Lords Sitting of 9 July 1973

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Saint Edmundsbury and Ipswich.

HOTEL SERVICE CHARGES AND V.A.T.
LORD DERWENT: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether (1) service charges made by hotels and restaurants have or have not to be distributed to the staff; (2) in either case it is permissible to charge V.A.T. on the service charge; and (3) a customer can refuse to pay the service charge and make his own contribution to the staff, thus avoiding V.A.T. on his contribution to the staff.
THE EARL OF GOWRIE: My Lords, the first part of the Question is not a matter for Her Majesty's Government, but I understand that practice varies. The answer to the second part of the Question is that where a service charge is included in a hotel or restaurant bill it is part of the value on which the value added tax is charged. As to the third part of the Question, whether a customer can refuse to pay a service charge is a matter between him and the supplier.
LORD DERWENT: My Lords, if the practice varies, is my noble friend aware that probably more than 90 per cent. of the customers—or I suppose we call them "consumers" nowadays—think the service charge is paid entirely to the staff? And where it is not, or only part of it is paid to the staff, is not that cheating the customer, and if so, should the tax authorities condone cheating by charging V.A.T. on it?
THE EARL OF GOWRIE: My Lords, I think that there are aspects which are somewhat unsatisfactory here, and I will look at them more closely. However,
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I cannot agree that there is a question of cheating a customer because, of course, a service charge is part of a total charge for goods and services by the hotel or restaurant, and is advertised as such.
LORD ROYLE: My Lords, is it not a fact that most of us regard what is called a service charge as a gratuity rather than a service charge, and because of that, it is most unfair that the Government should take 10 per cent. of what is, in effect, a gratuity to the staff of the hotel?
THE EARL OF GOWRIE: My Lords, the noble Lord will be aware that the V.A.T. is and was always a tax on services as well as goods, so I do not think there is any question of unfairness here.
LORD HALE: My Lords, can the noble Earl, Lord Gowrie, say, if a customer takes his advice and refuses to pay the service charge, what happens when the proprietor detains his baggage?
THE EARL OF GOWRIE: My Lords, I am sure anyone would carry the noble Lord's baggage for him free, gratis and for nothing.
LORD DOUGLASS OF CLEVELAND: My Lords, if a service charge is not paid to the people who give a service, is not that an offence under the Trade Descriptions Act?
THE EARL OF GOWRIE: No, my Lords, because under the Wages Councils Act 1959 there are statutory minimum wages for those who work in hotels and restaurants, and employers may not use tips to make up this minimum level. But as I said in my earlier answer, a service charge is advertised as such, as part of the total charge for goods and services.
LORD SHINWELL: My Lords, is the noble Earl aware that the so-called service charge, which in the opinion of some people is intended as a gratuity or in lieu of a gratuity, is just a sham, whether it is 10 per cent., 12½ per cent., or, as in some cases, 15 per cent., and that those concerned are always holding their hand out, expecting a tip whether they are waiters, chambermaids or porters?
THE EARL OF GOWRIE: My Lords, some hotels do pass the whole of the receipts to the staff while others retain the service charge but claim they pay

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correspondingly higher wages. Others, especially restaurants, put no service charge on the bill, pay lower wages and expect the staff to make them up in tips.
LORD COLERAINE: My Lords, would it not be possible to have a uniform practice in this matter? Would that not be more fair to everybody? Would it be possible to amend the Catering Wages Act, for instance, so that there is a uniform practice?
THE EARL OF GOWRIE: My Lords, it is always open to any Member of your Lordships' House or of the other place to attempt to bring in legislation on this question.
THE EARL OF LAUDERDALE: My Lords, would the Government not support the principle of fair trading in this matter?
THE EARL OF GOWRIE: My Lords, I think it would be premature for me to give an answer on that; but as I said to the noble Lord, Lord Derwent, I think there are unsatisfactory aspects about this matter which I will look at more closely.
BARONESS SUMMERSKILL: My Lords, could not the Government indicate to these establishments that they must show on their brochures, or whatever they produce, what kind of establishment it is? The noble Earl indicated that there could be three ways of operating in these places. Why should not the customer be told precisely what method is being adopted?
THE EARL OF GOWRIE: My Lords, I do not wish to be too repetitive. I have answered this point several times. A service charge on a bill is an announced charge as part of the total charge for goods and services.
BARONESS SUMMERSKILL: My Lords, the noble Earl has just told the House that the employer can tell the customer that he is keeping the tip because he pays good wages. The employer can adopt other means, and give the tip to the domestic. Why cannot the customer, whether in an hotel or a restaurant, be told exactly what is being done?
THE EARL OF GOWRIE: My Lords, I did not tell the House that the employer
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can tell the customer about this. Of course he can; but there is no requirement on him to do so. I said that my information was that the practice varies.
LORD SLATER: My Lords, is the noble Earl aware that there have been many supplementary questions directed to him on this particular Question on the Order Paper, and while they have all been most helpful, would he not agree with the question that was asked by his noble friend below the gangway; that a black list ought to be published in regard to this particular issue, and that the Government ought to take some direct action to stop what is happening at the moment?
THE EARL OF GOWRIE: My Lords, I think there would have to be a little more evidence of abuse before such a step was taken, but I did say to my noble friend that I would look more closely into the question.

IMMIGRATION: ILLEGAL ENTRANTS' POSITION
2.43 p.m.
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will authorise the Secretary of State for Home Affairs (1) to publish rules setting forth the criteria under which immigrants who have arrived in this country illegally after March, 1968, and who have obtained a status or irremovability shall be allowed to remain here and (2) to provide that any immigrant refused permission to stay should have the right to state his case to the Immigration Appeals Tribunal whose decision shall be regarded as binding.
THE MINISTER OF STATE, HOME OFFICE (VISCOUNT COLVILLE OF CULROSS): My Lords, I have, I am afraid, rather a long Answer. As I made clear in this House on June 12, and as my right honourable friend the Home Secretary confirmed in another place on June 26, all the circumstances of the case will be taken into account when a decision is being made whether or not an illegal

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entrant who came here before the beginning of this year should be sent away—age; length of time in the United Kingdom; strength of connections, if any, with this country; personal history, including character, conduct, employment record and the like; domestic and family circumstances; medical condition; any factors inviting compassionate treatment and any representations received.
My right honourable friend has considered very carefully the suggestion that he should publish rules establishing who will and who will not be allowed to stay here, but he has decided that attempting to define precisely in advance the strength and nature of each factor that should be decisive would introduce undue rigidity and would not necessarily be to the benefit of the illegal entrant. He considers that it is better that each case should be considered, as he has promised, personally and individually by a Minister in the light of the circumstances I have mentioned. As to the second part of the Question, my right honourable friend is not persuaded that it would be right to transfer the responsibility for making these decisions from him to a tribunal. Anyone sent away will have the same right of appeal when he has left this country as a person who is refused leave to enter and who does not hold a work permit, visa or entry certificate. To give a special right of appeal exercisable in this country to illegal entrants would put them in a more favourable position than those who seek to enter this country openly and are refused entry.
LORD BROCKWAY: My Lords, may I thank the noble Viscount for that very full reply? And may I ask whether he is aware that very many immigrants now are bewildered and uncertain about their position? Is it not likely that there will be so many who are involved that it will be difficult for the Home Secretary to exercise his discretion personally? In saying that, I want to acknowledge that I have had very considerate response when I have raised these issues on individual cases. Would it not be better, not only for the sake of the immigrants but also for the sake of the officials who have to deal with this matter, that precise rules should be indicated to them?
VISCOUNT COLVILLE OF CULROSS: My Lords, I must take it from the noble
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Lord, who is always well informed in these matters, that people are bewildered. As to the numbers, I have always said, and this has been repeated, that I do not know how many there are. I am glad that the noble Lord himself, and I hope others, have had considerate response. We think that to lay down rigid criteria would be a mistake. There are many circumstances where one has to take together a large number of different factors and balance them out in order to get a fair decision. To lay down rules would be to pick upon one particular thing or another particular thing which might be entirely inappropriate for an overall decision. We believe that the approach that I have described is in the end fairer to the people concerned and gives a more just result.
LORD BROCKWAY: My Lords, may I ask the noble Viscount a further question about the second point which I raised? Why should not these people have a right of appeal to the Immigration Appeals Tribunal? Is he aware that I have found from my own experience that that Tribunal has acted very fairly in the case of those who have been threatened by deportation? Would it not be better that the interpretation of the law should be allowed to a Tribunal of that character rather than be left to the responsibility of an individual?
VISCOUNT COLVILLE OF CULROSS: My Lords, the immigrant has an appeal to the Tribunal after he has left this country, but on limited grounds only. Like everybody else who comes here without the necessary documentation, he has limited grounds of appeal, but not on the merits of the case. First of all it would require legislation to give him an appeal on the merits, and, secondly, we think that the procedure that I have already outlined is a fairer, and indeed a quicker method of dealing with it.
LORD BROCKWAY: My Lords, does not the noble Viscount know that that answer does not deal with the problem at all? This person has the right to appeal after he has left this country. Is it not the case that those who may be threatened with deportation at Heathrow or anywhere else now have the automatic right to go to the Appeals Tribunal? Why should not immigrants who have been

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given permission to remain in this country have the same right to go to the Tribunal?
VISCOUNT COLVILLE OF CULROSS: My Lords, the whole point is that they have not been given leave to enter into this country. They may have acquired some de facto status, but that is not the same. If a person who comes here perfectly lawfully but without the necessary documentation, such as an entry permit, has to go home before he can appeal, we think the same ought to apply to people who have come here surreptitiously and illegally—that they also should go home. I am sorry, but I have explained this before, and we must stand firm on it; otherwise, it would be very unfair indeed.
LORD MAYBRAY-KING: My Lords, would not the noble Viscount agree that it would be wrong if the illegal immigrant were placed in an advantageous position compared with those who are waiting in the queue to come here legally?
VISCOUNT COLVILLE OF CULROSS: Yes, My Lords; I agree with the noble Lord, and it is a point that I have attempted to make several times. I think that we must take account of those who are waiting and coming here in the proper way, and perhaps having to be very patient indeed about it.

PROCEDURE: PEERS AND STARRED QUESTIONS
2.50 p.m.
LORD DERWENT: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask the Leader of the House whether he would consider drawing the special attention of noble Lords to page 68 of the Companion to the Standing Orders, where it states, "The essential purpose of Starred Questions and supplementaries is to elicit information from the Government, and so they should not incorporate statements of opinion".
THE LORD PRIVY SEAL (LORD WINDLESHAM): My Lords, in answer to a
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Question last week, I reminded the House that the Companion to the Standing Orders states:
"Starred Questions are asked for information only, and not with a view to making a speech or to raising a debate".
The passage to which my noble friend refers is also relevant, and draws particular attention to the undesirability of incorporating statements of opinion either in Starred Questions or in supplementaries.
LORD DERWENT: My Lords, may I thank my noble Leader very much for publicising the matter so thoroughly.
LORD PLATT: My Lords, is it in fact possible to stick strictly to that rule? Is a question allowable if it is worded: "Would Her Majesty's Government agree that …" and then goes on to state an opinion as well as to ask a question of Her Majesty's Government?
LORD WINDLESHAM: My Lords, the words quoted in my noble friend's Question are from the Companion to Standing Orders. As we discussed on the earlier Question put down recently by the noble Lord, Lord Shinwell, it is for the House as a whole to interpret the way in which the Standing Orders are applied, and to maintain order within the House. A certain tolerance has always been a feature of your Lordships' proceedings, but it is a question of how far that tolerance extends.
LORD SOMERS: My Lords, would not the noble Lord agree that there are many instances when speakers preface their observations with the words, "Is the noble Lord aware", and then follow on with a long statement of opinion?
LORD WINDLESHAM: My Lords, I think that it is worth your Lordships' keeping in mind that including statements of opinion in the form of a question does not necessarily bring them within the rules of order. This is a matter of judgment. It is also sometimes a matter of the length of the supplementary as well as whether it is put in the form of a question or not. These are not hard and fast rules, but they need to be applied with some sense of judgment by noble Lords in all parts of the House.

RHODESIA AND INDEPENDENT AFRICA: DEATHS FROM VIOLENCE
LORD COLERAINE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many people in Rhodesia have met violent death since the Unilateral Declaration of Independence; and whether they can estimate, to the nearest hundred thousand, how many have died in the same period as the result of violence in those independent States in Africa which are recognised by Her Majesty's Government.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, we have no means of obtaining reliable information about the number of people who have met violent deaths in Rhodesia since U.D.I. Nor would it be appropriate to seek specific information from other African countries where we have no constitutional responsibility.
LORD COLERAINE: My Lords, may I ask my noble friend whether she is aware that I can hardly believe my ears? Is it not the case that Her Majesty's Government claim to be the only legal Government in Rhodesia and, as such, is it really beyond their powers to get very easily accessible information of this kind? May I ask whether, if I put down the Question again, she will get her office to telephone the Daily Telegraph, The Times, or the Guardian, or some other reputable newspaper, and get the information which her office apparently lacks? With regard to the second part of her Answer, how is it that on July 3 she was able to make an estimate, which she called a "conservative estimate", of the number of people who have been killed in Burundi of 120,000, and is unable to make comparable estimates for other countries?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, referring to the Question on the Order Paper by my
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noble friend Lord Barnby, I was not aware that my noble friend could hardly believe his ears. In answer to the first part of his Question, he will of course be aware that we have no Mission in Rhodesia. We can make a rough estimate, but we cannot give reliable or accurate figures. In answer to the Question the other day to which he referred, I gave a rough estimate, and I said that I could not give accurate figures.
LORD COLERAINE: My Lords, all I was asking of the noble Baroness was to give a rough estimate to the nearest 100,000, in other cases. She was able to give a rough estimate as to 120,000 last week; I do not see why she could not have managed as to 100,000 this week.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am sure that the House, and all noble Lords, would like to have accurate information.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, since I am rather inhibited by the Answer to the previous Question by the noble Lord, the Leader of the House, may I ask the noble Baroness whether Her Majesty's Government would be assisted in their difficult tasks in the Common-wealth if the noble Lord, Lord Coleraine, would refrain from giving permanent praise to the régime which is in rebellion against the Crown, and occasionally gave credit to the social and economic progress achieved by those countries which are independent?
LORD COLERAINE: My Lords, before my noble friend replies, may I ask her whether she is aware that I have never praised the present Government in Rhodesia? The most I have done is to seek to make Her Majesty's Government behave in a rational manner.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am most interested in the exchanges, through me, from both sides of your Lordships' House. I would only say that it is because we are trying to get a fair and just settlement within Rhodesia that we consider that it is not to the advantage of anyone that any estimates or rough figures should be published.

BUSINESS
EARL ST. ALDWYN: My Lords, with the leave of the House, my noble friend Lady Tweedsmuir of Belhelvie will be making a Statement on the Helsinki Conference on European Security at a convenient moment after 3.30 p.m.

IMPROVED SERVICES FOR THE DEAF
EARL ST. ALDWYN: My Lords, my right honourable friend the Secretary of State for Social Services is making a Statement in another place on improved services for the deaf. It has been agreed through the usual channels that this Statement need not be repeated here, but, with the leave of the House, I will arrange for it to be circulated in the OFFICIAL REPORT.
The Statement was as follows:
"With your permission, Mr. Speaker, and that of the House, I wish to make a Statement on behalf of myself and my right honourable friends the Secretaries of State for Scotland and Wales about important steps which the Government are taking to improve services for the deaf.
"As honourable Members will know, the hospital-based treatment of deafness has been an integral part of the National Health Service, and has included the provision of a range of hearing aids for those likely to benefit from their use. But as knowledge has grown the body-worn Medresco aids which have served us so well are ceasing to be fully adequate. We propose, therefore, as part of the National Health Service to provide over the coming years a behind-the-ear aid free of charge for all adults for whom it is suitable, and for children who already receive this type of aid. This will offer an alternative to Medresco aid users, and help many who do not now use a Medresco aid and cannot afford a commercial behind-the-ear aid. These people will for the first time be able to benefit from the hospital-based clinical and allied services in obtaining an aid and in using it effectively.
"The numbers involved are large—probably one million or more. The cost
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will be met from the resources available for the expanding health service programme, but it will necessarily take time to produce enough suitable aids, and to secure suitable staff. We therefore aim to begin issuing the new aids in the autumn of next year, and to complete the operation over five years. This programme will offer the opportunity to British industry to establish large-scale manufacturing facilities for head-worn hearing aids with potential benefits for overseas as well as home sales.
"In the first year we propose to give priority to:

war pensioners who require aids for accepted disabilities,

mothers with young children,

children of any age and young people receiving full-time education,

young people whose behind-the-ear aid has been replaced by a body-worn model on leaving school,

people with an additional severe handicap, such as blindness,

people with exceptional medical need not included in these groups.

"There are many other people with impaired hearing, both of working age and elderly, outside these groups, and we shall therefore be consulting the bodies concerned to help us in determining priorities for the second and later years of the programme.
"Even with this new aid not all needs will be met, and in particular some of those suffering from sensorineural deafness may not be helped. Further research is required, and the Medical Research Council is taking steps to encourage fundamental studies.
"We recognise that other services for the deaf call for improvement. There are shortages of trained staff, which will take some years to remedy. I must emphasise that a great range of skills needs to be secured before we can apply our existing knowledge to those who might benefit, and that much new knowledge needs to be won before substantial groups of the deaf can be fully helped. We hope that the National Health Service and local authorities, in partnership with the voluntary organisations which have

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done so much pioneering work, will strengthen these services as quickly as practicable."

NORTHERN IRELAND (EMERGENCY PROVISIONS) BILL
Brought from the Commons on Friday last, and printed pursuant to Standing Order No. 48; read la.
PROTECTION OF WRECKS BILL
Read 3a, and passed.

WATER BILL
2.58 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (BARONESS YOUNG): My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3ª.— (Baroness Young.)
On Question, Bill read 3ª, with the Amendments.
Clause 3 [Members of water authorities]:
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF EDUCATION AND SCIENCE (LORD SANDFORD)THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF EDUCATION AND SCIENCE (LORD SANDFORD) moved Amendment No. 1:
Page 5, line 6, leave out ("in") and insert ("as respects").
The noble Lord said: My Lords, on behalf of my noble friend Lady Young, I beg to move the first Amendment, This is a drafting Amendment and is intended to make it clear that the area of a water authority is the area as respects which they are responsible for the discharge of any given functions, although the discharge of those functions may in certain circumstances involve them in taking action outside that area as well as inside it. It is necessary to be precise because the population formula in Clause 3(b) relates the representation of counties on regional water authorities to the proportion of their population
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which is resident within the regional water authority's area.
On Question, Amendment agreed to.
Clause 5 [Directions to water authorities]:
LORD SANDFORD LORD SANDFORD moved Amendment No. 2:
Page 8, line 44, at end insert ("but before giving a direction to water authorities generally, the appropriate Minister or Ministers shall consult the Council about the proposed direction").
The noble Lord said: My Lords, on behalf of my noble friend Lady Young, I beg to move Amendment No. 2 which is little more than a technical Amendment. It requires the appropriate Minister or Ministers to consult the National Water Council before giving a direction to water authorities generally under Clause 5 of the Bill. As the Council will be the collective voice of the water authorities, this requirement is clearly appropriate. The Amendment implements an undertaking given by my right honourable friend the Minister for Local Government and Development when a similar Amendment was moved at Committee stage in another place. My Lords, I beg to move.
BARONESS WHITE: My Lords, I would say very briefly that although the noble Lord, Lord Sandford, said that this is a technical Amendment, we regard it as a step in the right direction in helping to build up what might otherwise be not very impressive powers of the National Water Council.
On Question, Amendment agreed to.
Clause 12 [Supply of water by statutory water companies on behalf of water authorities]:
BARONESS YOUNG: My Lords, I beg to move Amendments Nos. 3 and 4. In the interest of clarity, Amendment No. 4 should state after the word ("limits") "in line 7". These are two drafting Amendments. My Lords, I beg to move.
Amendments moved—
Page 15, line 11, leave out ("undertakes") and insert ("undertake").
Page 16, line 6, leave out from ("enable") to ("limits") in line 7 and insert ("them to meet the foreseeable demands of consumers within their").—(Baroness Young.)
On Question, Amendments agreed to.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 5:
Page 16, line 8, leave out subsection (8) and insert—
("(8) Subject to the provisions of any order made under section 254 of the 1972 Act as applied by section 35 below, so much of the enactments relating to the undertaking of a statutory water company as imposes on the company any duty to supply water, except Part VIII of Schedule 3 to the Water Act 1945 (supply for public purposes) and any local statutory provision which is similar to any provision of that Part, shall cease to have effect.")
The noble Baroness said: My Lords, this is a drafting Amendment. The present subsection (8) of this clause terminates the duties laid upon statutory water companies by local enactments to supply water. But it is necessary to make this termination subject to the provisions of consequential and transitional orders which may be made under Section 254 of the Local Government Act 1972, as applied for the purposes of the Bill, and this Amendment makes this clear. My Lords, I beg to move.
On Question, Amendment agreed to.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 6:
Page 16, line 11, leave out subsection (9) and insert—("(9) For sections 12 and 13 of the Water Act 1945 (supply of water in bulk and default powers) there shall be substituted the sections set out in Part I of Schedule [Supply of water in bulk and default powers] to this Act.
(10) Sections 2(1)(b) and 4 and 4(2) to (4) of the Water Act 1948 (which also relate to the supply of water in bulk) shall cease to have effect.
(11) Part 11 of Schedule [Supply of water in bulk and default powers] to this Act shall have effect in relation to the making and confirmation of orders by a water authority under sections 12 and 13 of the Water Act 1945 as substituted by Part I of that Schedule.")
The noble Baroness said: My Lords, in moving this Amendment I should like at the same time to speak to Amendments Nos. 8, 17, 17A, 23 and 31. I should also like to say that there is a small printing error in Amendment No. 23, which appears on page 6 of the Marshalled List. Although these Amendments are of very considerable length, I should like to assure the House that they do not change the substance of the Bill at all. What they do is to set out in a much more comprehensible and satis-
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factory manner certain essential but non-controversial provisions about two matters. The first is bulk supplies of water to statutory water undertakers, and the second is the taking of default action by a water authority against a statutory water company. These provisions are at present Clauses 12 and 13 of the Bill.
These two clauses make modifications to Section 12, which covers the supply of water in bulk, and Section 13, which covers the default powers of the Secretary of State, of the Water Act 1945. The effect of these Government Amendments will be to substitute in the 1945 Act new Sections 12 and 13 containing all the necessary modifications, and to prescribe in the Bill the procedure to be followed in connection with the making of orders by water authorities, either on the compulsory giving or taking of a bulk supply by a statutory water company, or in declaring the company to be in default. Inter alia, such orders will require to be confirmed by the Secretary of State. This matter has been set out fully and at length in these Amendments, in order to make it more comprehensible for people working through the Bill than if it were set out by reference. My Lords, I beg to move.
On Question, Amendment agreed to.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 7:
Transpose the last subsections of Clause 12 to the end of Clause 7.
The noble Baroness said: My Lords, the purpose of this Amendment is to bring together in one clause—that is, Clause 7—the provisions of the Bill relating to working arrangements between water authorities and other bodies, which are all based upon the Local Authorities (Goods and Services) Act 1970. My Lords, I beg to move.
On Question, Amendment agreed to.
Clause 13 [Amendment of provisions as to supply of water in bulk]:
BARONESS YOUNG: My Lords, I beg to move Amendment No. 8.
Amendment moved—
Leave out Clause 13.—(Baroness Young.)
On Question, Amendment agreed to.
Clause 16 [Arrangements for discharge of sewerage functions]:
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 9:
Page 21, line 32, leave out ("a") and insert ("the").
The noble Baroness said: My Lords, this is a drafting Amendment. The context of paragraph (a) of subsection (8) of Clause 16 indicates that the reference should be to the committee which, by virtue of this subsection, is discharging functions on behalf of the local authority which appointed it and not just to any committee. I beg to move.
BARONESS WHITE: My Lords, this is not the place at which I had rather hoped the Government would insert the definite, rather than the indefinite, article—which was Clause 4—but we have no objection to this change.
On Question, Amendment agreed to.
Clause 17 [Requisitioning of sewers for domestic purposes]:
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 10:
Page 23, line 39, at end insert—
("(a) as to the qualifying amount in the case of any premises").
The noble Baroness said: My Lords, in moving this Amendment I should like to speak at the same time to Nos. 11 and 12. The purpose of these three Amendments is to make any disagreement over the expense involved in laying a sewer and associated sewerage on requisition subject to arbitration. I beg to move.
On Question, Amendment agreed to.
BARONESS YOUNG: My Lords, I beg to move Amendment No. 11.
Amendment moved—
Page 24, leave out lines 4 to 13 and insert ("qualifying amount", in relation to any premises, means one eighth of the expense of providing such a sewer as is sufficient to satisfy the requirements of subsection (1) above in the case of those premises and of providing any other sewer which it is necessary or appropriate to provide in consequence").—(Baroness Young.)
On Question, Amendment agreed to.
BARONESS YOUNG: I beg to move Amendment No. 12.
Amendment moved—
Page 24, line 22, at end insert—
("(11A) A sewer shall be treated for the purposes of this section as used for domestic purposes if it is used for removing the contents of a lavatory or removing water used for cooking or washing other than water used for the business of a laundry or a business of preparing food or beverages for consumption otherwise than on the premises.").—(Baroness Young.)
On Question, Amendment agreed to.
Clause 23 [Duties with regard to nature conservation and amenity]:
LORD SANDFORD LORD SANDFORD moved Amendment No. 13:
Page 29, line 14, leave out "Natural Environment Research" and insert "Nature Conservancy".
The noble Lord said: My Lords, in moving this Amendment on behalf of my noble friend Lady Young, I should like to speak to Amendment No. 29 which is identical. These two Amendments substitute references to the new Nature Conservancy Council for references to the Natural Environment Research Council in the two places in which the latter is at present mentioned in the Bill. This is to take account of the provisions of the current Nature Conservancy Bill. We have already dealt with that Bill in this House and it received its Second Reading in another place on July 4, so it is not yet enacted, But in view of the advanced stage that it has reached, it is now considered preferable to deal with the change of name in this way, rather than to adopt the alternative and clumsier course of waiting until the Water Bill receives the Royal Assent and then moving Amendments to the Nature Conservancy Bill. My Lords, I beg to move.
BARONESS WHITE: My Lords, we are entirely in agreement with this. It seems much the most sensible way to proceed. Looking at the duties which are dealt with in the two places in this Bill referred to by the noble Lord, it would appear that they fall pretty clearly on the side of the Nature Conservancy Council rather than on the side of the Natural Environment Research Council. So we would entirely concur with the proposed change.
On Question, Amendment agreed to.
LORD SANDFORD LORD SANDFORD moved Amendment No. 14:
Page 29, line 19, leave out second ("the") and insert ("that").
The noble Lord said: My Lords, on behalf of my noble friend I beg to move Amendment No. 14, which is still dealing with the same point of the Natural Environment Research Council and the Nature Conservancy Council. This is a drafting Amendment by which it is intended to make it clear that the council referred to at the close of subsection (3), now that we have passed the previous Amendment, is the Nature Conservancy Council and not the National Water Council. A misunderstanding might arise because the term "the council" is used everywhere else throughout the Bill to mean the National Water Council. I beg to move.
On Question, Amendment agreed to.
3.12 p.m.
LORD CHAMPION LORD CHAMPION moved Amendment No. 15:
After Clause 30 insert the following new clause:
Restriction on disposal of local authority undertakings
"30A. It shall not be lawful for a local authority to sell, lease or otherwise dispose of its interest in any undertaking for the supply of water, or in the revenues or assets of that undertaking, revenues or assets, and any such sale, lease, disposal or agreement entered into since the 31st October 1972 shall be void and of no effect."
The noble Lord said: My Lords, the purpose of the new clause which I now move is a simple one. It is to stop the sale of local authority-owned water undertakings to statutory water companies and to cancel sales already made since the general proposals of the Government for water became known. The date chosen in the Amendment for the latter purpose is that of the gracious Speech outlining the Government's programme of legislation for the 1972–73 Session, in which, of course, this Water Bill was forecast. Let me make it clear that I do not blame those local authorities for their enterprise in selling or in trying to sell their water undertakings, but I very much blame the Government for permitting it to happen, for transactions of that nature are bound to put other local authorities who have not sold their water undertakings in a wholly disadvantageous position.
What we have to do here is to ask ourselves what is going to be the result of the sales that are taking place, or have already taken place, by local authorities to statutory water companies. The local authorities selling their water undertakings are to benefit considerably from their sales, but when eventually the decision is made to take over those companies, as will inevitably take place sooner or later, the ratepayers in the localities which have had their undertakings handed over to the new water authorities without, be it noted, compensation, will have to help to pay for the undertakings sold to the companies. If I may take two of the transactions now taking place as an illustration, the Watford Corporation is in process of selling its water undertaking to the Colne Valley Water Company. This will be done by means of the Colne Valley Water Order 1973, which is now in draft. The consideration for that transfer is £791,500 plus a sum equal to the expendable stores and a sum equal to the difference between the aggregate amount of any expenditure discharged by the corporation on capital connected for the purpose of its undertaking and the aggregate amount of any loan repayment due in respect of expenditure on the undertaking.
Now how much will be the net gain to the Watford Corporation I do not know, for it is clear that, vis-à-vis the local authority water undertakings, the relief from loan repayments will be much the same in both cases, for the local authority whose undertaking is being taken over by the water authority will find that their loan capital which will be handed over will be serviced by the water authority; so that the position between the two relative to the outstanding loans will be the same. But on the figures that I have mentioned, is seems to me that the Watford Corporation will gain a clear million pounds, or perhaps very much more. That is over and above what would be the case if, as a result of this Bill, their water undertaking was taken from them and handed to the water authority covering the Watford area. As I see it that sum, that million pounds, will be used by the corporation either in relief of rates or for some capital project for the benefit of Watford's ratepayers. When eventually the Colne Valley Water Company is

517
bought by the nation or by a water authority under a compulsory purchase order, the local authorities which have had their undertakings taken from them without compensation under the provisions of this Bill will find themselves paying at least the million pounds that I have mentioned for the property.
VISCOUNT AMORY: My Lords, if the noble Lord will allow me to interrupt him, there is one point about which I am not quite clear. He has said twice, I think, "without compensation", but if I understood him aright the authority which has sold their undertaking to the water company would have received compensation for the sale of it, and therefore the ratepayers would have received that compensation.
LORD CHAMPION: My Lords, has the noble Viscount read the Bill in such a way that he thinks that the water authorities will be paying compensation to the local authorities for their undertakings taken over? If he has, I must admit that I have missed that point. I thought that when publicly-owned undertakings were taken over in this way compensation was not payable, but I should like to hear the noble Baroness—and I hope that she will answer her noble friend—when she comes to reply on this point.
VISCOUNT AMORY: My Lords, may I point out that the noble Lord has got it wrong? I thought he was referring to the sales of water undertakings by a local authority to a water company. In that case, where they have sold the undertaking, they have received compensation for that sale; and therefore the ratepayers are that much better off. Indeed, I think the noble Lord said it.
LORD CHAMPION: My Lords, I am grateful to the noble Viscount. That is exactly the point that I was making: that the authorities which sell their undertaking to companies will in fact gain, and I think that in the case of Watford, for example, they will gain a million pounds. But what happens when, say, the Taf Fechan Water Company is taken over by the water authority in the Wales area? No compensation will be paid, and there will be that much loss to the authorities in that area. I am glad the noble Viscount nods assent to what I am now say-
518
ing as an understandable statement of the position.
VISCOUNT AMORY: My Lords, I think my mistake was that I thought the noble Lord was referring to a subsequent takeover by the nation of the assets that the water company had acquired, as to which he said the ratepayers would then be penalised. The point I was making was that in that case I think the ratepayers would have benefited from the initial sale to the water company. But I realise now that he is referring not to the sale but to the takeover without compensation.
LORD CHAMPION: Yes, my Lords, up to that point, but eventually when the Colne Valley water undertaking, for example, is purchased by the nation in some way, it will have to be paid for partly by the very ratepayers whose undertakings have been taken from them, under this Bill, to the water authorities; and this is the unfairness that I am trying to point out to the House and to the Government. The whole system is quite unfair, in that it has enabled some water authorities who have been a little smart, perhaps, to sell their undertakings to a company and profit considerably thereby. This amount will have to be paid eventually, when there is a takeover of these companies, either by the ratepayers in the area or by the water users or by the taxpayers. I hope that the position is now reasonably clear on the complaint that I am making about the Government action in permitting these sales to take place, since it was known what the Government were going to do. I mentioned at the outset that I had dated this Amendment to operate from the time of the gracious Speech of last year. In fact, of course, it was known long before then what the Government were going to do. Consultation papers were issued and they made it fairly clear.
My Lords, the position here is much the same for the Epsom Corporation. They are going to sell their undertaking to the Sutton and District Water Company by the provisions of the Sutton District Water Order 1973. The consideration for that transfer is £255,000, and I gather that one of the objections to be made will be related to the fact that the undertaking is considered to be

519
worth considerably more than £255,000. As in the case of Watford, there will be a gain to the local ratepayers at the expense of other ratepayers; or, depending on how eventually the company is taken over, by the taxpayers generally. I understand that Tunbridge Wells and Chesham Urban Council are in the same position as Watford and Epsom. If these sales are permitted, as is clearly the intention of the Government, a comparable payment ought to be made to those local authorities whose water undertakings are being confiscated under the provisions of this Bill. There should be equality of treatment between all local authorities who are selling their undertakings or having them taken over by the nation.
Clearly we ought to do something about this. At least we ought to place the ratepayers in the rest of the area which includes—for example Watord and Epsom—in a position of equality of treatment. That is all I am asking for. I am not going to make a threat of confiscation by a future Labour Government of the water companies acquired as a result of enterprise on the part of the local authorities I have mentioned. But I think that this enterprise is to some extent pretty smart practice. Any future Government carrying out in its entirety this Government's understandable original intention, to place in public hands, the control of water, from the collection to the sea, ought to take steps to see that any water charges imposed on, say, consumers at Watford take into consideration the fact that they have profited by the sale of their water undertaking; they have benefitted, while other authorities will have had their undertakings confiscated under the provisions of this Bill.
Another fact which must be considered by a future Government taking over the water companies, if these sales go through, is that, because of the desire to beat the deadline of the takeover by the water authorities, these local authority water assets may well be being sold at a knockdown price, because those concerned are determined to get out before the provisions in the Bill become operative. I think that in permitting this to happen the Government are acting unfairly to those authorities who are not in a position to sell and who are doing the right
520
thing; namely, seeing their water undertakings being handed over to the nation. I beg to move.
3.25 p.m.
BARONESS YOUNG: My Lords, I think it would be helpful if I began by setting the background on the Government's proposals in this Bill for statutory water companies, because the noble Lord, Lord Champion, has asserted that some local authorities are being very smart and getting away with the selling of their water undertakings to water companies; and that therefore this creates a great deal of unfairness as between one authority and another. The first point I should like to make is that the transfer of a statutory water undertaking requires the making of an Order by the Secretary of State, under Section 9 of the 1945 Water Act. In this connection an applicant for an Order must submit a draft Order to the Secretary of State and publish the notice of the application in the London Gazette and in local newspapers in the area affected by the application. Then there is an objection period of twenty-eight days. If within that time an objection is received from any local authority in the affected area, or from any other person appearing to the Secretary of State to be affected by the application, the Secretary of State must hold a public inquiry. I have set this out so that it may be seen that in any of these cases there are the statutory procedures to be gone through.
When the time came for the consideration of this piece of legislation an explanatory memorandum of the Government's proposals for the reorganisation was published in December, 1971. It said:
"It is thought unlikely that any circumstances will arise to justify further regroupings in advance of 1st April 1974—"
That is, of course, regrouping of local authorities with statutory water com-panies—
"but the Secretary of State is prepared to consider on their merits proposals for voluntary regroupings submitted by statutory water companies."
This attitude was further clarified in a letter to the Water Companies Association on March 22, 1972, which said that proposals would be considered, provided that they were technically sound and could be agreed on in sufficient time for the overall effect of such amalgamation

521
to be viewed against the background of the Bill. On November 15, 1972, the Water Companies Association was told, first, that in view of the announcement of legislation for the reorganisation of the water industry the Secretary of State had decided that it would not be appropriate for him to entertain further applications for Orders—that is, for amalgamation between local authorities and statutory water companies—where the necessary formalities (that is the passing of a formal resolution to apply for the Order) had not been completed by that date, November 15, 1972.
LORD CHAMPION: My Lords, that is the date I was after.
BARONESS YOUNG: The Secretary of State said he would consider cases that had met that date-line; but, as I have already outlined in the procedure, they would be considered on their merits and be subjected to a technical examination.
My Lords, I have explained this background in some detail because I wish to make clear that the Government's attitude is not doctrinaire. We have tried to indicate that we do not think there should be a significant change in the balance between statutory water companies and the public sector. On the other hand, there are certain cases where there may well be a strong case on technical grounds for amalgamating two undertakings to produce a single management unit. There are, for example, some very small local authority undertakings which, for one reason or another, have been passed over in the general process of regrouping which has been taking place almost continuously since 1945 and have just remained as a small local authority undertaking in an area served exclusively by a water company.
What is in the Bill has been designed to make a sensible and practical working relationship between the Regional Water Authorities and the statutory water companies, and it is felt that in cases such as I have outlined it would be more sensible for the local authority undertaking to be amalgamated with the statutory water company. The noble Lord, Lord Champion, mentioned two particular cases and he will, I hope, understand if I do not comment further on them at this stage because in both cases either there has just been a public inquiry or there is about
522
to be one, and in the circumstances I am sure the House will understand that it would not be right for me to comment further. But if I may give one example, there is an amalgamation which came into effect on April 1, 1973, between the Wortley Urban District Council and a large local authority undertaking (Sheffield County Borough), and another involving the transfer of a small local authority undertaking (Chesham Urban District Council) to the Rickmansworth and Uxbridge Valley Water Company. The Chesham Urban District Council supplies only 1·1 million gallons a day, as against 33·1 million gallons a day for the water company, and it is completely surrounded by the company. The proposal was advertised in the normal way and there were no objections. It is for this reason that, in the Government's view, there is no case for reopening the matter.
The noble Lord, Lord Champion, raised a point early in his speech about the fact that some local authorities might be making an enormous amount of money out of this. The position is that where a water authority take over a water undertaking they will take over the burden of the outstanding loan charges. I hope, therefore, that I have explained to the House the relationship as we see it between the Regional Water Authorities and the statutory water companies and why we consider that in these circumstances it is right that some local authority water undertakings should be merged with the statutory water companies. It is a practical reason, a way of coming to a sensible arrangement in these particular areas, and we consider that this is a pragmatic and sensible approach to this problem. It is for that reason that I am unable to accept the Amendment.
LORD CHAMPION: My Lords, the noble Baroness has made as good a case as possible for a wholly indefensible position. The attitude of the Government in this matter is, in my opinion, absolutely indefensible. We were told by the noble Baroness that on the instructions of the Secretary of State no further orders were to be made after November 15, 1972. I can only think that by that time somehow it had become borne in on the Secretary of State that this whole procedure was quite unfair. The noble Baroness advised the House of the machinery, and it was right

523
that she should do—the machinery of the actual making of the draft, the holding of the inquiry and so on—but the noble Baroness has not satisfied me that the Government have really considered whether it is fair or not to continue with this matter. My Lords, if I talked here for an hour I should merely be saying that the Government in my opinion are quite wrong to go on in the way they have,
Clause 40 [Commencement]:
3.43 p.m.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 16:
Page 45, line 25, after ("1930") insert (",Part VI of the Local Government Act 1948,").
and I would ask noble Lords to express their feelings by walking through the Lobby with me in a vote of protest against the Government's wholly indefensible position.
3.35 p.m.
On Question whether the said Amendment (No. 15) be agreed to?
Their Lordships divided: Contents, 45; Not-Contents, 67.

CONTENTS

Archibald, L.

Gaitskell, B.

Sainsbury, L.

Brockway, L.

Gardiner, L.

St. Davids, V.

Buckinghamshire, E.

Garnsworthy, L. [Teller.]

Samuel, V.

Burntwood, L.

Geddes of Epsom, L.

Shinwell, L.

Burton of Coventry, B.

George-Brown, L.

Slater, L.

Champion, L.

Hale, L.

Snow, L.

Chorley, L.

Henderson, L.

Stocks, B.

Cooper of Stockton Heath, L.

Hoy, L.

Strabolgi, L.

Crook, L.

Jacques, L.

Summerskill, B.

Davies of Leek, L.

Janner, L.

Taylor of Mansfield, L.

Diamond, L.

Kennet, L.

White, B.

Donaldson of Kingsbridge, L.

Leatherland, L.

Williamson, L.

Douglas of Barloch, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Wise, L.

Douglass of Cleveland, L.

Wright of Ashton under Lyne, L.

Evans of Hungershall, L.

McLeavy, L.

Fiske, L.

Pargiter, L.

NOT-CONTENTS

Aberdare, L.

Gowrie, E.

Nugent of Guildford, L.

Airedale, L.

Greenway, L.

Oakshott, L.

Amory, V.

Grenfell, L.

Onslow, E.

Atholl, D.

Grimston of Westbury, L.

Orr-Ewing, L.

Balfour, E.

Hailsham of Saint Marylebone, L. {L. Chancellor.)

Porritt, L.

Belhaven and Stenton, L.

Redcliffe-Maud, L.

Byers, L.

Hawke, L.

Rennell, L.

Carrington, L.

Hill of Luton, L.

St. Helens, L.

Cawley, L.

Hylton-Foster, B.

St. Just, L.

Colville of Culross, V.

Ironside, L.

Saint Oswald, L.

Conesford, L.

Lauderdale, E.

Sandford, L.

Courtown, E.

Limerick, E.

Sempill, Ly.

Cowley, E.

Lloyd of Kilgerran, L.

Spencer, E.

Craigavon, V.

Long, V.

Strathcarron, L.

Daventry, V.

Lothian, M.

Strathclyde, L.

de Clifford, L.

Loudoun, C.

Strathcona and Mount Royal, L.

Derwent, L.

Luke, L.

Drumalbyn, L.

Milverton, L.

Strathspey, L.

Eccles, V.

Monck, V.

Tenby, V.

Effingham, E.

Monckton of Brenchley, V.

Tweedsmuir, L.

Elles, B.

Mowbray and Stourton, L. [Teller.]

Tweedsmuir of Belhelvie, B.

Emmet of Amberley, B.

Windlesham, L. (L. Privy Seal.)

Erskine of Rerrick, L.

Northchurch, B.

Young, B.

Ferrers, E. [Teller.]

Resolved in the negative, and Amendment disagreed to accordingly.

The noble Baroness said: My Lords, this Amendment is necessary to empower water authorities to pay financial loss allowance and travelling and subsistence allowances to their members in the interim period up to April 1, 1974, when they will be making preparations for the transfer of their functions. I beg to move.
On Question, Amendment agreed to.
BARONESS YOUNG: My Lords, I beg to move Amendment No. 17A.
Amendment moved—
Page 45, line 31, leave out ("(6) (7) and (8)") and insert ("and (6) to (11), except subsections (9) and (11 so far as relating to section 12 of the Water Act 1945").—(Baroness Young.)
On Question, Amendment agreed to.
BARONESS YOUNG: My Lords, I beg to move Amendment No. 17A.
Amendment moved—
Page 45, leave out line 32.—(Baroness Young.)
On Question Amendment agreed to.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 18:
Page 45, line 39, leave out ("(1) to (3)").
The noble Baroness said: My Lords, I beg to move Amendment No. 18. The purpose of this Amendment is to bring subsections (4) and (5) of Schedule 2—the general provisions about recreation—into operation on April 1, 1974, and not, as the clause is at present drafted, on Royal Assent.
On Question Amendment agreed to.
Schedule 3 [Administration, finance, etc., of Water authorities and the National Water Council]:
LORD SANDFORD: My Lords, on behalf of my noble friend, Lady Young, I beg to move Amendment No. 19 which does no more than correct a printing error.
Amendment moved—
Page 59, line 17, leave out ("fully") and insert ("duly").—(Lord Sandford.)
On Question. Amendment agreed to.
LORD SANDFORD: My Lords Amendments 20 and 21 are similar in purpose. They introduce consistency into the Bill by treating "the authority" in the plural and not in the singular. With the leave of the House I will move them together.
Amendments moved—
Page 59, line 37, leave out ("is") and insert ("are").
Page 60, line 7, leave out ("is") and insert ("are").—(Lord Sandford.)
On Question, Amendments agreed to.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 22:
Page 62, line 10, after ("towards") insert ("research or related activities and").
The noble Baroness said: My Lords, the purpose of this Amendment—which is to paragraph 31(2) of Schedule 3—is to enable revenue raised in a local land drainage district to be spent on research and other related activities as well as on those items at present listed in the paragraph. Clause 25(10) of the Bill requires a water authority to make arrangements for the carrying out of research and related activities but there is no corresponding power to make a contribution towards the cost of research out of land drainage revenue. This Amendment makes this possible. I beg to move.
On Question, Amendment agreed to.
BARONESS YOUNG: My Lords, I beg to move Amendment No. 23 and to point out at the same time that there is a printing error on the Marshalled List. The words "and the" in the substituted section 13(2) should read "or a".
Amendment moved—
After Schedule 3 insert the following new Schedule
Supply of water in bulk by agreement or compulsorily

SUPPLY OF WATER IN BULK AND DEFAULT POWERS
  PART I

    SECTIONS TO BE SUBSTITUTED FOR SECTIONS 12 AND 13 OF THE WATER ACT 1945
    12.—(1) An agreement may be made between any statutory water undertakers and any other persons, whether statutory undertakers or not, for the giving by those other persons, and the taking by the statutory water undertakers, of a supply of water in bulk for any period and on any terms and conditions, and, where the supply is to be given by persons who are themselves statutory water undertakers, either within or outside the limits of supply of those undertakers.
    (2) An agreement under this section to which a statutory water company is a party shall require the approval of the water authority on whose behalf the company are supplying water, and the water authority shall withhold their approval in any case where a supply of water is to be given by a statutory water company if it appears to the authority that the giving of the supply would be likely to interfere with the supply of water for any purpose within the company's limits of supply.
    (3) Where it appears to a water authority that it is expedient—

    (a) that any statutory water company through whom the authority are supplying

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    water should give a supply of water in bulk to any other such statutory water company or to the authority and that that other company or the authority should take such a supply, or

    (b) that the authority should give such a supply to such a company,

    and the water authority are satisfied that the giving and taking of such a supply cannot be secured by agreement, they may by order require the giving and taking of such a supply for such period and on such terms and conditions as may be provided in the order.
    (4) The power conferred by section (3) above may be exercised jointly by two or more water authorities in any case where the transfer of a supply of water in bulk between their areas appears to them to be expedient.
    (5) Where it appears to the Secretary of State that it is expedient that one water authority should give to another a supply of water in bulk, and he is satisfied that the giving and taking of such a supply cannot be secured by agreement, he may by order require the respective authorities to give and to take such a supply for such period and on such terms and conditions as may be provided in the order.
    (6) For the purpose of laying any pipes or installing any apparatus connected therewith, being pipes or apparatus required for giving and taking a supply of water in pursuance of an agreement or order made under this section, statutory water undertakers may exercise, either within or outside their limits of supply, the like powers as are exercisable under Parts V and VI of Schedule 3 to this Act for the purpose of laying mains by undertakers to whose undertaking those Parts apply, but subject to the like conditions and obligations.
    (7) Without prejudice to section 254 of the Local Government Act 1972, as applied by section 35 of the Water Act 1973, where immediately before 1st April 1974 statutory water undertakers are under an obligation to give a supply of water in bulk to any other statutory water undertakers, and the obligation arises otherwise than under an agreement or order made under this section, the obligation shall, as from that date, be deemed to be created by an agreement under this section, and—

    (a) the parties may accordingly by agreement vary or terminate the obligation to supply water in bulk and the terms and conditions relating to it; but

    (b) the Secretary of State may, on the application of either of them, terminate that obligation on such terms and conditions as he thinks fit.

    Default powers
    13.—(1) If a complaint is made to the Secretary of State that a water authority have failed—

    (a) to give an adequate supply of water, either as respects quantity or quality, to any part of their area, or to give any supply which they have been lawfully required to give, or

    528

    (b) to take such steps as are reasonably practicable to obtain new powers or to extend their existing powers for the purpose of remedying any such failure, or

    (c) to do anything which they are required to do by or under this Act,

    or the Secretary of State is of the opinion that an investigation should be made as to whether a water authority have failed in any of the matters mentioned in paragraphs (a) to (c) above, he may cause a local inquiry to be held into the matter.
    (2) Where a statutory water company are supplying water on behalf of a water authority and a complaint is made to the water authority that the company have failed—

    (a) to give an adequate supply of water, either as respects quantity or quality, to any part of the water authority area which they are supplying, or to give any supply which they have been lawfully required to give, or

    (b) to take such steps as are reasonably practicable to obtain new powers or to extend their existing powers for the purpose of remedying any such failure, or

    (c) to do anything which they are required to do by or under this Act,

    or a water authority are of opinion that an investigation should be made as to whether any statutory water company through whom they are supplying water have failed in any of the matters mentioned in paragraphs (a) to (c) above, the authority may cause a local inquiry to be held into the matter.
    (3) Subsections (2) to (5) of Section 250 of the Local Government Act 1972 shall apply in relation to a local inquiry under subsection (2) above as they apply in relation to a local inquiry which a Minister causes to be held under subsection (1) of that section—

    (a) with the substitution of a reference to the water authority holding the inquiry for any reference to the Minister, and

    (b) with the omission from subsection (4) of the word "local".

    (4) If after a local inquiry has been held in pursuance of subsection (1) or (2) above it appears to the Secretary of State or, as the case may be, the water authority holding the inquiry, that there has been such a failure as is mentioned in subsection (1) or (2) above on the part of the statutory water undertakers in question, the Secretary of State or the water authority, as the case may be, may make an order declaring the undertakers to be in default and directing them for the purpose of remedying the default to discharge such of their functions in such manner and within such time or times as may be specified in the order or, as the case may be, to take such steps within such time or times as may be specified in the order to obtain new powers or to extend their existing powers.
    (5) If a water authority declared to be in default by an order made under subsection (4) above fail to comply with any requirement of the order within the time limited by it for compliance with that requirement, the Secretary of State, in lieu of enforcing the order by

    529
    mandamus or otherwise, may make an order transferring to himself such of the functions of the water authority as he thinks fit.
    (6) If a statutory water company declared to be in default by an order made under subsection (4) above fail to comply with any requirement of the order within the time limited by that requirement for compliance with the requirement, the water authority, in lieu of enforcing the order by mandamus or otherwise, may make an order suspending the whole or any part of any arrangements made with the statutory water company in question under section 12 of the Water Act 1973, as appears to them necessary in view of the failure, and transferring to themselves such of the functions of the company as they think fit.
    (7) Where functions transferred to the Secretary of State under this section include the function of applying to the Secretary of State for any new powers or for an extension of existing powers, the Secretary of State may grant the new powers or the extension as if an application had been made therefor, and shall give all such notices and do all such other things as would have been required to be given or done in connection with such an application, and any enactment relating to the application for an grant of such new powers or extension of existing powers shall have effect with the necessary adaptations and modifications.
    (8) Where any functions have been transferred to the Secretary of State or a water authority under this section, any expenses incurred by the Secretary of State or the water authority in discharging those functions shall be paid in the first instance by the Secretary of State or the authority, but the amount of those expenses as certified by the Secretary of State or the authority shall on demand be paid to the Secretary of State or, as the case may be, the authority, by the body in default, and shall be recoverable accordingly, and the body in default shall have the like power of raising the money required as they have of raising money for defraying expenses incurred directly by them.
    (9) Any order made under subsection (5) or (6) above may provide for the transfer to the Secretary of State or the water authority, as the case may be, of such of the property and liabilities of the body in default as, in the opinion of the Secretary of State or the water authority, may be necessary or expedient, and when any such order is revoked the Secretary of State or the authority may, either by the revoking order or by a subsequent order make such provision as appears to him or them to he desirable with respect to any property or liabilities held by him or them for the purposes of the functions transferred.
    Interpretation of sections 12 and 13
    13A.—(1) Expressions used in either of the last two foregoing sections and in the Water Act 1973 have the meanings assigned to them by that Act.
    (2) Any reference to a statutory water company in the last two foregoing sections includes a reference to a joint water board or joint water committee, and in relation to such a
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    board or committee any reference to the water authority on whose behalf a statutory water company are supplying water is a reference to the water authority on whose behalf a statutory water company represented on the board or committee are supplying water.

  PART II

    MAKING AND CONFIRMATION OF WATER AUTHORITY ORDERS UNDER SECTIONS 12 AND 13 OF THE WATER ACT 1945
    1. No order made by a water authority under section 12 or 13 of the Water Act 1945 shall have effect until confirmed by the Secretary of State under this Part of this Schedule.
    2. A water authority shall, at least one month before they apply for the confirmation of any such order,—

    (a) cause a notice of their intention to make the application to be published in the London Gazette and in such other manner as they think best adopted for informing persons affected, and

    (b) cause copies of the notice to be served on the bodies to whom the order relates and any other public authorities who appear to them to be concerned.

    3. For at least one month before an application is made for the confirmation of such an order, a copy of it shall be deposited at the offices of the water authority.
    4. The water authority shall provide reasonable facilities for the inspection without charge of an order deposited under paragraph 3 above.
    5. Any person on application to the water authority shall be entitled to be furnished free of charge with a printed copy of such an order.
    6. The Secretary of State, with or without a local inquiry, may refuse to confirm an order submitted for confirmation under this Part of this Schedule, or may confirm the order either with or without modifications; and the authority shall, if so directed by the Secretary of State, cause notice of any proposed modifications to be given in accordance with such directions.
    7. The Secretary of State may fix the date on which an order confirmed under this Part of this Schedule is to come into operation, and if no date is so fixed the order shall come into operation at the end of the period of one month beginning with the date of confirmation.
    8. An order confirmed under this Part of this Schedule shall be printed and deposited at the office of the water authority and copies of it shall, at all reasonable hours, be open to public inspection without charge.
    9. Any person on application to the water authority shall be entitled to be furnished with a copy of it, on payment of such reasonable sum as the authority may determine.
    10. Subsections (2) to (5) of section 250 of the Local Government Act 1972 shall apply in relation to a local inquiry under this Part of this Schedule as they apply to a local inquiry which a Minister caused to be held under subsection (1) of that section but with

    531
    the omission of the word "local" from subsection (4)."—(Baroness Young.)
    On Question, Amendment agreed to.
    Schedule 4 [Land drainage]:
    EARL FERRERS EARL FERRERS moved Amendment No. 24:
    Page 71, line 42, leave out from beginning to ("authorities") in line 43 and insert ("members of a regional or local land drainage committee appointed by or on behalf of a constituent council or constituent councils as it applies in relation to members of a water authority appointed by a local authority or").
    The noble Earl said: My Lords, this is a clarifying Amendment to make it clear that the terms of office of local authority members of regional and local land drainage committees apply irrespective of whether those members are appointed by those authorities or, in the event of disagreement, appointed on behalf of those authorities.
    On Question, Amendment agreed to.
    Schedule 5 [Consequential, transitional and supplementary provisions]:
    BARONESS YOUNG BARONESS YOUNG moved Amendment No. 25:
    Page 82, line 7, leave out paragraph (c) and insert—
    ("(c) for the calculation, collection and recovery on behalf of a water authority by a local authority during a transitional period of amounts payable in respect of services provided in the local authority's area by the water autho- rity and for the apportionment during that period of any payment in whole or in part of any demand by a local authority which includes any such amount as between those services and the other purposes for which the demand is made.
    The noble Baroness said: My Lords, I beg to move Amendment No. 25. The purpose of this Amendment is to provide a more comprehensive means of dealing with the mechanism to be included in the transitional order for the recovery of charges.
    On Question, Amendment agreed to.
    3.49 p.m.
    BARONESS YOUNG BARONESS YOUNG moved Amendment No. 26:
    Page 82, line 44, at end insert—
    ("(8A) In section 259(4), as it applies for the purposes of this Act, for the references to the reorganisation of local government effected by the 1972 Act there shall be substituted a reference to the provisions of this Act.").
    The noble Baroness said: My Lords, I beg to move Amendment No. 26 which relates to the applied provisions of the Local Government Act 1972. Section 259 provides for compensation for loss of office, and Subsection (4) brings within the scope of the regulations which may be made under the section, those persons who suffer loss of employment or pay caused by reorganisation under the Act of 1972. This Amendment substitutes, for the purposes of the Bill, a reference to the provisions of this Bill for the reference to reorganisation under the Act of 1972.
    On Question, Amendment agreed to.
    Schedule 7 [Minor and consequential amendments, etc.]:
    BARONESS YOUNG BARONESS YOUNG moved Amendment No. 27:
    Page 99, line 40, leave out ("such companies, boards and committees") and insert ("any description of water undertakers").
    The noble Baroness said: My Lords, Amendment No. 27 modifies the wording of the replacement Section 9 of the Water Act 1948 (subscriptions to associations of water undertakers). It has been pointed out that, as at present drafted, subscriptions could be paid only to an association representing statutory water companies, joint water boards and joint water committees, whereas an association might well in practice (like the present Water Companies Association) limit its membership to statutory water companies. This Amendment will now apply only to statutory water undertakers other than water authorities, in so far as this describes the type of association which undertakers will be empowered to join. At the same time, the opportunity has been taken to widen the scope of the provision so that such undertakers will be empowered to join an association of any description of water undertakers. It is now wide enough to cover a European or international association. I beg to move.
    On Question, Amendment agreed to.
    BARONESS YOUNG: My Lords, I beg to move Amendment No. 28. This Amendment is concerned with the prevention of waste of clean water, and the effect of it is to preserve the status quo. I beg to move.
    Amendment moved—
    Page 100, line 36, leave out from beginning to ("waste") in line 37 and insert—
    ("(1) Subject to any provision to the contrary contained in any instrument made under or by virtue of the Water Act 1973, Part XIII of Schedule 3 to the Water Act 1945 (provisions for preventing waste of water), except section 61 (power to test water fittings), shall apply throughout every water authority area except in the limits of supply of a statutory water company within the meaning of the Water Act 1973.
    (1A) Section 64 of that Schedule").—(Baroness Young.)
    On Question, Amendment agreed to.
    LORD SANDFORD: My Lords, we discussed this with Amendment No. 13. I beg to move Amendment No. 29.
    Amendment moved—
    Page 101, line 10, leave out ("Natural Environment Research") and insert ("Nature Conservancy").—(Lord Sandford.)
    On Question, Amendment agreed to.
    BARONESS YOUNG BARONESS YOUNG moved Amendment No. 30:
    Page 107, line 7, at end insert—
    ("Town and Country Planning Act 1971
    93A. In section 147(4) of the Town and Country Planning Act 1971 (exclusion of compensation for refusal of planning permission, etc., where development is premature by reference (a) to the order of priority in the development plan or (b) any existing deficiency in the provision of water supplies or sewerage services) for the proviso, there shall be substituted the following proviso:—
    "Provided that this subsection shall not apply if the reason or one of the reasons so stated is that that development would be premature by reference to the matters mentioned in paragraph (a) of this subsection and the planning decision refusing the permission is made on an application made more than seven years after the date of a previous planning decision whereby permission to develop the same land was refused for the same reason, or for reasons which included the same reason."")
    The noble Baroness said: My Lords, I beg to move Amendment No. 30 which makes a consequential modification in the provisions of the Town and Country Planning Act 1971 relating to compensation.
    Section 147(4) of that Act provides, inter alia, that compensation is not normally payable for the refusal of planning permission where the reason for refusal is that development is premature by reference to any existing deficiency
    534
    in the provision of water supplies or sewerage services. There is the proviso however that compensation may become payable if planning permission is refused a second time for the same reason after a period of more than seven years. Up to now this proviso has protected an applicant for planning permission against any failure on the part of the relevant authorities to provide water or sewerage. However, under this Bill an applicant will have an alternative which we consider a more effectual remedy in the form of the provisions for the requisitioning of sewers in Clause 17 of the Bill, coupled with the provision in Section 37 of the Water Act 1945 for the requisitioning of water supplies. It would be unnecessary and inappropriate therefore to leave open the alternative possibility, because we believe that under the Bill there is a better remedy. I beg to move.
    BARONESS WHITE: My Lords, I do not propose to contest this Amendment, because I do not understand it. My only purpose in rising is to say that I think it is regrettable that this should have come at such a late stage in the Bill, because it means that those of us who are not expert in this matter have no further opportunity. Had this been an Amendment which we might have wished to query, it would, I think, have been desirable that we should have had a little more notice, and the Department might have thought a little earlier on about putting it down.
    BARONESS YOUNG: My Lords, I am sorry that the noble Baroness, Lady White, feels that this has come at a very late hour, but if there are points that she would like to raise about which I can write to her, I shall be happy to do so.
    On Question, Amendment agreed to.
    Schedule 8 [Repeals]:
    BARONESS YOUNG: My Lords, I beg to move Amendment No. 31.
    Amendment moved—
    Page 109, leave out lines 34 to 50.—(Baroness Young.)
    On Question, Amendment agreed to.
    BARONESS YOUNG: My Lords, Amendment No. 32 is a drafting, Amendment. I beg to move.
    Amendment moved—
    Page 109, line 52, after ("19") insert (',in subsection (1), the words from "and the" to the end of the subsection.")—(Baroness Young.)
    On Question, Amendment agreed to.
    BARONESS YOUNG: My Lords, Amendment No. 33 is a technical Amendment the purpose of which is to remove subsection (4) of Section 136 of the Water Resources Act 1963 (Amendments and repeals) from the list of repeals in Schedule 8 to the Bill. I beg to move.
    Amendment moved—
    Page 114, line 9, at end insert ("except subsection (4)")—(Baroness Young.)
    On Question, Amendment agreed to.
    3.58 p.m.
    BARONESS YOUNG: My Lords, I beg to move that this Bill do now pass. In doing so, I should very much like to thank my noble friends Lord Sandford, Lord Ferrers and Lord Colville, who have borne the burden of this Bill, and my noble friend Lord Aberdare, who has managed the Welsh clauses. I should like to thank the noble Baroness, Lady White, for her kindness and consideration to me in this, the first Bill that I have had to look after in this House, and to say how much I have appreciated the way in which we have been able to work together to conclude it so satisfactorily.
    Moved, That the Bill do now pass.—(Baroness Young.)
    BARONESS WHITE: My Lords, I should like, in my turn, both to thank my noble friends who have worked very hard with me on this Bill and also the noble Baroness, Lady Young, and the noble Lords who have been assisting her for their courtesy at all stages. I am delighted that this should have been the noble Baroness's first Bill, and, as she knows, we welcome her warmly to her new Ministerial position. I only wish that the courtesy of the Government Front Bench had been matched by a willingness to accept Amendments from the Opposition, because I do not think a single Amendment has been accepted from our side. This is a little discouraging. We have put forward some very constructive suggestions, but not one of them of substance has found favour with the Government. So to my mind, courtesy has hardly been matched by depth of thought.
    536
    My Lords, I am sure that the Government are well aware that not only noble Lords on our side, but noble Lords in other parts of this House, are still not happy at the way in which the Government have tackled the whole problem of the central organisation for water in this country. I am sure that it is entirely unconstitutional, and perhaps "cast a shadow" would hardly be an appropriate way of putting it, but if we say we hope that the noble Lord, Lord Nugent of Guildford, may enjoy any new responsibilities that may perhaps come his way, I am sure we shall not be misunderstood. I should like to stress to the Government—and if the noble Lord is listening, so much the better—that, in our view, unless the National Water Council really exerts itself, particularly in the field that we have discussed so much, that of research and planning, it will not fulfil the expectations which the Government have for its success. In particular—as noble Lords know, I have been worrying about this aspect ever since the early stages of the Bill—if the National Water Council do not protect scientific and planning staff from the kind of intellectual emasculation suggested in the Paper recently circulated by the noble Lord, Lord Sandford, then I do not believe that scientists of the first standing will be prepared to work for the new water organisation.
    I think this is a really serious matter. There are some noble Lords in the House who may not have been following the Bill with close attention, but I would ask any of them who is concerned with scientific research to obtain from the Printed Paper Office the Paper to which I have referred and, after reading it, to ask themselves whether they would not feel distinctly uneasy if they were concerned in scientific advice to Governments and expected to work under the kind of conditions outlined in the Bill and which were criticised most formidably by the noble Lord, Lord Zuckerman, just a week ago on the Report stage. The only other point I would make is that we on this side are still unconvinced of the need for a Water Space Amenity Commission in England. We think that it will simply add to correspondence and paper work. We are not happy about metering, but obviously we have not succeeded in convincing the Government.

    537
    I should like finally to refer to my own country of Wales, where water is still one of the most "inflammable" substances there is. I am grateful indeed to the noble Lord, Lord Aberdare (because I know he has many other preoccupations at the moment, with social security matters and so on), for the interest that he has shown in matters concerned with the Welsh parts of this Bill. In the one serious Amendment which I moved and which was not accepted, it seemed to me that while the noble Lord might have won "on points", as it were, so far as water organisation was concerned he showed a lamentable grasp of the political realities of Mid-Wales. With that, I should like once again to thank noble Lords in all parts of the House who have taken the trouble to work seriously on a Bill which is going to affect the water organisation in this country for many years to come.
    On Question, Bill passed, and returned to the Commons.

  EUROPEAN SECURITY AND CO-OPERATION: HELSINKI TALKS
  4.2 p.m.
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, with the leave of the House, I should like now to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs. His Statement is as follows:
  "As the House will be aware, I represented the United Kingdom at the first stage of the Conference on Security and Co-operation in Europe which took place in Helsinki from the 3rd to the 7th of July.
  "Two important results were achieved. First, the final recommendations of the preparatory 'talks, which began in Helsinki last November, were unanimously approved. This means that there is an agreed basis for the work of the second stage of the Conference at which the questions of substance will be tackled. Secondly, it was agreed that this second stage should open in Geneva on the 18th of September preceded by a meeting of the Co-ordinating Committee starting
  538
  three weeks earlier on the 29th of August.
  In Helsinki last week the representative of each participating State was able to state his country's views on questions affecting security and cooperation in Europe. A number of delegations tabled specific proposals for discussion at the second stage. In my own speech I sought to place the emphasis where I believe it belongs: on the need to change for the better the conditions of life for ordinary people in the Continent of Europe. I am putting a copy of my speech in the Library of the House, together with the proposals which I tabled and a copy of the Communiqué issued in Helsinki on the 7th of July. The Final Recommendations of the Preparatory Talks are already in the Library.
  "I believe the House will welcome the fact that preparations can now go ahead for the next phase of this Conference, which could well be of such great importance, since it is at this second stage that we hope that recommendations on specific practical measures can be worked out and agreed."
  My Lords, that is the end of my right honourable friend's Statement.
  LORD KENNET: My Lords, the House will be grateful to the Minister of State for repeating the Statement made to the other place. Can the noble Baroness confirm that the Government will continue to link progress at the Security Conference with progress at the Mutual and Balanced Force Reductions Conference which has not yet opened, and that the former will not be allowed to reach conclusions until the latter is well advanced towards conclusions? May I say how pleased some of us are—certainly I am myself very pleased—at the crusty, septuagenarian, common sense with which Sir Alec continued to refer to them as "Mutual and Balanced Force Reduction talks" in spite of the Russian insistence that they were not to be "balanced"? Would the Government not agree that the important thing which was achieved last week was the approval of all the recommendations in the preliminary document, which is indeed a weighty affair and much better than might have been expected? That is very good. May I

  539
  also ask the Government whether they will watch the "culture section" very carefully from now on? It is limited to achievements, events, bodies and so on. Art, my Lords, is not usually "events and bodies"; it is a natural flow as between one human being and another, and the best thing that States can do is keep out of it.
  4.6 p.m.
  LORD BYERS: My Lords, I should like to welcome very much indeed the progress which has been made at Helsinki. I should also like to ask the Minister one question. Is it intended to publish an agenda before the second stage of the Conference in September and, if so, when is the document likely to be published?
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I should like to thank both noble Lords who have spoken and to say to the noble Lord, Lord Kennet, that there is no formal link between the Conference on M.B.F.R.s and the Helsinki Conference, but of course the political situation is such that what happens in each must be borne in mind at each. On the question of culture, it is rather a wide agenda but perhaps when he sees our own proposals he may think there is common sense attached to them, as he was good enough to say in reference to my right honourable friend's speech, for which I thank him very much. In answer to the question by the noble Lord, Lord Byers, on the publication of an actual agenda, may I say that the noble Lord will know that the final recommendations of the Helsinki consultations have already been published and are available. Once the Co-ordinating Committee has met at the end of August, I think it will then be possible to publish the agenda.
  LORD SHINWELL: My Lords, may I ask the noble Baroness whether she can say what proposals Her Majesty's Government intend to place before the Conference at the second stage and whether those proposals will be indicated to Members of your Lordships' House (and presumably to those of another place) so that opinions can be expressed about them? Is the noble Baroness aware that the general comment in the Press, inclu-
  540
  ding almost the whole of the Western Press, is to the effect that although during the course of many speeches proposals were made particularly for the need for the Soviet Union to provide greater mobility and more freedom of movement, and so on, the Soviet Union representatives were unyielding. Can the noble Baroness say whether that assessment is correct?
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, the noble Lord will have heard in the Statement which I have repeated that the proposals by the United Kingdom delegation on the three main subjects before the second stage of the Conference will be placed in the Library. The first one, to which I think he is drawing particular attention, concerns questions relating to security in Europe—confidence-building measures. Perhaps he would care in particular to have a look at that. I am sorry that I forgot to make a note of his second question as he was speaking. I wonder whether he would be good enough to remind me of it.
  LORD SHINWELL: My Lords, I referred to comments made in practically the whole of the Western Press and in particular to the propositions that the Soviet Union should be more willing to provide greater freedom of movement and greater mobility in order that people in the Soviet Union might move about as they wished. It was said that the response from the Soviet Union was unyielding. Could the noble Baroness say whether that is correct?
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I regret that in concentrating on the noble Lord's first point I neglected to take a note of his second. It is perfectly true that, as was said in the Press, the second stage of this Conference is charged with preparing proposals to help freer movement. The noble Lord will find this in paragraph 45 of the final Recommendations. My right honourable friend had a private meeting with Mr. Gromyko and took the chance to draw attention to the very strong feelings held in this country about the position of certain Soviet citizens who wish to emigrate and are prevented from doing so. But I am afraid that Mr. Gromyko was not receptive.
  LORD ORR-EWING: My Lords, could my noble friend tell the House whether Her Majesty's Government are going to put the question of verification high on the agenda? Because there are many of us who feel that there is no point in discussing complicated arrangements for mutual balanced force reductions unless firm verification is provided on both sides.
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, the Conference on Mutual Balanced Force Reductions is of course a conference that is going to be held in Vienna, where the whole question of verification will be of great importance. This part that deals with security is on confidence-building measures; for example, the United Kingdom document says that:
  "In our view a failure to provide prior notification of movements, while providing such a notification of manoeuvres, would prejudice the opportunity to create a greater climate of confidence."
  LORD BROCKWAY: My Lords, while thanking the noble Baroness for her Statement and for her answers, may I ask her whether Her Majesty's Government recognise that this Conference at Helsinki is absolutely historic? Is it not the first occasion when there has been a meeting of representatives of all the European countries, West and East, the neutral countries, the United States of America and Canada? Is this not an extraordinary advance towards bringing some settlement of these issues? Will Her Majesty's Government seek during this second phase to overcome the difficulties, which are not unsurmountable, that still exist?
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, it is an historic conference and Her Majesty's Government worked very hard to make sure that it was possible to have a practical application to the various confidence-building measures in the second stage. One has to remember, of course, that there are at least three other very important conferences on the whole question—on disarmament, on arms and everything else going on—and this is devoted to confidence-building measures, to certain commercial aspects and to the very important cultural aspects, including freedom of movement of people.
  BARONESS GAITSKELL: My Lords, would the noble Baroness congratulate the Foreign Secretary on his insistence about freedom of movement?—and here I support my noble friend Lord Shinwell. It is an issue which is hardly ever raised enough; it is very important and simple; and so far it has meant only shots over the Berlin Wall between East and West.
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I thank the noble Baroness, Lady Gaitskell, for her congratulations to my right honourable friend, which I will certainly convey to him. He is concerned that this Conference shall be an opportunity not just for people to make statements of principle, however good they are, but also for them to translate them into practice.
  LORD GEORGE-BROWN: My Lords, is the noble Baroness aware that from here on, not only between now and the second stage but from here on for three years, the United States of America is going to be of very little use to Western Europe, and that the atmosphere is building up there for a massive pull-out from her responsibilities? Could she tell me whether her right honourable friend is taking this factor into account, and how in the second stage and thereafter we propose to energise Europe so that we can look after ourselves, however America now behaves?
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, that is a rather sweeping statement by the noble Lord, Lord George-Brown. The United States is a member of this Conference, has helped with the preparatory work, and will of course be continuing with the work; and she is there because of the reality of the American defence of Europe. Whatever the internal difficulties within the United States at the present time, they nevertheless do not alter the fact that she is one of our strongest allies and so we hope she will remain.
  LORD WIGG: My Lords, before the Government become caught up in technical questions of verification, would they not realise that it is very important to public opinion, not only in this country but throughout Europe, that as regards balanced force reductions they should be informed of what was, what is, and what is hoped to be achieved? Would it not

  543
  be excellent for Her Majesty's Government to publish, if they choose in White Paper form, the strength of our own Forces, quantitatively and qualitatively, and what they know of the strength of Forces not only in the Western bloc but in the Eastern bloc, so that for the first time we can get away from some of the fairy stories which are published annually in our Defence White Paper and come face to face with reality?
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I think the noble Lord is referring to the Conference in Vienna on mutual and balanced force reductions. I am making a statement about a Conference in Helsinki on Security and Co-operation. The facts and figures that he needs are not only in the Defence White Paper but also come out during the course of the debate on that subject.
  LORD WIGG: My Lords, the noble Baroness clearly answered a question from one of her noble friends—it was probably convenient to do so—on the question of verification. That prompted me to suggest that before verification is approached as an abstract subject it could in fact be tested by the realities of the present.
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I think I in fact said to my noble friend that verification was a subject for discussion at Vienna, at the M.B.F.R. talks.
  LORD KENNET: My Lords, would the noble Baroness not agree that the annual publications of the International Institute of Strategic Studies in London and the Swedish International Peace Research Institute in Stockholm give a very full account of force levels and armaments in both West and East Europe and are on the whole worthy of belief?
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, a member of my family was intimately connected with the Institute of Strategic Studies, and I think I can praise their work. But I would also say that the conference which we are discussing now is not a conference designed to discuss specific amounts of arms, which is a completely different subject.
  LORD WIGG: My Lords, out of deference to the noble Baroness's relative I will not comment on the document of the Institute of Strategic Studies, but if in fact we want to get somewhere near the truth then study of the defence documents issued by the United States is a much preferable source.
  BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am sure that when we get to that subject we shall take that point into account.

  CROMARTY FIRTH PORT AUTHORITY ORDER CONFIRMATION BILL
  Brought from the Commons; read 1ª, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2ª and reported from the Committee.
  ULLAPOOL PIER ORDER CONFIRMATION BILL
  Brought from the Commons; read 1ª, and (pursuant to the Private legislation Procedure (Scotland) Act 1936) deemed to have been read 2ª and reported from the Committee.
  ULSTER DEFENCE REGIMENT BILL [H.L.]
  Returned from the Commons agreed to, with an Amendment; the said Amendment considered and agreed to.

  FAIR TRADING BILL
  4.19 p.m.
  Report received.
  Clause 2 [General functions of Director]:
  LORD JACQUES LORD JACQUES moved Amendment No. 1:
  Page 2, line 30, leave out ("economic")
  The noble Lord said: My Lords, friends of consumers on all sides of the House have for many years lamented the fragmentation of consumer affairs over so many different Ministries. They welcome the appointment of a Minister of

  545
  Consumer Affairs, because here was promise of some co-ordination. The purpose of this Amendment is to ensure that there is effective co-ordination. If the Secretary of State is to be an effective co-ordination it is essential that he should be informed, and in this he will rely heavily upon the Director General of Fair Trading. The Director, in the Bill as it stands now, is somewhat inhibited. In matters economic he is charged with the responsibility of putting himself into the position of being aware of and having knowledge of the circumstances of economic practices that may be adversely affecting the interests of consumers. But when it comes to the other interests of consumers he is severely restricted. He can only receive and collate information; he has a purely passive role. We believe that if the Secretary of State is to be a successful co-ordinator the Director must be in a stronger position for keeping him informed. We believe that the Director should be required by Statute to put himself in the position of being aware of and knowing the circumstances of any practice, not only economic, which would adversely affect the interests of consumers.
  When we were in Committee, Members on both sides who had a very active part to play in consumer affairs, told us that according to their experience matters of health and safety had been more significant than economic matters and that was likely to be the pattern for the future. The burden of the Minister's case against the Amendment which was proposed in Committee was that it would result in some duplication and waste. We on this side of the House are equally opposed to duplication and waste; and if we thought that the Amendment now being proposed would result in substantial waste we should not move it. We believe that the waste will be minimal, and for this reason: the Government have made it clear that they regard the post of Director as a very important one and we therefore assume that they will be seeking to appoint to the position a man or women of knowledge, but knowledge tempered by judgment. We also know, according to the figures given in the preface to the Bill, that the Director will be severely restricted in the resources that will be available to him or her, and we believe that the kind of person who is
  546
  likely to be appointed is not going to use his or her scarce resources on doing things which they can get done elsewhere without a charge against the budget. We therefore believe that the overlapping will be minimal.
  At the Committee stage the Committee was evenly divided. We have had another look at the Bill and the Amendment, and we have come to the conclusion that the easiest and perhaps best way of dealing with this matter is not to make reference to economic, health or safety matters in the Bill but simply leave it that the Director should put himself in the position of being aware of and knowing the circumstances of any practice affecting the interests of consumers. Accordingly, we have put down an Amendment which is somewhat different from the Amendment moved in Committee. I beg to move.
  4.24 p.m.
  THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, this is an Amendment which, as the noble Lord says, is slightly different from the one moved in Committee; but it is nevertheless on a subject which has been debated very fully in another place and here. It is fair to recall to your Lordships that it was in response to arguments from the Opposition that the Government broadened the functions of the Director General by adding paragraph (b) to enable him to deal with evidence of practices which may adversely affect the interests of consumers other than economic interests, which are to be his primary function and indeed the reason why the Government decided to invest the Director General. Having gone so far to meet the wishes of the Opposition, we had hoped that the Opposition would welcome or at least be satisfied with this compromise. However, I agreed in Committee to reexamine the issue, and I can assure the noble Lord that I have done so with the utmost care. I must tell him, however, that we still do not see our way to go any further than we have gone already. The reason is, quite simply, that whether this is a minor matter or a major matter—and we think it is a major matter, while the noble Lord thinks it is a minor matter—if we did so, we should simply be duplicating the existing responsibilities of Ministers and Government Departments

  547
  to protect the consumer in non-economic fields, and duplicating the efforts and the resources which they devote to the discharge of their responsibilities.
  Another thing that noble Lords do not quite recognise, as they might, is that the Amendments that we have already made serve to add a new dimension to the work of Departments by giving them access to a new source of evidence, information and advice about practices adversely affecting consumers' health and safety, and other non-economic matters, and they will enable the Director General to make recommendations to the Secretary of State and, through him, to the Ministers concerned about them. Here is at least part of the co-ordination to which the noble Lord, Lord Jacques, is aspiring. I mentioned at an earlier stage that there is a Ministerial Committee on consumer affairs chaired by my right honourable friend the Minister of Trade and Consumer Affairs. The noble Lord is underestimating the degree of co-ordination that will now take place, and I hope he will give due weight to this because the Director General will be able to receive and collate such evidence as comes his way, whether from sources such as consumer bodies, weights and measures inspectors, the courts, or any other individual, firm or body, or from his own observations in the course of discharging his duty to watch for and act upon practices which adversely affect the economic interests of consumers. But he will not be equipped, and it would be wrong to equip him, with the means to make the detailed assessment that is needed for the preparation of measures to deal with health and safety and other non-economic matters. It is not possible to reach conclusions, or keep yourself informed on such matters of health and safety, unless you are in a position to make these detailed assessments. We believe that the detailed assessments ought to be left to the bodies that have been established for that purpose.
  Let me take the example of food standards. I am sure that noble Lords are well aware of the existence of the independent advisory committees, the Food Standards Committee, the Committee on Medical Aspects of Food Policy and its sub-committees dealing with
  548
  nutritional questions; and of the Committee on Medical Aspects of Chemicals in Food and the Environment and its sub-committees dealing with subjects such as toxicity, carcinogenicity and other matters. These committees and subcommittees are manned by the country's leading experts in medical and allied problems. The Food Standards Committee and Food Additives and Contaminants Committee also have experts on food science and technology, and the practical aspects of food production and distribution, and on enforcement, as well as consumer representation.
  But what noble Lords seem to be overlooking is that nearly 300 people—expert advisers to the Department of Agriculture, Fisheries and Food, the Department's own officials and the Department of Social Security—are involved in this work. The majority are highly qualified in medicine or science. It is unthinkable that we should seek to duplicate their work by equipping the Director General—as we should have to do—with a comparable array of experts or even with a smaller and less effective body of experts. I am bound to repeat that that would be a prescription for waste. The noble Lord said that it would be only a little waste, but it would also be a prescription for conflict and confusion. It would also dilute the effort that the Director General can make in those areas where there is at present no machinery. As I said before, we are seeking here to fill the gap, and the gap is on the economic side. The other services exist already.
  I do not want to detain your Lordships unduly, but I think it is important that we should recognise that the mere fact—and I refer here to something that the noble Lord, Lord Sainsbury, said during the Committee stage—that the number of orders made is fairly modest is not an indication of the activity or inactivity of these bodies. An example is the work of the Home Office in connection with the Consumer Protection Act. The mere fact that the Home Office has powers to make regulations relating to any prescribed class of goods on such matters as composition, content, design, construction, finish or packing and may require such goods to be accompanied by the prescribed warning or instructions—the mere fact that those powers exist

  549
  gives the Government the necessary leverage and influence to improve standards through voluntary agreement. When these powers exist and are properly administered by their appropriate Departments there is no point in seeking to duplicate them or to pass the whole or part of the responsibility on to somebody else.
  When the Home Office receives a complaint about consumer goods which are alleged to he unsafe—and they receive a considerable number of such complaints each year—they investigate it and if on investigation it is confirmed that a hazard does exist they do not immediately rush off and make an order. Generally they approach the manufacturers or importers concerned. Almost invariably the manufacturers or importers are prepared to withdraw the goods if the hazard is at all serious, and to arrange for them to be modified so as to eliminate the hazard. At the same time, the Home Office issues a public warning in the form of a Press notice and sometimes it advertises this warning. If the approach to the manufacturer or the importer proves ineffectual then an order can be made. If the Director General were to be given a share in the responsibility for the safety of consumer goods he could do no more. Indeed in practice it is unlikely that he could do as much. He certainly could not do as much unless the goods had been thoroughly tested and ways of reducing the hazard tried out, and for that expert advice is essential.
  When one thinks of the safety of consumers, accidents in the home spring to mind. To deal with them both the systematic gathering of case histories and the analysis and interpretation of such information are needed. This means research. The safety research section of the Scientific Advisory Branch of the Home Office has recently put forward proposals for various research policy projects to be undertaken in 1973–74. An example of the kind of research project is that now being undertaken by the Rubber and Plastic Research Association into the burning behaviour of plastic materials used in the manufacture of furniture. Of course it is proper that these should be allocated to specific Departments where the responsibility should lie.
  550
  I hope that I have said enough to convince your Lordships that this is not the kind of work that the Director General should undertake. The Amendments already incorporated into the Bill will ensure that the Director General will not ignore non-economic practices which adversely affect the consumer. If he comes across them his right course is to pass them to the Departments concerned to be handled by the appropriate experts and not to recruit experts of his own. He must discharge his own primary responsibilities. We shall give him plenty to do. To overload him would be no service to the consumer. We do not want him to be a faceless factotum; we want him to be a live and very human force in the service of the economic interests of the consumer.
  I hope the noble Lord will appreciate this argument. I understand the desire that one should have one person or one body—and it would have to be a very large body (if we were to expand it so far) to be responsible for all consumer affairs. Obviously this subject was looked at by the Government at the time of the preparation of this Bill but we wanted to make the best use of the resources we already had deployed and at the same time to fill the gap that is acknowledged to exist. I urge the noble Lord not to press his Amendment because I really think it would—I was going to say almost destroy the Bill, but it would certainly drive a very deep hole in it. In point of fact, I do not think it would do much more than distract the Director General from his main functions. It would cause him to look into a great many things on which he has no power to act. We think that he should concentrate on the functions that we are giving him to perform.
  LORD JACQUES: My Lords, I would compliment the Minister on the case he has put forward. He has put forward a very good case, but in so doing I think he has grossly exaggerated what we are seeking to do. We have sufficient knowledge of the ramifications of consumer affairs and the machinery of government to know that centralisation is not realistic and not practicable. All that we are trying to do is to ensure that the Secretary of State, who is chairman of the Ministerial committee to secure coordination, is adequately informed. As

  551
  chairman of that committee, he is in a very authoritative position and he should be more fully informed on consumer affairs in general than anybody else on the committee. We should like the Director General to be in a position where he could keep the Secretary of State fully informed.
  I am wondering whether what we really want could not be achieved by some modification to paragraph (b). Clause 2(1)(b) at present says, "to receive and collate evidence". Would the Minister consider the possibility of putting in one further word, "to seek, receive and collate evidence", so that if the Director General had a suspicion that there were practices which were against the consumers' interests he could at least seek evidence to show whether there was or was not.
  LORD DRUMALBYN: My Lords, the noble Lord has made a reasonable suggestion, but it overlooks the fact that the various Departments already have their officers seeking this evidence. What we are doing is to provide a further channel of evidence. I do not think we want to provide any further body to seek the evidence. I can assure the noble Lord that this was one of the things that was considered but it was resisted on these grounds, and I think they are cogent grounds.
  LORD JACQUES: My Lords, I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  LORD JACQUES LORD JACQUES had given Notice of his intention to move Amendment No. 3:
  Page 3, line 22, at end insert—
  ("( ) It shall he the duty of the Director to encourage trade associations and similar bodies to establish codes of practice designed to maintain fair trading and protect the interests of consumers.")
  The noble Lord said: At this stage I wish to thank the Minister for Amendment No. 46 and in view of that Amendment I shall not move this Amendment.
  Clause 3 [Consumer Protection Advisory Committee]:
  4.40 p.m.
  LORD JACQUES LORD JACQUES moved Amendment No. 5:
  Page 3, line 30, after ("of") insert ("making recommendations to the Director on any
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  matter affecting the interests of consumers and for the purpose of").
  The noble Lord said: My Lords, in our view this is a crucial Amendment. As the Bill is drafted at the moment, the Consumer Protection Advisory Committee has a merely passive role. It can consider and advise only on matters which have been referred to it. We put down an Amendment in Committee to give the Advisory Committee a more positive role. The Minister's case against it was that it involved duplication. He told us that the Government had considered what machinery was required, whether it was a Consumer Council, a Consumer Institute or a Director, and then had come to the conclusion it should be a Director. If we were going so to amend the Bill as to convert the Consumer Protection Advisory Committee into a Consumer Council with a staff of its own, then we were going to duplicate. We have taken notice of that point and have now put forward an Amendment which in our view entirely overcomes the objection of the Minister. The Amendment which was put at the Committee stage gave the Committee authority to investigate, consider and recommend. The Amendment which is now before the House gives the Committee authority merely to recommend. Clearly, the key word which has been eliminated is "investigate". That is what would give rise to duplication and expense.
  My Lords, there is a further change in the Amendment. In the Amendment proposed at the Committee stage, the Consumer Protection Advisory Committee could
  "recommend to the Secretary of State or another Minister or the Director".
  The Amendment has been modified, and what we are asking is that the Committee should have authority to recommend only to the Director. It should be able to say to the Director, "From our observation this or that is going on; would you kindly have a look at it to see whether any action is necessary". We believe that this very slightly positive role on the part of the Committee would involve no duplication. It would enable the Committee to prod the Director if need be. We are putting forward what we believe is the very minimum to give this Committee some positive role, and

  553
  in view of the way in which the Amendment has been severely modified we hope it will be acceptable to the Minister.
  4.44 p.m.
  LORD DRUMALBYN: My Lords, this Amendment seems a very simple one, but I am afraid there are objections to it. May I just state the case as I see it, because perhaps again noble Lords have not quite taken on board what the function of the Consumer Protection Advisory Committee is, what its role is, and what its duties are going to be. What the Amendment proposes in effect is that the Committee should be empowered to make recommendations to the Director General on its own initiative—I think that is the point—on matters affecting consumers' interests, whether economic or not. The Bill envisages that its prime function is to assess proposals submitted to it by the Director General for Statutory Orders regulating consumer trade practices which appear to him to have an adverse effect on the economic interests of consumers. The Amendment is not limited, as I understand it, to the economic interests; but that is the role which the Committee is to be constituted to fulfil. Its members will be chosen for their ability to assess the need for the orders and whether the orders are likely to be effective and equitable.
  May I draw the noble Lord's attention—I am sure he is aware of this—to the fact that the Bill also envisages in Clause 14 that references will be made by the Secretary of State, by any other Minister or by the Director General Ito the Committee, and that the Committee is to consider and report on the references. In considering these references it will have access to the information which the Director General will have already compiled. He could not ask the question unless he had done some research into the matter first. The Director General has also to help it in any other way he can, but the Committee is not intended to have the means of carrying out investigations. The noble Lord says quite rightly that he does not mention investigations here, but the fact remains that it is a little difficult to make valid recommendations unless you have made some investigations first. It is the duty of the Director General to keep under review and to investigate. It would be quite
  554
  pointless to equip the Committee to do the work the Director General is given a duty to do. It is the Director General who is the watchdog; it is he who has to accumulate evidence—it is not for the Consumer Protection Advisory Committee to do that. It is for the C.P.A.C. to consider matters referred to it.
  There is no provision in the Bill empowering it to employ staff. It is intended to be an advisory body. There is a dilemma here. On the one hand, if it is going to make valid recommendations, it needs to make investigations. On the other hand, it cannot easily or sensibly make recommendations as it is at present constituted. If the Committee were simply to deliberate at large and make recommendations without having any staff of its own to carry out research and investigation, it is difficult to see what action the Director General would take on those recommendations or what weight he would give to them. If the subject on which the recommendation was made was within his scope of action—as affecting the economic interests of consumers—no doubt he would look into the matter closely, but the Amendment is not confined to the economic interests.
  If the recommendation related to non-economic matters, all he could do if he thought fit would be to treat it as evidence which he might take into account with a view to making a recommendation himself to the Secretary of State. There is nothing to prevent individual members of the Committee from drawing the attention of the Director General to practices which seem to them to be adversely affecting the interests of consumers. Indeed, they would be particularly well placed to do so as individuals. But I suggest to the noble Lord that to formalise this in the Bill and to provide that they should be able to make collective recommendations is a very different matter. I suggest that such a provision would be liable to give rise to friction and misunderstanding rather than to help the Director General, and if it did raise these difficulties it would impair the relationship we are seeking to establish between them. That is why I say that on the face of it this appears to be a sensible Amendment, but the fact is that the Committee is not constituted to initiate in this way and unless it has the power to initiate, its recommendations are not likely to be

  555
  very well founded. The Consumer Protection Advisory Committee is conceived as a body designed to give advice on the matters referred to it; it is not conceived as a pressure group. So I am sorry, but I feel unable to accept this Amendment.
  BARONESS BURTON OF COVENTRY: My Lords, I think and I hope that there is a gulf between us on this particular matter. I shall not repeat what I want to say on the next Amendment, but it seems to me that one of the great drawbacks of this Consumer Protection Advisory Committee is that it is to have no powers whatsoever in respect of initiation. I have listened carefully to what the Minister has said and I took down what he said last time, and I appreciate the points he has made; but I would have thought that if the Government hope to get on this Committee really first-class people they know what should be looked at without having to undertake research on the matter. I am not convinced by their argument. I think the Minister probably understands what we are getting at, but I am very doubtful whether the Department understands this. I am not being offensive, but there really exists the feeling that this Committee—I do not know whether one would call it a rubber stamp, but it is not really going to have anything to do except what the Minister admits it is only going to have to do, and that is solely to consider matters referred to it. I for one (and I understand this is what my noble friend Lord Jacques was saying) do not agree that the Committee should have powers only to deal with what is referred to it. I would support the Amendment and I hope my noble friend will press it to a Division.
  BARONESS PHILLIPS: My Lords, I too would like to support my noble friends here, even though the Minister has made this very reasonable explanation. There was one argument I could not follow. The Minister suggested that it would be necessary to have extra staff. Since the Director General must obviously have a back-up of staff, this would be merely a committee which would be utilising the staff already in existence. It did not seem to me that that argument was valid at all. One of the things that a committee manned by able people always ask is, "Are we to be merely a committee to give a rubber stamp to
  556
  everything put forward, or a body which can really bring to light some of the practices the consumer does not like? "At the moment we have not got such a body. We have only the ad hoc bodies, like the food standards body to which the Minister referred, or the Consumers Association, which again is nothing to do with the Government. So many of us saw this as an opportunity to create a committee which could really take the initiative. I hope that the Minister will find some way round the difficulty, even if he does not like our wording. I cannot see why the Director General should object to having a lively and able committee rather than a committee which merely accepts what he cares to bring before them. They may meet every month and he might not have anything to bring to them. I feel that he will certainly not get the quality of people that are needed to serve on this Committee.
  5.2 p.m.
  LORD DRUMALBYN: My Lords, if I may speak again with the leave of the House, the noble Baroness wonders why the Director General should object. I do not think that this is quite the point. The Director General has not yet been appointed, and of course he has not been able yet to object. We in this House are saying what are to be his functions and what are to be the functions of the Consumer Protection Advisory Committee. I think perhaps we are apt to personalise this matter too much at times. This is going to be an organisation, and the Director General is going to be the head of it. He is going to be at the head of the body to bring to light practices adverse to the consumer. That is what he is being set up to do. The Consumer Protection Advisory Committee can make recommendations only if they have the means to investigate. I do not think one can say that they could use the Director General's facilities to investigate.
  I think this will work out quite well, because we shall be appointing very intelligent and experienced people to the Consumer Protection Advisory Committee. The mere fact that they are members of the Committee will orient them towards observation of consumer practices. They, individually, at least, will constantly be in touch, I have no doubt, with the Director General and will be able to bring matters to his attention. All the

  557
  noble Baroness and the noble Lord, Lord Jacques, are asking is that this should be formalised and that the Committee should make their recommendations as a body. I am saying that I do not think this would work, because the Director General would say to them, "You have not investigated this. You are coming along with ideas, and I am very glad to have your views". To formalise that into the position of recommendations seems to me to be dangerous. I think it could be the cause of friction. I really do not think this would improve the Bill or improve the kind of relationship that we want to see with the Director General and the C.P.A.C. He wants to be able to rely upon it as a body of assessors that will keep him on the right lines. They are going to keep him on the right lines in this way. He is not going to keep them on the right lines by seeking recommendations from them. As the noble Baroness says, there is a difference of approach here, and one has to make up one's mind what one wants this body to do. I think one ought to start in the way we are doing. It could be that this might evolve; we do not see it evolving yet, but it could. We believe that the right thing to do is to treat the Committee as a jury of assessors in the first place and see how that works out.
  BARONESS PHILLIPS: My Lords, can the noble Lord say what is the difference between a Mrs. Brown as a consumer writing to the Director General and a group of Mrs. Browns who make up a committee approaching the Director General? The Minister described the operation as a formalising one. I think that it has been formalised the other way, that if they want to approach him they have to do it as individuals.
  LORD DRUMALBYN: My Lords, officially as a body the Consumer Protection Advisory Committee will not be given the function of making recommendations to the Director General. We think this would be unwise at the present stage. If they like to give their views, whether individually or two or three together, I am sure that in view of their personal qualities and their experience on the Committee the Director General will be more willing to listen to them than to other people.
  LORD JACQUES: My Lords, the difference between us seems to be very clear. The Government's attitude to this Committee is that it should merely advise on matters submitted to it, and that would largely be to give its views on proposed Statutory Orders. We are suggesting that the Committee should have a second function, that it should be able to make recommendations to the Director General. On this Committee will be representatives with knowledge or experience of work in consumer organisations. They may come from organisations which have recently done the necessary research work and found that this or that practice is going on. Surely they should have the right to raise it in the Consumer Protection Advisory Committee, having regard to the name of the Committee, and say that this is going on and would the Director General kindly have a look at it to see whether anything needs to be done. That is the minimum of positive role that we should expect this Committee to have. We have come down so far and minimised its role so much that we think it should be acceptable to the Minister.
  4.58 p.m.
  On Question, Whether the said Amendment (No. 5) shall be agreed to?
  Their Lordships divided: Contents, 55; Not-contents, 72.

  CONTENTS

  Airedale, L.

  Diamond, L.

  Leatherland, L.

  Amherst, E.

  Donaldson of Kingsbridge, L.

  Llewelyn-Davies of Hastoe, B.

  Amulree, L.

  Douglas of Barloch, L.

  Lloyd of Kilgerran, L.

  Archibald, L.

  Evans of Hungershall, L.

  Maelor, L.

  Bernstein, L.

  Gaitskell, B.

  Meston, L.

  Beswick, L.

  Gardiner, L.

  Nathan, L.

  Blyton, L.

  Garnsworthy, L. [Teller.]

  Ogmore, L.

  Brockway, L.

  George-Brown, L.

  Phillips, B.

  Buckinghamshire, E.

  Granville of Eye, L.

  Platt, L.

  Burton of Coventry, B.

  Hale, L.

  Redcliffe-Maud, L.

  Byers, L.

  Henderson, L

  Sainsbury, L.

  Champion, L.

  Hoy, L.

  St. Davids, V.

  Cooper of Stockton Heath, L.

  Hurcomb, L.

  Samuel, V.

  Davies of Leek, L.

  Jacques, L.

  Shinwell, L.

  Slater, L.

  Tanlaw, L.

  Wise, L.

  Stocks, B.

  Taylor of Mansfield, L.

  Wright of Ashton under Lyne, L.

  Stow Hill, L.

  White, B.

  Strabolgi, L. [Teller.]

  Williamson, L.

  Wynne-Jones, L.

  Summerskill, B.

  Winterbottom, L.

  NOT-CONTENTS

  Aberdare, L.

  Elles, B.

  Napier and Ettrick, L.

  Alexander of Tunis, E.

  Emmet of Amberley, E.

  Nugent of Guildford, L.

  Amory, V.

  Exeter, M.

  Oakshott, L.

  Atholl, D.

  Ferrers, E.

  Orr-Ewing, L.

  Balfour, E.

  Fraser of Lonsdale, L.

  Rankeillour, L.

  Balfour of Inchyre, L.

  Gainford, L.

  St. Aldwyn, E.

  Belhaven and Stenton, L.

  Gowrie, E.

  St. Helens, L.

  Berkeley, B.

  Greenway, L.

  St. Just, L.

  Brooke of Cumnor, L.

  Grenfell, L.

  Saint Oswald, L.

  Brooke of Ystradfellte, B.

  Grimston of Westbury, L.

  Sandford, L.

  Brougham and Vaux, L.

  Hailes, L.

  Selkirk, E.

  Carrington, L

  Hailsham of Saint Marylebone, L. [L. Chancellor.)

  Sempill, Ly.

  Cawley, L.

  Somers, L.

  Clwyd, L.

  Hanworth, V.

  Strathclyde, L.

  Coleraine, L.

  Jessel, L.

  Strathcona and Mount Royal, L.

  Conesford, L.

  Killearn, L.

  Courtown, E.

  Limerick, E.

  Strathspey, L.

  Craigavon, V.

  Long, V.

  Tenby, V.

  Crawshaw, L.

  Lothian, M.

  Teviot, L.

  Daventry, V.

  Merrivale, L.

  Tweedsmuir, L.

  de Clifford, L.

  Milverton, L.

  Tweedsmuir of Belhelvie, B.

  Denham, L. [Teller.]

  Monck, V.

  Vivian, L.

  Derwent, L.

  Monckton of Brenchley, V.

  Windlesham, L. (L. Privy Seal.)

  Drumalbyn, L.

  Mowbray and Stourton, L. [Teller.]

  Wrottesley, L.

  Dundonald, E.

  Young, B.

  Eccles, V.

  On Question, Motion agreed to.

  5.7 p.m.
  BARONESS BURTON OF COVENTRY BARONESS BURTON OF COVENTRY moved Amendment No. 4:
  Page 3, line 1, leave out subsection (3).
  The noble Baroness said: My Lords, I have no intention of asking the House to divide on this Amendment, and if I am given permission at the end I shall withdraw it. I have put it down for a specific purpose, because I wanted to test opinion in the House to find out whether other Members agreed with me or disagreed, and particularly to see if I can persuade the noble Lord, Lord Drumalbyn, to give just a little on this matter. Primarily I put it down because I am worried, and it seemed the best thing to put it down on this particular subsection empowering the Secretary of State to appoint full or part-time members.
  At the Committee stage the noble Lord, Lord Drumalbyn, gave us some points about this Consumer Protection Advisory Committee, and he has repeated some of those points this afternoon.1 He told us that it will be a body of part-time people brought together from time to time. I do not know whether my noble friend Lady Phillips is always optimistic
  560
  —possibly she is—but I certainly thought that she was optimistic this afternoon because she spoke about monthly meetings of this Advisory Committee. As I understood the Minister when he answered me at the earlier stage, when I had the temerity to suggest that perhaps the Advisory Committee might meet weekly, I was assured that they certainly would not meet weekly, and that they would meet "from time to time as required". Therefore, I hope that my noble friend Lady Phillips is not being optimistic, because I should regard monthly as not being often enough. But perhaps we could leave that point for the moment.
  The noble Lord, Lord Drumalbyn, went on to say that there is power for the members of this Committee to be paid, but he does not envisage that it will be necessary to pay them—certainly not in the initial stages. I should like to anticipate what the noble Lord may say in reply. We in this country have a great tradition of social service, and unpaid social service, which I think we would all wish to uphold. So I am not talking about cash value; I am talking about the status of the Committee which is not paid. If this Consumer Protection Advisory Committee are to be a Committee of the

  561
  status which I and the consumer organisations envisage, I certainly think that the members should be paid.
  The next point which the noble Lord made was when I asked him whether the Committee would have the power or the authority to call on outside expertise, if it were necessary. The noble Lord said that they would not have the power, that it would not be necessary, and that if they required any outside expertise the Director General was there to supply it. He told us that the Committee would have no secretariat of their own, but would be staffed by the Department of Trade and Industry. He also told us that they would have no power to initiate inquiries. I just do not think this is good enough. We may not be able to do anything about it now, but if one feels strongly one can always hope that eventually, in time, something will get through.
  I should like to say straight away that I have a great admiration and respect for our own Civil Service. I know that when one prefaces one's remarks with a statement like that, one is presumably going on to say something which might be derogatory to the organisation; but it is quite true that I have a great admiration and respect for it. I believe that this Committee will be run by civil servants and I can see no alternative to that from the facts given to me by the Minister. There is something which is worrying me very much indeed, and I hope that it is worrying other people who have not had either the good fortune or the bad fortune to be Ministers, or who are not members of the Civil Service.
  I thought this afternoon that what the noble Lord said in reply to my noble friend Lord Jacques on Amendment No. 1 (and again I say this without wishing to give offence) was a typical Civil Service reply. It went on for ever; it went around every possible thing it could go around; it could have been much briefer. I am not trying to be rude, and I hope the noble Lord knows that I am not being rude. But my reaction was, "My goodness! This could have been said in half the time"; the reply just seemed to go on and on. I do not know whether I shall have any friends in the Department of Trade and Industry after this—or, indeed, whether I have any now; but I feel that
  562
  civil servants tend to live in an ivory tower. I cannot think of a better expression than that. There really is a gulf between people in the Civil Service and people not in it. It is probably unavoidable, but I think it is there. I believe that if one is in the Civil Service one tends to think as the Civil Service thinks. Of course if one is a high flyer and goes straight to the top that is splendid; and some people come out of the Civil Service. But there is a Civil Service-ese type of thinking.
  I do not believe that any of us in this House to-day—I may be proved wrong—who are interested in consumer affairs and who are not in the Civil Service could ever proffer terms of reference like this for the Consumer Protection Advisory Committee. It would never occur to us, and I do not think it would occur to members of consumer organisations, if we wished the Committee to be effective. It is this gulf that worries me. Every day we raise questions like this, and there is a gulf between the Civil Service type of thinking and—I say this with the best will in the world—the ordinary consumer. If somebody gets up and says, "But civil servants are consumers, too", I shall reply that I know that, but that does not bridge this gulf. We get this same putting-off, this same type of answer, which is rather like hitting a mattress with no rebound. With respect, it is something of which the Civil Service should be made aware.
  I think my noble friend Lady Phillips raised my next point. To whom does one write if one wishes a matter to be raised? It is not the slightest use writing to the Consumer Protection Advisory Committee. They have no powers of initiation, so we are stumped there. Presumably one can write to the Minister; but one can write to the Minister now. If the Committee have no powers to initiate, and can only deal with points referred to them, I should like to ask whether the Minister agrees with me—I do not suppose he does—if I say that, really and truly, as matters are at the moment we do not need the Consumer Protection Advisory Committee. The Director General will do the work; and good luck to him! I hope that we get a first-class person. But this Advisory Committee is a smokescreen. I do not believe that the large body of consumers in this country

  563
  have any idea that the Consumer Protection Advisory Committee, on which we set so many hopes, will be no more than a rubber stamp to deal with what is referred to them; to meet from time to time as and when necessary; unpaid and without staff of their own, but staffed by the Department of Trade and Industry. This worries me very much. I hope that I have not been rude. My Lords, I beg to move.
  VISCOUNT HANWORTH: My Lords, I am afraid that I disagree somewhat with the noble Baroness. Lady Burton. It is important that the Director General is strong and well advised. I should hate to see a clash between him and the Committee, and I believe that if one takes the word "advisory" in its broadest sense the Committee are perfectly capable of putting forward their own ideas. It would be the greatest pity, however, if they were made so strong that a clash could occur. The Government have decided that the Director General should have the power in this case, and it would be a great mistake to make a change.
  5.19 p.m.
  LORD DRUMALBYN: My Lords, I have been most interested, as always, to listen to the observations of the noble Baroness. Lady Burton. I do not know what will happen to her the next time she climbs up the ivory tower and meets a few civil servants. I was also glad to hear what the noble Viscount, Lord Hanworth, had to say on this matter. Probably the best way of looking at this point is to consider what would happen if we did not have a Consumer Protection Advisory Committee in the Bill. It would have been quite possible to let the Director General get on with the job. As the noble Viscount said, he is the man who will have the power, the means and the resources. But, as I said at an earlier stage, it is just because he has such considerable power, and because the Secretary of State is to receive proposals from him, that we thought it right that people drawn from the public should be involved and should have a look at the proposals for orders which the Director General makes from time to time, and that he should submit questions to the Committee as to whether a practice is
  564
  contrary to the interests of consumers, and should ask for their advice in the form of a report. I think we should have been criticised if we had not put in a body like this.
  The question is whether, admitting that we need a body drawn from the public to look at what the Director General is proposing, we should then extend its functions further. I think this is the point. We have been pressed to extend them further. I have been maintaining that on the whole this would be a mistake because it would be duplicating the Committee's functions. If we extend them further—and the noble Baroness is right to attach her remarks to this particular provision—what she is moving to do is to leave out the words:
  "The Secretary of State may appoint persons to the Advisory Committee either as full-time members or as part-time members."
  She is right in what she says. We do not believe that for the ordinary members of the Advisory Committee there will be more than a part-time job. I think that it would be only right that they should sometimes sit in panels—and this would still further reduce the number of times that they gather as a body. This is inherent in the nature of the task; for they are here as a jury of assessors.
  My own feeling is that the Secretary of State will have no difficulty in getting people to perform this kind of task. It will be a very responsible job because in effect what they will be doing is coming in on legislation. They will be taking part in the preparation of orders, sifting them, assessing them and so on. This is a very responsible task. We shall need people of high calibre to do it, people who would not be able to afford the time to serve full-time. We shall get a higher calibre of people in asking them to devote their time only periodically. I think this is the right way to deal with it. I hope that the House will agree that there should be no difficulty in getting people to take on a very responsible task of this kind. There are many other Committees of various kinds carrying on responsible jobs of this kind in one way or another, Departmental Committees, Royal Commissions and so on, whose members are not paid. I do not think that the status of a body depends on the amount its

  565
  members are paid. I find myself disagreeing with the noble Baroness on these matters. The noble Baroness is right in thinking that we are not going to encourage people to write to the C.P.A.C.; that the C.P.A.C. is not going to advertise "Write to us!" This is not its function. There are proper channels established for communication from the consumer, and I hope we shall be fostering these channels. There is a great deal that the Director General can do about it. We hope that letters will come ultimately to the Director General.
  I hope that I have dispersed the "smokescreen" that the noble Baroness talked about. So far from being a smokescreen, this was a logical step in the argument. The Director General's power is so great that he needed—and I expressed it in a way that was not very much to the liking of the noble Lord, Lord Diamond—a sounding board or touchstone. This is the function. The Advisory Committee will not be meeting until the Director General gets into his stride. The Director General will have to get together his machinery and his staff and get down to the job and see what has to be done by way of orders. Once he gets into his stride, some of them will be kept pretty busy. I hope I have described adequately, though perhaps loosely, the way in which we look at the duty of the Consumer Protection Advisory Committee. Given this point of approach, I think we have got this matter in the right perspective. I know that it does not go as far as noble Lords would like it to go; but as a body it was not envisaged in this light at all. I hope that, on consideration, noble Lords will feel rather less dissatisfied with the concept now than was perhaps the case when we began the discussion.
  BARONESS BURTON OF COVENTRY: My Lords, I do not agree with the noble Lord, but I thank him for his reply. I am sure the Advisory Committee will have the good wishes of everyone in this House. In hoping that they will be considerably overworked, may I ask the leave of the House to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  5.27 p.m.
  LORD JACQUES LORD JACQUES moved Amendment No. 6:
  Page 4, line 19, at end insert—
  ("( ) At least sixty per cent. of the members of the Advisory Committee shall be persons described in paragraphs (b) and (c) of subsection (5)").
  The noble Lord said: My Lords, this Amendment is concerned with the composition of the Advisory Committee. The Committee will consist of at least three elements: those who have had knowledge or experience in the supply of goods; those who have had knowledge or experience in enforcement; and those who have had knowledge or experience in consumer organisations. There is nothing in the Bill as it stands which would prevent those who have had knowledge or experience in the supply of goods from being in a majority. We think that in a Consumers' Protection Advisory Committee those with knowledge or experience in consumer organisations should be in a majority. However, the Amendment does not go so far as to insist on that. What we are asking is that those with knowledge and experience in enforcement and those with knowledge and experience in consumer organisations should together form 60 per cent. of the Committee.
  At the Committee stage, the Minister pointed out that in addition to the three categories which I have mentioned, other people would probably be appointed. He mentioned, in particular, lawyers and accountants. I should have thought that a lawyer or an accountant should have been appointed to this Committee because he specialised in a certain way; because he specialised in advising suppliers, or in advising enforcement authorities and in advising consumer organisations; so that in one way or another he could have been put in one of the three categories. Furthermore, the Minister said at the Committee stage:
  "I cannot believe that the Secretary of State will appoint a majority of traders; that is, persons with a knowledge of or experience in supply."
  He went on to say that he was prepared to look at the Amendment to see,
  "if we can make it clear that our object is to get the best possible balance in this Committee".
  The real purpose of this Amendment is to get from the Minister the results of the thought that he promised he would give to this question. If he is not prepared to accept this Amendment on the

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  Marshalled List, I would ask whether there is any other Amendment that he will accept. Would he, for example, accept a straightforward Amendment which limited the proportion of those who have knowledge or experience as suppliers? If so, we should be pleased to withdraw this Amendment and put down a different Amendment at the next stage. I beg to move.
  LORD DRUMALBYN: My Lords, the noble Lord is indefatigable in trying to get the right form of constitution for this Committee. I do not complain about it, but in a way his approach is negative. He wants to make certain that it is not overridden by one section or another. I think he made a slip of the tongue in saying the Committee will consist of three groups. It will not. Subsection (5) makes it quite clear that those appointed are to have knowledge or experience of the three sections here: first, experience in the supply of goods; secondly, experience in the enforcement of weights and measures legislation; and, thirdly,
  "experience in organisation, established, or activities carried on, for the protection of consumers".
  But there need not be more than one of each, so it would be quite wrong to say that the Committee, which is to have a minimum of 10 and a maximum of 15, will consist of these three groups.
  It is the intention of the Secretary of State that there should be independents. I said that there might be a lawyer or an accountant because there generally is on such committees. I did not mean to imply that they were going to be appointed because they were lawyers or because they were accountants. They would be appointed for their knowledge of and experience in consumer affairs, their interest in consumer affairs, and their general ability to perform the function of an assessor on this Committee. I think it would be a mistake to try to tie down the proportion in any particular way. It might well be that 50 per cent. will be independents, not in any of these three categories; I do not know. The Secretary of State will have to find the best people he can get. What the clause sets out to secure is that there should be at least some people with this specialised experience; but there will be others with
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  more general experience—and, of course, the groups will not necessarily be mutually exclusive. The noble Lord, with his own particular experience, might easily qualify under more than one of the groups, I think. I just say this by way of illustration.
  It is not intended that people should be appointed from particular callings or bodies, or anything like that, and then be representative of those callings, vocations or whatever. They will be appointed on their own merits for what they can contribute to the Committee, and, so to speak, while their ticket of entry may be that they fall into group (a), (b) or (c), on entering the Committee they will, as it were, hand up their ticket of entry and just come in as members of the group to give it the benefit of their accumulated wisdom and experience. My Lords, I hesitate to say this, but I have a particular experience of this in the Advertising Standards Authority. In that case, I was immensely impressed that, whatever the background from which people were appointed to that committee, once they got on to the committee one hardly knew from what background they came. They contributed their views without reference to their backgrounds at all, and never was there a division on such grounds between the independents and those who came from the Press, and so on—never. I would imagine that exactly the same situation would apply here. I do not think it is a good thing to try to lay down particular provisions of this kind—limiting provisions. But I can say to the noble Lord that what he is out to achieve is fully understood and appreciated by my right honourable friend, and I am quite certain that when these appointments come to be made he will not have cause to complain that the Committee will be dominated from any particular quarter.
  On Question, Amendment negatived.
  Clause 15 [Exclusion from s. 14 in respect of certain services]:
  5.35 p.m.
  BARONESS PHILLIPS BARONESS PHILLIPS moved Amendment No. 7:
  Leave out Clause 15.
  The noble Baroness said: My Lords, we now return to a point which I raised at Committee stage. It refers to the

  569
  clause in the Bill dealing with the professions; and, with permission, I would also speak to Amendment No. 48, because that refers to the same point. At Committee stage I made the point, which I believe to be true, that in these days people do not spend their money only on goods; they also spend it on the services of professional people. I noticed that the Consumer Information Bulletin, which is a document that comes to me from the Department from time to time as it is issued and which I find a splendid little piece of information, made reference to the reply which the Minister had given in another place but which was in substance what the noble Lord, Lord Drumalbyn, had said when replying to me in Committee.
  He said that the Commission (we are now talking about the Monopolies Commission) would look at the practice of barristers and advocates in the United Kingdom (these were practices which are known as the two-counsel rule) and the regulation of charges by scale fees by architects and surveyors.
  The Bulletin then goes on to say:
  "There will also be scrutiny by the Commission of certain restrictions on advertising by barristers, solicitors, accountants and veterinary surgeons."
  My Lords, this is splendid, and I should be the last to say that this is not right and valuable. But it does not go far enough. Since the Committee stage I have had a number of letters from professionals urging me to press this point again. I noted from one Sunday paper that certain dentists were actually conducting sessions on how to brush your teeth, and were charging £18 a session for this privilege. I would not say that one needs to protect fools who spend £18 on such a foolish enterprise; nevertheless, I would suggest to your Lordships that if it were a trader who was engaged in this sort of thing it would be called an undesirable trading practice.
  The point I am making is that I feel that, so far as the professions are concerned, occasionally—I say "occasionally" because we know that, by and large, the professions give good service—the ordinary customer feels that some of their practices need investigation. In one letter my attention was drawn to a group practice of doctors, where one of their
  570
  patients had approached them at 1 p.m. one day seeking treatment for a child who had had a minor accident to its hand. Not one of these doctors was available from one to three o'clock on any day of the week, so the parents took the child to the hospital. The hospital, not unnaturally, asked why the matter had not been dealt with by the doctors, and then suggested that the woman should complain. When she telephoned to talk about this and to put in a complaint, one of the doctors said, "Of course, if you put in a complaint one of us will be struck off". Now this is a form of social blackmail; and perhaps naturally, the woman did not pursue the matter. But more and more one comes to realise that on many occasions the ordinary person feels that the professions do not necessarily give them the service to which they are entitled, and that some of their practices come very near to something which should be under scrutiny in connection with this Bill.
  My Lords, I am not attacking the professionals generally. I am saying, as I said in Committee, that if a man is doing his job well, whether he is a trader or a professional man, he has nothing to fear. This type of legislation is aimed at dealing with the undesirable, and I feel that this Bill provides an opportunity to include a group of people in the community who in fact are receiving much more money than others from the ordinary person. Nowadays, very few people go through life without engaging a solicitor, an architect or a veterinary surgeon, or without going to a doctor or a dentist; and I would suggest to your Lordships that there is nothing unreasonable in including them in this very useful piece of legislation which we are now discussing. I beg to move.
  VISCOUNT HANWORTH: My Lords, this Amendment has had quite a long history. It was started off successfully at Committee stage in another place but was opposed by the Government and deleted at Report. It was raised again here at Committee stage but was not pressed to a Division. First of all, what are the Government's reasons for opposing this Amendment? In the first place, they say that the professions have their own organisations to look after these matters, and I should be the last to think that the professions did not have a very high standard of ethics. That is not in dispute,

  571
  although occasionally they may fail; but, my Lords, it is very seldom that one allows, without some check, an organisation completely to run its own affairs. After all, that is what Parliament is about; it is a check on the Executive. One knows that professions tend to be notoriously reactionary, so far as change is concerned, and sometimes tend to obscure matters. So I think it is a good thing if there is somebody who can occasionally look at matters from outside.
  The second argument of the Government is that the Bill is not really applicable. If it is not applicable, then why worry and why take the trouble to put in a Schedule and eliminate the professions? The Schedule may well be anomalous. The truth, of course, is rather otherwise; the Bill can impinge on the sort of thing that I should like to see the Director able to examine in the occasional case when a profession as a whole is not acting completely in the consumers' interests. There is a third Government argument which is that the whole matter can be examined by the Monopolies Commission. This is a very blunt and large weapon to deal with matters of this sort, unless something is going very seriously wrong; and of course there is a considerable delay.
  Fourthly—though they have not said so—it is quite clear that there is a very strong lobby from the professions themselves. It is understandable that if a profession can govern its own affairs without being beholden to anybody else, or without anybody else looking at it, that is the sort of thing usually preferred. I think there are a number of instances in which one might want to look at what the professions were doing and which would in fact come under the Bill. First of all (and I am quoting these examples not because I think that anything necessarily needs to be done but because they are the sort of areas which might conceivably be looked at) there is the procedure for dealing with complaints. This might be misleading and confusing and come under Clause 17(2)(b) of the Bill. Again, taking the architects' field, it could be that there is confusion as to what responsibility an architect has for supervising the builder. There certainly is this confusion in the minds of many people and it could be that some improvement might
  572
  be made there; but I am not saying definitely that there should be. Methods of charging professional fees may also sometimes be obscure, unintelligible and misleading.
  I want to make absolutely clear, my Lords—and this unfortunately got confused at Committee stage—that there is no question of this part of the Bill dealing with negligence or individual mistakes made by professionals. The only area which it would cover is the general rules covering the whole of a profession which might be looked at. If we can improve the professionals' rules I think it would be useful. We shall have a very powerful and reasonable Director General and I can hardly conceive that there would be an attempt to do anything which was unreasonable.
  LORD FRASER OF LONSDALE: My Lords, can the noble Viscount tell me whether his Amendment would include a trade union secretary? It might be a good thing to have a look at him occasionally to see whether he treats his members properly.
  LORD JACQUES: My Lords, that is already covered by another clause in the Bill.
  5.45 p.m.
  THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF TRADE AND INDUSTRY (THE EARL OF LIMERICK): My Lords, without wishing in any way to curtail any debate which may follow, I think it might be for the convenience of the House if I were to intervene, not at any great length but to give some new emphasis to the very careful explanation which has already been given to the policy of the Bill. My noble friend Lord Drumalbyn explained very fully in Committee why the Government considered it inappropriate to ask the Consumer Protection Advisory Committee to investigate specifically professional practices. This is not because the Government believe that the professions should, be above the law or immune from scrutiny. On the contrary, the conduct of individual professional practitioners is already subject to rules and regulations, in many cases under the authority of Parliament, to a far greater extent than is the case in other fields of business

  573
  activity. The Government have also made it clear that they do not intend to shield the professions from appropriate forms of external inquiry in appropriate cases. The professions have already been the subject of very thorough preliminary survey by the Monopolies Commission. Further references to the Monopolies Commission are now being prepared, and, as the noble Baroness, Lady Phillips, mentioned a moment ago, the Commission are to investigate that practice of barristers and advocates in the United Kingdom known as the "two counsel" rule, the regulation of charges by scale fees on the part of architects and surveyors and certain restrictions relating to advertising by barristers, solicitors, accountants and vets.
  I might perhaps stress that it is only by virtue of the provisions of the present Bill that one of these references can be proceeded with. The provision in the Monopolies Act 1948 makes it impossible, as things stand at present, to ask the Monopolies Commission to investigate monopoly conditions which are expressly authorised by or under any enactment. This limitation is to be found in Section 2 of the Monopolies Act 1948. The rules about advertising by solicitors have a statutory basis in Section 28 of the Solicitors Act 1957, and cannot be investigated by the Monopolies Commission until the law has been changed. Once the 1948 Act has been replaced by the provisions of the present Bill, that particular limitation will cease to apply.
  This change in the law underlines the Government's commitment to see that professional problems can be the subject of external scrutiny in appropriate cases. That is not to say that the same procedures are necessarily apt to professional practices which are suitable for other forms of industrial and commercial activity. The extent to which professions are already regulated and have their disciplinary procedures, as referred to by the noble Viscount, Lord Hanworth, should not he overlooked. There are many professions besides that of solicitor which are regulated under Statute; their rules and regulations are subject to approval by the Privy Council. It must be assumed that Parliament has given its general approval to the procedures which operate. This, in short, is why the Government do not consider it appropriate
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  to provide for the possibility that specifically professional practices might be made criminal through the procedure described in Part II of the Bill. I should emphasise, as was clearly recognised by the noble Viscount, Lord Hanworth, that Clause 15 applies only to procedures in Part II of the Bill, and these procedures are intended to deal with practices of a general class.
  If your Lordships are concerned about the standard of service offered by individual professional practitioners, as appeared to be the case from some of the/ examples cited in the debate, I should draw attention to the provisions of Part III, where the Director is empowered to take action against persons who persist in a course of conduct which is detrimental to the interests of consumers and unfair to them. Hence, there is here no question of exemption, and these powers are exercisable against professional practitioners on exactly the same basis as against anyone else. The special provision which Clause 15 makes for the professions is the outcome of careful consideration. I hope that what I have said will underline the extent to which the professions are already subject to examination. The Government believe that it would be thoroughly unsatisfactory to provide in addition for investigation by the Consumer Protection Advisory Committee and the possibility of criminal Orders. I hope that the House will accept the force of these considerations and will leave Clause 15 as it stands.
  LORD PLATT: My Lords, I am very grateful to the noble Earl, Lord Limerick, for having intervened. His intervention makes it unnecessary for me to say anything more at length. The medical profession has been instanced by the noble Viscount, Lord Hanworth, and by the noble Baroness, Lady Phillips. I cannot speak for any other profession but I should like to point out, particularly to the noble Viscount, that it is not merely that the profession regulates itself, though to a very large extent it does and should continue to do so, in my opinion. That is one of the things which distinguishes a profession from a trade. After all, my Lords, a general practitioner is responsible to his Executive Committee, or he will be responsible to his Family Practitioner Committee

  575
  which has disciplinary powers. He is responsible to the Ethical Code of his own profession or a particular body of the profession to which he belongs, possibly a Royal College. He is under the General Medical Council, which has quite fierce disciplinary powers. If he is working in a hospital he is going to be scrutinised by the Hospital Commissioner. As the noble Earl has explained, there are other parts of the Bill from which the professions will not be exempt and I should not like to think that we were going to accept this Amendment.
  BARONESS PHILLIPS: My Lords, there is only one point that I should like to pick up. Some confusion seems to have arisen because I gave individual examples. I think it is possible to determine what I call trade practices only by the way in which individuals behave. I do not think that individual dentists would have these brush teeth sessions, but so far as I can gather it is a general trade practice. I appreciate that one does not deal with individual complaints, and I know exactly what we are talking about, but I find it a little disturbing that we tend to exclude certain protected groups.
  I recall the shock I felt when I spoke to public health officers and discovered that Crown premises were exempt from public health regulations. This seemed to me to be an anomaly. When I put down a Question I was told by the Minister that the voluntary system worked very well. I am sure that is true. But what I say to your Lordships is that most of the trades and professions have voluntary groups, yet this was not held to be enough to exclude them from the provisions of this Part of the Bill. Since the professions are in the market collecting money for services given I feel that they are on the same level as a trader who sells goods. We have moved away from the old idea that one or two people may have been concerned with the professions. Now we all call upon professional services at some time, and sometimes quite often during a lifetime. I do not see the reason for the exclusion, despite the explanation which I have been given. The question of the Monopolies Commission is one point, but it still does not cover the other professions,
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  many of which are getting more and more opportunities to provide services. On the other hand, I see that I am not going to get very far with this point and therefore I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause 16 [Restriction on references under section 14 in respect of certain goods and services]:
  5.56 p.m.
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 8:
  Page 13, line 3, after ("section") insert (""Minister" includes a Minister of the Government of Northern Ireland, and").
  The noble Lord said: My Lords, this Amendment relates to a fairly simple point. It is essentially a technical and drafting Amendment. Clause 16 provides that, before referring to the Consumer Protection Advisory Committee, the trading practices of certain nationalised industry bodies carried on only in connection with the supply of goods and services listed in Schedule 5, the Director General must first secure the consent of the Minister with sponsoring responsibility for that industry. The definition of "Minister" in Clause 135(2) excludes Northern Ireland Ministers from the scope of this clause unless a contrary provision is provided, and the Amendment is designed to deal with a case where a Northern Ireland Minister is responsible for a statutory body. It is necessary to cover the Northern Ireland Electricity Service which came into operation on April 1, 1973, and whose members are appointed by the Northern Ireland Minister of Commerce. I beg to move.
  Clause 19 [Scope of recommendation proposed in reference to which section 17 applies]:
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 9:
  Page 14, line 18, leave out ("or classes").
  The noble Lord said: My Lords, with this Amendment I should like to discuss Amendments 10, 11 and 12 and Amendment No. 49. These Amendments are intended to broaden the scope of Clause 19 to ensure that there is no undesirable restriction in the scope of Orders made under Part II

  577
  of the Bill. There has been some doubt whether the reference in Clause 19(1)(b) to the class or classes of consumer transactions in relation to which practices may affect consumers could narrow the Director General's power to make recommendations or Orders covering, for example, practices relating to the sale of goods generally. The Amendments are self-explanatory and they remove this doubt. I hope that they will be acceptable to your Lordships.
  BARONESS PHILLIPS: My Lords, it may assist the Minister if I say that by his courtesy in sending me copies of the majority of these drafting Amendments we have been able to study them and are not likely to be raising any points.
  LORD DRUMALBYN: My Lords, I beg to move Amendment No. 10.
  Amendment moved—
  Page 14, line 41, leave out from ("proposals") to ("and") in line 42.—(Lord Dramalbyn.)
  LORD DRUMALBYN: My Lords, I beg to move Amendment No. 11.
  Amendment moved—
  Page 14, line 31, leave out from ("order") to ("of") in line 32.—(Lord Drumalbyn.)
  LORD DRUMALBYN: My Lords, I beg to move Amendment No. 12.
  Amendment moved—
  Page 14, line 41, leave out from "proposals") to ("and") in line 42.—(Lord Drumalbyn.)
  Clause 29 [Power to enter premises and inspect and seize goods and documents]:
  5.59 p.m.
  LORD AIREDALE LORD AIREDALE moved Amendment No. 13:
  Page 18, line 31, leave out ("only").
  The noble Lord said: My Lords, I gave due notice in Committee that I should be moving this Amendment, so I trust that nobody has been taken by surprise and I hope that we may have a fruitful discussion. This is an Amendment to one of the enforcement clauses which permit a weights and measures inspector to inspect goods, purely at random and not when his suspicions have been roused and for this purpose to enter
  578
  any premises, save only "premises used only as a dwelling". I underline the word "only". In Committee I drew attention to the instance, which must exist in hundreds and thousands of cases all over the country, of small shopkeepers who live in the flat above the shop, or perhaps in a house adjoining the shop and annexed to it.
  In thousands of cases these shopkeepers must have spare rooms in their flat or their adjoining house, and they use the spare room as a stockroom for the shop. This must be a very common practice. This clause, as drafted, gives the weights and measures inspector access to the dwelling house for the purpose of going into the stockroom and examining the stock purely at random, without any question of suspicion having been aroused; and he is enabled to do this because of the wording, which says,
  "other than premises used only as a dwelling house".
  The inspector who is challenged by a shopkeeper is able to say: "This may be your flat, or your house, but if you have a spare room in it used as a stockroom you are not using it only as a dwelling and I therefore am given a right under the Act to enter your dwelling to inspect those goods."
  The issue is: Is it right that the privacy which we allow private citizens in this country, including shopkeepers and everybody else, to enjoy, should be invaded by an inspector who has no suspicion against the shopkeeper, but is entering purely to make a random check? In Committee, in answer to an argument from me rather similar to this one, on an Amendment rather similar to this, the Minister said:
  "The inspector could not be found wandering around without the knowledge of the shopkeeper who lived in the flat above as he would have to apply to the shopkeeper for admission."
  If I thought that those words were true, I should be perfectly happy and should not now be taking up the time of the House. But, far from a shopkeeper having to give his permission to the inspector in such a case, if the shopkeeper dares to challenge the inspector's right to enter his dwelling in these circumstances, the shopkeeper commits a criminal offence under the next clause of the Bill. Clause 30, which makes it a criminal offence to

  579
  obstruct an officer in the course of his duty.
  I was told that these words appear in the corresponding section of the Trade Descriptions Act 1968: and so they do. I remember that section very well indeed. It was highly unsatisfactory. There was a letter about it in The Times. In Committee in this House we amended that section considerably, but unfortunately we missed this particular point. Even Parliament cannot pick out every single point in every Bill, and we missed this point. If we had been as conscious then as we are now of this issue of privacy, with the recent Report of the Younger Committee on Privacy before us, I do not suppose we should have missed this point. But we did, and it was a blot on the 1968 Trade Descriptions Act. If these words are left in this Bill, it will be a blot on this Bill when it becomes an Act.
  I was then told: "No complaints have been forthcoming since the 1968 Act was passed." I can well believe that; and for two reasons. First, I believe that, in practice, inspectors of weights and measures are far too busy to do very much random checking. They have complaints to follow up, and they have multifarious other duties to perform. Secondly, weights and measures inspectors act with common sense, and any sensible inspector would know perfectly well that if he started walking into shopkeepers' flats and dwellings in order to carry out random inspections his reputation would fall like a stone; he would cease to get any co-operation from shopkeepers, and his work among shopkeepers would be quickly frustrated altogether.
  My Lords, that is where the matter rests. What one has to judge is: is it right to allow an inspector to enter a shopkeeper's private dwelling purely to go in there to make random checks? Is it not worth while preserving the wellknown axiom, that "An Englishman's home is his castle", including shopkeepers' houses, and saying that it is simply not worth while allowing that privacy to be invaded purely for random checks where no suspicion has been aroused? If we exclude the word "only" from this paragraph we shall achieve the end that I seek. I beg to move.
  LORD SOMERS: My Lords, I should like to support this Amendment. I have
  580
  a cousin who is a chartered accountant. He lives in his own house, two rooms of which he uses for office purposes, but the rest is a very nice dwelling house. One can carry it even further than that. If I were to take piano pupils into my house (not that I ever would, because I am no pianist) and were to teach them there professionally, would that constitute not using the house only as a dwelling? One can think of a good many cases where a house is partly used for professional purposes, but is mainly used for dwelling purposes.
  BARONESS PHILLIPS: My Lords, I intervene merely to say to the noble Lord, Lord Airedale, that, far from not noticing it in the Trade Descriptions Act, as I recall, the noble Lord put up a very strong plea on the same lines that he has pursued now, and I had the duty of having to reply to him on behalf of the Government. I did not satisfy the noble Lord, but he did put in a strong plea, to which we were hard-hearted enough not to give way.
  THE EARL OF LIMERICK: My Lords, I am certain that that tribute to the consistency of the noble Lord, Lord Airedale, is well merited. One must have sympathy with his purpose in putting down this Amendment, but I believe the point is mis-taken and that this Amendment, whatever purpose it would achieve, would not achieve the purpose the noble Lord has in mind. I would say, first, that it is clear that if this part of the Bill is to be properly enforced the duly authorised enforcement officers must be free to make routine checks in any premises, including those used in a dwelling where a trade or business is carried on. There are many businesses—and some have been in the news recently—which are carried on from private premises which may be such that we should all be happy to think there were inspectors who were going to concern themselves with what was going on there.
  I can indeed appreciate the noble Lord's anxiety that an enforcement officer should not invade the private accommodation of a shopkeeper. But the effect of the Amendment would be that if the shopkeeper lived on the premises the enforcement officer would have no right of entry to any part of the premises; he could not walk into the shop for the

  581
  purpose of carrying out an inspection. This would be quite intolerable for the proper enforcement of the Bill, given the large number of shopkeepers who live on the premises from which they trade. To take another case, if there is a factory in one part of which a caretaker lives, the words
  "any premises other than premises used as a dwelling"
  would preclude any right of inspection of goods in the factory. Therefore I think we should consider rather carefully why we are concerned.
  The noble Lord has stressed the question of the invasion of the privacy which derives, as was pointed out, in parallel with the provisions of the Trade Descriptions Act 1968 and the Weights and Measures Act 1963. My remarks may have been taken possibly a little out of context, but the inspector of course can enter the premises for the purposes of Section 29. If the shopkeeper seeks to prevent him from going into a private part of the premises, he has of course no power to force entry, though he would be entitled to point out, if he has reason to suspect that there are goods he might wish to inspect, that this would be preventing him from carrying out his duty. But beyond that he would have to apply for an order from the magistrates under the conditions in terms of subsection (3).
  I think we are entitled to point out here that we have five years of experience. I know that the noble Lord is not happy about this point, but there has not been a single complaint of abuse of powers, to the best of our knowledge, under these conditions—and people in these circumstances are not usually slow to complain if they believe that they have been badly treated by inspectors. I believe, for those reasons, that the provisions of the Bill as they stand are the provisions that should be included.
  LORD AIREDALE: My Lords, we are altogether bogged down in a drafting problem, are we not? The Minister said at the beginning of his observations that my Amendment was defective because it would have effects which are more far reaching then I intended. Of course, I accept that there will always be drafting defects, but if we could get together and draft something between us, or if the Minister could himself have something
  582
  drafted independently of any help from me which would deal with the privacy point—and I think the Minister is well seized of it—given that undertaking about the possibility of something being done on the redrafting, I should be very pleased now to withdraw this Amendment: otherwise, I think not. It was said in Committee, and it was said again just now, that the inspector cannot force an entry. I know that perfectly well, but my complaint is that he could enter without forcing, and in most cases it would be quite unnecessary for him to have to force an entry because the door between the shop and the dwelling, nine times out of ten, will not be locked, so the inspector can just walk in. I think that is wrong. However, if we could clear up this drafting difficulty I should be very pleased to withdraw this Amendment.
  THE EARL OF LIMERICK: My Lords, with the leave of the House, I think I could say this: it would be quite wrong for me to undertake to amend the Bill as time between now and next stage is very short. What I am quite prepared to do is to talk to the noble Lord and see whether there is some form of words which would meet his point without sacrificing mine. But beyond that I am afraid I cannot go.
  LORD AIREDALE: My Lords, I will clutch at a straw, and beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Clause 51 [Monopoly reference by Ministers]:
  6.14 p.m.
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 14:
  Page 37, line 2, after ("Scotland") insert ("the Secretary of State for Wales, the Secretary of State for Northern Ireland").
  The noble Earl said: My Lords, I think it would be for the convenience of the House to take Amendment No. 14 with Amendment No. 15. These Amendments follow closely the line which was explained by my noble friend in proposing earlier Amendments. If it would be for the convenience of the House, I would formally move these Amendments.
  THE EARL OF LIMERICK: I beg to move Amendment No. 15.
  Amendment moved—
  Page 37, line 4, after ("Ireland") insert ("the Minister of Commerce for Northern Ireland")—(The Earl of Limerick.)
  Clause 52 [Variation of monopoly reference]:
  THE EARL OF LIMERICK: My Lords, I beg to move Amendment No. 16. This Amendment is again for the same purpose.
  Amendment moved—
  Page 38, line 3, at end insert ("and the Minister of Commerce for Northern Ireland.") —(The Earl of Limerick.)
  On Question, Amendment agreed to. 6.16 p.m.
  LORD STOW HILL LORD STOW HILL moved Amendment No. 17:
  After Clause 52 insert the following new clause.
  Change in circumstances after monopoly reference
  ". If it appears to the Director in respect of a monopoly reference made by him, or if it appears to the Secretary of State (or in the case of a monopoly reference made by the Secretary of State jointly with one or more other Ministers, the Secretary of State and that Minister or those Ministers acting jointly) in respect of a monopoly reference made by him or them, whether in any case upon the representation of the Commission or otherwise, that since the making of the reference there has been a material change in the relevant circumstances, the Director or the Secretary of State or the Secretary of State and the Minister or Ministers concerned acting jointly, as the case may be, may direct the Commission to lay aside the reference."
  The noble and learned Lord said: My Lords, the object of this Amendment is to fill in what seems to me to be a lacuna in the text of the Bill. It arises in the following way. The Director General can refer a situation to the Monopolies and Mergers Commission and so can the Secretary of State. The Secretary of State can also do so, in circumstances which are prescribed in the Bill, of his own accord or in consultation or joint action with other Ministers. Under the text of the Bill and under existing legislation in the 1948 Act, unless there is some provision in that legislation or this Bill which I have missed, once the Director General, the Secretary of State or the Secretary of State in conjunction with another Minister has referred a situation to the Monopolies and Mergers
  584
  Commission, the Commission have to go—indeed are inexorably bound to go—right through the whole of this procedure and to come to the conclusion which the Bill requires them to reach after investigation. That can take a long time and, as one realises from the recent inquiry we have had into the pharmaceutical industry, months may elapse before those concerned will know whether the Commission think that there is a monopoly situation and whether, if so, this is against the public interest.
  Under the existing legislation there is, unless I am mistaken, no provision to enable either the Director General, the Secretary of State or the Secretary of State together with any other Minister to indicate to the Commission that a new situation has arisen which has made it quite unnecessary for the Commission to proceed with their work. Therefore, although even a completely new factor may have intervened which makes it an absolute waste of time for the Commission to go on with their inquiry, under existing legislation they are bound to go on. In the meantime, those concerned do not know where they stand and the Commission have to do a great deal of unnecessary work. They have to assemble evidence, to consider that evidence and to arrive at conclusions on the two issues to which I have just referred. All that the new clause is designed to do is to provide for the following. After a situation has been referred to the Commission, should some new relevant material change intervene which makes the work of the Commission on that reference utterly useless or pointless, then the Commission can be told they need not proceed with the inquiry on which they have embarked. That is all it does; and I would submit, having been advised by persons who are very experienced in this class of situation, that all I seek to do is to enable it to come about that the Director General or the Ministers concerned can say to the Commission, "Do not go any further with this inquiry: it is not necessary to do so."
  The words that we have used to bring this about are, "material change in the relevant circumstances". There could be many such material changes. Again if I may refer to our recent inquiry into the pharmaceutical industry, there was

  585
  a widespread voluntary price arrangement. After an inquiry has been started by the Commission that situation might emerge. All those concerned might agree to limit their prices with the result that further inquiry by the Commission would be useless and a waste of time. Another commodity might have come upon the market which would render it impossible for the Commission to hold that there was a monopoly situation. One answer might be: "In that event, the Monopolies Commission would say ' No ' in answer to the question whether a monopoly situation had been disclosed." But it is pointless to have to go so far as that if the situation has radically changed in the sense that I have indicated.
  This is no great change of principle; it is a minor change in the provisions of the Bill as they stand at present. Under the existing provisions of the Bill there can be, if one looks at Clause 48, a limited reference to the Commission, a reference purely on facts. Under the existing Bill there does not have to be an all-out inquiry; it can be limited in its terms. Under Clause 52, the terms of the inquiry can be varied by those who have brought it about, by the Director or Secretary of State, so the Bill comes near to doing what I seek to do. All I ask the Government to do is to go a little further and say that not only can they vary the terms of reference, but they can, in a suitable case, say, "Do not proceed any further with it". It would be an immense saving of unnecessary time and labour; it would eliminate uncertainty in situations in which as things stand at the moment uncertainty may continue for months. It would be in everybody's interest, it would save time and enable those affected to get on knowing where they stood instead of having to wait for the result of the inquiry. The Commission will be heavily occupied and it cannot be in anybody's interest to put on their shoulders work which can he removed from them.
  My Lords, that is the object of this Amendment. It is a modest change; it is not a change of principle but simply pushes one aspect of the Bill a little further in order to achieve a useful result. I beg to move.
  LORD CAWLEY: My Lords, I rise to support the noble and learned Lord,
  586
  Lord Stow Hill. In a lawsuit the plaintiff can discontinue, and I see no reason why in a reference to the Monopolies Commission the Director or Minister should not be allowed to discontinue if the Report of the Commission would be absolutely irrelevant and useless. If, as the noble and learned Lord said, there is no provision in this Bill for cancelling the reference in midstream, I suggest that there ought to be one, and that is why I support this Amendment.
  6.25 p.m.
  THE EARL OF LIMERICK: My Lords, the noble and learned Lord, Lord Stow Hill, as always, explained the purpose of this Amendment with great lucidity and no one could be in any doubt what its object is. I have listened carefully to him and I should like to make a preliminary point to be sure that there is no misconception about the basis on which monopoly references are initiated. The relevant circumstances in which monopoly references are made are simply those in which there are grounds for believing that a monopoly situation, as defined in Clauses 6 to 9 of the Bill, exists; that is, where a company or separate companies have at least one quarter of the relevant market, so as to inhibit competition in one quarter of the market. There is no presumption, as there is in the case of restrictive practices legislation, that monopoly as such operates against public interest, and the Monopolies Commission start any investigation from a completely neutral position.
  Monopoly references are not made indiscriminately and, given the wide range of situations which potentially fall within the scope of the legislation—particularly since the monopoly test is to be widened by the Bill—it can reasonably be expected that the Director General will not usually make references unless there is some reason, because of behaviour or performance by the firm concerned, to believe that the monopoly may be being or could be abused. This is a very different circumstance from the situation where a reference can be made only on evidence of abuse. Once a monopoly reference has been made, the Commission's first task is to establish whether monopoly conditions exist in relation to the supply of goods or services in question. If they find that they do not, that is an end of

  587
  the matter; the Commission would then report their finding and in effect would lay aside the reference. If the Commission find that a monopoly situation exists they are required to go on to assemble all the relevant factual material, and, in cases where the reference is not limited to the facts, to consider whether monopoly considerations operate against the public interest.
  If during the course of the Commission's investigations it emerges, to take an example, that there has been a significant change in the conduct of the monopolist, this would naturally be taken into account by the Commission in framing their report and conclusions. But I do not see the justification for simply abandoning an inquiry in such circumstances. It seems to me just as important in the case postulated by the noble and learned Lord, as in any other case, that the Commission should go on to prepare their report and findings. This in those circumstances would be unlikely to be unduly burdensome, either to the Commission or to the company or companies concerned, because in those circumstances the Commission could reasonably be expected to bring their work to a quick conclusion. There might be a particular value of a report in such circumstances: it would enable the facts about that particular monopoly situation in practice to be publicly available. If it were found a monopoly situation was not against the public interest, this would be made clear and would be in the interests of all the parties concerned.
  If the Commission reached a finding that the previous conduct of the monopolist or monopolists had operated against the public interest and might do so again, it would provide a basis for action through seeking undertakings or, if necessary, by order, to prevent a recurrence. It could add to the sum of our knowledge about these situations. The noble and learned Lord, Lord Stow Hill, produced circumstances in which there would be a material change. There could of course be others. The monopolist might sell or close down so much of his business to remove from him the 25 per cent. criterion, or the market could expand to a point where his production no longer accounted for that
  588
  percentage. But either would lead to a quick conclusion in the report and that information might well be of value. Equally, the fact that a monopolist had changed his conduct during the course of an inquiry might be significant, and the availability of a report to that effect could influence other people in the future.
  My last point is that we should beware because the existence of a material change is a somewhat subjective criterion. There is a lot to be said, once prima facie evidence has been adduced, for accepting the reference and continuing the reference that there is in existence a monopoly situation. There is also a lot to be said for letting the reference run its course. When we start talking about what is a material change, there could be suspicions about the circumstances in which such a judgment was given hypothetically. For all these reasons, while quite appreciating the points made by the noble and learned Lord who was looking for simplicity, backed up by my noble friend Lord Cawley, because there should be a right to terminate as there is in other cases of action, we nevertheless believe that on balance it is right to leave the Bill as it stands.
  LORD DIAMOND: My Lords, before the noble Earl sits down, could he explain one point on which I am not quite clear? He speaks about the inadequacy of a subjective judgment. Supposing the judgment is completely subjective; namely, that the Department takes the view that the new information becoming available to it is such that if it knew it at the time it would not have made the reference. Is the reference still to continue, and is there any value in that?
  THE EARL OF LIMERICK: My Lords, I quite take the point made by the noble Lord, Lord Diamond. I think there could still be value, for the reasons I have given.
  LORD STOW HILL: My Lords, I think it is in order for me to reply shortly, and I do so simply to thank the noble Earl for his answer. I listened carefully to what he said, and, if I may say so with respect, the point which he raised which slightly troubled me also was whether it might not

  589
  be invidious for the Minister or the Director, once a reference had been made, to withdraw it. Could his motives be misunderstood? The Minister founded the latter part of his argument on that consideration. May I say that I accept that, if I may say so without impertinence, as an argument of weight. The Minister says on balance he feels the Amendment should be rejected. Having considered that argument on balance, I thought it ought to be proposed. But this is a matter of judgment and, while I am disappointed, nevertheless I should like to thank him for his consideration, and in the circumstances do not think it would be right to press the Amendment.
  Amendment, by leave, withdrawn.
  Clause 69 [Different kinds of merger references]:
  6.32 p.m.
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 18:
  Page 51, line 4, at end insert—
  ("(2A) In relation to the question whether any such result as is mentioned in section 64(1)(a) of this Act has arisen, a merger reference may be so framed as to require the Commission to confine their investigation to the supply of goods or services in a specified part of the United Kingdom.")
  The noble Earl said: My Lords, I think it would be convenient if we were to consider Amendments Nos. 18, 19, 20 and 21 together. The Government's attention has been drawn to the fact that the merger provisions of the Bill fail to reproduce one of the effects of Section 6(4) of the Monopolies and Mergers Act 1965. Amendment No. 18 is designed to restore the position, It will provide in cases where a merger reference is made under Clause 64(1)(a)—that is, on the grounds that the merger in question creates or strengthens a monopoly situation—for the reference to specify which part of the United Kingdom is relevant. This is desirable in order to avoid a situation in which the Monopolies and Mergers Commission might be thought bound to consider the supply situation in every part of the United Kingdom before going on to consider the public interest aspects of the merger. Amendments Nos. 19, 20 and 21 are purely consequential Amendments to the provision in Clause 75, to references made in anticipation of a merger. I beg to move.
  Clause 75 [Reference in anticipation of merger]:
  THE EARL OF LIMERICK: My Lords, I have already explained them, and with the leave of the House, I would suggest that we take Amendments Nos. 19, 20 and 21 en bloc. I beg to move.
  Amendments moved—
  Page 55, line 10, leave out ("subsection (2) the") and insert ("subsections (2) and (2A) any");
  Page 55, line 12, at end insert ("or whether a result mentioned in section 64(1)(a) of this Act has arisen");
  Page 55, line 14, after ("created") insert ("or such a result will arise").—(The Earl of Limerick.)
  Clause 86 [Director to receive copies of reports]:
  THE EARL OF LIMERICK: My Lords, this is another Amendment consequential upon the addition by Amendment No. 15 of powers to Ministers. I beg to move.
  Amendment moved—
  Page 63, line 42, at end insert ("and the Minister of Commerce for Northern Ireland"). —(The Earl of Limerick.)
  6.36 p.m.
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 23:
  After Clause 98, insert the following new clause:
  Agreements relating to coal or steel
  ". In section 7 of the Act of 1956, before subsection (2) there shall be inserted the following subsections:—
  "(1A) In determining whether an agreement is an agreement to which this Part of this Act applies, where—

  (a) the parties to the agreement are or include two or more bodies to which this subsection applies, and

  (b) restrictions relating to coal or steel, or relating to both coal and steel, are accepted under the agreement by two or more such bodies, whether the restrictions so accepted by those bodies are the same restrictions or different restrictions,

  no account shall be taken of any such restriction which is accepted under the agreement by a body to which this subsection applies, whether that restriction is also accepted by any other party to the agreement or not.
  (1B) Subsection (1A) of this section applies to any body which, in accordance with Article 80 of the E.C.S.C. Treaty, constitutes an undertaking for the purposes of Articles 65 and 66 of that Treaty, and in that subsection "coal" and "steel" have the mean-

  591
  ings assigned to them respectively by Annex I to that Treaty."
  The noble Earl said: My Lords, this Amendment will remove from the scope of the restrictive practices legislation agreements to which two or more coal, iron or steel undertakings are party and in which restrictions are accepted by two or more such undertakings relating to coal or steel products as defined in the Treaty of Paris. The coal and steel producers of this country may be placed at a competitive disadvantage compared with their European counterparts because of the difference of approach to restrictive agreements in the Treaty of Paris, on the one hand, and in the United Kingdom's restrictive practices legislation, on the other. Your Lordships will be aware that under the provisions of the Treaty of Paris the European Commission may by an administrative procedure authorise certain kinds of restrictive agreements relating to coal and steel. In most cases it is quite clear whether an agreement would prevent, restrict or distort normal competition within the Common Market, which is the criterion by which the Commission assesses them. In some cases, however, the matter is uncertain and in these areas of doubt there may be little case law which is of assistance.
  The Treaty of Paris is drafted in more general terms than the restrictive practices legislation in this country where there is seldom much doubt about whether or not an agreement is registrable. There is thus an area of uncertainty in which the steel producers in both public and private sectors consider they may be subject to restraints which are not imposed on their European competitors. The Government have accepted the force of this argument in the special case of coal and steel, and have therefore introduced this Amendment. I beg to move.
  Clause 100 [Patent or design pooling agreements]:
  LORD CAWLEY LORD CAWLEY moved Amendment No. 24:
  Page 72, line 38, after ("8A.") insert—
  ("(1) This section shall only apply to any particular form of patent or registered design pooling agreement or of any licence, assignment or agreement granted or made in pursuance of a patent or registered design pooling agreement in respect of which the Secretary
  592
  of State shall have made an order by statutory instrument bringing such agreements, licences or assignments within the provisions of this section.").
  The noble Lord said: My Lords, with the permission of the House I would wish to speak upon Amendment No. 24, and formally move that Amendment, and on Amendments Nos. 25 to 31. Clause 100 is a very important clause indeed. It concerns patent licences; it concerns patents, and we all know that our intellectual property in this country is worth a lot more than our material property. We are always told that this country lives by its brains. This clause, as it stands, produces a startling effect: that almost every patent licence would become registrable in the Register of Restrictive Practices. It is an extraordinary fact but that is so.
  The Government, equally, have not told Parliament in either House what this clause is all about. It may be of course that nobody has asked them, but at any rate in the Second Reading in this House just two lines of Hansard are devoted to this clause. The clause has had the minimum of publicity and most of the interested parties do not seem to have woken up until this very late date. It is true that in Committee in another place the Minister gave an assurance that he would introduce Amendments at the Report stage—that was on April 5—but he certainly did not do so.
  I want to ask the Minister now: What is the evil it is sought to avoid? This clause seeks to put patent pooling arrangements in the role of "naughty agreements", one might say. It seeks to have them registered. Secondly, I want to ask the Minister why there is such a tremendous hurry to pass this clause when we know that a Patents Bill is coming forward in the near future in order to implement the recommendations of the Banks Committee, which the D.T.I. set up themselves. Thirdly, I wish to ask the Minister what bodies were consulted before this clause was put forward? These patent pooling arrangements have been in existence for at least forty years to my knowledge and there seems to be an extraordinary sense of immediacy about getting down to this business. For example, were the Chartered Institute of Patent Agents consulted? Was the Law

  593
  Society consulted? Who else was consulted? I can only surmise that the Department of Trade and Industry decided that patent pooling agreements are naughty and ought to be suppressed. They did not really know what these comprised. In my view it is similar to the attitude of the late Lord Brentford when he was Home Secretary, when he was all out to suppress night clubs. He did not really know what happened there, but they were naughty and had to be suppressed. This is certainly borne out by the fact that the draftsman at the D.T.I. certainly did not know what he was suppressing in this case, because as I said before, the drafting of the clause as originally put forward covered almost every form of patent licence. I am glad to say that now the D.T.I. have seen the error of their ways and I fully support Amendments Nos. 25 to 31 inclusive which at any rate cut down the scope of this clause to a reasonable degree.
  But the C.B.I., who have recently "come to life", let us say, now consider that my noble friend's Amendments do not go quite far enough, and this Amendment is put forward so that there shall be further consultation and then, if the Minister thought that other forms of agreement were objectionable, he could use his powers under Clause 132 of the Bill to make orders prescribing these agreements. Since it was quite clear that when the clause was drafted the nature of patent pooling agreements was not understood, I should have thought that this Amendment would have given the necessary time for the Department of Trade and Industry to put the matter right. I realise that the Third Reading of this Bill will come shortly. I can understand that the Amendment which I put forward is unlikely to commend itself to the Ministry, but I ask them to have another look at it. I beg to move.
  LORD STOW HILL: My Lords, I should like to support the argument so powerfully put forward by the noble Lord who has just resumed his seat. The provisions of the existing legislation, I should have thought, as amended by Clause 100, will really produce a most unfortunate result in many cases unless there is some provision, as it were, for a "let out" such as the noble Lord, Lord Cawley, has suggested in the Amendment to which
  594
  he has put his name. If one looks to see what the provisions of the existing legislation are one finds that they are as follows: under Section 6 of the Restrictive Practices Act 1956 agreements which contain certain restrictions are brought within the scope of the sections which require registration under the 1956 Act and may result in the agreement being referred to the Restrictive Practices Court. It was realised that that was far too wide a provision in scope and accordingly Section 8(4) of that Act provided a "let out" for a large number of agreements. Now it is proposed to limit the "let out" introduced by that subsection by saying that it shall not apply to patent pooling agreements.
  Then one looks to see what is a patent pooling agreement, and one finds that it is defined in subsection (2) of Clause 100 of this Bill. That definition is so wide (as I am advised) that it really will bring into the scope of the 1956 Act and this Bill hundreds of agreements—agreements really which operate in the public interest; agreements which are not entered into in order to elbow people out of the competitive market; agreements which are completely beneficial in their scope and purpose so far as the public interest is concerned. That is the effect of the definition of the pooling agreement.
  It would take time to give many examples, but if we take the ordinary licensing agreement, whereby a patentee licenses the use of his patent to a licensee, over and over again the licensee voluntarily enters into certain restrictions because he does not want to pay for the use of the advantage which the patent confers out and out; he only wants to make a restricted use of it. There are cases in which patents overlap and the holders of the respective patents, instead of going to law on the matter, agree that each shall have a licence to use the other's patent. so that dispute and litigation is avoided. Case after case of that sort of situation can be instanced, in which it really could not conceivably be said that the mischief which is aimed at by the 1956 Act, and by this Bill, is present. Those agreements will be brought within the scope of Clause 100 because of the definition of a patent pooling arrangement.

  595
  The noble Lord, Lord Cawley, has already reminded your Lordships that a new Patent Bill is on the way. Already those agreements would be affected by Section 57 of the existing Act. He reminded your Lordships of that, but apart from that, if you have a patent pooling arrangement which does or may militate against the public interest there is always the Monopolies Commission, or the Monopolies and Merger Commission as it is now called, to which the matter can be referred and the agreement can be declared by the Commission to be wholly invalid. So it is not as if there is not ample protection for the public interest in the existing legislation. The existing legislation bristles with protection. Therefore, I respectfully submit that by tabling the Amendments which follow the Amendment proposed by the noble Lord, Lord Cawley, they have gone much too far and (as the noble Lord has reminded your Lordships) they have tabled—and I very much hope that the House will carry—Amendments which will have the effect of excluding what I may describe as bipartite arrangements between two persons, two bodies, two companies. That is all to the good; that will then place outside the scope of the Act many agreements which are extremely useful—ordinary licensing agreements, joint venture agreements and similar agreements.
  That is all to the good; but even if, as I hope it will, the House accepts these Amendments, thereby greatly improving and limiting the scope of Clause 100, nevertheless there will be many cases which are not taken out of the scope of the clause by those Amendments, cases in which three or more principal parties are involved and cases in which, if no change is made, the agreement will necessarily come within the scope of subsection (2). I should have thought that the noble Lord, Lord Cawley, has in point of fact hit upon exactly the right remedy. What has he done? What he proposes in his Amendment is that if one gets an agreement which is one of a category which falls within the scope of subsection (2) of the Bill, it should not automatically be deprived of the effect of Section 8 of the 1956 Act. It should not automatically come within the scope of Clause 100.
  596
  It should come within the scope of Clause 100 only if the Secretary of State, having considered that type of agreement—for example, the types of agreement to which I have referred—and having formed his judgment upon it thinks that that type of agreement or particular agreement of that type should be brought within the scope of Clause 100 of this Bill.
  If that is what the noble Lord proposes, I submit to the House that that is a sensible and businesslike way of dealing with a problem which may bring an enormous amount of inconvenience and uncertainty in its train and a great deal of quite unnecessary work. It is for that reason, which he has explained so clearly and forcibly, that I hope the House will accept it, or that the Minister, if he cannot accept it, will at any rate recognise that there is great force in the argument of the noble Lord, Lord Cawley, and will say that between now and the Third Reading of the Bill he will introduce some further Amendments in order to give effect, either in terms to what the noble Lord, Lord Cawley, proposes, or to the purpose which the noble Lord, Lord Cawley, is seeking by his Amendment to encompass.
  6.52 p.m.
  THE EARL OF LIMERICK: My Lords, my noble friend has developed a closely reasoned case for his Amendment and I listened with great interest to him and to what the noble and learned Lord, Lord Stow Hill, had to say about Amendment No. 24. I have sympathy with his arguments that certain kinds of bilateral cross-licensing agreements cannot be presumed to be against the public interest and indeed, as my noble friend recognised, we have ourselves put down an Amendment about which I shall say something in a moment, Amendment No. 25.
  Before listening to this debate I was firmly of the opinion, and I would not like to be on record as saying I have changed my mind, that pooling agreements with three or more parties should be subject to registration in those cases where the parties accept any of the restrictions set out in Section 6(1) of the 1956 Act. This point is well understood, I know, by the two noble Lords who have just spoken, that it is only agreements which do accept these restrictions that are so subject. My noble friend Lord

  597
  Cawley asked a number of questions which I should like to try to answer. He asked first of all what the Department was worried about. I can tell him that four cases have come to light. The first of these related to the agreements which collectively formed the patent pool of the members of the Electric Lamp Manufacturers Association, one of the first industries to be investigated by the Monopolies Commission, and that perhaps is a classic example of what can be done with a sufficient array of patents. The pool grouped together most of the electric lamp manufacturers in the United Kingdom and a large foreign parent company of some British firms and related to the working of patents in the United Kingdom and most Commonwealth countries.
  There were three agreements involving pooling or exchange of patent rights dealt with already under the Restrictive Trade Practices Act, Section 8(4) not being applicable because some restrictions related to non-patented goods. In the first of these, two companies agreed to grant exclusive licences of their traffic signal patents to each other. The home market then was divided territorially by specifying for each area prices below which the company to be excluded therefrom should not sell. The Registrar here was able to establish the existence of provisions relating to non-patented goods; the agreement was then determined. The agreement for the Permanent Magnet Association included provisions for patent pooling. The main provisions of the scheme, which dealt with research and development of magnetic materials irrespective of their patentability and fixed prices for them, were found consistent with the public interest, but a restriction that members would withhold from the market new magnetic materials except on terms and conditions provided by the Association was condemned by the Restrictive Practices Court. Then there was the agreement between the members of the Flushing Cistern Makers Limited dated 1957, a year after the restrictive practices legislation came into effect. The main object set out in the memorandum of the Association was to find, apply for, register, purchase and protect patents in relation to flushing cisterns and to grant licences in respect of same. The licences were subject to the condition that the price at which any
  598
  patented goods were sold should not be less than those agreed by the members. This was clearly a price-fixing agreement based on a patent pool. This agreement came to light only recently and was condemned by the Restrictive Practices Court this year.
  My Lords, these cases suggest there is something to worry about. My noble friend then asks why we are doing this in the Fair Trading Bill and not in any change in the Patent law flowing from the Banks Committee.The Banks Committee commented on the failure of many patentees to register their assignments and licences with the Patent Office, with the result that many agreements never appeared on the Patent Office register and public knowledge about the restrictions they might contain was incomplete. Two things may be done: first, sanctions could be imposed on the failure to register patent licences or assignments; and, secondly, the protection of the public from abuses arising from restrictions in patent licences should be considered in connection with changes in the restrictive practices legislation—paragraph 517 of the Banks Report. What we are doing in this Bill stems directly from the second of those points.
  Then my noble friend asked about who was consulted. Over two years ago industry was aware that in the review of the restrictive practices legislation which was announced in December 1970 the exemption for patent pooling agreements in Section 8(4) of the 1956 Act was under consideration, and in that time there were several consultations in which this matter was among those discussed. Apart from the C.B.I., the Registrar of Restrictive Trade Agreements and the Patent Office were involved in discussions. This Bill was published in November 1972, which is nearly eight months ago, containing Clause 100 as it now stands. We received representations about it for the first time two days before the Committee proceedings on that clause in another place. That was on April 3. There have since been further consultations which have led to the Government Amendment. So I think I am entitled to point out that it can hardly be said this is a measure that has been slipped through The proposal to amend this area of the law has been known about in general terms since 1970.

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  The Bill was published eight months ago. If it has not been commented on before in Parliament, I think this is, if I may respectfully say so, not the fault of the Government. My noble friend Lord Cawley recognises the constraints imposed on us by time. Time before the next stage is very short, and it is in this connection a pity that this debate, which I think could usefully have taken place in Committee, is taking place now on the basis of a starred Amendment. Nevertheless, I should like to study very carefully what has been said. I think that substantial arguments have been raised by the two noble Lords who have spoken. I do not think it would be right to give any undertaking either to accept this Amendment or any variant of it, but I should like to consider it, and time being as short as it is, if my noble friend Lord Cawley would perhaps get in touch with me to-morrow I think we could pursue this point.
  I think it would be convenient to go straight on and refer to Amendment No. 25. I can do that briefly by saying that it will make it a prerequisite of registrability that a patent or design pooling agreement must have at least three registrable parties. I understand from what has been said that this is acceptable to noble Lords who have spoken. This is because industry has represented that the clause as drafted would catch agreements which were beneficial and should not therefore be brought within the scope of legislation. They argued that Clause 100 would go beyond what the Government had intended, namely, to make registrable pooling agreements which restricted the free availability of patented inventions. They considered that it would also have the opposite, and undesired, effect of impeding full exploitation of improvements to existing patents. It has also been represented that cross-licensing of patents can arise when two companies have done research simultaneously in the same field. Their patents often overlap, and a cross-licensing agreement has the advantage of avoiding litigation and the ensuing expenses and delays.
  After carefully considering these arguments, although as I explained earlier they came very late in the day, the Government have reached the conclusion that bilateral cross-licensing arrangements cannot as a class fairly be made subject
  600
  to the presumption in the restrictive practices legislation of being contrary to the public interest. This applies particularly where the licensee improves a patented invention and grants to the licensor the right to use the improved patent. This Amendment, therefore, keeps them outside the scope of the restrictive trade practices legislation. Clause 100 will still extend the legislation to cover patent pools which have three or more parties and which are therefore potentially capable of the more serious abuses. As we are dealing at this stage with Amendment No. 24, I will simply move that.
  VISCOUNT AMORY: My Lords, I was very glad to hear my noble friend say that he would look sympathetically at the object behind my noble friend Lord Cawley's Amendment. I hasten to say that I have no erudition in the field of patent pooling; I might say I would not know how to pool a patent if my life depended on it. And similarly as regards flushing cisterns I am an absolute amateur. But I have a great deal of sympathy for one aspect of the Amendment, the one recently discussed by the noble and learned Lord, Lord Stow Hill, and this one. Every bit of legislation that is passed has the effect of piling new work on hard-pressed bodies, and if there are occasions when we can avoid that being done automatically I think it is a good thing. That aspect appeals to me. I was not altogether happy about the reasons of the noble and learned Lord, Lord Stow Hill, except for one aspect. I do not think it would be wholly good to make it too easy for a reference to be made and then withdrawn again, in case it might be made as a threat or to see what happens; that would be very easy if it could be withdrawn at any moment. This one seems to me to have no objection at all that I can see. All I wanted to say was how pleased I was to hear my noble friend say that he would look at the object behind the Amendment.
  LORD CAWLEY: My Lords, I am most grateful to my noble friend for what he has said, and in particular that the reason for this clause has been brought to light. I feel it is a very good thing that Parliament should know what this is all about. The honourable Member in another place who moved the

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  Amendment in Committee said that this is a very complicated clause, and I think he was right. Now at any rate we have had a statement from the Minister as to what it is all about. My noble friend spoke of assignments and licences being registered in the Patent Office. Of course, there you cannot look at the terms of the licence; you merely see on the register that so-and-so has granted a licence to so-and-so. So it is not really very relevant to these points. I quite accept what my noble friend said, that it would be a good thing to look at this matter again and to see whether anything can be done. I cannot say that I have very much expectation that in three days he will be able to do anything, but I appreciate what he has said, and on that assurance I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  THE EARL OF LIMERICK: My Lords, these Amendments have been discussed. I beg to move Amendments Nos. 25 to 31.
  Amendments moved—
  Page 73, line 5, after ("include") insert ("at least three").
  Page 73, line 12, leave out ("each such patent") and insert ("one or more such patents").
  Page 73, line 13, leave out ("design to each") and insert ("designs to one or more").
  Page 73, line 14, leave out ("each") and insert ("one or more").
  Page 73, line 15, leave out ("each") and insert ("at least one").
  Page 73, line 17, leave out ("each") and insert ("one or more").
  Page 73, line 18, leave out ("each") and insert ("one or more").—(The Earl of Limerick.)
  Clause 102 [Examination on oath of certain employees of bodies corporate and unincorporated trade associations]:
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 32:
  Page 74, line 37, leave out ("subsection") and insert ("subsections").
  The noble Earl said: My Lords, I am grateful to the noble and learned Lord, Lord Stow Hill, for raising this question during the Committee stage. As I said when the point was first raised, it is normally for the court to examine the merits of any claim for privilege and decide whether or not it should require disclosure
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  of particular information or documents. I do not think it is very probable that privileged information would be required by the Restrictive Practices Court. I accept, however, that a lawyer-employee should have the same right to refuse to disclose privileged information that lawyers in private practice have, and it seems right to put the question beyond doubt. It is, of course, for the court to decide in particular cases whether or not information is privileged.
  I think I should have started off by suggesting that we should be considering Amendments Nos. 32 and 33 together. I beg to move Amendment No. 32.
  LORD STOW HILL: My Lords, I rise only to thank the noble Earl very sincerely for putting these two Amendments on the Marshalled List. They entirely meet the anxiety I expressed. I am most indebted to him.
  THE EARL OF LIMERICK: My Lords, I beg to move Amendment No. 33.
  Amendment moved—
  Page 74, line 41, at end insert—
  ("(3B) Nothing in this section shall be taken to compel the disclosure by a barrister, advocate or solicitor or any privileged communication made by or to him in that capacity, or the production by him of any document containing any such communication.").—(The Earl of Limerick.)
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 34:
  Page 76, line 36, at end insert—
  ("( ) At any time when any such interim order is in force, the Court, on the application of the Director or of any person who is subject to or entitled to the benefit of any restriction specified in the order, may discharge the order and substitute for it any interim order which could have been made on the original application under this section.").
  The noble Earl said: My Lords, I think we could take together Amendments No. 34, 35 and 55. The first two simply amplify Clause 104 in a way which makes complete the circumstances in which the Restrictive Practices Court may terminate interim orders. The Opposition drew attention to this point in another place. The Amendment to Schedule 12, Amendment No. 55, makes clear that the provisions of Section 22 of the 1956 Act do not apply to interim

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  orders. It is obviously right that the Restrictive Practices Court should be able to discharge or vary its own orders. I am advised that it has no inherent power to do so, and these Amendments will give it the necessary power. I beg to move.
  Tun EARL OF LIMERICK: My Lords, I beg to move Amendment No. 35.
  Amendment moved—
  Page 76, line 42, at end insert—
  ("( ) the discharge of the order by the Court."). —(The Earl of Limerick.)
  Clause 111 [Provisions as to Certain Associations]:
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendments Nos. 36, 37, and 38.
  Page 82, line 7, at beginning insert ("it")
  Page 83, line 19, leave out ("were") and insert ("included")
  Page 83, line 24, leave out ("were") and insert ("included").
  The noble Earl said: My Lords, I think that we might take Amendments Nos. 36, 37, and 38 together. Amendment No. 36 is purely a drafting Amendment to make the sub-paragraph grammatically correct. Amendments Nos. 37 and 38 rectify an inadequacy in drafting. The object of Clause 98 is that the Secretary of State would be able to withdraw approval of an industrial or provident society if it entered into any agreement or made any recommendation which in his opinion should not be precluded from investigation by the Restrictive Practices Court. It appears, however, that as the words stand he could do so only if the agreement or recommendation in question related to the supply of services. These last two Amendments ensure that the provision operates equally if the agreement or recommendation relates to the supply of goods. I beg to move.
  Clause 117 [Trading schemes to which Part XI applies]:
  7.12 p.m.
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 39:
  Page 90, line 29, leave out from ("concert") to end of line 31 and insert ("in this Part of
  604
  this Act referred to as "the promoters"), are to be provided by one or more of those persons").
  The noble Lord said: My Lords, I beg to move Amendment No. 39. This is rather more than a drafting Amendment. It makes clear that in this particular context the definition of "promoter" is to include not only persons who actually supply goods or services to participants but also persons who merely arrange for them to be supplied to a third party. I beg to move.
  LORD STOW HILL: My Lords, I rise only to put one question to the Minister which has been suggested to me as being a question that should be asked, although of course I ask it entirely on my own responsibility. I put the question on the first of this series of Amendments which make some changes in Clause 117 and Clause 118 and which bring in what I concede at once are very necessary changes in the law relating to pyramid selling. That is a type of transaction which can do a great deal of harm, and I do not for a second, in putting this question, seek to raise any doubt as to the desirability of these new provisions.
  As Clause 117 is drafted, and as it will read if the Amendments are parried, could it perchance by a side wind, and through inadvertence, relate to what is described as "mail order business", which I understand is extremely useful, serves a very real public need, and which should not, so it is submitted, be subjected to the limitations and prohibitions contained in Clause 118? I apologise to the Minister who I see is seeking information in order to furnish a reply, for not having given him notice of the question which I wanted to ask. I do so all the more because in May of this year the Department of Trade and Industry sent out a very full explanation of their purpose in introducing these two clauses into the Bill relating to pyramid selling, and asked for comments. I am not certain, but so far as I know they did not receive any comment to the effect that mail order business might, by accident, have been included in the provisions of Clauses 117 and 118. That is why I rise to ask the question, and I do not know whether the Minister can yet answer it.
  The doubt which occurred to me as I studied this clause related to the rather general scope of the word "participant"

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  in Clause 117. A person who participates in the scheme is described as a "participant". That seems a rather natural appellation for a person who participates in a scheme, but when one examines the language it really is extremely wide. If I am supplied by post with goods under the system of mail order business I sup-in a sense, I participate in that scheme and would be a participant. I would be supplied with those goods not at premises at which I carry on business, so that part of the definition would be satisfied. The only question would be whether the supply of goods to me is made in circumstances in which it is intimated to me that I will receive some reward, whether in the form of a payment, a discount, or some extra goods, if I introduce some other person like myself who wants those goods supplied to him pursuant to the mail order business system which is the subject of inquiry.
  I do not assert or deny, I just do not know. I ask the question whether this rather wide definition could be construed, if the Minister is so advised, to include a perfectly legitimate and useful mail order business system. I again apologise for not having given warning to the Minister that I proposed to put this question, but I would be most grateful if, before the House passes this Amendment, he would be so good as to give me any reply he is able to give.
  LORD DRUMALBYN: My Lords, I thank the noble and learned Lord for what he has said. In point of fact, I think his question would perhaps be more appropriate on the next Amendment rather than this one. It is the intention that the mail order transactions should be included in the definition in Clause 117. This has been explained to the Mail Order Traders Association who have come to see the Minister concerned, Mr. Emery, and he has explained that they have to be included because this is the way in which it has been necessary to draft these provisions. The point here is that Clause 117 deals with,
  "any trading scheme which includes the following elements…"
  and Clause 118 empowers the Secretary of State to make regulations relating to such schemes. The non-objectionable schemes will not be caught by the regulations; schemes will be caught only if they
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  offend against the regulations. To the extent that we think that they will not give cause to offend against them, they will be excluded from the regulations.
  I think that I should make it clear, as I did earlier when I introduced this Part of the Bill during the debate on the Committee stage, that pyramid selling has proved to be a very difficult problem, and I indicated that although we considered that the definition of trading schemes should be comprehensive, we would wish to give further thought to it before the Report stage. The Amendments are designed to make it more difficult for objectionable schemes to evade the definition, but non-objectionable schemes will of course, not be caught. What I understood the Mail Order Traders' Association to object to was being bracketed with the pyramid schemes, through being covered by the description in Clause 117. This, I am afraid, is unavoidable, but, as I have tried to make clear, it is only those who are guilty of the objectionable practices who will be caught and I think the Association are now satisfied on this point.
  May I repeat what I said in Committee, that by no means all trading methods which fall within the scope of the definition are objectionable. It is no part of the Government's intention to criticise, to attack or to diminish the established marketing techniques of honest and reputable enterprises, which include companies subscribing to codes of good conduct such as those set out by the Direct Sales and Service Association and the Mail Order Traders' Association. I hope that the noble and learned Lord will rest on that assurance.
  LORD STOW HILL: My Lords, with the permission of the House, may I rise once again to thank the noble Lord very much indeed for that answer? When I put the question I was not aware that the Association had approached the Department, and in those circumstances I apologise for having put the question. I am most grateful to the noble Lord.
  7.22 p.m.
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 40:
  Page 90, line 42, leave out from ("of") to ("transactions") in line 2 of page 91 and insert ("any one or more of the matters specified in the next following subsection.

  607
  ( ) The matters referred to in paragraph (d) of subsection (1) of this section are—

  (a) the introduction of other persons who become participants;

  (b) the promotion, transfer or other change of status of participants within the trading scheme;

  (c) the supply of goods to other participants;

  (d) the supply of training facilities or other services for other participants;

  (e)").

  The noble Lord said: My Lords, this is a rather complicated matter and perhaps I may explain it in this way. If a trading scheme falls outside the description in subsection (1) of this clause, it will not be subject to regulations made by the Secretary of State under his powers in Clause 118 and any abuses it may cause cannot be stopped. It now appears that as this clause stands evasion would be possible. Objectionable schemes might be run on the basis of a recruit's being required to pay his recruiter, directly or indirectly, for training or other services. Or a recruit might be required to pay his recruiter a fee, not immediately when he joined the scheme but at a later stage, perhaps for promotion to a higher level in the organisation. Arrangements of these kinds, like those embraced by subsection (1)(d) of this clause as it stands, would allow participants the prospect of benefiting from their recruiting activities. The central abuses of pyramid selling might therefore continue unchecked, if such schemes fell outside the definition. There is, indeed, some evidence that pyramid selling organisations, instead of paying recruitment fees, are using both these methods of rewarding recruitment. The first proposed Amendment is designed to ensure that schemes using them are brought within the definition and will therefore be subject to regulations. Amendment No. 41 is consequential upon the introduction of the new subsection which is the subject of this Amendment. My Lords, I beg to move.
  LORD DRUMALBYN: My Lords, I beg to move Amendment No. 41.
  Amendment moved—
  Page 91, line 7, leave out ("the preceding subsection") and insert ("subsection (1) of this section "). —(Lord Drumalbyn.)
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 42:
  Page 91, line 28, leave out ("and") and insert—
  ("( ) In this section").
  The noble Lord said: My Lords, this is a paving Amendment for the changes to be made to Clause 118. I beg to move.
  Clause 118 [Regulations relating to such trading schemes]:
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 43:
  Page 92, line 6, leave out from ("from") to second ("such") in line 8 and insert—

  ("(a) supplying any goods to a participant in the trading scheme, or

  (b) supplying any training facilities of other services for such a participant, or

  (c) providing any goods or services under a transaction effected by such a participant, or

  (d) being a party to any arrangements under which goods or services are supplied or provided as mentioned in any of the preceding paragraphs, or

  (e) accepting from any such participant any payment, or any undertaking to make a payment, in respect of any goods or services supplied or provided as mentioned in any of paragraphs (a) to (d) of this sub-section or in respect of any goods or services to be so supplied or provided,

  unless (in any such case)").
  The noble Lord said: My Lords, this Amendment extends the matters on which the Secretary of State may make regulations. As Clause 118(2) stands, regulations made under it to prevent participants in trading schemes within the definition from being unfairly treated can apply only when goods are actually supplied to participants or their customers. The Amendment ensures that if any one of a number of transactions takes place between promoters and participants, or between participants, the regulations must be observed if an offence is not to be committed. These transactions include supplying or arranging for the supply of goods, services or training to participants and taking payment for goods or services supplied, or to be supplied. My Lords, I beg to move.
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 44:
  Page 92, line 27, leave out from ("of") to end of line 29 and insert ("any of the matters

  609
  mentioned in paragraphs (a) to (e) of subsection (2) of this section").
  The noble Lord said: My Lords, Clause 118(3)(c), as it stands, provides that regulations may be made imposing limits on the liabilities to be incurred by participants in respect only of goods and services supplied by the promoters. The Amendment will make it clear that regulations may limit participants' liabilities in respect of all the transactions mentioned in subsection (2) as amended. There will then be no doubt that the regulations may limit payments to be made by participants for goods, training or any other services, whether these are supplied by promoters or other participants, or supplied under arrangements made by them. My Lords, I beg to move.
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 45:
  After Clause 121 insert the following new clause:
  Enforcement provision.
  "—The provisions of sections 29 to 32 of this Act shall have effect for the purposes of this Part of this Act as if in those provisions—

  (a) references to a weights and measures authority or a duly authorised officer of such an authority were omitted, and

  (b) any reference to an offence under section 23 of this Act were a reference to an offence under this Part of this Act.

  (2) For the purposes of the application to Northern Ireland of those provisions as applied by the preceding subsection—

  (a) any reference to the Secretary of State shall be construed as a reference to the Ministry of Commerce for Northern Ireland, and

  (b) paragraphs (c) and (d) of section 33(2) of this Act shall have effect as they have effect for the purposes of the application of Part II of this Act to Northern Ireland."

  The noble Lord said: My Lords, when we discussed the Amendment of my noble friend Lord Hanworth on this subject in Committee, I undertook to look at the whole matter of enforcement of the provisions to deal with pyramid selling. As the Bill now stands, prweedings under this Part could be brought by anyone—the police, the Department, the Director General, local weights and measures authorities or even a private citizen. If it were left like that and no duty was laid upon any agency, responsibility for enforcement would rest generally with the police, and it would clearly be un-
  610
  necessary and inappropriate to place this as a special task upon them. We gave careful consideration to the possibility of placing the duty on local weights and measures authorities, which my noble friend proposed, but we came to the conclusion that to do so would widen considerably the scope of their present duties. They are now concerned with matters which are usually of importance to local consumers, whereas pyramid selling organisations are, by contrast, often nationwide and their objectionable practices do not generally injure consumers; it is usually the participants who suffer. Because they are organised on a national scale, investigations are likely to make a greater call on resources of both men and money than the usual run of cases, which are now dealt with by the weights and measures authorities. I am sure that local authorities would wish to examine this aspect of the matter closely before accepting this rather wider task.
  What we need is early and vigorous enforcement of Part XI, and we have come to the conclusion that this can best be carried out by the Department. The organisation for this task already exists; its staff are experienced in investigating such matters and in bringing prosecutions over the whole field of company law. It seemed right to apply these resources to this purpose for the limited period which we hope it will take to get rid of the objectionable practices of pyramid selling. The Amendment would give the Department special powers to investigate pyramid selling organisations. Although the Department already has powers to investigate the affairs of registered companies under Section 109 of the Companies Act 1967, these do not extend to firms trading as partnerships. We have therefore thought it right to propose that, for the purpose of investigating pyramid selling, special powers should be available to range over the whole field of organisations, whether registered or unregistered. The powers which the Amendment would make available are a suitably adapted form of those which weights and measures authorities have for the purpose of enforcing orders made under Part II of the Bill. They would enable investigations to be initiated quickly and, where it was found that offences had been committed, for proceedings to be brought. I beg to move.
  VISCOUNT HANWORTH: My Lords, I should simply like to thank the Government for this Amendment, which seems to cover most of what I wanted.
  Clause 122 [Publication of information and advice by Director]:
  7.30 p.m.
  LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 46:
  Page 95, line 15, at end insert—
  ("( ) Without prejudice to the exercise of his powers under subsection (1) of this section, it shall be the duty of the Director to encourage relevant associations to prepare, and to disseminate to their members, codes of practice for guidance in safeguarding and promoting the interests of consumers in the United Kingdom.
  ( ) In this section "relevant association" means any association (whether incorporated or not) whose membership consists wholly or mainly of persons engaged in the production or supply of goods or in the supply of services or of persons employed by or representing persons so engaged and whose objects or activities include the promotion of the interest of persons so engaged.").
  The noble Lord said: My Lords, this is an Amendment to meet a proposal by the noble Lord, Lord Jacques, and indeed one which is contained in an earlier part of the Bill. The reason why we did not accept the noble Lord's Amendment as it stood was because we thought it was better to include a definition of the type of association referred to because we feel this cannot be left at large, and it is important. For instance, there must be no doubt as to whether the provision might inadvertently bring in trade unions, and this Amendment will make certain of that. Secondly, the Government Amendment includes a reference to the dissemination of codes to members. This is an important part of the exercise. Thirdly, the Government Amendment, as the noble Lord will have observed, is strictly limited to codes designed to safeguard and promote the interests of consumers. Although the Bill is called the Fair Trading Bill, "fair trading" is not defined in the Bill—I am not sure it is even mentioned in the Bill—and it is probably better to deal with matters that we can fully understand, because "consumer" is defined in the Bill.
  I hope this Amendment will be acceptable to the noble Lord. It is, I think, a useful Amendment. The Government
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  have been very ready to listen to constructive suggestions of this kind, and we believe that effective codes of voluntary conduct can be most helpful. We therefore think it right that the Director General should encourage these, but there is one word of warning that I should give. The recommendations that are made by trade associations to their members would give rise to registrable agreements if they dealt with the matters set out in Section 6 of the Restrictive Trade Practices Act 1956. Nothing in either the Amendment set down by the noble Lord, Lord Jacques, or in the Amendment we are now discussing will affect the obligation to register such agreements, but the Director General will be taking over the functions of the registrar of restrictive trading agreements, and he will be well placed to discuss with associations the implications of their proposals and the likelihood that particular agreements, although registered, might be the subject of representations made by the Director General to the Secretary of State under Section 9(2) of the Restrictive Trade Practices Act 1968. These are the representations on which the Secretary of State can rule that the agreement need not be referred to the Restrictive Practices Court. So it is well conceived that the Director General should assist in this way, in the formation of codes, and should encourage the formation of codes, although he will have to take cognisance of them later in his capacity of being in charge of the restrictive trade practices legislation. I thought I ought to make that plain, but, all the same, it is a very worthwhile thing to do. I beg to move.
  LORD JACQUES: My Lords, I thank the noble Lord for an extremely useful Amendment. I could go on at length and point out all the advantages, but I think it would be most inappropriate.
  Clause 135 [General interpretation provisions]:
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 47:
  Page 103, line 15, after ("undertaking") insert ("which is carried on for gain or reward or which is an undertaking").
  The noble Lord said: My Lords, to give credit where credit is due, this Amendment stems from a suggestion made

  613
  by the Law Society in correspondence with my right honourable friend the Minister for Trade and Consumer Affairs. The Law Society suggested that the definition of "business" might be regarded as excluding undertakings which do not charge consumers directly for their services but are recompensed by commission. This Amendment is designed to take account of the fact that some persons who provide services commercially to consumers do not charge the consumer, but live on commissions paid by the commercial undertakings. Insurance brokers would provide an obvious example. The purpose of this Amendment is to ensure that any practice adopted by such persons in dealing with members of the public may be examined as consumer trade practices notwithstanding that the services are provided without any charge; for example, to the motorist or the householder who wants to insure. I beg to move.
  Schedule 6 [Matters falling within scope of proposals under section 17]:
  THE EARL OF LIMERICK: My Lords, this Amendment was discussed with Amendment No. 9. I beg to move.
  Amendment moved—
  Page 115, line 23, after ("practice") insert ("either generally or"). —(The Earl of Limerick.)
  Schedule 7 [Goods and services (in addition to those in Schedule 5) wholly or partly excluded from section 50]:
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 50:
  Page 116, line 8, at end insert—
  (".Water.").
  The noble Earl said: My Lords, this Amendment is necessary to remedy an accidental omission. Schedule 7, together with Schedule 5, lists the goods and services supplied by undertakings which are nationalised or otherwise controlled by Statute and in respect of which only Ministers, and not the Director, will be able to make monopoly references. The statutory monopoly in the supply of water was overlooked when the Schedule was drawn up. I beg to move.
  Schedule 11 [Transitional provisions and savings]:
  THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 51:
  Page 126, line 34, leave out from ("undertaking") to ("is") in line 35 and insert ("given to a Minister which").
  The noble Earl said: My Lords, I think it might be convenient if I spoke to Nos. 51, 52, 53 and 54 together. These four Amendments are somewhat technical, and they all bear on the same point. Generally speaking, it is intended that the Director should take over the work, now handled by the Department of Trade and Industry, of policing undertakings and orders following Monopolies Commission reports. This is the point of Clause 88 of the Bill. Paragraph 9 of Schedule 11 extends the Director's follow-up functions under that clause to the follow-up of undertakings given before the Director takes over his duties. For the future, it will be for the Director himself, if so requested by Ministers, to enter into consultations with firms. He will himself negotiate undertakings. But transitionally, where undertakings have been given before the commencement of the Act, the position will have so to be certified to him by the Secretary of State. Amendments 51 and 52 deal with cases where negotiations may actually be in progress when the Director takes over. The other Amendments—that is, Nos. 53 and 54—make no change of substance. They are simply intended to clarify the procedures which will have to be carried out to ensure that the Director is au fait with past reports and undertakings. I beg to move.
  THE EARL OF LIMERICK: My Lords, if it has the agreement of the House, I would propose Amendments Nos. 52, 53 and 54 en bloc. I beg to move.
  Amendments moved—
  Page 126, line 39, at end insert ("and which either—

  (a) was given before the commencement of this Act, or

  (b) is given after the commencement of this Act in a case where no request under subsection (1) of section 88 of this Act has been made to the Director to carry out consultations in accordance with that subsection.")

  Page 126, Line 41, at end insert ("and the Minister to whom any such undertaking was

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  or is given shall furnish particulars of it to the Director").
  Page 126, Line 50, at end insert—
  ("( ) The preceding provisions of this paragraph shall have effect without prejudice—

  (a) to the duty of the Commission under section 86 of this Act to transmit to the Director copies of reports which were made by the Commission before the commencement of this Act and which, by virtue of paragraphs 1 and 7 of this Schedule, have effect as if made under this Act, or

  (b) to any duty of the Director, where requested by the appropriate Minister or Ministers to do so with respect to any such report, to carry out such consultations as are mentioned in section 88(1) of this Act.")—(The Earl of Limerick.)

  Schedule 12 [Enactments amended]:
  THE EARL OF LIMERICK: My Lords, this Amendment was discussed with Amendments Nos. 34 and 35. I beg to move.
  Amendment moved—
  Page 128, line 42, column 2, at end insert—
  ("In section 22, after subsection (4) there shall be inserted the following subsection:—
  "(5) The foregoing provisions of this section shall not apply in relation to any order made under section 21A of this Act."."). —(The Earl of Limerick.)

  FAMILY INCOME SUPPLEMENTS (COMPUTATION) (No. 2) REGULATIONS 1972
  7.41 p.m.
  THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE)THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE) rose to move, That the Draft Family Income Supplements (Computation) (No. 2) Regulations 1972, laid before the House on June 14, be approved. The noble Lord said: My Lords, I beg to move that the Family Income Supplements (Computation) (No. 2) Regulations 1973, be agreed to. Family Income Supplement is paid to low income families where the head of the family is in full-time work and there is at least one dependent child. The supplement is payable when the family's weekly resources fall below a prescribed amount which varies according to the size of the family. The weekly rate of the benefit is one half of the amount by which the family's total
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  income falls below the prescribed amount subject to a maximum and minimum weekly payment.
  Since the Family Income Supplement scheme started in August 1971 the prescribed amounts have been increased in April each year. The Family Income Supplements (Computation) Regulations 1973 which raised the prescribed income levels from April 3 this year were approved by the House in February. The prescribed amounts were raised to £21 a week for a one-child family; £23·50 for a two-child family; £26 for a three-child family; £28·50 for a four-child family; increasing by £2 steps for larger families. At the same time the normal period of award was extended from 26 weeks to 52 weeks by Section 3 of the Pensioners and Family Income Supplement Payments Act 1972.
  Upratings of the prescribed amounts will in future be made in the autumn along with all the other social security benefits so that payments are at their highest level at the start of the winter. To avoid an 18-month gap between up-ratings the present regulations provide for a small increase in the prescribed amounts from October 2 on top of the increases already introduced in April. Provision is also made for a higher maximum payment for families with three or more children. My Lords, I beg to move.
  Moved, That the Draft Family Income Supplements (Computation) (No. 2) Regulations 1972, laid before the House on June 14. be approved. —(Lord Aberdare.)

  REDUNDANCY PAYMENTS (MERCHANT SEAMEN EXCLUSION) ORDER 1973
  7.43 p.m.
  THE EARL OF GOWRIE THE EARL OF GOWRIE rose to move, That the Draft Redundancy Payments (Merchant Seamen Exclusion) Order 1973, laid before the House on June 11, be approved. The noble Earl said: My Lords, the Order before your Lordships' House to-day replaces an Order which was published on October 23, 1972. That Order referred to the service of merchant seamen under articles. From

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  January 1, 1973, merchant seamen are no longer employed under articles but under crew agreements, and a reference is included accordingly in the present Order. The main purpose of the Order, as before, is to prevent a possible anomaly from affecting the entitlement of merchant seamen to payments under the Redundancy Payments Act 1965. In 1968 an Order was made after consultation with the shipping industry to exclude merchant seamen from the statutory scheme where their service is covered by a voluntary redundancy payments scheme agreed by the industry. In one respect the criteria of exclusion in the 1968 Order has been found to be too wide. Service was excluded if it was under articles requiring the observance of National Maritime Board terms and conditions of employment.
  The articles, however, have been used by some employers who are under no obligation to participate in the industry's redundancy payments scheme, and the same will apply to the crew agreements which have now replaced the articles. The obligation to participate arises only where the employer is in membership of an organisation affiliated to the National Maritime Board. Consequently, some merchant seamen might be excluded from the statutory scheme even though their service was not covered by the industry scheme. The Board have asked for the Order to be amended in order to close any possible gap. The Order which I am now asking your Lordships to approve seeks to remedy this anomaly by excluding service under articles, or from January 1 under crew agreements, only where the service is in a ship which is covered by the employer's membership of an affiliated organisation. I beg to move.
  Moved, That the Draft Redundancy Payments (Merchant Seamen Exclusion) Order 1973, laid before the House on June 11, be approved. —(The Earl of Gowrie.)

  INTERNATIONAL COCOA AGREEMENT BILL
  7.45 p.m.
  EARL FERRERS: My Lords, I beg to move that this Bill be now read a
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  second time. The purpose of the Bill is to give effect to the International Cocoa Agreement. This Agreement entered into force provisionally on June 30, after all the major exporting countries and every one of the 26 importing countries who signed it had either ratified the Agreement or had undertaken to apply it provisionally. The importing members include all the member States of the E.E.C. as well as the Community collectively. So far as the United Kingdom is concerned, the entry into force of this Agreement is the culmination of many years of effort by successive Governments of both Parties.
  Cocoa has long been accepted as a commodity for which the support of an International Commodity Agreement was particularly appropriate. It is a commodity which has been subject to severe price fluctuations yet one on which several developing countries are heavily dependent, particularly Ghana, which is the major producer. Indeed there is a particularly strong Commonwealth interest in the International Cocoa Agreement, since Ghana, Nigeria and other Commonwealth producers together account for nearly half the world's cocoa production.
  The purpose of the Agreement is to reduce excessive price fluctuations and to assure suppliers at prices equitable both to producers and consumers. For this purpose, the Agreement relies on a system of adjustable export quotas combined with a buffer stock. Export quotas will be applied when the world cocoa price is below 29 U.S. cents per lb. or about £250 per ton, which is well below the current world price. These quotas are adjusted during the year in accordance with price movements below this level with the aim of preventing the prices from falling below 23 U.S. cents per lb. or about £200 per ton. At the same time, the buffer stock will purchase cocoa at the end of each year in any member country which has a cocoa surplus both to its export quota and its domestic requirements. This cocoa will be stored for resale when the price reaches the maximum envisaged in the Agreement of 32 cents per lb. or £280 per ton. This should help therefore to moderate price rises.
  The Agreement was being negotiated a year ago when the supply and demand

  619
  were more evenly balanced and when prices were within the range envisaged in the Agreement. So volatile are the price movements that they are now not far from double the top of that range. We could not therefore expect the Agreement to achieve in the short term any moderation in the present high price levels since these reflect actual or projected shortfalls in supply which are largely the result of damage caused to crops by drought both in South America and West Africa. The Agreement will inevitably therefore begin with an empty buffer stock so that nothing can be done it both assume obligations.
  On the other hand, over the longer term there are two ways in which an agreement of this kind could help to moderate price rises. First, the buffer stock will accumulate supplies of cocoa during periods when prices are low—as they were, for example, in 1971–72. These supplies will then be resold when the cocoa price reaches the maximum of the range envisaged in the Agreement, about £280 per ton. In passing, it is worth noting that the maximum capacity of the stock of 250,000 tons is considerably greater than any deficit which has occurred in any one year since the war. The more important part is the role which the Agreement should play in giving producers confidence to expand production in line with the rising world demand for cocoa and cocoa products. This is particularly important in view of the fairly longterm cycle of cocoa production and the past history of wildly oscillating price movements which is still much in producers' minds. The Agreement, my Lords, is in the long-term interest both of producers and of consumers and under it both assume obligations.
  The purpose of the Bill is to provide the powers necessary to enable the United Kingdom to fulfil the obligations assumed by importing Governments. These relate essentially to the control of imports and, in particular, the measures necessary to provide for financing of the buffer stock. This is to be achieved by means of a contribution charged, at least in the first two years of the agreement at the rate of 1 U.S. cent. per pound or about £9 per ton of cocoa or cocoa products when they first enter international trade. Export-
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  ing members of the Agreement have undertaken to ensure that no shipments of cocoa leave their shores without the presentation of a certificate showing that the contribution has been paid or secured. Importing members similarly undertake to ensure that all imports of cocoa are accompanied by such a certificate, whether they come from member countries or from non-member countries. For this reason the Bill provides that cocoa beans and cocoa products shall be imported only under authority of a licence granted by the Secretary of State, which in practice will be the Secretary of State for Trade and Industry. The conditions of the licence may require the presentation of evidence to Customs that any contribution chargeable under the Agreement has been paid or secured.
  In order to interfere as little as possible with the normal course of trading, it is proposed that imports of these products from member countries should be authorised under an open general licence. This means that imports from these countries—which provide either directly or indirectly over 98 per cent. of our imports of cocoa and cocoa products—will continue to be imported without quantitative limitation or any other restriction, save only the requirement to submit evidence that the contribution due has been paid or secured. This evidence would be in the form of a prescribed certificate which the exporters will be required to furnish to importers along with the shipping documents. The document will equally serve as evidence that the export was in accordance with any export quotas which were then in effect. Different arrangements will need to apply to imports from non-member countries of cocoa because these would be subject to quotas.
  My Lords, the administrative arrangements of this Agreement have been worked out with the advice and cooperation of the cocoa trade and the industry, and the Government deeply appreciate the valuable help which these organisations have so generously given both during the long negotiations for the Agreement and also subsequently in the detailed preparations for giving effect to its provisions. I have no doubt that we can continue to rely on their support in the future to ensure the success and effectiveness of the Agreement.

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  This is the first international agreement for ten years to seek to bring greater stability to another primary commodity by co-operation on an international plane between importing and exporting countries. The United Kingdom took a leading part in its negotiation and we have invited the International Cocoa Council to establish its headquarters in London—an invitation which we hope they will accept. I am confident that this modest Bill will help to secure some measure of stability in cocoa production and in the industries associated with it, and I hope that your Lordships will give it a Second Reading.
  Moved, That the Bill be now read 2a. —(Earl Ferrers.)
  7.54 p.m.
  LORD HOY: My Lords, we are grateful to the noble Earl for his explantion of this Bill. I would not altogether agree with him when he describes it as a modest Bill. Anyone who has had anything to do with this particular commodity over a fairly long number of years would regard it as more than modest. I can think of two of our noble friends who are in the House to-night—the noble Viscount, Lord Amory, had a fair amount to do with it when he was Minister of Agriculture; my noble friend Lord Champion when he was Parliamentary Secretary had to cope with this particular problem, and certainly in my own experience in the six years I spent at the Ministry we spent a considerable time over cocoa. If we in fact get stability out of arrangements of this kind we shall have taken a big step forward. As I understand it, the Bill does three simple things—simple in the sense that achievement has been reached. First of all, it will prevent the very wide fluctuations which took place in the price of this commodity. This caused endless trouble. As the Minister said, the manufacturers and traders had a most difficult job contending even with retail prices in this country of commodities that were produced from this product. The one thing we were always attempting to do was to give stability to the countries which produced it. One has only to look at the first five in the list, from Ghana to the Cameroons, to see how dependent their economies are on this particular product.
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  Any great fluctuation in price in a downward direction makes, and did makes, economic trouble for them, so that from the producers' point of view this Bill gives them a stability that they have not enjoyed before.
  We should not overlook the fact either that of all the countries in the world Britain is the fourth largest importer. Therefore it is important from our own point of view—not only from the manufacturer's but from the consumer's point of view—that we should get stability into the price of this commodity and not allow these wide fluctuations to take place. So I think that from this side of the House we should welcome the Bill as it is.
  There is only one thing which gives me a little concern—and I have already told the Minister about it. In Clause 1(7) it says:
  "…and includes any amendment of that agreement (whether made before or after the passing of this Act)…"
  I am sure that this must be common form, but it is a little difficult to understand that this in fact will take precedence whether the agreement is come to by amendment either
  "before or after the passing of the Act."
  This seems a little difficult to understand. While I welcome the Bill, I should be grateful for an explanation as to what the words mean.
  Viscount AMORY: My Lords, I should like to echo what the noble Lord has said and the welcome he has given to this, I think he would agree, not modest, but bold and audacious measure put before us. I was surprised to hear that it was the first international commodity agreement for ten years—I think that is what my noble friend said—because 20 or 25 years ago we used to spend a very great deal of time trying to work out international commodity agreements, and the aim of them must be wholly good: to try to even out some of the tremendous fluctuations that can do great damage to the countries involved both from the producers' and from the consumers' end. These are very difficult things to operate, and I am sure we should all wish this Bill every fortune and say how pleased we are to give it a Second Reading.
  EARL FERRERS: My Lords, I am very grateful to the noble Lord, Lord Hoy, and to my noble friend Lord Amory for what they have said and the welcome they have given to this Bill. The noble Lord, Lord Hoy, said that he was surprised that I described it as a modest Bill and indeed when he tells me that my noble friend Lord Amory, the noble Lord, Lord Champion, and the noble Lord, Lord Hoy, have been having a go at it and found it difficult to come to any degree of conclusion, I am bound to say that possibly my use of the word "modest" was too modest.
  LORD HOY: Just to get the Record right—the three noble Lords to whom the noble Earl is referring had no difficulty in coming to conclusions—it was getting agreement on the conclusions.
  EARL FERRERS: My Lords, I accept that entirely, and indeed it is a good thing that at last we have been able to come to agreement—and I am bound to say, again in all modesty, that that success was not due to me such as the conclusions were due to the noble Lords to whom the noble Lord, Lord Hoy, referred. Obviously, this will be a very great help to stabilise the price of cocoa from these countries which depend so largely upon it for their economic success. If we have achieved this, we have achieved quite a lot.
  The noble Lord, Lord Hoy, was concerned about Clause 1(7) which he said referred to
  …any amendment of that agreement (whether laid before or after the passing of this Act)…"
  I do not think that there is anything sinister in this; indeed, it has precedents. The words are frequently put into Acts. The reason is that when an agreement is arrived at, such as the document which the noble Lord has before him, it is possible that there may be alterations to it before the Act is passed, or even after. These may be only matters of small note. I would refer the noble Lord to the fact that in order to make these changes there have to be considerable areas of agreement. If he looks at Article 75, he will see that it is quite a process which has to be gone through in order to change the Agreement and the purpose of putting in these words is to ensure that if such
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  agreement is arrived at the Bill should apply to any alteration, too. In the Sugar Act of 1956 these words were mentioned in relation to the Commonwealth Sugar Agreement, in Section 1(9); and also with regard to the International Sugar Agreement, in Section 29(5) of the same Act. So that there are precedents. My Lords, I am grateful to the noble Lords for what they have said. With them, I hope that this will achieve some great degree of success.
  On Question, Bill read 2ª, and committed to a Committee of the Whole House.