the Lord Chancellor to prescribe limits on the value of work that may be carried out under the green form scheme without obtaining the specific approval of the legal aid committee. For most purposes the present limit is £25. For undefended divorces the limit is £45. It is sometimes desirable to have a limit for certain categories of cases so that the work does not have to be interrupted while an application is made to the committee for special consent in a particular case. Clause 2 is intended to simplify that procedure.
Clause 3 enables the Lord Chancellor to prescribe the maximum contribution payable by those receiving advice and assistance in the same way as clause 4 confers powers, to which I have referred, in respect of those receiving legal aid. That enables the Lord Chancellor to substitute a different formula for the some-
840
what cumbersome table that is at present found in section 4 of the Legal Aid Act 1974.
The House may wish to know the cost to public funds of these improvements. In the debate last week in the Standing Committee on Statutory Instruments my hon. and learned Friend told the Committee that the total annual estimated cost of the package was £6 million. Of that figure about £1 million is attributable to the improvements suggested in the Bill. The only measure that is likely seriously to cost money is the variation of the formula for calculating the maximum contribution. The Bill gives the Lord Chancellor power to make regulations. The cost will depend upon what regulations are made. But, the assumption that he did, as my noble Friend had in mind, alter the formula to reduce the fraction from one-third to one-quarter, the anticipated cost would be about £1 million per year.
There was full consultation with the Law Society in drawing up the Bill. I go so far as to say that the Law Society approves the Bill. It is very much in mind that in any regulations made under the Bill there will also be the fullest consultation with the interests involved.
This is a modest cost for a measure that will alleviate hardship and help to increase confidence in the ability of our legal system to provide a redress for grievances. The importance of maximising public confidence in the legal system is not an issue that divides the House. I commend the Bill to the House.
2.7 p.m.
Mr. Ian Percival: I assure the Solicitor-General that the Opposition welcome the Bill. Like him, I shall resist the temptation to be provocative.
The Bill will add to the amount of money that we must find to finance the scheme. There are some aspects of costs about which we are not entirely happy. It is difficult to obtain accurate estimates. Even so, this is a burden that we shall not object to inheriting from the Government in the early future. We wish the Bill well and want to see it pass all its stages now. We shall do everything we can to facilitate that.
When the Legal Advice and Assistance Act was passed, it was described by the then Attorney-General as the charter of the little man to the British courts of

841
justice. We have all been proud of that. The parliamentary relations sub-committee of the Law Society expressed the desire to have such a charter in these words:
"Just as it was unthinkable that an accident victim's injuries should be untreated through inability to pay his doctor, so he should not be prevented through lack of funds from pursuing his just remedies at law."
Hon. Members on both sides of the House will wholeheartedly subscribe to the principles that are defined in those words.
It is sometimes suggested that people cannot obtain access to the courts as lawyers make too much profit. I thought it was interesting that the parliamentary relations sub-committee referred to experiments carried out to see whether legal aid work was reasonably remunerative and found in two cases that it was being done at a loss. I mention that not out of feeling for the lawyers involved, but for this reason. If we allow that situation to continue, people will be deprived of the opportunity to obtain legal assistance, because if services must be operated at a loss there will be a time limit to the period in which they will be provided.
When the scheme was introduced we were proud of it. At that stage it was estimated that 80 per cent, of the population would be eligible for legal aid. That does not mean free legal aid. Rather, it means legal aid with some contribution.
Will the Solicitor-General tell us in a little more detail how far we shall have caught up by the time we have the package represented by the Bill and the financial regulations that were approved last week? I give that specification as I realise that there will be room under the Act for taking further steps forward by regulation. Will the Solicitor-General indicate where we shall have got to when the Bill is passed into law? I do not say that to denigrate or minimise my welcome to the Bill. I welcome this measure, as do many others. However, we must be careful not to give too optimistic a view of the outcome of a piece of legislation. We must not build up people's hopes unduly. We should always be very careful not to do that.
Secondly, one of the few ways in which we can judge what the cost is likely to be is by having some sort of estimate of
842
how many more people will come in. I do not underestimate the difficulty of getting comparative figures, but at the moment we are not considering like with like. I take the figure of 80 per cent, as being the one that was generally accepted at the time as being the percentage of the whole population which would be entitled to legal aid at the time when the legal scheme was first introduced. Now the best estimate we have is that 70 per cent, of two-parent/two-children families would be eligible for legal aid.
I would think that that is a different basis of calculation and would produce the result not only that we would have a shortfall between the 70 per cent, and the 80 per cent, but that, if we are talking about two-parent/two-children families, that is a smaller section of the community than taking the community as a whole. If I am right about that, I think that the conclusion is that we still have quite a way to go in order to catch up with where we started, and it is as well that we should have the clearest possible indication on that.
Thirdly, perhaps the Solicitor-General could help us on the question of the disregards in relation to capital. The parliamentary relations sub-committee of the Law Society referred to the small nest-eggs that many people have. They have built them up over a long period of time. I am not talking of wealthy people with large capital resources but of the little nest-egg that everyone likes to have, the little something to fall back on, whether it is to pay for a decent burial or to leave to children, or to a husband or wife. For far too long, sums that were far too small have been brought into account in arriving at the contribution.
For a long time, under the legal aid system the amount of capital disregards has been smaller when considering legal aid than when considering supplementary benefit. Perhaps the Solicitor-General will tell us how far we shall have gone with this package towards catching up with those deficiencies. I am also told that there are still cases in which persons with families on supplementary benefit find themselves having to make not only some contribution but a substantial one. Have we caught up with the position where those who are in receipt of supplementary benefit will be entitled to free legal aid? Can we say as a general proposition that

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we have now reached that position? If so, so much the better.
I am sorry that the hon. Member for Kingston upon Hull, East (Mr. Prescott) is not here. On one occasion I had the pleasure of having him as my opponent in Southport. He so often makes a very useful and practical contribution to our debates in this House. I just want to say that on the Conservative Benches also we are very conscious that there are many situations of the kind that he mentioned. On whichever side of the House we may be, it will always be our wish to endeavour to remove anomalies.
On behalf of the—for the time being—Opposition, I welcome the Bill.
2.14 p.m.
Mr. David Weitzman: Perhaps I may be permitted, Mr. Deputy Speaker, to add just a few words, as my swan song in this House, in support of the Bill. Everybody recognises the need to assist a litigant as much as possible, and we all know how very necessary it was that the provisions of legal aid should be increased as much as possible in order to achieve that object. I am extremely pleased that the Government have been able to introduce the Bill, improving those provisions and giving us the opportunity of allowing the litigant to have his remedy in a proper manner.
I am delighted to have seen my right hon. and learned Friend the Solicitor-General introducing the Bill today, at a time when the Government's demise is about to become a fact. I hope that he will have very many future opportunities to act in this way in a Labour Government.
2.15 p.m.
The Solicitor-General: With the leave of the House, Mr. Deputy Speaker, it would be very remiss of me if I did not thank my hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) for his very kind words. On behalf of the whole House, I wish him well in his forthcoming retirement. His contributions to our discussions in this House over a long period of years are on record, and they will not easily be forgotten. I hope that we shall still see him and his contributions in other connections in the years to come.
844
I am grateful to the hon. and learned Member for Southport (Mr. Percival) for the welcome that he gave to the Bill. He asked three pertinent questions. He asked, first, how far the total package of the Bill, plus the regulations introduced last week, has brought the position back to what it was originally intended to be and to what it was assessed as being in 1950. The best comparative figures that we have relate to individuals. I understand that that is not necessarily the most clear indication. It would probably be better to have families, for if we compare individuals, something turns on the proportion at any given time of the very young and the very old in society, and the number of married couples, and so forth. If we are to have the comparative figures, they are probably best derived from individuals, if only because at different times the other figures do not always seem to be available.
In 1950, as the hon. and learned Gentleman said, it was estimated that about 80 per cent, of the population was eligible for inclusion within the legal aid scheme, irrespective of what a person's contribution might be. It seems that by 1973 that proportion had fallen to about 40 per cent, of individuals. It will be recollected that in 1973 the practice began of keeping the limits abreast of inflation, so that after that time the fall was to a great extent arrested. As far as we know, the proportion now is about 40 per cent. It is estimated that the package will raise that again to something over 70 per cent., and it could be as high as 80 per cent. But if we are to be accurate and not raise expectations too high, it would be fairer to say something over 70 per cent.
The hon. and learned Gentleman's second question was whether the capital limits for legal aid are now broadly in line with the capital limits for supplementary benefit. I understand that the answer is that they are, and that the two are about on a level.
Thirdly, the hon. and learned Gentleman asked whether all those who are eligible for supplementary benefit are, broadly speaking, eligible for legal aid. I understand that the answer to that question is "Yes". Certainly it would be very disturbing if the answer were in any doubt. I understand that the answer after this package would be "Yes". We all start off if not with a clean sheet at least

845
with a fresh start and, to whomever it falls to implement the intentions in this package, there is a great deal of hope for the future of those who have to avail themselves of the legal system in order to assert or defend their rights. They will have the opportunity of legal advice and, where necessary, legal representation, and they will not be precluded on financial grounds.
Mr. Percival: In addition to thanking the Solicitor-General, I should just like to ask leave of the House to join in the tribute which the Solicitor-General paid to the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman). I do so most warmly.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Thomas Cox].
Further proceedings postponed, pursuant to Order this day.

LEGAL AID BILL [Lords]

  LEGAL AID [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to amend certain enactments relating to legal aid and legal advice and assistance, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the sums so payable under the Legal Aid Act 1974 or the Legal Aid (Scotland) Act 1967 in consequence of—

  (1) provisions enabling assistance to be given to a person by taking on his behalf any step in the institution or conduct of any proceedings before a court or tribunal, or of any proceedings in connection with a statutory inquiry, whether by representing him in those proceedings or by otherwise taking any step on his behalf (as distinct from assisting him in taking such a step on his own behalf) provided the assistance is approved by an appropriate authority in accordance with regulations made for the purposes of those provisions;

  (2) provisions for securing that, where a party receives any such assistance or legal aid in connection with any proceedings and those proceedings are finally decided in favour of another party, the court by which the proceedings are so decided may make an order for the payment to the other party out of the legal aid fund of the whole or any part of the costs incurred by him in those proceedings;

  846

  (3) provisions for reducing in relation to a person receiving legal aid, his maximum contribution in respect of disposable income and his maximum contribution in respect of disposable capital;

  (4) provisions removing the requirement for regulations to secure that in computing the resources of an applicant for legal aid there shall be observed the rules set out in paragraphs 17, 18, 23 and 25 of Schedule 1 to the Supplementary Benefits Act 1976;

  (5) provisions enabling advice and assistance or legal aid to be given to a body of persons corporate or unincorporate which is concerned in a representative, fiduciary or official capacity.—[Mr. Thomas Cox.]

  LEGAL AID BILL [Lords]
  Postponed proceedings resumed.
  Bill immediately considered in Committee, pursuant to Order this day.
  [Sir MYER GALPERN in the Chair]
  Clauses 1 to 3 ordered to stand part of the Bill.

  Clause 4

    CONTRIBUTIONS FROM PERSONS RECEIVING LEGAL AID
    The Solicitor-General: I beg to move amendment No. 1, in page 4, line 20, leave out "£815" and insert "£1,500".
    The First Deputy Chairman: With this amendment, it will be convenient to take Government amendments Nos. 3, 6 and 8.
    The Solicitor-General: These amendments are to take account of the regulations approved by the House last year. The regulations are intended to come into force on 6 April. The Bill has, in effect, lapsed the regulations, and without these amendments from 6 April the provisions in the Bill would be lagging behind the new limits.
    Mr. Percival: We recognise the need for these amendments and support them.
    Amendment agreed to.
    The Solicitor-General: I beg to move amendment No. 2, in page 4, line 22, leave out first' such ' and insert
    ' one quarter of the excess or such other'.
    The First Deputy Chairman: With this amendment, it will be convenient to take Government amendment No. 7.
    The Solicitor-General: This is to provide in the Bill itself what would otherwise fall to be done in regulations made under the Bill. The other elements in the passage are intended, as I said, to come into force on 6 April, but no one would benefit from these provisions until it was possible to make regulations and to introduce an affirmative resolution. Therefore, in order to ensure—as I think everyone agrees—that they should be done at once, subject to the power to amend them subsequently by regulations, the intention is that the provisions should actually be introduced into the Bill itself.
    Amendment agreed to.
    Amendment made: No. 3, in page 4, line 24, leave out '£365' and insert '£1,200'.—[The Solicitor-General.]
    Clause 4, as amended, ordered to stand part of the Bill.
    Clause 5 ordered to stand part of the Bill.

  Clause 6

    EXTENSION OF ASSISTANCE TO REPRESENTATION IN PROCEEDINGS
    The Solicitor-General: I beg to move amendment No. 4, in page 7, line 25, leave out 'that subsection' and insert 'subsection (6A)'.
    The First Deputy Chairman: It will be convenient to take at the same time Government amendment No. 5.
    The Solicitor-General: These amendments are to take account of the fact that the Legal Aid (Scotland) Act, to which reference is made in the clause, already has a subsection (6A) which was introduced by the Social Work (Scotland) Act 1968.
    Amendment agreed to.
    Amendment made: No. 5, in page 7, line 27, leave out ' (6A)' and insert ' (6B) '—[The Solicitor-General]
    Clause 6, as amended, ordered to stand part of the Bill.
    Clauses 7 and 8 ordered to stand part of the Bill.

  Clause 9

    CONTRIBUTIONS FROM PERSONS RECEIVING LEGAL AID
    Amendments made: No. 6, in page 8, line 28, leave out ' £815' and insert '£1,500'.
    No. 7, in page 8, line 30, leave out first 'such' and insert
    one quarter of the excess or such other'.
    No. 8, in page 8, line 32, leave out ' £365 ' and insert ' £1,200 '.—[The Solicitor-General.]
    Clause 9, as amended, ordered to stand part of the Bill.
    Clauses 10 to 13 ordered to stand part of the Bill.

  Clause 14

    CITATION, COMMENCEMENT AND EXTENT
    The Solicitor-General: I beg to move amendment No. 9, in page 10, line 33, leave out subsection (6).
    This is what is normally referred. to as the privilege amendment. It relates to the subsection introduced in another place to avoid questions of privilege, leaving it to this House to take it out, and I assume that the Committee will wish to do so.
    Amendment agreed to.
    Clause 14, as amended, ordered to stand part of the Bill.
    Schedules 1 and 2 agreed to.
    Bill reported, with amendments; as amended, considered.
    Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
    Bill accordingly read the Third time and passed, with amendments.

LAND REGISTRATION (SCOTLAND) BILL [Lords]
As amended (in the Standing Committee), considered.
LAND REGISTRATION (SCOTLAND) BILL [Lords]
  Clause 20

    TENANTS-AT-WILL
    2.25 p.m.
    Mr. Douglas Henderson: I beg to move amendment No. 1, in page 17, line 43, leave out 'one twenty-fifth' and insert 'one-fiftieth3/10/2007'.
    Mr. Deputy Speaker (Mr. Myer Galpern): With this we may take the following amendments:
    No. 2, in page 17, line 44, at end insert:
    'or twenty-five times the amount of the annual rent.'.
    No. 3, in page 18, line 19, leave out from ' tenant-at-will' to end of line 23 and insert:
    'shall pay his own expenses and the landlord shall pay his own expenses in conveying the interest to the land to the tenant-at-will and the landlord shall bear responsibility for providing any plan or drawing of the tenancy land necesary for the conveyance."
    Mr. Henderson: These are three associated amendments. I emphasise to the Lord Advocate, who is here to reply on behalf of the Government, that these three amendments are alternative to each other in terms of dealing with the question of compensation in obtaining title for tenants-at-will. They are alternatives and not cumulative provisions to be taken together.
    The Lord Advocate (Mr. Ronald King Murray): That is very helpful to me. I had not been aware of that.
    Mr. Henderson: That may well mean that the Lord Advocate will be reconsidering his response today, since he was not aware of the position until now.
    I first raised this matter when the Bill went to the Scottish Grand Committee on 15 March. It relates to tenants-at-will in the North-East of Scotland who are in a peculiar type of legal limbo. They are neither the feudal proprietors of the land nor tenants in the accepted sense of the word. They are people who have the right to the property built on the land—that is, the house built on
    850
    the land—but who have no right to the land itself.
    This form of tenure has existed in the North-East for a considerable period. Tenure was given mainly to build up the fishing villages in the North-East by landlords who wished to increase the size of the villages. The tenant-at-will pays an annual rental for the land on which the premises are sited and he himself has title to the house situated on that land.
    This system worked quite well for a long time, in that the tenant was able to sell the House to someone else or transfer it to his heirs without any incumbrance or difficulty, rather in the same way as a motor car can be sold. A notice is simply sent to the landlord and an entry is made in the estate records that the tenant-at-will on a particular location was Mr. A as opposed to Mr. B. The system worked quite well until inflation increased land values and it became more difficult for tenants-at-will to find finance to buy such houses. It also meant that, because they did not have a feudal title, they were unable to obtain improvement grants from the local authority because they could not exhibit a valid title. During the five years that I have been in this place, I have asked that tenants-at-will be taken out of this legal purgatory and put into a position where they have the same property rights as anyone else.
    2.30 p.m.
    I acknowledge that the Government and the Lord Advocate have shown a great deal of sympathy and understanding about the position of tenants-at-will. We see the fruits of that in the present Bill. I want to make it quite clear that despite what I say today I in no way want to hold back the Bill's progress. It is very important that tenants-at-will should be given the right to buy their own property.
    The Lord Advocate: The hon. Gentleman has been very kind in his tribute. However, he does not need to say anything more if he does not want to.
    Mr. Henderson: I have no doubt that that would greatly accommodate the Lord Advocate.
    Mr. J. Enoch Powell: This is the last opportunity that the Lord Advocate will have.
    Mr. Henderson: Yes, this is his last appearance.
    Mr. Deputy Speaker: Order. I would remind the Lord Advocate that there is to be a general election on 3 May.
    Mr. Henderson: That is a useful observation, Mr. Deputy Speaker, to all of us. But the remarks that I am making are in no way related to a general election. They are related to the matter that is contained in these amendments. The issue at stake is the terms under which a tenant-at-will will be able to obtain full title to the property.
    The Government's proposals are contained in clause 20. I believe that they are rather onerous terms for the tenant-at-will. My amendment seeks to alter these terms more in favour of the tenant-at-will. In amendment No. 2, which is being discussed at the same time, I have suggested a formula of 25 times the amount of the annual rent. That would have a great advantage in that it would follow the same course under which we agree to have feu duties redeemed. Feu duties are redeemed on a factor that is multiplied by the amount of the feu duty, and it is, therefore, a relatively certain sum.
    Under the Government's proposal, as at present in the Bill, a valuer would be required to put a value on the land, and the buildings thereon, if the formula suggested in clause 20(3) were to be accepted This would involve the tenant-at-will in the payment of professional fees which I believe would be quite unnecessary. But if this were simply a multiple of the annual rent—I have suggested 25 times as being a reasonable amount—there would be no need whatever for a valuer to be involved, and no additional fee burden would be placed on the tenant-at-will.
    The other possibility relates to the payment of expenses. If the clause were left as it is, on the one-twentyfifth formula it could be that the tenant-at-will would be paying somewhere around £400. In addition, he might have between £300 and £400 to pay for legal expenses, surveyor's expenses and other incidentals in order to register his title. Therefore, it would cost about £800, perhaps even up to £1,000 in some cases, in order to transfer the right in the land to the tenant. I do not think it can be the Government's inten-
    852
    tion to burden tenants-at-will with about £1,000 in order to gain this particular advantage. Indeed, many tenants-at-will might find it necessary to take out a mortgage on their houses in order to pay for these expenses.
    When I raised the matter in the Scottish Grand Committee on 15 March, the Under-Secretary of State for Scotland—the hon. Member for Stirling, Filkirk and Grangemouth (Mr. Ewing)—who replied on behalf of the Government, said that he was prepared to look at the matter at a later stage. When on 27 March I raised it again in Scottish Standing Committee, which dealt with the Bill ex-peditiously, the Lord Advocate himself said:
    "I shall look into this matter further to take into account the points which have been made."—[Official Report, First Scottish Standing Committee, 27 March 1979; c. 49.]
    I hope that today the right hon. and learned Gentleman will be able to announce that he has looked at this matter fairly, as I would expect him to, and that he feels that at least one of these proposals will be acceptable to the Government and can be incorporated in the Bill so that at long last tenants-at-will will have their disadvantages removed at a reasonable price. I hope that we shall have that response from the Lord Advocate.
    Mr. George Younger: We are grateful to the hon. Member for Aberdeenshire, East (Mr. Henderson) for raising this matter again. Before the Lord Advocate gives us his views upon these amendments, and what he feels can be done about them, I should like to say that it was a fairly unanimous view in the Committee that this would be a good opportunity, if possible, to regularise the position of tenants-at-will, who in some senses constitute a strange anomaly compared with the rest of Scotland. I hope that the Lord Advocate will do all that he can to respond to what the hon. Gentleman has said, bearing in mind that it is the wish of hon. Members on all sides of the House to take this opportunity of regularising the position of tenants-at-will.
    I do not know whether the amendments are technically correct. I am not a lawyer, and I am not familiar with the law as to tenants-at-will. I hope that the Lord Advocate will bear in mind the views of the Committee as a whole, which was

    853
    very sympathetic to the situation of these tenants.
    The Lord Advocate: At the outset, I would like to make it clear that the Bill—the hon. Member for Aberdeenshire, East (Mr. Henderson) was generous in his tribute—regularises completely the substantive rights of tenants-at-will. The issue that arises in respect of these amendments is a peripheral or side issue as to the expenditure involved in achieving that regularisation. One must be absolutely clear about that. The position of tenants-at-will is regularised. They are given a status of the kind that they have been seeking but have never yet achieved.
    Although this is a peripheral issue, it is nevertheless, an important one. I am happy to be able to say something further about it, as I undertook to do during Committee. It may be useful if I first dealt with the merits of the amendments. The hon. Member for Aberdeenshire, East was frank in telling me that these amendments are intended to be alternatives. I am afraid that must lead me to tell him that, unfortunately, they are defective, because as drafted they do not operate as alternatives in terms of the clause. However, the technical defect argument is not enough. I want to deal with the merits as well, because I am sure that the House would like to decide this matter on principle. I hope to satisfy the House that what the Bill does is reasonable and fair. I do not say that another view might not be taken, but all I argue is that what the Bill contains is reasonable and fair and I ask the House to accept the Government's drafting on that basis.
    The first amendment seeks to replace the fraction of one-twentyfifth with one-fiftieth. It may perhaps be helpful if I point out the context in which this change in fraction takes place. The clause with which we are dealing provides in subsection (3) for the payment to be made for a tenant-at-will to his landlord by way of compensation in respect of acquisition of tenancy land. It is common ground, and this is accepted in the amendment, that there is nothing whatever wrong with the provisions so far. In other words, it is accepted in principle that, in order to regularise this situation, it is reasonable that the tenant should compensate the
    854
    landlord for what he is conveying to him. Therefore, that is common ground and is not challenged in any way.
    What is challenged is the next bit. At present the Bill provides three bases upon which compensation can be assessed. The first is the most equitable of all—by agreement. In other words, if the parties agree that a certain sum should be payable, that is the sum which the law says shall be payable. We then come to two cases which arise if there is not agreement. Again, let me stress that neither of these is challenged by the hon. Gentleman. The second one is the value of the tenancy land, not including any buildings thereon but assuming that planning permission for residential purposes has been granted for it.
    The value as assessed in that second leg may be the one that is required. I shall come shortly to the question of how one chooses between them.
    The next alternative—there are really two alternatives together, because 2 and 3 are really alternatives—and the third option, as the Bill stands, is one-twenty-fifth of the value of the tenancy land. I think that the hon. Gentleman perhaps implied that his amendment was for one-twentyfifth, but his amendment is for one-fiftieth.
    These are the three options. As I have pointed out, the second and the third options are true alternatives. One finds that out by turning over to the next page of the Bill, page 18, where one is told that it is "whichever is the lesser"—that is, of these two, because obviously agreement excludes both of these two.
    The hon. Gentleman is saying, therefore, that (b) should be one-fiftieth. First, that would produce a disconformity between paragraphs (a) and (b) because (a) and (b) have been worked out objectively on the basis of the factual information supplied by Inland Revenue valuers in Scotland. There is a balance between the two. I think that the House will appreciate that if one had an alternative which was not reasonably balanced—in other words, if one was always derisory as compared with the other—obviously the derisory option would be the one that universally applied. Therefore, one must have the two options. Therefore, it is reasonable that (a) and (b) should be fairly balanced.

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    I must tell the House that one-twenty-fifth is the average or median figure which is brought out in voluntary cases of conversion of tenancies in the experience of those accustomed to dealing with the matter. I do not think that anyone could have devised a fairer way, in a Bill of this kind, of assessing what is a reasonable fraction. It must be accepted that when one is putting a fraction in a Bill there is always an element of arbitrariness about it. I should have thought that in this particular case it would be very difficult to say that a figure so arrived at has any arbitrariness that could possibly be avoided.
    I think that that deals substantially with the merits of the first amendment. I hope that the House will reject it. In fact, I hope that the hon. Gentleman has been convinced by my argument and will be convinced by what I have further to say—I see that he is shaking his head. However, I shall do my best with him, notwithstanding.
    The second amendment seeks to add an additional option—I think that that is the effect of what the hon. Gentleman has told me—so that instead of having the valuation determined by agreement or by alternative (a) or alternative (b), he wants a further alternative (c) three legs if one does not get agreement between the parties, and again we take the lesser. I think that the hon. Gentleman is accepting that.
    If we take that, then we have, in addition to these other two legs, the third option, 25 times the amount of the annual rent. As clause 20(8)(b) acknowledges, ground rents for tenancies-at-will are redeemable, and some have been redeemed. In the case of redeemed rents, there would be no existing base figure for capitalisation in order to produce a valuation in terms of this amendment. In other words, the amendment could not cut in those cases.
    There is a further point, because some tenancies-at-will will command only nominal rents. Some will be as low, I am told, as 50p. Others have been brought up to a more modern and realistic figure, a factor of many times more than 50p. As the House will see, this would introduce a radical inconsistency in terms
    856
    of which for substantially the same sort of holding one tenant would be paid compensation at a factor of many times greater than a corresponding tenant-at-will with exactly the same sort of holding who was paying a nominal rent. Apart altogether from the obvious inequity of that, one would be compounding the position by, as it were, putting a premium on those landlords who have been most grasping and have sought to increase the rent to the maximum extent before the Bill bites.
    I should have thought that if my first argument does not carry compulsion to the hon. Gentleman, perhaps that second argument would do so, certainly in regard to that clause.
    I turn to the third argument, which is, I think, the strongest argument that the hon. Gentleman has put forward. Clause 25 requires the tenant-at-will to reimburse expenses reasonably and properly incurred by the landlord in conveying his interest in the tenancy land. In my submission, that clause is equitable and it certainly reflects the general practice in comparable fields. I think that the best field which I can use to illustrate that is the Crofting Reform (Scotland) Act 1976, a comparatively recent Act. Under section 1 of that Act, a crofter can obtain an order of the Land Court entitling him to a conveyance of croft land from his landlord, and under section 4(3) the Land Court can order that expenses necessarily incurred by the landlord in connection with the conveyance are to be borne by the crofter. That is a close analogy, allowing for the different nature of the more complex operation that was involved in the Crofting Reform (Scotland) Act because, as the hon. Gentleman knows, that involved the dwelling house and the croft land itself. Sometimes that included the dwelling-house and sometimes it did not. This is a close analogue with the situation under the clause. In each case the tenant, or the crofter, as the case may be, has a statutory right to be granted a recordable title, which, of course, is a substantial benefit being conferred on him and taken away from the landlord.
    2.45 p.m.
    However, one can put the point higher. In the Bill, the rights of the tenant-at-will are considerably higher than the rights of the crofter, because, under the

    857
    crofting Act, the Land Court can refuse the crofter's application to obtain what is in effect the ownership of his land. Under the present Bill, that is not so. If the tenant-at-will wants a recordable title, he must get it.
    Therefore, it seems to me that, for that reason as well, it would be odd if one were to put, in terms of expenses, the tenant-at-will in a position substantially better than the position of a crofter in a somewhat analogous situation.
    In conclusion, let me say that the conveyancing element in these expenses will be subject to the scale of fees of the Law Society of Scotland. Should the tenant-at-will feel that any expenses are not—I reflect the words I have already used in Committee—reasonably and properly incurred, he has the remedy not only of taxation, which I have mentioned before, but, under clause 21(1)(iv), of making an application to the Lands Tribunal for a determination of these expenses.
    I think that I have gone a long way towards meeting the substance of the hon. Gentleman's points, although I am bound to advise the House against accepting any of these amendments. However, I give a further undertaking, which I hope the hon. Gentleman will accept in this situation, to see what administrative steps can be taken to ensure that a moderate scale of fees would be applicable to these transactions, and that that will be known to those who are concerned.
    Mr. Henderson: I shall not conceal the fact that I am extremely disappointed by the Lord Advocate's reply. It seems that the Government are leaning over backwards to help the lairds and landlords in the North-East of Scotland as against tenants-at-will. I am extremely disappointed that they are doing this.
    I am afraid that the Lord Advocate did not deal with the 25 times annual rent point, in the sense that this would give a certain value which the tenant-at-will could calculate for himself. There would be no need to bring in surveyors, charging expensive fees, to work out the valuation of a house and the land.
    The Lord Advocate mentioned the crofting Acts. I think that he must be aware—it is certainly my information—that this legislation has been a bonanza for surveyors throughout the Highlands.
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    Enormous fees are being earned on the basis of the formula laid down in the crofting Act. I would have hoped that we would not make that mistake again here.
    The Lord Advocate referred to the Lands Tribunal and said that tenants-at-will would be able to go to it. It may be all right for lawyers to talk in that way, but that is not a very good answer for ordinary people who have a small house and want to own the small piece of land on which it is situated. The Lord Advocate was a bit out of touch with reality when he referred to the Lands Tribunal as being the remedy for people in that situation.
    I hoped that, by adopting a fixed method of compensation, we would have overcome many of these problems and avoided a great deal of expense to tenants-at-will in acquiring titles. However, the Lord Advocate has put the Government's position. I do not want in any way to jeopardise the possibility of tenants-at-will getting the justice which has been long overdue. I should have thought that if anything were done in the Bill, it should have erred on the side of generosity to the tenants, to compensate them for the many years during which landlords have kept them in such a state that they have not been able to put in a modern bathroom or a modern kitchen because they could not get a title. Landlords have been pushing tenants to pay sums of £1,000—£1,500 in some cases—for a small strip of ground which is worth nothing like that sum.
    I would have thought that if the Government were to lean in any direction, it would be towards these people who have had a raw deal over a long period and are only now coming to a state where they can get a proper title. I do not know what steps the Lord Advocate can take in an administrative way, to which he referred in his closing remarks. Is it possible that he could have an agreement with the Law Society that there could be a fixed-fee, irrespective of the tenancy-at-will, charged in legal fees? That would be a help. I am disappointed with the way that he and the Governent have dealt with this point. I do not want to jeopardise the chances of the tenants-at-will getting the justice that is long overdue to them. For that reason, I must,

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    with great reluctance, beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Motion made, That the Bill be now read the Third time.
    [Queen's Consent and Prince of Wales's Consent, in respect of the Principality and Stewartry of Scotland, signified.]
    Question put forthwith, pursuant to Standing Order No. 56 (Third Reading), and agreed to.
    Bill accordingly read the Third time and passed, with amendments.

CREDIT UNIONS BILL
As amended (in the Standing Committee), considered
CREDIT UNIONS BILL
  New Clause 1

    TAXATION
    '.—(1) After section 340 of the Income and Corporation Taxes Act 1970 there shall be inserted the following section—
    340A.—(1) Subject to subsection (2) below, in computing for the purposes of corporation tax the income of a credit union for any accounting period—

    (a) neither the acivity of the credit union in making loans to its members nor in placing on deposit or otherwise investing from time time its surplus funds shall be regarded as the carrying on of a trade or part of a trade; and

    (b) interest received by the credit union on loans made by it to its members shall not be chargeable to tax under Case III of Schedule D or otherwise.

    (2) Paragraph (b) of subsection (1) above shall not apply to an accounting period of a credit union for which the credit union is obliged to make a return under section 340(5) of this Act and has not done so within three months after the end of that accounting period or such longer period as the inspector shall allow.
    (3) No share interest, loan interest or annuity or other annual payment paid or payable by a credit union in any accounting period shall be deductible in computing for the purposes of corporation tax the income of the credit union for that period from any trade carried on by it or be treated for those purposes as a charge on income.
    (4) A credit union shall not be regarded as an investment company for the purposes of sec tion 304 or section 306 of this Act (management expenses and capital allowances).
    (5) In the case of a credit union registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 before the passing
    860
    of the Credit Unions Act 1979, the preceding provisions of this section shall apply to the accounting period beginning on or after 1 October 1979.
    (6) For the year 1978–79 and the next six following years of assessment there shall be disregarded for all purposes of the Income Tax Acts any share interest paid to a member by a credit union and a credit union shall not be obliged under section 340(5) of this Act to make a return in respect of any such payment.
    (7) In this section—
    "credit union" means a society registered as a credit union under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969;
    "share interest" and "loan interest" have the same meaning as in section 340 of this Act;
    "surplus funds", in relation to a credit union, means funds not immediately required for its purposes;
    and references to the payment of share interest or loan interest include references to the crediting of such interest.
    (2) In section 340 of the Income and Corporation Taxes Act 1970 (industrial and provident societies, etc.)—

    (a) in subsection (1) (share and loan interest to be deductible or constitute a charge on income) after the words"subject to subsection (6) below" there shall be inserted the words "and to section 340A(3) of this Act"; and

    (b) at the beginning of subsection (3) (share and loan interest to be chargeable under Case III of Schedule D) and at the beginning of subsection (5) (duty to make return of payments made without deduction of tax) there shall be inserted the words "Subject to section 340A(6) of this Act.".—[Mr. Denzil Davies.]

    Brought up, and read the First time.
    2.52 p.m.
    The Minister of State, Treasury (Mr. Denzil Davies): I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Oscar Murton): It will be convenient to discuss at the same time Government amendment No. 41.
    Mr. Davies: Amendment No. 41 is a drafting amendment consequential on the new clause. New clause 1 deals with the taxation position of credit unions. As hon. Members will know, especially those who were on the Committee and also my hon. Friend the Member for Belfast, West (Mr. Fitt), who has made representations on this matter, there have been some difficulties relating to the taxation of credit unions. I believe that this new clause meets almost entirely the representations that we have received. I hope

    861
    that it will put to rest the fears that have been expressed about the trading position. If the House accepts the new clause, as far as the tax on the trading surpluses of credit unions is concerned and any surplus made by them in relation to their activities with their members, there would be complete exemption from corporation tax for ever. That could, of course, be changed in future, but this new clause would give a complete exemption for ever for all credit unions in relation to their surpluses from corporation tax throughout the United Kingdom.
    The other contention raised in Committee was the question of taxation on their dividends. The new clause provides that until 1984–85, and including the year 1984–85, no tax will be charged on the dividends paid to their members by credit unions. That income will be completely free, as a matter of law, not as a matter of administrative convenience, in the hands of the members of credit unions. I believe that this proposal goes a long way to meeting the concern expressed by many hon. Members on both sides of the House about the original provisions in the Bill. What happens after the 1984–85 year of assessment will have to be decided when the times comes. But we have been able to secure this complete exemption for six years. This goes a long way to meet the fears that were raised.
    This applies throughout the United Kingdom. It is only right that the tax regime of credit unions should be the same throughout the United Kingdom. The new clause meets that point. I hope that it meets the points that were raised and allays the genuine fears that were expressed.
    Mr. Peter Rees: When we came to consider the taxation treatment of credit unions upstairs in Standing Committee, the Committee was almost unanimous in welcoming the exemption of surpluses from transactions between credit unions and their members. Some hon. Members on the Standing Committee thought that was probably true as a general principle, without any need for statutory provision. Whether that is a true view or not, we obviously welcomed a specific exemption making the position clear beyond doubt. Consistent with that, we, on this side, thought it
    862
    wrong that they should be able to claim investment company status for management expenses.
    I think I am right in recalling that when the Committee turned to consider the tax treatment of the so-called dividends by credit unions to their members we found that the solution proposed by the Government was indefensible. I do not make that point in any criticism of the Minister. We recognise the difficulties with which he was faced, which were perhaps not of his own making. The Committee obviously groped around for some satisfactory solution that would be fair to the interests of members of credit unions and fair to the interests of members of comparable savings organisations.
    I ventured to put forward in Committee the proposition that either the surpluses, when distributed, should be entirely free of tax or should be subject to tax. That was perhaps a rather stark position, but the Minister eventually recognised that the solution he propounded, which depended upon a distinction between credit unions set up before and after a certain date, was difficult to commend to the public. I am sure that the whole House is grateful to the Minister of State for having reconsidered the problem with an open mind and come up with his present compromise suggestion, which involves all credit unions being subject to tax or, to be more exact, the members of credit unions being subject to tax on the distribution of surpluses distributed to them, but after a period of six years.
    There will be a period of six years, as it were, when the present arrangements, such as they are—the Minister may wish to touch on that—will be perpetuated. Or are we to understand that total exemption will be conceded for credit unions this side of St. George's Channel and the other side?
    Mr. Derail Davies Mr. Derail Davies indicated assent."
    Mr. Rees: I am grateful for that intimation. After six years, the members of all credit unions will be on the same basis.
    I detect that the Minister of State has approached the problem from a different angle by making this new clause not part of the Credit Union Bill but part of the Income and Corporation Taxes Bill.

    863
    That is the proper way in which the problem should be approached. It is not essentially a credit union matter. It is a taxation matter. One has to consider the treatment of credit unions by comparison and in relation to the treatment of comparable bodies. It means that the House at some future period could reconsider and come back to this question when it returns to the whole treatment of interest for tax purposes, particularly taxation for small amounts of interest. As emerged in Committee, this is possibly a subject that another Parliament in another context will want to consider. It is what I would call a general taxation problem and not one specific to credit unions.
    On this basis, we are certainly prepared to accept the new clause, recognising that it now fits, in a more orderly and consistent way, into the general framework of taxation comprised in the Income and Corporation Taxes Acts.
    Mr. J. Enoch Powell: When the House, and subsequently the Committee, considered the original proposals in the Bill for tax treatment of credit unions and their distributions to their members, there was an almost universal feeling that the proposal was inherently unsatisfactory, in that, among other things, it created permanently two classes of unions whose members would be, in perpetuity, differently treated.
    This all arose from the fact that, in Northern Ireland, where most of the credit unions still are within the United Kingdom, a special extra-statutory concession had been made which had been in existence for now virtually 10 years and raised the question how they were to be brought into tax.
    On Second Reading, I said on behalf of my hon. Friends:
    "those who my hon. Friends and I represent have no desire to be differentiated, for good or ill. in matters of taxation, from their fellow citizens in the rest of the United Kingdom." —[Official Report, 12 February 1979; Vol. 962, c. 827.] I suggested that any solution which was to be acceptable should conform to three requirements: first, there should be a uniform United Kingdom tax system; secondly, there should not be two classes of taxpayer; thirdly, the Northern Ireland credit unions should be shielded from the wind of a new tax liability.
    864
    3 p.m.
    An act of surgery was performed in Committee, and the Minister of State, like the good surgeon, has followed that up now with an act of prosthesis in the shape of the new clause. I think that he has now hit upon as satisfactory an arrangement as could have been devised.
    The moratorium, so to speak, for existing credit unions of six years will draw no distinction between those which have or might have enjoyed the concession hitherto and new unions. The six-year moratorium will apply to everyone on both sides of the Irish Sea.
    Of course, there will be a jolt, or a step, when the six-year period ends. I hope that I am not out of order in referring to another amendment on the Paper and inquiring whether a provision in it was designed, or partly designed, to alleviate that gradient. I refer to subsection (6) of new clause 4, which enables credit unions to pay into a fund instead of direct to the shareholders sums which would otherwise have been distributed to the shareholders or members of the union. It may be that that provision could be used by credit unions whose members have hitherto been enjoying exemption in order to provide a smoother graduation of liability as between the first six years and the subsequent period than would otherwise occur.
    At any rate, that is something which, either in connection with new clause 4, which will give him a slight moratorium, or now, the Minister of State will be able to clear up. I hope that the proposal in the Bill will be accepted as reasonable by hon. Members but also that it will be felt by members of the credit unions and the credit unions themselves in Northern Ireland to be a reasonable solution to a difficulty which could not be wholly satisfactorily dealt with but which arose out of an anomalous tax ruling in the Province. I hope therefore that it will command general agreement.
    Mr. Gerard Fitt: I, too, welcome what the Minister has said. I know that, in the concluding days of this Parliament, it is useful that agreement can be found in the House on this matter. I was not present on Second Reading, but I have this afternoon been reading the Minister's speech on that

    865
    occasion. He showed himself very much aware how important credit unions have been in Northern Ireland, where about 85,000 people are members of them.
    The credit union idea seems to have taken root more deeply in Northern Ireland than in any other part of the United Kingdom. From my earliest days, particularly in religious circles, the idea of credit unions among communities has always been put forward—the idea of self-help within a community, of people sustaining one another in times of need without resorting to moneylenders. I have had no affection, and at times open hostility, for moneylenders.
    Not once, throughout all the years that credit unions have existed in Northern Ireland, has anyone defaulted as a result of money lost through membership of such a co-operative union. Therefore, one is inclined to ask why, credit unions having existed for so long to the mutual benefit of members, there not having been any cases of misappropriation, dishonesty or mismanagement, legislation is necessary. That seems to be the view of many people in control of credit unions in Northern Ireland.
    The money in credit unions is used by members not for the flamboyant material things of life but for furniture, holidays or household essentials. The amounts involved are not phenomenal.
    The credit union system is voluntary. There is no question of anyone making a profit. Those who give up their time and expertise to keep credit unions in business are the best type of people to be found in any part of the United Kingdom. Such people are motivated by concern for the community, not for financial or material gain.
    Given their record—no one has run away with anyone else's money; they have a clean, honest record—the credit unions in Northern Ireland ask why there has to be legislation. There were no doubt other reasons which made it imperative for the Government to initiate the legislation. I believe that the new clause will go some way to allay any fears that the Government are in some way attacking credit unions. I am sure that is not the Government's intention. I shall distribute copies of the Second Reading of the Bill to as many credit unions as possible in my constituency to show that the Minister
    866
    is aware of the good objectives which motivate the credit unions.
    Are the credit unions aware that the Government have had a second look at the proposed legislation and are, in effect, to exempt credit unions from tax liabilities for six years? That would seem a reasonable time to allow the credit unions to make whatever changes may be necessary. Who knows what the prevailing conditions may be in six years? In view of the Liverpool, Edge Hill by-election result, we could have a Liberal Government at Westminster and they may be inclined to be even more liberal than my right hon. Friend.
    I am not quite certain how the Minister has publicised this proposal. Has he informed those who made representations to him that he has had a change of mind, or has he left it to hon. Members? If the credit unions are told that the Government have gone out of their way to introduce an exemption for six years, I am sure that they will receive that change in a spirit of good will.
    I realise that the Government have gone as far as they can. There will be no question this afternoon of the House totally rejecting the Bill. If it were to be rejected and reintroduced in another Parliament, credit unions may not receive the sympathy which has been extended to them by this Government. I welcome the new clause.
    Mr. Laurie Pavitt: I commend the new clause and congratulate my right hon. Friend the Minister of State. I was not a member of the Standing Committee although I am a Cooperative-sponsored member in this House, but that particular group was well represented on the Committee. I followed these affairs upstairs with a good deal of interest.
    This anomaly emerged from discussions in Committee. It would be disastrous if. because of the successes of an individual form of co-operation in one part of the United Kingdom, an extension of this excellent facility were penalised. I have a life-long interest in and concern with the ethics and principles of the cooperative movement.
    This particular form of credit and thrift was pioneered in Northern Ireland. In the history of the co-operative movement there are the Raiffeisen movement

    867
    in Germany, the Rochdale movement in Great Britain and the excellent work of Horace Plunkett, first of all in Ireland as a whole and later in Ulster.
    My right hon. Friend has come to a fair compromise solution in this matter. The whole of the credit union movement—and I have some participants in my constituency—will welcome the fact that we have reached a solution to what could have been a fairly intractable problem.
    Mr. Tony Newton: I played my part in Committee in demolishing the arguments for the proposal, because there was no doubt that it was unacceptable. It could have led to one factory in my constituency having a credit union whose members paid no tax because it was already established, and a factory next door setting up a credit union and its members being taxed. That would have been manifestly unfair. Therefore, I am grateful for the Minister's reconsideration. I support this compromise.
    It might be regarded as strange to have doubts, but I have some about the proposal that these payments should be free of tax. Once that concession has been made, it will be difficult to withdraw it. It could be seen as unfair competition, for the attraction of small savings, against other financial institutions. There could be a massive incentive for high-rate taxpayers to ensure that their money is in a credit union.
    As I pointed out in an exaggerated way in Committee, the ultimate conclusion is that £180 of tax-free interest from a credit union, which would have been the maximum figure in the Bill at the time, is equivalent to a top-rate payer of the investment income surcharge of £9,000 of income from any other source. There is a major incentive to high-rate taxpayers to put their money into a credit union.
    Mr. Powell: At least that would have constituted the necessary common bond between taxpayers at a high rate.
    Mr. Newton: I take the right hon. Gentleman's point. I do not want to defend our existing rates of tax, because they are too high. The problem must be tackled by reducing tax rates rather than by increasing the scope for devices to
    868
    reduce tax burden in this way. The right answer is a de minimis exemption for small amounts of interest from whatever source—whether from banks, building societies, credit unions or any other form of saving.
    3.15 p.m.
    Mr. Dezil Davies: The right hon. Member for Down, South (Mr. Powell) drew attention to new clause 4. It is not intended that it should have the type of effect that he thought that it might have. The amendment to that new clause to some extent meets the argument of the hon. Member for Braintree (Mr. Newton) in that it reduces the shareholding to £2,000, although it allows the dividend limit to be increased.
    My hon. Friend the Member for Belfast, West (Mr. Fitt) raised several points. There is no intention of curtailing the activities of credit unions. The success of credit unions in Northern Ireland has led us to believe that we must ensure that in the rest of the United Kingdom they are given the right framework to develop, as they have developed in Northern Ireland. I hope that the Bill will put credit unions on a firm foundation. The experience in Northern Ireland shows that they are excellent institutions. They enable people to borrow money at reasonable rates of interest without having to go to moneylenders. That is important, especially because of the small sums of money which can be borrowed from credit unions.
    I hope that all the interested parties are aware of the new clause and that they will regard it as a good compromise between the different interests. I hope that they will accept that it does not jeopardise the development of the credit union movement in Northern Ireland and in the rest of the United Kingdom.
    The hon. Member for Braintree asked about high-rate taxpayers. There is not much in his argument. The limits are such that I cannot see that groups of stockbrokers will get together to form credit unions to avoid income tax. The limits in the legislation are fairly stringent.
    The overriding purpose of the Bill is so good that we should not inhibit the growth of credit unions merely because it might lead to the avoidance, in some instances, of higher rates of taxation. I hope that the House will agree to accept

    869
    the new clause and amendment No. 41, which is consequential.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New Clause 2

    GENERAL PROHIBITION ON DEPOSIT-TAKING
    '(1) Subject to sections 8 and 9 of this Act, a credit union shall not accept a deposit from any person except by way of subscription for its shares.
    (2) In this section and section 8 of this Act a"deposit" means a sum of money paid on terms—

    (a) under which it will be repaid, with or without interest or at a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the credit union; and

    (b) which are not referable to the provision of property or services or to the giving of security.

    (3) For the purposes of subsection (2) (b) above, money is paid on terms which are referable to the provision of property or services or to the giving of security if, and only if,—

    (a) it is paid by way of advance or part- payment for the sale, hire or other provision of property or services of any kind and is repayable only in the event that the property or services is or are not in fact sold, hired or otherwise provided; or

    (b) it is paid by way of security for payment for the provision of property or ser vices of any kind provided or to be provided by the credit union; or

    (c) it is paid by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise.

    (4) If a credit union accepts a deposit in contravention of this section it shall be guilty of an offence and liable on conviction on indict ment or on summary conviction to a fine which on summary conviction shall not exceed the statutory maximum.
    (5) The fact that a deposit is taken in contravention of this section shall not affect any civil liability arising in respect of the deposit or the money deposited.—[Mr. Denzil Davies.]
    Brought up, and read the First time.
    Mr. Denzil Davies: I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker: With this we may discuss Government amendment No. 18.
    Mr. Davies: New clause 2 merely aligns the Credit Unions Bill with the
    870
    Banking Bill in relation to the definition of a deposit. The two Bills go together. The Banking Bill is now being considered by the House of Lords. We hope that it will be dealt with rapidly by both Houses and that it will become law before Parliament is dissolved on Saturday. We hope that this Bill will be passed just as rapidly. That is necessarry to align the two Bills.
    The Bill as it stands provides that credit unions shall not accept a deposit but it leaves the word"deposit" undefined. The new clause and the subsequence amendments apply the Banking Bill definition of"deposit" so that there is no clash between the two Bills.
    Mr. Powell: Perhaps this is a convenient point to invite the Minister of State to confirm the point I put to him in Committee, and which had been raised with me by certain credit unions. It concerns the question of donations. Will the Minister of State confirm that there is nothing in the Bill which limits or prevents direct donations being made to credit unions? This is probably the appropriate point at which to get that on the record.
    Mr. Denzil Davies: I can confirm that point. The right hon. Gentleman raised the matter in Committee and I have looked into it. I can confirm that there is nothing to inhibit or restrict donations in the way that he describes.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New Clause 4

    COMPUTATION AND APPLICATION OF PROFITS
    '.—(1) In ascertaining the profit or loss resulting from the operations of a credit union during any year of account all operating expenses in that year shall be taken into account (including payments of interest) and provision shall be made for depreciation of assets, for tax liabilities and for bad and doubtful debts, but no provision shall be made in respect of amounts to be paid by way of dividend.
    (2) A credit union shall out of its profits from year to year establish and maintain a general reserve as follows—

    (a) if at the end of any year of account the amount standing to general reserve before any transfer under this subsection is less than ten per cent, of total assets, the credit

    871
    union shall transfer to general reserve not less than twenty per cent, of its profits for that year or such lesser sum as is required to bring the general reserve up to ten per cent, of total assets;

    (b) if at the end of any year of account the amount standing to general reserve before any transfer under this subsection is more than twenty per cent, of total assets, the crdeit union shall transfer to the revenue account and treat as revenue for that year a sum not less than that required to reduce the general reserve to twenty per cent, of total assets;

    (c) subject to paragraphs (a) and (b) above a credit union may at the end of any year of account—

    (i) transfer to general reserve from the profits of that year, or

    (ii) transfer from general reserve to the revenue account and treat as revenue for that year,
    such sums as the credit union may in general meeting determine, provided that the general reserve is not thereby reduced to less than ten per cent, or increased to more than twenty per cent, of total assets.

    (3) Not less than ninety per cent, of the amount available for distribution in respect of any year of account that is to say, the profit of that year reduced or increased by any trans fer to or from general reserve in accordance With subsection (2) above, shall be applied in such one or more of the following ways as the credit union shall in general meeting deter mine—

    (a) subject to subsection (4) below, in the payment to members of dividends on the amount of their paid-up shares;

    (b) as a rebate of interest paid by or due from members who have received loans from the credit union, such rebate being propor tional to the interest paid by or due from such members during that year of account; and

    (c) subject to subsection (5) below, for social, cultural or charitable purposes.

    (4) The dividend payable on any shares of a credit union shall not exceed a rate of six per cent, per annum or such other rate as may from time to time be specified by order made by the chief registrar with the consent of the Treasury.
    (5) No part of the amount available for dis tribution in respect of any year of account shall be applied by a credit union for the purposes mentioned in subsection (3)(c) above unless a dividend of not less than three per cent, per annum is paid for that year on all paid-up shares of the credit union; and the total sum applied for those purposes out of the amount available for distribution in respect of any year of account shall not exceed ten per cent, of that amount.
    (6) Where in accordance with subsection (3) above a credit union in general meeting deter mines that an amount shall be applied in any of the ways mentioned in paragraphs (a) to (c) of that subsection, that amount may, unless the determination is that it be distributed or ex pended forthwith, be so applied by being
    872
    appropriated to a fund to be distributed or expended from time to time or at some future date; and where in accordance with that subsection a credit union in general meeting determines that an amount shall be applied for a purpose falling within paragraph (c) of that subsection, that amount may, unless the determination is that it be expended in some specific manner, be expended for that purpose at the discretion of the committee.
    (7) Nothing in this section applies to income arising from, or to expenses incurred by a credit union in operating, such a trust fund as is referred to in section 8(3) of this Act.'—[Mr. Denzil Davies.]
    Brought up, and read the First time.
    Mr. Denzil Davies: I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker: With this we may take the following amendments:
    (a), as an amendment to the proposed new clause, in subsection (4) leave out 'six' and insert 'eight'.
    No. 4, in clause 5, page 5, line 11, leave out "£3,000" and insert "£2,000".
    No. 5, in page 5, line 15, leave out "£3,000" and insert "£2,000".
    Government amendment No, 16.
    No. 17, in page 7, line 20, leave out "six" and insert "eight".
    Government amendment No. 22.
    No. 23, in page 11, line 31 leave out "cultural" and insert
    "or cultural purpose for which prior consent in writing of the chief registrar has been obtained".
    No. 24, in page 11, line 32, after "or", insert "any".
    Mr. Davies: The clause replaces the existing clause 13. There was some discussion in Committee about clause 13, and doubts were expressed about the efficacy of the drafting. We found that there was a good case for amending practically every subsection of the clause to make clarifications or remove ambiguities, so we decided that it would be best to rewrite the whole clause.
    The old subsection (1) has been removed since the hon. Member for Brain-tree (Mr. Newton) pointed out that it could be taken to enable a credit union to apply its funds outside its objects as defined in clause 1. Clearly that would not make sense. We have made several changes of terminology in the new clause and have made more explicit some points which

    873
    were only implicit before. There are no changes of principle. In effect, it means that clause 13 is made subject to clause 1, so that anything done under clause 13 has to conform with the objects as set out in clause 1.
    Mr. Peter Rees: There were certainly considerable reservations on our side of the Committee about the original clause 13. It was for that reason that I and my hon. Friends put down amendments dealing with the ultimate application of a credit union's surpluses. They did not prove acceptable to the majority of the Committee, but my hon. Friends and I felt it right to come back to this point, which is why we have put down amendment No. 23. It is designed to limit the social or cultural purposes to which a credit union can apply its surpluses. We felt that the terms "social" and "cultural"were so wide that they gave the managing committee of a credit union almost unlimited scope for the application of its funds.
    The keen eye of my hon. Friend the Member for Braintree (Mr. Newton) detected that, possibly, under the original clause 13 such applications would be subject to the overriding requirement that they should be within the objects of a credit union as set out in clause 1. But there was an area of ambiguity there, and I am therefore grateful to the Minister for having responded to the doubts expressed from our side of the Committee.
    Amendment No. 23 was put down before new clause 4 appeared on the Order Paper. I think that new clause 4 meets our objection. By implication, at any rate, it emphasises that any applications for social or cultural purposes, whatever those very wide terms may mean, must be within the general objects of a credit union. If they are subject to that restriction, the limitation that we propose in the amendment, which is that the application should be subject to approval by the registrar, will not prove necessary.
    On amendment (a), we would certainly feel that a greater degree of flexibility should be given to a credit union and that it should be able to make distribution of up to 8 per cent. We thought that 6 per cent, was unduly restrictive, but we believe that the increased figure should be coupled with the limitation that a person should be able to deposit only
    874
    £2,000 with a credit union. That would balance that relief. That would mean, to use the words of my hon. Friend the Member for Braintree, that depositors could not exploit credit unions by depositing considerable sums on which they would receive tax-free interest.
    The Opposition consider that a fair balance would be struck if the amendments were accepted. I hope that the Minister will accede to them. We do not wish to press amendment No. 23 to a Division.
    Mr. Pavitt: I rise to talk briefly on amendment (a) and amendments Nos. 4 and 5 that were tabled by my hon. Friend the Member for Farnworth (Mr. Roper). I feel that I am a poor substitute for my hon. Friend as he is more or less the progenitor of the Bill. When he first entered the House he began to promote similar Bills.
    I am more than grateful to be called to speak after the hon. and learned Member for Dover and Deal (Mr. Rees). I intended to speak briefly on two short amendments, and the hon. and learned Gentleman has said precisely what I want to say about amendments (a) and Nos. 4 and 5.
    The hon. and learned Gentleman has explained that as there is a limit on dividend it is essential to attract more and more depositors to join credit unions. They perform a worthy service in offering credit and encouraging thrift. When the Bill reaches the statute book, we hope that there will be a growth of credit unions. Amendments Nos. 4 and 5 seek to facilitate that growth.
    I have a constituency interest. One of the first credit unions started in my constituency. For about three years one in nine of immigrants from the Caribbean came to live in Willesden. They brought with them a number of qualities, especially the Shrine Credit Union. It was one of the first credit unions and it will be profoundly affected by the Bill.
    In spite of the general pressures of a consumer society and advertising, there is a great need to return to savings, to credit and stability of the family income. Amendment (a) is designed to encourage people to adopt that approach to money management within the family budget. The Shrine Credit Union, which has been operating for a number of years in my

    875
    constituency, has already made fantastic strides in that direction.
    I hope that the House will accept amendment (a). As a counterbalancing factor, I hope that amendments Nos. 4 and 5 will be accepted. I hope, Mr. Deputy Speaker, that you will allow a vote to be taken on the three amendments.
    Mr. Norman St. John-Stevas: On a point of order, Mr. Deputy Speaker. As you will know, Mr. Deputy Speaker, there has been an explosion on the premises and somebody has been injured. We do not know whether it is a Member who has been injured. The work of the House should continue, but should it not be considered whether a Minister should make a statement or whether the sitting, which will shortly be suspended, should be suspended now?
    Mr. Denzil Davies: I agree with and endorse what the hon. Gentleman has said. Clearly there is a serious situation in the precincts of the House. If you were minded, Mr. Deputy Speaker, I should endorse the suggestion that the sitting be suspended because of the seriousness of the situation.
    Mr. Deputy Speaker: The Chair is aware that there has been an accident within the precincts of the Palace of Westminster. The Serjeant at Arms, officials and others are busy investigating it. If it is the wish of the House that the House should suspend temporarily, I am prepared to agree to that course. I suspend the proceedings for 15 minutes.
    3.30 p.m.
    Sitting suspended.
    3.50 p.m.
    On resuming—

HOUSE OF COMMONS (CAR EXPLOSION)
The Parliamentary Secretary to the Treasury (Mr. Michael Cocks): With deepest regret, I have to inform the House that an explosion has occurred within the precincts of the Palace, which has involved a car and a person, as yet unidentified, who has sustained serious injuries, although the extent of these is not yet known.
The whole House will join me in expressing the utmost abhorrence of this outrage. We have marked our condemnation by suspending the sitting. But the work of Parliament must continue, and the sitting will be continued as soon as possible.
Mr. Norman St. John-Stevas: May I, Mr. Deputy Speaker, on behalf of the Opposition and the other parties in this House, express our total agreement with the statement of the Government Chief Whip? We express our concern and sympathy, both for the injured person and for any relations who are concerned.
We condemn utterly this interference with the work of the House of Commons, which is the symbol of our liberties. It is absolutely right, as the Government Chief Whip has suggested, that having marked our concern and abhorrence by the suspension of the sitting, we should continue with the business for today and despatch it as expeditiously as possible. It is essential that the work of the Palace of Westminster should not be controlled by others.
Later—
Mr. Deputy Speaker (Mr. Oscar Murton): Before we continue with the debate, I should like to tell the House that Mr. Speaker has been informed of the incident which has occurred and has directed me to say that he has the deepest concern for the injured person and wishes to convey his great sympathy for all relatives in their distress.

CREDIT UNIONS BILL
As amended, further considered.
CREDIT UNIONS BILL
  New Clause 4

    COMPUTATION AND APPLICATION OF PROFITS
    Question again proposed, That the clause be read a Second time.
    3.53 p.m.
    Mr. Powell: I take it, Mr. Deputy Speaker, that it is your wish that we should proceed with the debate.
    I gather that the hon. Member for Brent, South (Mr. Pavitt) had concluded his remarks upon new clause 4. Perhaps I may say that I hope that the hon. and learned Member for Dover and Deal (Mr. Rees) is right in his assumption that the new clause limits, in the way in which he suggested, the scope of the subscriptions for social, cultural or charitable purposes. Perhaps the right hon. Gentleman the Minister of State could confirm that when he replies to the debate.
    I raised two matters with the right hon. Gentleman in Committee, and this is perhaps the appropriate occasion on which to deal with them. Considerable anxiety has been expressed by certain credit unions as to whether the provisions for the accumulation of reserves, in the Bill as it stands and as it will stand with the new clause, are fully adequate in the case of a credit union which might be in very weak financial circumstances and not making appreciable profits. I am obliged to the right hon. Gentleman for a letter which he wrote to me on this subject, and for the renewed consideration that he has given to it. His view, with which I would be inclined to concur, is that it is not really desirable either to elaborate unduly the provision for the formation of a reserve or to give the chief registrar special discretionary powers in relation to the reserves.
    However, I think that perhaps the solution may lie, as the right hon. Gentleman suggests, in proper insurance by credit unions against bad debts and other threats to their viability. That is covered by a later amendment. I hope, therefore, that the credit unions which have expressed anxiety in connection with the
    878
    accumulation of reserves will study what is proposed in the context of compulsory insurance. They may well come to the view that that is the way in which to deal with the risk about which they were concerned.
    The other matter relates to assets. The valuation of assets of the credit unions will be necessary in order to comply with the terms of the new clause. Certainly the principal assets, in this sense, of credit unions will be their premises. But that very fact means that from year to year there may be considerable variations, I suspect mostly upwards, in the current valuation of the assets of credit unions. The consequence of revaluation, if substantial, either upwards or downwards, would be to operate automatically upon the provisions for the reserve either to make the reserve inadequate or, what is more likely, to make the reserve excessive and consequently invoke the provisions for the reduction of a reserve to the maximum of 20 per cent., specified in the clause.
    This would seem to present difficulties, but the right hon. Gentleman has suggested to me that it would be possible for the excess value of revalued assets to be treated separately in the accounts of credit unions by way of the formation of a revaluation reserve. I am sorry, especially in present circumstances, to be putting the point to the right hon. Gentleman. I understand the difficulties of our keeping full attention. I wonder if the right hon. Gentleman would confirm that it will be within the terms of the Bill, as amended, for a separate revaluation reserve to be maintained by a credit union and thus for the fluctuation upwards and downwards of the reserve requirements, in consequence of the change in the value of assets, to be avoided or at any rate palliated.
    Mr. Denzil Davies: I think I can give the right hon. Gentleman the assurances he wishes. There will be no objection to have a special revaluation reserve. I take the point that he made in Committee. It is important, but there will be no objection to having that special reserve which would eliminate the fluctuation from year to year of the assets, because the assets are basic to the question of what reserve the credit union should maintain. I accept that entirely.

    879
    The new clause meets to some extent the Committee point regarding the inter relationship between clause 13 and clause 1. As far as amendments Nos. 4, 5 and 17 are concerned—
    Mr. Powell: I apologise for interrupting. One has been slightly distracted. I take it that in his reply the right hon. Gentleman will be good enough to refer, in connection with subsection (6) of this clause, to the query I raised earlier regarding the purpose of the admissible funding instead of direct payment of sums by way of share interest. It was a point which was raised on a previous new clause. If he could refer to subsection (6) it would be helpful.
    Mr. Davies: Yes, I will deal with subsection (6) in a moment. I take the right hon. Gentleman's point. The clause itself is an attempt to resolve the difficulty between the original clause 13 and clause 1. Subsection (6) makes it clear that a credit union can, if it wishes, carry forward some of its profits from one year to spend in another—for example, to smooth the flow of dividends from year to year. It also makes it clear that the annual general meeting can, if it wishes, set aside a certain amount for social, cultural and charitable purposes, without specifying to the last penny how this amount is to be spent.
    These are simply enabling provisions to allow credit unions to do ordinary and sensible things if they wish. We have tabled them only because the rules about distribution in the present clause 13 (3) and the new subsection (3) could otherwise be taken to mean that everything which is to be distributed must be distributed at once and that the AGM must decide every last detail of that.
    I do not know whether that meets the point of the right hon. Member for Down, South (Mr. Powell), but if it does not I shall certainly look at the matter to try to clarify it further.
    Mr. Powell: I am greatly obliged to the right hon. Gentleman. I see the point, obviously—
    It being Four o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That Government Business may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Thomas Cox.]

CREDIT UNIONS BILL
As amended, further considered.
Question again proposed, That the clause be read a Second time.
Mr. Powell: I am obliged to the Minister and I take the point that credit unions should have some flexibility, particularly not to distribute up to the last penny, as it were, under the terms of the new clause. On the other hand, it appears that there is no limitation in subsection (6), so that, at any rate theoretically, that subsection might enable a credit union to go to the opposite extreme and to pursue a policy of accumulation. It would presumably be entitled to apply the accumulated funds in various ways and thus substantially to alter the character of the operations which are normal to a credit union.
We are obviously at a late stage in our consideration of the Bill in this House, but that is the point which aroused my attention in subsection (6). Perhaps, as the Bill goes on its way elsewhere, the right hon. Gentleman will be able to give consideration to that.
Mr. Denzil Davies: I take the right hon. Gentleman's point that one would not wish subsection (6) to be used as a kind of accumulation provision. I do not know exactly what the powers of the registrar would be in that situation, but I will certainly look into the point to see whether, even at this late stage, we can satisfy ourselves that that is not the effect of the subsection.
I am happy to accept amendment No. 4, which is taken with amendments Nos. 5 and 17 in the name of my hon. Friend the Member for Farnworth (Mr. Roper). I think that the hon. and learned Member for Dover and Deal (Mr. Rees) has said that he does not object to them. I should therefore be happy to recommend their acceptance.
I think that we have now gone part of the way, if not all the way, to meet the point in amendments Nos. 23 and 24 by redrafting clause 13 and making it clear that it is subject to clause 1. I

881
hope that the hon. and learned Member will feel that he need not press those amendments in view of the new clause.
Question put and agreed to.
Clause read a Second time.
Amendment (a) proposed, in subsection (4), leave out 'six' and insert ' eight'.— [Mr. Pavitt.]
Mr. Deputy Speaker (Mr. Oscar Murton): Perhaps I should inform the hon. Gentleman that Mr. Speaker did not select this amendment for Division, but only for discussion.
Mr. Pavitt: On a point of order, Mr. Deputy Speaker. At the outset of the debate I requested that you would reconsider these matters, since they have been accepted by both sides of the House, and that you would consider allowing a debate, and if necessary a vote, on them.
Mr. Powell: On a point of order, Mr. Deputy Speaker. Is it not possible for you, in circumstances in which the Government have expressed their readiness to accept an amendment which has been debated, to facilitate the business of the House by permitting the hon. Member in whose name it stands to move it?
Mr. Deputy Speaker: That can be done, and I will use my discretion in the matter.
Amendment agreed to.
Clause, as amended, added to the Bill.

CREDIT UNIONS BILL
  New Clause 5

    INSURANCE AGAINST FRAUD OR OTHER DISHONESTY
    '(1) A society shall not be registered as a credit union unless the appropriate registrar is satisfied that on registration there will be in force in relation to that society a policy of insurance complying with the requirements of this section; and a credit union shall at all times maintain in force such a policy and if it fails to do so shall be guilty of an offence and liable on summary conviction to a fine not exceeding £200.
    (2) In order to comply with this section, a policy of insurance—

    (a) subject to such exceptions as may be prescribed must insure the credit union in respect of every description of loss suffered or liability incurred by reason of the fraud or other dishonesty of any of its officers or employees;

    (b) must so insure the credit union up to a limit of not less than £20,000 (or such other
    882
    figure as may be prescribed) in respect of any one claim except that the liability of the insurer may be restricted to an amount not less than £100,000 (or such other figure as may be prescribed) in respect of the total of the claims made in any one year;

    (c) must not, except with the consent in writing of the chief registrar, provide in relation to any claim for any amount greater than one per cent, of the limit referred to in paragraph (b) above to be met by the credit union; and

    (d) must be issued by a person who is permitted under the Insurance Companies Act 1974 or the corresponding provision for the time being in force in Northern Ireland to carry on in Great Britain or Northern Ireland insurance business of a relevant class or who has corresponding permission under the law of another member State.

    (3) In paragraphs (a) and (b) of subsection (2) above "prescribed" means prescribed by regulations made by the chief registrar with the consent of the Treasury.
    (4) Regulations made by virtue of paragraph (b) that subsection may provide for different figures in relation to different descriptions of credit union, whether by reference to the amount of the assets of the credit union or to such other factors as appear to the chief registrar to be appropriate and if such regulations do so provide the reference in paragraph (c) of that subsection to the limit referred to in the said paragraph (b) shall be construed as a reference to the limit applicable to the credit union in question.'.—[Mr. Denzil Davies.]
    Brought up, and read the First time.
    Mr. Deputy Speaker: With this new clause we may discuss Government amendment No. 1.
    Mr. Denzil Davies: I beg to move, That the clause be read a Second time.
    The clause makes it a condition of registration that credit unions should insure against fraud or dishonesty of their officers or employees. The clause meets an undertaking which I gave in Committee when the matter was fully debated.
    Mr. Powell: I wonder whether the right hon. Gentleman can help with what must be a simple matter of construction of amendment No. 1, in page 1, line 6, clause 1, leave out 'section 6(4)' and insert
    'section' 6(4) and (Insurance against fraud or other dishonesty)(1)'.
    As I read it, that would result in the clause reading:
    " Subject to sections 6(4) and "—
    clause 5 or whatever it will be—
    "below and to section 2(1)".

    883
    Is there an error in the drafting of the amendment?
    Mr. Davies: I was not aware of an error. The amendment is, in page 1, line 6, clause 1, leave out 'section 6(4)' and insert
    'sections 6(4) and (Insurance against fraud or oilier dishonesty)(1)'.
    Those are the words which are added to it. I have no instructions that there is an error.
    Mr. Powell: It would appear that the word"below ", at any rate in its present position, has become supererogatory.
    Mr. Davies: If so, perhaps it can be corrected without too much difficulty during the remaining stages of the Bill.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  Clause 1

    REGISTRATION OF CREDIT UNIONS UNDER THE INDUSTRIAL AND PROVIDENT SOCIETIES ACT 1965
    Amendment made: No. 1, in page 1, line 6, leave out ' section 6(4)' and insert
    ' sections 6(4) and (Insurance against fraud or other dishonesty)(1)'.—[Mr. Denzil Davies.]
    Mr. Denzil Davies: I beg to move amendment No. 2, in page 3, line 6, after ' as', insert
    ' and is a relative of,'.
    Mr. Deputy Speaker: With this we may discuss Government amendments Nos. 3 and 30 and amendment (a) to Government amendment No. 30, in paragraph (c), leave out' and reputed spouse'.
    Mr. Davies: Amendment (a) is an Opposition amendment.
    The Government amendments relate to clause 1(6), which allows the relatives of a credit union member to be counted within the common bond if they share the member's household. The amendments expand the definition of"relatives" to cover, in particular, common law wives, husband and illegitimate children. It meets the fair and legitimate point raised in Committee by the hon. Member for Braintree (Mr. Newton).
    Amendment agreed to.
    Amendment made: No. 3 in page 3, leave out lines 8 to 12.—[Mr. Denzil Davies.]

  Clause 5

    MEMBERSHIP AND VOTING RIGHTS
    Amendments made: No. 4 in page 5, line 11, leave out '£3,000' and insert '£2,000'.
    No. 5, in page 5, line 15, leave out '£3,000' and insert '£2,000'.—[Mr. Pavitt].
    Mr. Denzil Davies: I beg to move amendment No. 6, in page 5, line 35, at beginning insert
    'Subject to any provision in the rules of a credit union as to voting by a chairman who has a casting vote,'.
    This amendment meets the point raised in Committee by the right hon. Member for Down, South (Mr. Powell) regarding the casting vote of the chairman. It will allow a credit union to choose whether its chairman should abstain on first votes or have a second vote in the case of ties. It should clear up the uncertainty which was raised in Committee.
    The model rule proposed by the British credit unions suggests that the chairman should abstain on first votes. The model rule of the Irish League suggests that he should not but that he should have a second vote, if necessary. I think that the proposed amendment makes either rule acceptable.
    Mr. Powell: It is perhaps ironical that there is a difference within the movement in rules in this respect and that the Great Britain rule conforms with that of this House, whereby the chairman, who has a casting vote, does not in fact vote. I think that is perhaps more correct than"abstains", when not using his casting vote. At any rate this amendment will enable the credit unions to have the matter perfectly clear in their rules as it ought to be.
    Amendment agreed to.

  Clause 6

    MINIMUM AND MAXIMUM NUMBER OF MEMBERS
    Mr. Denzil Davies: I beg to move amendment No. 7, in pages 5, line 40, leave out' of the 1965 Act'.

    885
    There are other amendments which are consequential to amendment No. 7. Credit unions must have a minimum of 21 members whereas other industrial and provident societies require only seven. Clause 6(1) substitutes various sections of the Industrial and Provident Societies Act as they apply to credit unions. The amendment adds another item to the list. It substitutes 21 members for seven in a section of the Companies Act which applies to credit unions by virtue of the Industrial and Provident Societies Act. The relevant section provides for the winding up if the number of members falls below the minimum.
    Amendment agreed to.
    Amendments made: No. 8, in page 5. line 41, after '2(1)', insert 'of the 1965 Act'.
    No. 9, in page 6, line 1, after '16(1)(a)(i)' insert' of that Act'.
    No. 10, in page 6, line 2, leave out 'and'.
    No. 11, in page 6, line 3, after '53(2)' insert 'of that Act'.
    No. 12, in page 6, line 4, at end insert
    ',and
    (d) section 222(d) of the Companies Act 1948 as it applies by virtue of section 55(a) of the 1965 Act to the presentation of a petition for winding up a credit union,'.—[Mr. Denzil Davies.]
    Mr. Peter Rees: I beg to move amendment No. 13, in page 6, line 30, after 'be', insert 'in the public interest and'.
    Mr. Deputy Speaker: With this we may discuss amendment No. 15, in page 6, line 35, leave out 'may' and insert 'shall'.
    Mr. Rees: The registrar under clause 6 has discretionary power to waive the limit on the maximum number of members that may belong to a credit union so that they may be extended beyond a 5,000 limit. Certain reservations were expressed in our debates in Committee about this to the effect that it would enable credit unions to expand possibly to an undesirable degree given the various concessions that are made to them.
    My hon. Friends and I feel that if the registrar is to have this discretionary power it must be exercised strictly. At the moment the registrar is obliged only when considering whether to waive this maximum number to consider whether
    886
    such a waiver would be in the interests of the members and would not jeopardise the existence of a common bond between them. We think that it is appropriate that he should also take into account the public interest because this is not purely a matter of domestic concern to credit unions. If they expand beyond the 5,000 mark they will become vehicles of a different order. It will be necessary to see whether they can travel comfortably on the same roads with various other savings organisations and institutions. On that basis I hope that the right hon. Gentleman may feel disposed to accept this modest amendment.
    4.15 p.m.
    Mr. Geoffrey Finsberg: I tabled an amendment which would have inserted the words
    "nor operating contrary to the public interest."
    My hon. and learned Friend's amendment seemed to be more pleasantly worded, so I withdrew my amendment and added my name to amendment No. 13. In addition, I tabled amendment No. 15 because the Trustee Saving Bank is somewhat unhappy about the original drafting of the Bill.
    I turn to amendment No. 15. The Treasury seems to have accepted that credit unions should not be allowed to grow to the size that they have grown in America. Therefore, the membership has been limited by clause 6. This can be amended further by statutory instrument which is subject to the affirmative procedure. Under clause 6(5) exemption can be granted under certain circumsances.
    My suggestion is that instead of the word"may"it would be better to use the word"shall" so that the registrar has to take into account that the membership should not exceed whatever maximum he may have specified.
    Mr. Denzil Davies: Amendment No. 13 is similar to amendment No. 14 which was not selected. We are prepared to accept amendment No. 13.
    I should also be happy to accept amendment No. 15. However, there are certain consequential drafting problems involved in that amendment which might necessitate technical drafting changes. I think that we can carry out those changes in the later stages.
    Amendment agreed to.
    Amendment made: No. 15, in page 6, line 35 leave out 'may' and insert 'shall —'.[Mr. Denzil Davies.]

  Clause 7
    SHARES AND DIVIDENDS
    Amendment made: No. 16, in page 7, line 19 leave out subsection (6).— [Mr. Denzil Davies.]
  Clause 8
    DEPOSIT TAKING
    Amendment made: No. 18, in page 7, line 23, leave out subsection (1).— [Mr. Denzil Davies.]
  Clause 9

    POWER TO BORROW MONEY
    Mr. Denzil Davies: I beg to move amendment No. 19, in page 8, line 14, leave out from beginning to ' and' in line 17 and insert—
    ' (1) A credit union may borrow money from an authorised bank or temporarily from another credit union or an association of credit unions but the amount so borrowed'.
    Mr. Deputy Speaker: With this we may discuss Government amendment No. 20, amendment No. 21, in clause 12, page 11, line 3, after ' union', insert
    ' provided the consent of the Treasury has been obtained'.
    and Government amendment No. 26.
    Mr. Davies: These amendments are consequential to previous amendments and a new clause, the purpose of which was to align the Credit Unions Bill with the Banking Bill. The amendments were circulated in draft in Committee. There are slight differences but they are only technical.
    Mr. Powell: I believe that a number of credit unions will be grateful for these amendments because there has been some doubt, as the Bill previously stood, about the possibility of credit unions lending to one another—inter-credit union loans in other words. I understand that these amendments remove any possibility of doubt. I am obliged to the Minister.
    Mr. Geoffrey Finsberg: My amendment No. 21 takes a slightly different line
    888
    from that taken by the right hon. Member for Down, South (Mr. Powell). My amendment makes the responsibility that of the Treasury rather than the registrar.
    The trustee savings banks are anxious. They say that the Bill as it stands permits a credit union to lend to another credit union. It encourages a credit union to lend funds at risk and encourages credit unions to look to each other rather than to their members and the careful management of their funds. The Bill undermines to some degree the common bond of members which one imagines that credit unions want to propagate. In some way they should be self-policing.
    I do not contest the arguments in favour of the other amendments. I suggest that it would be more helpful if in this clause we provide that the Treasury should be consulted with a view to obtaining its consent.
    It may be that the Minister of State is not prepared to go along with that in its present form because, perhaps, to have to give the consent to a loan of £500 would be a total waste of time. Will he therefore consider whether a figure should be inserted below which the registrar would give consent and above which the Treasury would have to be consulted and give its view? I do not wish to press this too far, but it is a point which might helpfully be cleared up by the Minister.
    Mr. Denzil Davies: We are concerned here with temporary loans where one credit union wishes for a short period to assist another. The hon. Member for Hampstead (Mr. Finsberg) wants to insert the element of Treasury consent. I think that he will accept that Treasury consent should not be required in these cases. They would concern fairly small cases. I take the point that was made in Committee by the right hon. Member for Down, South (Mr. Powell) and others that it would be beneficial if credit unions could help each other out temporarily in this way. I do not think that there is scope for abuse here. If there were, the registrar would have overriding power to keep his eye on things.
    I do not see a problem, and I think that the fears expressed by the trustee savings banks are not well founded. The registrar, in exercising his overall powers, would keep his eye on this as he would on other aspects of the operations of

    889
    credit unions. I hope therefore, with that assurance, that the hon. Member might feel at this stage not disposed to press his amendment.
    Amendment agreed to.
    Amendment made: No. 20, in page 8, line 19, leave out 'from' to end of line 21 and insert:
    'an authorised bank shall be disregarded for the purposes of the limit on borrowing imposed by subsection (1) above if the credit union has obtained the consent in writing of the chief registrar.'.—[Mr. Denzil Davies.]

  Clause 13
    APPLICATION OF FUNDS AND GENERAL RESERVE
    Amendment made: No. 22, in page 11, line 10, leave out Clause 13.—[Mr. Denzil Davies.]
  Clause 17

    POWER TO SUSPEND OPERATIONS OF CREDIT UNION
    Mr. Denzil Davies: I beg to move amendment No. 25, in page 13, line 26, leave out
    'in the interests of members or'
    and insert:
    'having regard to the interests of all the members of the credit union or in the interests of'.
    Mr. Deputy Speaker: With this we may also take Government amendments Nos. 27, 38 and 39.
    Mr. Davies: This clause empowers the chief registrar to suspend some or all of the operations of a credit union if this would be
    "in the interests of members or potential members".
    The amendment expands the wording so that the registrar will be better able, if necessary, to take account of the fact that suspension might be in the interest of some members, but not of all. It thus parallels the Government amendment to clause 18(2) which deals with cases of winding up. This point was raised in Committee.
    Government amendment No. 27 is concerned with clause 18(2), which allows the registrar to petition for the winding up of a credit union in the public interest or in the interest of members. The hon. Member for Braintree (Mr. Newton) suggested that we might add the words "or some of them"which parallels with the
    890
    previous amendment. This amendment meets the spirit of that suggestion. It would enable the registrar to act in all cases where the interests of members conflict, but it will avoid opening up the problems that were raised in Committee by the amendment suggested by the hon. Member for Braintree.
    Mr. Powell: I wonder whether all is quite right with the amendment. I understand and respectfully agree with the insertion of the notion of all members. I agree that it should be the membership as a whole whose interests have to be taken into account in deciding upon expediency by the chief registrar. However, by altering the wording we are introducing the words
    "having regard to the interests of all the members ".
    A disjunction has ben created between members and potential members which did not exist in the Bill as it originally stood. We now have a contrast between the interests of all the members of a credit union to which the chief registrar is to have regard and, as an alternative, the interests of potential members in which, or not having regard to which, the registrar is to consider his action as potentially expedient.
    Clearly it would be undesirable for the interests of potential members to be disjoined from those of the existing members. I think that that is the effect of the redrafting that has taken place. As the Bill stood originally, it was satisfactory. Members or potential members created, one group of whom part had crossed; the flood and part were crossing yet. However, by the redrafting a contrast has been created between present and future which is surely undesirable.
    I hope that I have made the point such as it is. I believe that it has substance. I hope that the right hon. Gentleman is sufficiently seized of it to undertake to have it considered in an assembly where matters of this sort at least are liable to have a professional scrutiny.
    Mr. Denzil Davies: I understand the point made by the right hon. Member for Down, South (Mr. Powell). It demonstrates the danger, sometimes, of meeting arguments made in Committee without always thinking through the consequences of the arguments. I do not accept entirely what he says, but as so often he has made a good point and we

    891
    shall consider it. We do not want to create a disjointing between existing and potential members. Consideration will be given to whether it is necessary to amend the amendments.
    Amendment agreed to.
    Amendment made: No. 26, in page 13, line 42 leave out from "from" to"if"in line 44 and insert"an authorised bank ".—[Mr. Denzil Davies.]

  Clause 18

    CANCELLATION OR SUSPENSION OF REGIS TRATION AND PETITION FOR WINDING UP
    Amendment made: No. 27, in page 15, line 8, leave out "in the interest of" and insert
    "is just and equitable having regard to the interests of all".—[Mr. Denzil Davies.]

  Clause 25

    PROVISIONS AS TO OFFENCES
    Mr. Denzil Davies: I beg to move Government amendment No. 28, in page 18, line 12, leave out subsection (7).
    Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 29, 31, 32 and 33.
    Mr. Davies: Government amendments Nos. 28, 29, 31 and 32 are tidying-up amendments to bring a number of definitions into the normal alphabetical list in the interpretation clause. It is unnecessary to say anything more about those amendments. They are purely technical amendments.
    Government amendment No. 33 is different. It relates to the meaning of "charitable". That word has a different meaning in the law of England and the law of Scotland. The statute of charitable uses of 1601 did not apply to Scotland for fairly obvious reasons. "Charitable" has a different meaning in Scotland. The meaning of "charitable" within income tax legislation has to be the same in England and Scotland because income tax is applied throughout the United Kingdom.
    The amendment provides that "charitable" shall be construed in Scotland in the same way as it is in income tax legis-
    892
    lation. It imports the English law of charity into the law of Scotland for these purposes.
    Amendment agreed to.

  Clause 28

    INTERPRETATION, ETC.
    Amendments made: No. 29, in page 18, line 36, leave out subsections (1) and (2).
    No. 30, in page 19, line 12 at end insert—
    '"relative", in relation to any person, means any of the following—

    (a) his spouse;

    (b) any lineal ancestor, lineal descendant, brother, sister, aunt, uncle, nephew, niece or first cousin of his or his spouse; and

    (c) the spouse of any relative within paragraph (b) above;

    and for the purpose of deducting any such relationship an illegitimate child or step-child shall be treated as a child born in wedlock; and
    "spouse" includes former spouse and reputed spouse.'.
    No. 31, in page 19, line 12, at end insert:
    '"credit union", except in the expression "Northern Ireland credit union", means a society registered under the 1965 Act by virtue of section 1 above;
    "the 1965 Act" means the Industrial and Provident Societies Act 1965;
    "non-qualifying member", in relation to a credit union, has the meaning assigned to it by sections 5(5) and 19(4) above;'.
    No. 32, in page 19, line 12, at end insert:
    ' and
    "statutory maximum", in relation to a fine on summary conviction, means—

    (a) in England and Wales, the prescribed sum within the meaning of section 28 of the Criminal Law Act 1977; and

    (b) in Scotland, the prescribed sum within the meaning of section 289B of the Criminal Procedure (Scotland) Act 1975;

    (which in each case was at the passing of this Act £1,000.)'.
    No. 33, in page 19, line 12, at end insert:
    '"charitable", in the application of this Act to Scotland, shall be construed in the same way as in the Income Tax Acts;'.—[Mr. Denzil Davies.]

  Clause 30

    SHORT TITLE, COMMENCEMENT AND EXTENT
    Mr. Denzil Davies: I beg to move amendment No. 34, in page 20, line 32, leave out from 'instrument' to end of line 34 and insert:
    'and different days may be so appointed for different provisions.
    (3) Any reference in this Act to the commencement of any provision of this Act shall be construed as a reference to the day appointed under this section for the coming into operation of that provision.'.
    This amendment gives power to bring in different provisions of the Bill at different times. The registrars may need to use it to bring in the requirement for insurance cover against fraud a little later in the rest of the Bill to allow time for appropriate policies to be finalised with the insurers. It gives the registrar flexibility in the operation of the legislation.
    Amendment agreed to.
    Amendment made: No. 41, in page 20, line 35, leave out '23' and insert '(Taxation)'.—[Mr. Denzil Davies.]

  Schedule 1

    MATTERS TO BE PROVIDED FOR IN RULES OF CREDIT UNION
    Mr. Denzil Davies: I beg to move amendment No. 35, in page 21, line 14, after 'meetings' insert:
    ',including provision as to the quorum necessary for the transaction of any description of business,'.
    Mr. Deputy Speaker: With this we may discuss amendment No. 36, in page 21, line 15, leave out from 'rules' to end of line 16.
    Mr. Davies: These are drafting amendments. The hon. and learned Member for Dover and Deal (Mr. Rees) carried an amendment in Committee to require credit unions to define the quorum for meetings. As it stands, it is not clear whether this requirement applies to all meetings or only meetings that deal with the rules. The amendment makes clear that this applies to all meetings.
    Amendment agreed to.
    Amendment made: No. 36, in page 21, line 15, leave out from 'rules' to end of line 16.—[Mr. Denzil Davies.]
    Mr. Powell: In the absence of the hon. Member for Bradford, North (Mr. Ford), I beg to move amendment No. 37, in page 21, line 30, after'society' insert—either—
    (a)'.
    Mr. Deputy Speaker: With this we may discuss amendment No. 40, in page 21, line 31, at end insert—
    or
    (b) from among persons, other than those referred to in section 7 of that Act, approved by the Secretary of State for the purposes of this paragraph.'.
    Mr. Powell: I understand that the effect of these amendments would be to bring within the scope of the auditing of credit unions the holders of certificates under section 161(1)(b) of the Companies Act 1948 who would otherwise be excluded. This is a somewhat esoteric matter to the accountancy profession. Nevertheless it is important.
    It has no doubt been brought to the attention of the right hon. Gentleman that probably these amendments are not the appropriate way in which to deal with the problem. But it would seem to be undesirable that persons who are otherwise authorised under the Companies Act to carry out statutory audits should be debarred from doing so under the Bill.
    Mr. Denzil Davies: These amendments are somewhat esoteric although they are important to accountants and auditors. However, they are not amendments that I am disposed to accept. The point is that the amendments would allow auditors who are not qualified—I qualify that word, in taking it out of the legislation—to audit the accounts of other industrial and provident societies. The list of "qualified" auditors in the Industrial and Provident Societies Act is open-ended in the sense that it includes anybody recognised for the purposes of the Companies Act, strictly for sections 161(1)(a) of the Act. For credit unions of any size, I do not think that we would wish to admit accountants who fail to meet that test. Small credit unions are allowed by the 1968 Act to appoint auditors who are not qualified. To be small, they must have not more than 500 members, not more than £5,000 in assets, and not more than £5,000 a year in total receipts and payments. To some extent the point

    895
    is met under the 1968 measure, but I would not wish to go any further or to go all the way with these amendments and allow credit unions to be audited by auditors who were not qualified under the Companies Act.
    Mr. Powell: It would have been wrong for this point, even at this late stage in the proceedings, not to be ventilated. I suspect that those concerned will wish to urge it further. But for the present, Mr. Deputy Speaker, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

  Schedule 2

    PROCEDURE IN RELATION TO DIRECTIONS UNDER SECTION 17
    Amendments made: No. 38, in page 22, line 19, leave out from beginning to 'give' in line 20 and insert ' he should '.
    No. 39, in page 22, line 33, leave out from ' that' to end of line 34 and insert
    'he should give the direction.'.—[Mr. Denzil Davies.]
    Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
    Bill accordingly read the Third time a fid passed.

STATUTORY INSTRUMENTS, &c.
Mr. Deputy Speaker (Mr. Oscar Murton): In order to save the time of the House, I propose to put together the three motions to approve statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c).

STATUTORY INSTRUMENTS, &c.
  CUSTOMS AND EXCISE
  That the Alcoholic Liquors (Amendment of Enactments Relating to Strength and to Unit of Measurement) Order 19/9 (S.I., 1979, No. 241), a copy of which was laid before this House on 12th March, be approved.
  VALUE ADDED TAX
  That the Value Added Tax (Aids for the Disabled) Order 1979 (S.I., 1979, No. 245), a copy of which was laid before this House on 12th March, be approved.

  ECCLESIASTICAL LAW
  That the draft Grants to Redundant Churches Fund Order 1979, which was laid before this House on 9th March, be approved.—[Mr. Thomas Cox.]
  Question agreed to.

KATHRYN HOOKER (DEATH)
Motion made, and Question proposed. That this House do now adjourn.—[Mr. Thomas Cox.]
4.40. p.m.
Mr. Christopher Brocklebank-Fowler: I should like to place on record my sympathy with the injured person and his or her relatives, Mr. Deputy Speaker, following the incident earlier within the Palace precincts. The House will understand, in the circumstances, if I add diffidence to my natural sadness in raising the topic for debate this afternoon, but I also recognise that it is my duty, as a Member of this House, to represent my constituents' interests even in the prevailing circumstances.
The purpose of the debate is to bring to the attention of the House the circumstances of the death of one of my young constituents in the Royal orthopaedic hospital, Stanmore, in the hope that the Minister will take this opportunity to report progress on his negotiations with the medical authorities about extending the power of the Ombudsman to include the consideration of clinical judgments.
The basic facts surrounding this tragic case are these. Kathryn Averil Hooker—Katie Hooker—suffered from slight curvature of the spine for about seven years up to her death, during which period she was observed for this condition. The intention was that she should have an operation which was designed to cure it. She died during the course of pre-operative treatment in hospital as a result of cardiac arrest on 9 March 1977, at the age of 13.
The substantial complaints against the hospital arise out of incidents which hap-

897
was to take place. The complaints are of two kinds, the first of which is administrative. A complaint has been made about the arrangements for Mrs. Hooker to stay in the hospital while her daughter was undergoing treatment, and particularly during the period immediately prior to the operation. The manner in which she was subsequently informed of her daughter's collapse and subsequent death is also the cause of complaint. Once her daughter had been accommodated in the hospital, Mrs. Hooker went to bed. Shortly after lying down to sleep for the night, she was awakened by a loud banging on the door. It was the nursing superintendent, who said "We are doing everything to save your daughter's life. Are you a Christian? If so, pray for your daughter's life." This was a very abrupt introduction, in the circumstances, to the fact that her daughter was lying grievously ill at the time.
There is also the fact that the hospital informed the mother of another patient that it was her child who died. Subsequently, that woman, a Mrs. Home, not only confirmed the appalling shock that she received as a result of the error by the hospital but also confirmed the fourth point of administrative complaint, namely, that the hospital did very little to give support and care to Mrs. Hooker following her daughter's collapse and subsequent death.
The second group of complaints against the hospital is largely medical. The first of these is that there were minor incidents of an unsatisfactory nature about the child's treatment prior to the operation. For example, the pre-operative treatment required that the child should be in a plaster cast. The plaster of Paris jacket which was part of this cast had a bolt on it which caused Katie's arm to be bruised and scratched. There was an easy solution to this problem, but it was attended to only after it was brought to the attention of the hospital authorities by the parents, Mr. and Mrs. Hooker.
The second and more serious aspect of medical criticism is that it subsequently transpired that Kathryn Hooker suffered her cardiac arrest before the operation was due to take place, and at the subsequent inquest the anaesthetist, Dr. Sylvia Duckworth, admitted that a ventilator had not been properly switched on, with the result that oxygen was not coming
898
through the circuit in sufficient quantity to sustain the child's life. From information which Mr. and Mrs. Hooker have subsequently obtained, there seems to have been a delay of several minutes before resuscitation could start, because of the plaster of Paris jacket and the fact that it had to be cut away to enable cardiac massage to take place.
Those are serious allegations, particularly the medical ones. Since the publicity surrounding this case, a woman living near Colchester, not a constituent of mine, has telephoned to inform me that her daughter survived a collapse in similar circumstances during a similar operation only as a result of the vigilance of the anaesthetists on duty. Therefore, it is not only a matter of my constituents' case, but also one of wider public interest, that the risks inherent in the pre-operative treatment for this operation should be the subject of independent scrutiny.
After the unfortunate death of their child, Mr. and Mrs. Hooker sought to secure an independent inquiry into the circumstances of their daughter's death. They initially took legal advice, and were advised that they were entitled to the somewhat nominal damages due under the provisions of the Fatal Accidents Acts. Nevertheless, my constituents were not interested in any sum of damages because they could not bring back their daughter. Indeed, their case today is that they are not interested in any figure of damages because nothing can replace the life of their daughter. However, they would like to know more about the circumstances of her death in order that other people will not suffer the loss that they have suffered or, indeed, the anguish that they have subsequently suffered since their daughter's death.
After further consultations with solicitors, my constituents approached the hospital, through their solicitors, for an inquiry. After correspondence between their solicitors and the hospital solicitors, the hospital finally agreed to hold an internal inquiry specifically limited to the administrative matters as opposed to the clinical ones. In due course, a hearing took place of a board of inquiry that was set up by the hospital. The members of the board of inquiry freely admitted to Mrs. Hooker that they had not carried out such an inquiry before. Their inexperience showed during the conduct of

899
the inquiry, but Mr. Hooker and to a lesser extent Mrs. Hooker were reasonably satisfied that their allowed complaints were properly investigated.
However, the report that followed this investigation was so brief as to be almost to the point of discourtesy. The original letter of complaint to the hospital from their solicitors ran to about four pages. The report of the governors was less than two pages long, the whole of the first page of which consisted of details of witnesses, their terms of reference, and so on. The inquiry made four recommendations to improve facilities at the hospital, and although in small measure these dealt with some of Mr. and Mrs. Hooker's complaints, the main complaints were still unanswered.
Subsequently, on my advice, the whole case was referred to the Health Service Commissioner. After going into the matter in considerable detail, and having meetings not only with myself but also with the Chairman of the Select Committee on the Parliamentary Commissioner for Administration, officers of the Health Service Commissioner went to Kings Lynn to meet Mr. and Mrs. Hooker, at which point the Commissioner regrettably came to the conclusion that this was not a case which he could usefully investigate, because the main complaints arose out of matters of clinical judgment which he was not empowered to investigate.
I again re-emphasise that Mr. and Mrs. Hooker have all along wanted a full and proper inquiry into the circumstances of their daughter's death. Another course of action that they have considered with their legal advisers is to institute legal proceedings, but they have been advised both by solicitors and by counsel that the maximum damage they would be likely to recover if they successfully prosecuted that course of action would be in the region of £1,500, plus £250 to Mrs. Hooker for nervous shock.
In compensation terms, this is a relatively small sum. But, as I have already pointed out, my constituents are not interested in compensation. However, it is perhaps worth pointing out that this is less than one would expect to receive for losing a finger in an accident. It is the sort of sum that would be awarded
900
to a plaintiff who suffered minor injuries with minimal permanent effect.
Mr. and Mrs. Hooker's legal advisers take the view that, if proceedings were started against the hospital, the hospital and the doctor concerned would make a payment into court in excess of what they expected the damages to be. The advice which legal advisers have given to my constituents is that if they were to win the case and to be awarded less, or to lose the case, they might subsequently become liable for the whole costs of the case, which in the event of its being in the High Court and lasting three or four days could amount to about £10,000. That is clearly beyond their resources. Although they have limited resources and have applied for legal aid, they have been refused it.
Putting it crudely, the possibility of the Hookers prosecuting their case through the courts provides them with the opportunity of damages of around £1,500 now and no subsequent inquiry, or the possibility of an inquiry with the very real risk that they might be called upon to pay damages and the sum of £10,000 at the end of it. This clearly is substantially beyond their means—and not only that. I should have thought it is substantially beyond what any member of the public should be at risk of in circumstances of this kind.
Neither the inquest nor the hospital inquiry, nor the Ombudsman or the courts, seem likely to give Mr. and Mrs. Hooker the full facts surrounding the case.
I return now to the first report from the Select Committee on the Parliamentary Commissioner for Administration in Session 1977–78, published on 6 November 1977, and the subsequent debate initiated by my hon. and learned Friend the Member for Colchester (Mr. Buck) on Friday 1 December last year. During that debate, the Minister himself reminded the House of the whole chain of action which had taken place—first of all, the Davies report; then the fact that in the initial remit of the Health Service Commissioner clinical judgment was to be excluded; then the request by Ministers that the Select Committee should review the jurisdiction of the Health Service Commissioner; and then, of course, the report, which the Minister himself recognised in that debate as having been a

901
very valuable report, putting forward the need for a simple and straightforward procedure at hospital and health authority levels which would be easily understandable by people who wished to complain and by staff involved in handling complaints.
The Minister went on to say that he was in the course of setting up such a procedure and then he referred to the Select Committee's suggestion, which I certainly support in the light of this case—that the Health Service Commissioner should have his jurisdiction changed in order to enable him to investigate cases in which clinical judgment is involved.
At the time of that debate, on 1 December, the Minister himself reported to the House that the Government had not yet reached a conclusion about these recommendations. He said that the Department had been having meetings with representatives of the joint consultants committee and that he hoped early in the new year to report on what those recommendations might be.
I believe that the tragic case of Katie Hooker deserves examination, not only to give solace to her parents but also in the public interest. I hope that, in the light of my remarks this afternoon, particularly my reference to the Minister's speech on 1 December, the Minister will now accept that point and tell us how it can be carried out, preferably by extending the powers of the Health Service Commissioner to investigate matters involving clinical judgment.
4.52 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins):
I begin by expressing my heartfelt sympathy for Kathryn's family in their distress at this tragedy. It is particularly sad when a young child, with all that life has to offer before her, is struck down in this way. All parents will feel for Mr. and Mrs. Hooker in their sad loss.
There is, I think, no dispute about the facts of this regrettable accident. Kathryn was admitted to the Royal National orthopaedic hospital, Stanmore, on 6 February 1977, and an operation was arranged for 8 March 1977. The usual arrangements were made for Kathryn's mother to stay in the mothers' home in the grounds of the hospital so that she could be near Kathryn to help and com-
902
fort her during the first trying days following the operation.
Kathryn was given a general anaesthetic at 4 p.m. on 8 March, but before the start of surgery Kathryn had a cardiac arrest. Immediate resuscitative measures were successful and she was transferred to a ward for further supervision. At 8 p.m. her general condition improved, but there was some evidence of neurological change. At 10 p.m. her condition appeared to have somewhat improved, but at 10.15 p.m. it deteriorated and external heart massage was started. Unfortunately, her condition continued to deteriorate and Kathryn died at 6.35 a.m. on 9 March 1977. At the subsequent inquest the cause of death was given as cerebral anoxia due to or as a consequence of cardiac arrest, and a verdict of misadventure was returned.
Solicitors acting for Mr. and Mrs. Hooker wrote to the Royal National orthopaedic hospital in June 1977, pressing for compensation for Kathryn's death, saying that on the information they had and on the basis of evidence given at the inquest it was, in their view, plain that Kathryn's death was caused by the negligence of the employees of the hospital. They also alleged there were serious shortcomings in the way that the hospital dealt with Kathryn's case quite apart from the negligence which in their view led to Kathryn's death.
In September 1977 the same solicitors wrote to solicitors acting for the hospital informing them that they would now be issuing proceedings against the anaesthetist and, as the hospital was not concerned in this matter, would be dealing direct with solicitors acting for the consultant anaesthetist's Medical Defence Union. My information is that those proceedings have not been concluded and I am sure it will be appreciated that it would not be right for me, in these circumstances, to make any comments in relation to allegations of professional negligence. Nevertheless, I have taken note of the statement of the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) that Kathryn's parents are now in a dilemma about taking legal action, but I have no information to show that they have withdrawn from proceedings.
The hospital was, of course, much concerned about the general complaints made

903
by Kathryn's family and set up a committee of inquiry made up of members of the board of governors to look into these matters. Kathryn's parents were invited to give evidence, and they did so. They also heard all the witnesses and were encouraged to ask questions or to raise matters of interest arising out of the witnesses' interviews.
The more serious complaints made by Mr. and Mrs. Hooker concerned events immediately following Kathryn's cardiac arrest in the theatre. They included such matters as Mrs. Hooker not being advised to contact her husband; that there were no means of communication between the mothers' home and the hospital, which resulted in members of the hospital staff arriving with messages for Mrs. Hooker; that telephones were not readily available; and that neither Mrs. Hooker nor her daughter Jane, who was staying with her, received any care or support from the staff of the hospital. There were other complaints about poor facilities such as inadequate lighting of the grounds of the hospital and lack of heating in the mothers' home.
All these matters were investigated by the committee of inquiry and I think it fair to say that in discussions with the committee the parents recognised that their recollection of events may not have been wholly accurate, or could have been open to different interpretations.
To mention examples, it had been said that there were no means of communication between the hospital and the mothers' home. But the facts are that when Kathryn's condition deteriorated at 10.15 p.m. on 8 March the night superintendent nurse decided to tell Mrs. Hooker personally, rather than by telephone, so that she could give not only a full explanation but also provide comfort and practical help in such matters as contacting relatives.
There were also factual matters such as a complaint that the doors of the rooms in the mothers' home were not numbered, which would have made it easier to establish which parents were occupying the different rooms. The rooms were numbered, but the hospital recognises that it would be an additional help if name labels were also attached to the doors, and this has been put in hand.
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The committee found four complaints that could be substantiated. First, it accepted that there was a need for better arrangements for the emergency contacting of individual mothers occupying rooms in the mothers' home. Secondly, it is also accepted that improvements in the external telephone arrangements in the mothers' home, either by facilitating calls via the hospital switchboard at night or by the installation of a coin-operated system in the mothers' home, are required. Thirdly, the hospital accepts the need for emergency room heating in the lounge of the mothers' home during periods when the central heating has been switched-off. Lastly, a more effective means needs to be found to enable mothers using the mothers' home to find their way about what are, to them, unfamiliar grounds covering a wide area. The board of governors has already put the first three items right and the remaining matter will be dealt with during the next financial year.
As the nursing staff were involved in the more serious of the complaints, I believe it right to state that the committee of inquiry found no grounds for complaint against them. I should also record that the parents thanked the house governor of the hospital for the way in which the inquiry had been conducted.
I should tell the House that the Health Service Commissioner also received a submission from the solicitors acting for Mr. and Mrs. Hooker, but he has explained to them that the action taken by doctors in deciding how to treat a patient is solely a matter of clinical judgment and he has no power to investigate such actions.
I now come to the major point raised by the hon. Member for Norfolk, North-West. The hon. Member quoted from the debate on 1 December in which I took part, as did the hon. and learned Member for Colchester (Mr. Buck), who was Chairman of the Select Committee, and asked what action the Government were taking on that report on an independent review of hospital complaints.
As I told the House on 1 December 1978, when it was discussing the motion of the hon. and learned Member for Colchester, we are having discussions with representatives of the medical profession on the Select Committee's proposals. Until those discussions are completed, I am

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afraid there is nothing further I can say about the Government's position as regards the Select Committee's recommendation. I think that I indicated in the course of that debate some of the difficulties; and, indeed, they were appreciated by the Select Committee.
As regards complaints about facilities, the Health Service Commissioner noted that the hospital had acknowledged that there were shortcomings and had undertaken to introduce measures to remedy them. That being so, he did not consider any investigation by him would achieve more than the board of governors had already done.
It is, of course, open to my right hon. Friend the Secretary of State to order a formal committee of inquiry to look into the circumstances of Kathryn's death. But such committees are set up only if the facts cannot be ascertained by other means. Not only have I received copies of the findings of the committee of inquiry and seen statements made by members of the staff, but I also have before me copies of the evidence given at the inquest which set out the facts about events in the operating theatre in unequivocal terms. In the circumstances, I do not propose to advise my right hon. Friend to set up an independent committee of inquiry.
Accidents in hospitals fortunately do not happen very often. That statement will
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be no comfort to grieving parents. They ask "Why do they happen at all?" and their immediate response—I share the hon. Gentleman's concern—is to establish what went wrong and to seek assurances that it will never happen again. It is, of course, possible to prevent some recurrences—for example, if equipment is being used incorrectly or some fault not detected in design comes to light. My Department is keenly aware of these kinds of mishaps; and a system is in being whereby such faults are reported to the Department which, in turn, issues advice to employing authorities. But it has to be recognised that no matter how well trained, skilled and experienced hospital staff are, there is always a risk that a mistake will be made, human fallibility being what it is.
It is my sincere hope that time will soften the grief felt by Kathryn's parents and her family. The death of a child, always felt most keenly, must be particularly hard to bear when it is so unexpected. I am sure I speak for the hospital, too, when I say that we understand the family's distress, and I hope I may ask the hon. Gentleman to convey to them my deepest sympathy and that of my Department in their sad loss.
Question put and agreed to.
Adjourned accordingly at one minute past Five o'clock.