Lords Sitting of 6 March 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 Gloucester.

COMPTROLLER AND AUDITOR GENERAL
LORD BALOGH: 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 they would consider setting up machinery to avoid the possibility of the Comptroller and Auditor General having to act in matters for which he bears responsibility as accounting officer of a Department.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, the Comptroller and Auditor General is an independent statutory officer, appointed by the Crown and answerable only to Parliament. As such, he naturally bears no responsibility as the accounting officer of a Department other than in connection with the Exchequer and Audit Department.
LORD BALOGH: My Lords, I thank the noble Earl for his answer, which did not really cover my Question. Is it not important that steps should be taken to ensure that the independence of the Comptroller and Auditor General should be not merely there (I have no doubt it is there) but also seen to be there? If that officer has been in the service of Her Majesty, would it not be better not to appoint him, or to appoint someone else, on questions in which he bore responsibility as the accounting officer in years past?
EARL JELLICOE: My Lords, the noble Lord's Question is referring to the present time; his supplementary question, as I understand it, is referring to the past time. All I would say imme
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diately in reply is that I know of no case in which the independent judgment of the Comptroller and Auditor General has been impugned or has in any way been seen to be impugned. If there is a particular problem which the noble Lord has in mind, and he would like to write to me about it or discuss it with me, I should be very glad to entertain his representations.
LORD SHACKLETON: My Lords, I wonder whether the noble Earl would agree with my view that the Question could be interpreted as referring to "former accounting officer". Is the noble Earl aware that my noble friend was in no way impugning the position or the integrity of any occupant now or in the past? Does he also note that in fact there is a possibility of less generous-minded people attributing a bias when a matter comes before the Auditor General in regard to a Department in which he was formerly the accounting officer?
EARL JELLICOE: My Lords, I recognise that there could be a problem here, but I think we should be very careful about getting ourselves into a position in which it was thought wrong ever to appoint to this very important post someone who had been a Permanent Secretary in a Department. This would be excluding us from the possibility of appointing people with the sort of experience which I should have thought is required in this particular job.
LORD SHACKLETON: My Lords, I should not take my noble friend's Question off him, and I apologise to him; but is the noble Earl aware that my noble friend is not suggesting that ex-Permanent Secretaries should not be appointed, but merely that they should not act in those matters that relate to a Department in which they were formerly the accounting officer, and that someone else should carry the responsibility?
EARL JELLICOE: My Lords, I am not quite clear whether the noble Lord the Leader of the Opposition is necessarily the correct interpreter for his noble friend; he may be. But it seems to me that he is taking the Question rather off his noble friend.
LORD BALOGH: My Lords, would the noble Earl care to read my Question?
LORD SHACKLETON: My Lords, the noble Earl, Lord Jellicoe, does not answer my noble friend. He may realise why others have to join in in his support.
SEVERAL NOBLE LORDS: Hear, hear!
EARL JELLICOE: My Lords, noble Lords opposite say, "Hear, hear!", but I thought that they might do me the justice of acknowledging that, naturally, I read the noble Lord's Question before answering it.
LORD BALOGH: May I read the Question to the noble Earl?
SEVERAL NOBLE LORDS: No!
LORD BALOGH: It does not matter what you say—"To ask—"
SEVERAL NOBLE LORDS: Order!
EARL JELLICOE: My Lords, I am not intervening to answer the noble Lord's supplementary question, which I shall be very glad to do. I am intervening, as the Leader of your Lordships' House, to say that the supplementary question of the noble Lord, Lord Balogh, I think goes a little wide, when he says, "It does not matter what you say." That is not the normal way in which we address noble Lords anywhere in your Lordships' House. I would say that to the noble Lord or to any noble Lord opposite, as I would say it to any noble Lord sitting behind me.
LORD SLATER: My Lords, would the noble Earl—
EARL JELLICOE: My Lords, I am sorry, but I still have to answer a supplementary question from the noble Lord, Lord Balogh.
LORD BALOGH: My Lords, I merely wish to say that I did not impugn anybody. I wanted to ask the noble Earl what sort of machinery should be devised in order to avoid possible impugnment in future, and this I think the noble Earl has not answered.
EARL JELLICOE: My Lords, I should be very glad to look into this position. I really do not feel that, in practice, there is the problem which I think is worrying the noble Lord, Lord Balogh. But I should be very glad to look into the position and, if need be, to discuss it with
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him and, indeed, with any other noble Lord who is interested in the matter. I fully recognise that it does touch on an important point. I would say, most emphatically, that I am sure that the noble Lord, Lord Balogh, is barking up the wrong tree if he is in any way impugning the independence of any particular person.
LORD SHACKLETON: My Lords, if I may come back to the noble Earl, may I ask him to withdraw the statement that my noble friend is impugning anyone? He was at great pains not to do so and, in the general interest of good relations, perhaps the noble Earl would accept—for all of us heard this—that there was no suggestion of impugning an individual. My noble friend stressed the matter as one of appearance. We all accept that there is no criticism of any individual.
EARL JELLICOE: My Lords, I should be very glad to withdraw that suggestion if in fact I had made it, but it is not within my recollection that I did.

NORTH SEA OIL: BRITISH SHARE
2.43 p.m.
LORD BALOGH: 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 Her Majesty's Government on what basis the statement was made that the British share of the oil reserves in the British part of the North Sea was 58 per cent.; how many oilfields were included, and at what tonnage; how many further oilfields have already been proven, and whether Shell was considered as a totally British company.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, the figure of 58 per cent. applied to the British share of oil reserves in the fields so far proved, Forties, Auk, Brent and Argyll, counting Shell as 40 per cent. British. At least four other finds may prove commercial. Figures of reserves in individual fields are confidential. The current estimates of future oil production are now being reviewed, and the outcome of the review will be announced shortly.
LORD BALOGH: My Lords, would the noble Lord not agree that the statement such as has been made was really rather misleading?
LORD DRUMALBYN: My Lords, is the noble Lord suggesting that the statement I have just made is misleading? If so, would he care to say in what respect it is misleading?
LORD BALOGH: My Lords, I fear that perhaps I have to set myself up as a teacher of English grammar, which is a very unlikely job for me. I said "had been made"; not "had been made this minute" but "had been made in the distant past"—to wit, the original statement which I was asking to be cleared up.
LORD DRUMALBYN: My Lords, I hope that any efforts that have been made to clear up this matter have not been unsuccessful. I am not aware that any statement was misleading. I am grateful to the noble Lord for bringing into the open what has already been said to him in a letter.
THE EARL OF LAUDERDALE: My Lords, would my noble friend not agree that there are several kinds of reserves, notably "possible", "probable" and "proven", and that among proven reserves common experience is that not more than 15 per cent. are in fact recoverable?
LORD DRUMALBYN: My Lords, I think that perhaps 15 per cent. is putting it a little low. Thirty per cent., on the other hand, might be putting it rather high.
LORD BALOGH: My Lords, would not the noble Lord agree that it is misleading when one says (after we had a little misunderstanding about 21 per cent. and 12 per cent.) that the figure was 59 per cent., and it is also said that British interests have been protected but it then turns out that it is only four fields, and one bears in mind the composition of the respective consortia, which is not in the least usual?
LORD DRUMALBYN: My Lords, I do not think so. I think there has been a genuine confusion between an estimate based on the territories allotted and an estimate based on the resources proven. But there was never any confusion in my
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mind, and I am sure the noble Lord's mind is so clear that there is none in his.
THE EARL OF LAUDERDALE: My Lords, would my noble friend not agree that to use the term "oilfields" is to use a very general term for something which is variously interpreted? It could mean "basin", or it could mean a particular well. Is not this a common source of confusion?
LORD DRUMALBYN: Yes, my Lords; I think that may well be so. However, I am not sure that it arose in this case.

CULTURAL RELATIONS WITH CHINA
LORD SEGAL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps have been taken to develop cultural relations with the People's Republic of China since the exchange of Ambassadors with Peking; and what further intentions they have in mind on this subject.
THE MARQUESS OF LOTHIAN: My Lords, the Great Britain/China Committee was established last year to promote personal and professional exchanges with China in the cultural-scientific field. Exchanges in science, sport and culture will continue and a senior British Council officer will visit Peking in April.
LORD SEGAL: My Lords, I should like to thank the noble Marquess for that reply. Would he not agree that this is hardly enough in dealing with one-fourth of the world's total population? Could not the development of cultural relations, especially in the fields of science and medicine, be given a far higher priority and a much greater sense of urgency than appears to be the case at the present time?
THE MARQUESS OF LOTHIAN: My Lords, I entirely agree with the noble Lord that we want to step up the whole range of cultural exchanges with China, but considering that we have been in a position to do so for only the past 12

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months or so, things have been moving very fast. After all, the London Philharmonic Orchestra is going out to China this month, and an exhibition is being mounted over here in September—cultural pleasures which ought to be extremely interesting and effective. And of course, on the scientific and medical side, the noble Lord may well be aware that Sir George Godber, Chief Medical Officer at the Ministry of Health, is going to pay a visit to China in the next month. So I do not think there can be any doubt that things are moving.
LORD DAVIES OF LEEK: My Lords, is the noble Lord aware that probably all of us in this House and elsewhere in Britain were glad when in March, 1972, we recognised full diplomatic status when our excellent Ambassador there, John Addis, signed with Chiao Kuan Hua, the Chinese deputy Foreign Secretary, the note of understanding? In consequence of China's being in the main stream of life, as historically she always has been, does not the noble Marquess think that it might be an excellent exercise for the Minister of Education to encourage an exchange of schoolchildren? We can eradicate the propaganda from both sides. Would not a committee to study this problem of schoolchildren exchanges be valuable?—for the future is theirs, whatever nationality they may bear.
THE MARQUESS OF LOTHIAN: My Lords, I think that is a most interesting suggestion, and I will certainly pass it on to my right honourable friend.
BARONESS SUMMERSKILL: My Lords, having had the opportunity of visiting China and seeing many of the health services there, may I ask the noble Marquess whether he would have it in his mind as a possibility to see whether delegations of Chinese doctors might be invited to this country? I believe the noble Marquess and his colleagues would be very much surprised to know how many of these doctors qualified here in the early 1920s and are still alive.
THE MARQUESS OF LOTHIAN: My Lords, it would certainly be interesting to do as the noble Baroness suggests, and I will bring the suggestion to the attention of my noble friend, who is sitting beside me. I believe he will be able to
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confirm that we are proposing to send over specialists from this country to China.
LORD O'NEILL OF THE MAINE: My Lords, may I ask whether the Minister is aware that as long as the Chinese go on paying for their purchases of British aircraft in cash, cultural interests will improve at a very rapid rate?
THE MARQUESS OF LOTHIAN: My Lords, I am obliged to my noble friend.
LORD SHEPHERD: My Lords, I hope they will not be the Harrier.
LORD SEGAL: My Lords, may I ask the noble Marquess whether, in addition to the arrangements being made through the British Council further arrangements could not be made direct with some of our British universities to invite scholars and research workers to come to this country, which would be to our mutual advantage?
THE MARQUESS OF LOTHIAN: My Lords, this probably could be arranged and I will undertake to make representations in this regard.

VIETNAM: INTERNATIONAL CONFERENCE ON PARIS AGREEMENT
2.52 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 what conclusions were reached at the International Conference on Vietnam.
THE MARQUESS OF LOTHIAN: My Lords, a copy of the Statement made yesterday in another place by my honourable friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs has been published in the OFFICIAL REPORT.
LORD BROCKWAY: My Lords, I thank Her Majesty's Government for having published that Statement which enables us to comment with some knowledge. While welcoming the international endorsement of the Agreement between the United States of America and Hanoi, may I ask whether this Declaration is not

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very inadequate in its failure to provide for international action to see that this agreement is observed? Further, while the International Commission of Control and Supervision will make reports, is it not a fact that there is no provision whatsoever for the implementation of those reports? I should also like to ask whether the danger of Canadian withdrawal is not very serious. What has been the role of Her Majesty's Government in all this?
THE MARQUESS OF LOTHIAN: My Lords, I believe the noble Lord has put his finger on one of the problems involved in this very difficult situation. He will have read the Statement made yesterday by my right honourable friend, in which he said that this Agreement will work only if all parties to it are convinced and are willing to try to make it work. I am sure the whole House will wish the Agreement well and hope that it will stick. The Canadian Government, as the noble Lord knows, said that there is a possibility that they might not be able to carry on after 60 days. We do not know whether in practice that will turn out to be the the case, but so far as Her Majesty's Government are concerned, we intend to give our support, so far as we can, to the implementation of the Agreement.
LORD BROCKWAY: My Lords, is the Minister aware that I am putting these questions not in any partisan way but out of a very deep concern over the chaos which has been left in Vietnam and Indo-China as a result of the ceasefire? May I ask Her Majesty's Government to keep a very careful watch on the situation. I should also like to ask whether it is the desire of Her Majesty's Government that this matter should be left in the hands of the United States and Hanoi? Do they not think it is regrettable that the United Nations has been kept out of it, and is it not possible that some international interest may still be necessary before this complicated situation can be resolved?
THE MARQUESS OF LOTHIAN: My Lords, we will certainly keep as close a watch as we possibly can on the situation. As the noble Lord must be aware, Her Majesty's Government are as interested as any other in the preservation of peace. We ourselves would like
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to have seen the United Nations playing a part in this situation and the time may yet come when they will be able to do so.
LORD HARVEY OF PRESTBURY: My Lords, would my noble friend agree that the chaos referred to is more likely to be cleared up if the exchange of prisoners takes place as arranged?
THE MARQUESS OF LOTHIAN: Certainly, my Lords; and we must hope that that will happen.

COSTS IN CRIMINAL CASES BILL [H.L.]
On Question, Bill read 3a, and passed, and sent to the Commons.

COAL INDUSTRY BILL
2.57 p.m.
EARL FERRERS: My Lords, I beg to move that this Bill be now read a second time. Last week, on a Motion introduced by the noble Lord, Lord Tanlaw, your Lordships discussed in a far-seeing and indeed fascinating debate the future prospects of energy from the point of view of the requirements for it, its availability and the sources from which it comes now and from which it may come in the future. If there was one thing that emerged from that debate it was that we know that we do not know all the answers. We do not know how much energy will be required in the future, how available it will prove to be and from where it will come. What was clear from that debate was the underlying opinion that we should keep all our options open. We heard how coal plays a vital part in meeting our energy requirements. It is a source of indigenous energy with vast reserves which could help to supply our needs for many years to come. But several speakers spoke of the uncertainties which surround alternative sources of energy, and because of these uncertainties, if for no other reason, it would be quite wrong to regard coal as a dying industry.
I recall these points because they show how this Bill, which provides support to the coal industry on a large scale over the next three to five years, is not an

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attempt to rescue something from the past but is essentially a forward-looking Bill, and it deals with an industry which has an important future. The importance of coal in our national life can be illustrated by two quite simple figures: it produces almost 70 per cent. of our electricity supplies, and it employs more than a quarter of a million men.
Despite the difficulties which have been caused by the declining trend in the market for coal, the Board made a small surplus in 1970–71. They hoped to repeat, or even to better, this in the following year, but unfortunately in the event they ended the year not with a profit but with a loss of £157 million. This, of course, was mainly the result of the miners' strike and the overtime ban which preceded it. I do not want to go into past history or to tread on tender ground, but we must recognise that there is a continuing result from this; namely, the continuing increased costs which have to be borne. The prospects about a year ago, were, therefore, for continuing losses. Without Government help the Board could only have remedied their financial position by a massive contraction of the industry. The fact that more than half of all pits were shown to be loss-makers gives an idea of how drastic this contraction would have needed to be. In addition to this, most of the pits which would have had to be closed if such a contraction had taken place are in the assisted areas, where unemployment was already high. And because there is often no alternative local work in the small mining villages which would have been affected, the hardship would have been even greater than current employment figures alone indicate.
Neither this Government nor, I suggest, any other Government, would have been prepared to face the social and human consequences which would have ensued had the industry been allowed to collapse. If we had allowed that to happen the decision would have been almost irrevocable. Pits, once closed, are almost impossible to re-open, and even more important is the fact that once the highly skilled labour force had been dissipated it would have been very difficult, if not impossible, to build it up again. It would have been very foolish to permit such a thing to happen, particularly so long as the current uncertainties surround our
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alternative fuel supplies—especially oil. This again was underlined by your Lordships last week. These were the reasons why the Government considered that help was justified, even if it meant help on a massive scale.
But the Government believe that the most important element of all in securing the future of the coal industry must be the efforts of those engaged in it, both management and men, to make it economic. It was for this reason that the Minister for Industry wrote both to the unions and to the management before framing this Bill, to ask what contribution they were prepared to make towards putting their house in order. He subsequently discussed their joint proposals with them at meetings which were unique in that the Government, the Board and the three unions concerned with mining were all represented.
The outcome was very encouraging. The two sides of the industry set out measures which they proposed to take, and which they believed would provide a real opportunity for the industry to be restored to a viable basis. The industry in their turn made proposals for Government help which we found to be substantially acceptable. They have been published and have been fully taken into account in framing the Bill. It was against this background that the Government decided to ask for the powers which are proposed in the Bill. The Bill falls into three major sections. The first deals with the valuation of the Board's assets. The figure on their books was unrealistic in relation to their earning capacity. There was also the burden of interest which was carried as a result of past losses. Our proposals will enable the Board to start 1973–74 with a clean slate on capital account.
It has been accepted by this Government and the previous Administration that there are certain social costs which are associated with running the industry which the Board cannot be expected to pay entirely on their own. The statutory provisions under which the Government help the Board with these costs were coming to an end. The Bill makes it possible to help the Board with costs, pensions, and redundancy payments up to about £50 million a year for the next three, or possibly five years. Thirdly, the Bill will enable grants, averaging up to

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about £125 million a year, to be made to the Board on operating account to give them a breathing space in which to find their feet commercially. Finally, there is a clause dealing with the membership of the Board and then the usual clauses and Schedules on interpretation and other legal points.
I will now deal with the individual clauses of the Bill. The Board's auditors, who are appointed by the Government, have been consulted about the earning capacity of the Board's assets other than those which are to be brought under the holding companies to which I shall refer later. They advised that the assets in question are over-valued on the Board's books by about £275 million. Secondly, by the end of the Board's current financial year, on March 31, 1973, the Board will have accumulated losses of between about £170 million to £180 million; the exact amount will not, of course, be known until the year has ended and the accounts are available.
Under Clause 1 of the Bill both these amounts will be written off the Board's accounts, and the Board's debts to the Secretary of State will thus be reduced by the total of about £450 million. This will save the Board interest of approximately £25 million a year, and their depreciation charges will be reduced by about £17 million. Some of the provisions of Clause 2 are consequential on Clause 1. The Board's present borrowing limit is £950 million, and in the light of the reduction in their debt this is being reduced to £550 million, but with provision for it to be raised to £700 million by Order. Similarly there is a new limit on the accumulated deficit which the Board may carry on their books. It will be £50 million which can be raised by Order to £100 million. In an enterprise of the magnitude of the Board the occasional deficit may be unavoidable. But the hope is that it will never again be of this order. The other provisions of this clause clarify and adjust the Board's borrowing powers and I do not think I need detain your Lordships with the details.
I come now to the second group of measures. Even with the Government help envisaged some pit closures are inevitable. There will be some cases in which reserves become exhausted, and it
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may prove impossible to avoid intolerably heavy losses in others. Government help will be needed to enable the Board to provide fair terms for the men affected.
Clause 3 authorises grants of up to 50 per cent. towards the Board's social costs associated with pit closures. The costs involved here are: redundancy payments under the Redundancy Payments Act; compensation for premature retirement and loss of prospects for the staff; payments towards rehousing and resettlement of men employed elsewhere in the industry, and maintenance of welfare activities. This is a continuation of powers which were first introduced by the previous Administration in 1965 and continued by this Government under the 1971 Act. Those powers expired at the end of 1973–74. The new powers run to March 1976, and can be extended by Order to March 1978.
Similarly, Clause 4 extends to March 1976 the Government's powers to make Redundant Mineworkers' Payments Schemes. These would have expired in March 1974. Under the present scheme a man made redundant over the age 55 can have his earnings maintained at 90 per cent. of their previous level for three years. An improved Scheme is being discussed with the Board and the unions, and when the discussions are completed the new Scheme will need to be approved by both Houses of Parliament. The Secretary of State has announced that the new Scheme will apply as from December 11, 1972.
Clause 5 authorises grants to be made to the Board towards the cost of improving the existing mineworkers' pension. The present rate is £1·50 a week, and discussions are going on between the Board and the unions on the basis of an improvement of £3 a week. This provision also runs to March 1976, but can be extended by Order to March 1978.
The third group of measures bears more directly on the Board's operations and less directly on the position of the men. In the short run it is possible that the Government's measures to control the contraction of the industry could lead to coal surpluses. These would either be sold to the Electricity Generating Board at suitable prices, or be put to stock.

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Clauses 6 and 7 will enable the Government to help finance these measures if they are needed. Clause 6 enables the Government to pay the costs of the Electricity Generating Boards if they burn more coal than they would have done solely on commercial grounds. The National Coal Board and the Generating Boards are negotiating on this "extra-burn". I do not wish to anticipate the outcome of these discussions, but naturally the Government will need to be satisfied with any agreement which is reached. This clause only runs to March 1976. Clause 7 provides for assistance with stocks. It will not apply to stocks over a total of 30 million tonnes, or below one-twelfth of the annual deep-mined output. This provision runs to March 1976 but it can be extended to March 1978.
Clause 8 will enable support to be given to the production of coking coal. This is prudent in view of recent world shortages of this essential material. The clause will enable the United Kingdom to participate in the coking coal subsidy scheme which is now under discussion between the members of the European Coal and Steel Community. Again the powers run to March 1976, but are extendable to March 1981. Clause 9 breaks slightly new ground for this country. I have already described the hardship which a collapse of the mining industry could cause in regional unemployment. The fact is that 90 per cent. of this industry is situated in assisted areas, and it is with that fact in mind that the Government are taking power in this clause to give grants specifically to moderate the contraction of the industry. Up to £210 million may be given for this purpose over the next three years.
Clause 10 will enable the Board to be strengthened by the addition of three further part-time members. We all recognise that the Board face a very difficult and complex task in restoring the industry to viability and in reorganising their ancillary activities. It is no reflection on their present skills that they will in the future be able to draw on outside expertise. The remaining clauses are really just technical adjustments.
We hope that this reorganisation will help the Board to bring the industry back on to its feet. It will be a big task
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and one involving large sums in public expenditure. I should of course point out that the amounts mentioned in the Bill are maxima. Actual payments will depend upon the performance and the prospects of the industry. The Government's commitment to the industry is not open-ended, and both sides of the industry realise that if it is to have a viable future it is essential that total costs are kept in line. But it cannot be stressed too strongly that the future must depend upon the industry's own efforts in increasing efficiency and containing costs. The productivity records which the industry set in November and December are promising. With that kind of effort within the industry I suggest that the Bill will provide a real opportunity for it to regain its feet as a competitive supplier of a large proportion of the country's energy needs. I am sure the House will wish the industry well in its task, and will wish it success. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Earl Ferrers.)
LORD DAVIES OF LEEK: My Lords, before the noble Earl settles down to listen to the debate I should like to ask him a question. If he considers that it should be left until the Committee stage I will accept his ruling. I was interested in his expression in dealing with Clause 9 when, if I heard him aright, he said that a further sum of £210 million would be granted to moderate the contraction of the pits. Is the noble Earl able to tell me whether that £210 million, which will be used in uneconomic pits, will be extra to the main amount granted, or is it within the main grant?
EARL FERRERS: No, my Lords, this is a special amount which can be provided over the next three years in order to help the pits to contract at a slower rate than otherwise would have been possible had the grant not been available.
LORD DAVIES OF LEEK: My Lords, I thank the noble Earl for that clarification.
3.13 p.m.
LORD SHEPHERD: My Lords, we on this side of the House, and I hope on all sides, express appreciation to the noble Earl not only for his speech in regard to its content but also for the general

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attitude that he had in his mind when making that speech. I say that because I think the House, and we on this side in particular, recognise that what the noble Earl has now said is in fact a complete reversal of what the Party opposite had in store for the coal industry when they achieved power in 1970. So while some of us may have had some suspicion of what were the real intentions, I believe that the noble Earl's speech, and particularly the manner in which he made it, will give us some assurance. I shall be particularly anxious to hear what my noble friends Lord Blyton and Lord Taylor of Mansfield, two Members of your Lordships' House who have not only an intimate knowledge of the industry but a continuing one with those who work in it, have to say, to see whether (as I hope they will be able to say) those who now work in the industry feel reassured as a consequence of the statement made last year by Her Majesty's Government and which is now contained in this Bill.
The noble Earl referred, I think on two occasions, to the fact that this Bill will put the industry back on its feet. The strike of last year had a devastating effect, not only on the financial condition of the industry but also on the structure of the pits. Like the noble Earl, I do not intend to say a great deal about that particular episode. It is, however, a matter of regret that there had to be this major injury to this industry in order that the miners could obtain pretty well all their demands as a consequence of the Wilberforce Inquiry into pay and conditions in the industry. It is a matter of regret that there was not the machinery available, or acceptable to the two sides, to find a proper solution (as eventually the Wilberforce Committee found) without having to go to the length of that disastrous strike.
I will return now to the subject of putting the industry back on its feet, for if one looks at the whole history of the coal industry since it was nationalised it can be seen that it has been one of gradual (but developing in momentum) improvement, not only in the conditions of its workforce, in which not only the Board but previous Governments can take pride, but also in increasing efficiency. One only needs to look at the various graphs that are to be found in
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the last annual report of the National Coal Board to see how significant those improvements have been. It is indeed gratifying to read in this report of the major improvements in productivity that the Chairman of the National Coal Board can report, following the strike. One of the remarks of the Chairman that struck me as of great significance was about the determination of the Board that as a consequence of that strike there had to be much closer consultation between the two sides of the industry. All the information that I have received during the past two or three weeks since I was asked to speak on this Bill leads me to believe that the two sides in the industry are now closer together than they have been for many years. That is indeed gratifying.
With regard to the Bill, a very large sum of money is being written off, and I think the Government are right. There is no purpose in having this sort of deficit around the neck of the Board. It is not only depressing but it also puts any future figures out of perspective, and if one is starting again after that strike I think it is right that one should start, as I believe the Minister in another place put it, "with a clean slate". If one has a clean slate, then the new figures, whether they are surpluses or deficits, will have a much greater sense of reality.
On this side of the House we particularly applaud Clause 9, which deals with regional grants. Those of us who have had any experience at all of the mining areas will know that a great deal needs to be done there, and if one can in any way slow down where retraction is necessary in order that new industry and new services may be brought in, so much the better. I suspect that at the end of the day the total sum that may be expended will not only be well worth while but in fact will be a great deal cheaper to the State than if it were left and had to be dealt with many years later. We applaud Clause 3 dealing with redundancy payments, the loss of superannuation and employment prospects; and also, in particular, Clause 5 which provides for mineworkers' pensions. All these provisions are not only right and just towards those who work in this contracting industry but I believe that they will help to create the right kind of atmosphere that is necessary for real co-operation between Board and management.

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Naturally we on this side of the House fully support the Bill and we shall certainly help towards getting put on the Statute Book within a matter of weeks, because I see that some of the clauses require to be implemented from April 1, which is not so long away. The last thing I would say is this. I should like to congratulate the industry and the Board in particular on the extent to which this very dangerous form of employment is being dealt with. The way in which the number of accidents involving injury have been regularly and consistently reduced, particularly the significant fall in the last two years, is quite dramatic. Unfortunately, some 50 or 60 miners a year still lose their lives. Efforts are being made, I know, to reduce this number, and when one looks at the total figure of accidents and casualties there is reason to hope that the Board and the National Union of Mineworkers can, in the end, make this industry a great deal safer than it now is.
With those few words, and with a special commendation to the noble Earl and the Government for having introduced this Bill and for having changed their policy, we on this side of the House shall support this Bill and will see what we can do to get it on the Statute Book by the right date.
3.22 p.m.
LORD BLYTON: My Lords, during the miners' strike last year, I moved a Motion in relation to that strike and I dealt somewhat exhaustively with the financial position of the coal industry. I said then that sooner or later the Government would have to make a financial reconstruction as the industry could not carry the burdens they were then carrying. Everyone knew that it was impossible to make a viable industry under the financial restrictions from which they were suffering. The last capital reconstruction was in 1965, since when 230 pits have been closed and we have reached the stage where the National Coal Board can have an operating surplus of £100 million without the industry's accounts showing a profit.
All those pits have closed and the N.C.B. have been burdened with the payment of assets which have gone. Everyone knew that the debt was too
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high in the light of the assets and the decline of the industry. Payment of those assets—that is, the pits that have been closed and are gone for ever—has meant that we have been paying for and servicing debts on machinery which was no longer in use at pits which closed. Those with a knowledge of the industry know that the charge per ton in interest is higher to-day than it was in 1965 when the Labour Government knocked off £415 million. The burden on the industry since then has been the weight of debt, and it is higher to-day than ever before.
The coal industry has had no reorganisation of its capital debt since 1965, despite a contraction of about one-quarter of our market for coal and all the closures that have taken place. They lost £157 million last year and expect to lose £100 million this year. The accounts of the coal industry over past years have been severely affected by the artificial continuation of massive debt burdens, and we have seen large operating surpluses of the industry in the past concealed by the massive interest and depreciation provisions. Those who understand the industry knew that this could not go on. I remember that last year, when dealing with this problem, we were told that if the strike went on the men would be doing away with their employment; that it would all go. But all those cries of woe that I heard last year have been proven wrong: not one pit has been closed as a result of that strike and since the men went back to work their productivity has increased far more than private industry. We are producing over 45 cwt. per man shift, which is something like a 5 per cent. increase in production. The Board and the men are working hand in hand. They jointly put their case to the Government for capital reconstruction, and the Bill today is a result of the amicable negotiations between all parties concerned.
My Lords, I not only welcome this Bill but I welcome the change of policy that is embodied in it. It is clear that the Government have rejected the policy of the last 12 years of letting the coal industry find its own level without aid being provided. The Minister said in another place on December 21, 1972:
"… we rejected that course"—

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that is, that the industry find its own level—
"as one which would have led to intolerable consequences both on social grounds and because it would have imposed an unacceptable danger to the security of the country's supplies of energy"—[OFFICIAL REPORT, Commons, 21/12/72, col. 1601.]
If I understand that aright, it means that coal is to play a more vital part in our future energy requirements.
For years in another place, when I spoke as a Front Bench Member in Opposition, the Miners' Union and the miners' M.P.s all put forward this point of view but we were always told that in competition with other fuels the industry had to find its own level. And what have we witnessed? In 1955, we had 705,000 men in the mining industry: today, we have 208,000. Over 400 pits have been closed during this period, and even in the period of my own Government 230 pits were closed. There was a write-off in 1965, as I have said, but as everyone knows, it became apparent early in 1969 that there was a necessity for the further write-off that is embodied in the Bill. After all these pits were closed, the capital debt hung around the industry's neck like an albatross, especially as the industry was so much smaller.
I want to speak now about what is to arise from this turn of events. Are we to get an energy policy in which coal will have a larger share? What should this policy be? What are its short term aims to the mid-seventies and the longer term aims after the mid-seventies? Much is written to-day about the uncertainty of the future availability and price of energy throughout the world. The Government themselves will have to make a judgment of the risks and the costs of alternative courses. All the estimates in the past have been wrong; each one that was produced "bashed" the coal industry, until our share of the market is now about 42 per cent., compared with 90 per cent. in 1950, of the total energy demand. Successive Governments, Labour and Tory alike, encouraged other fuels, like oil and nuclear power, imported liquid methane for gas purposes; that brought our industry down from 230 million tons of coal in 1950 to 141 million tons in 1971.
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As we were running the coal industry down in this country, America and Russia five years ago saw the long term danger of this course; they encouraged the use of coal, and increased output to safe proportions within their own economy. In making a judgment of the risks and the costs of alternative courses the Minister said in December last year:
"In making that judgment, the Government must have in mind the virtually irreversible nature of pit closures, and the cost of sinking new pits. It must also weigh the effect on our balance of payments of the use of different fuels. At present we believe that it would be foolish to allow an over-rapid contraction of the coal industry."—[OFFICIAL REPORT, Commons, 21/12/72, col, 1601.]
I am delighted, after all the years we have argued in another place and our representations have fallen on deaf ears, that there is this change of policy, though years belated, that I now rejoice so much about. The stage has been reached when contraction ought to end. I am not speaking of pits where reserves are exhausted; they naturally go out. I am certain that contraction would leave the country with an energy gap in the short term; but also we would be subjected to energy shortage in the long term if contraction were carried to any degree.
The miners for their part have shown how much they can contribute. Productivity has reached an all-time record, and the industry is now operating at the highest level of efficiency. That is there to be seen. We can compare this achievement with any of the coal industries of Europe, who are more State-aided than, or as much as, the Coal Board will be on the passing of this Bill. Only recently there were Press reports of the plight of the German coal industry, our largest competitor in Europe. It is known that the power stations of North Germany were able to buy British coal much more cheaply than coal from the Ruhr, even though German coal is at present much more heavily subsidised. Even before the overtime ban in 1971 and the strike in 1972 coal was being produced at a profit in our country, while in the Ruhr it was being produced at a deficit.
On December 11, 1972, the Minister in his Statement said that
"… fuels which appear to be expensive at present may prove to be rather cheaper in years to come.—[OFFICIAL REPORT, Commons, 11/12/72, col. 35.]

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This has been fortified by the statement made by the Chairman of the Coal Board, who said:
"While part of Europe's coal production is uncompetitive with oil and other fuels to-day, it seems likely that it will be much more competitive by the 1980s."
Speaking about future trends developing in world-wide energy demands which make it vital for us to conserve our basic resources, the Minister said:
"Some major European countries and the United States are aware of the impending problems".
There are immense problems. Nuclear power, which 10 to 15 years ago was to replace coal, is coming along very slowly. I still take the view that the coal-fired generating station in its proper place will outstrip any nuclear power station. Comparing like with like, nuclear power has not yet been competitive with coal. Millions of pounds have been poured into the nuclear energy programme, and we have not yet had any return from urging it on. Let me be quite clear. It is not that I do not want a nuclear programme. Before the Public Accounts Committee Sir John Hill said:
"So far we have not been able to generate more cheaply by nuclear means than by conventional means."
This is confirmed by the fact that the C.E.G.B. Dungeness power station is now four years behind schedule, and its cost will be more than double the original estimate of about £80 million. It will be many years before nuclear energy has parity with coal.
The chairman of the C.E.G.B. has said that if the price is right the Board would take 75 million tons of coal or more a year. I ask that Drax B be put on coal, and that there should be an increase in coal-fired stations in the future. With the aid provided for the N.C.B. in this Bill I think the price can be right for them. Supplies of natural gas, a clean and useful fuel, are of limited duration. We should conserve this fuel as much as we can. Mr. John License, chief economist of the Gas Council, has warned that it would cost more and that it would be a great mistake to use this domestic fuel for raising steam in power stations. While I do not wish to appear in any way to criticise the C.E.G.B., I hope that in their annual report the Government will reject this idea that they should have more gas. We have to know much more
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about the amount of natural gas in the North Sea. I am sure the Government are not enthusiastic about letting them have it, and neither is the Gas Corporation. Until more is known, it is right that it should be restricted, especially when coal is still admirable for steam raising.
Now to oil, my Lords, which may be plentiful to-day from the Middle East, but it is going up in price all the way and this trend will continue. These oil producing countries are now determined to extract as much as they can get for their oil. The oil sheikhs are doing this through their organisation which is called OPEC and I only hope the Government will follow the example of the oil sheikhs in their approach to the royalties that are in the North Sea. However, the price of Middle East oil is steadily rising and is certain to go higher in the future to satisfy the needs of America, which we learn is to become a net importer on a huge scale. The dimensions of the United States energy crisis, which will have great impact on the rest of the world, can be judged by the estimate that the United States adverse balance of payments for oil alone can rise from 2 billion dollars to 30 billion dollars in 10 years or less. That is why America is aiming to double its output of coal in the 1980s and to recruit and train another 50,000 additional miners by 1975. Why, even the Committee of the European Coal and Steel Community have been urging Britain and her new partners to promote their own coal-mining industry in order to avoid over-dependence on non-member countries for energy requirements. Everyone knows my views on the European set-up, but at least it is something to see them change their attitude from the position they have taken up against coal in the past 10 years to my knowledge.
Do not let us pretend to ourselves that all our energy requirements will be solved by North Sea gas or North Sea oil. This welcome addition to our energy resources is not likely to be with us until 1974, especially oil, and then very slowly; and so far as we know it is of limited duration. It is hard and expensive to get, as expensive as Middle East oil, and it is known that Britain will never be self-sufficient in oil. Even the Chairman of Shell last year urged the Government to encourage the mining of all coal

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which can be got out of the ground economically.
I do not want to go over the clauses of the Bill. The Minister covered them excellently. I want only to say a word about Clauses 4 and 6. Clause 4 relates to redundancy payments. The time has come when these ought to be stepped up. A man at the pit with 45 years' service gets about £800, yet if he had been a docker with this length of service he would have got three or four times that amount. I hope the Government will be generous in this matter. Clause 6 refers to the sale of coal to the generating boards. I hope the Government will promote the burning of coal. If the electricity market for coal contracts it will make this Bill impracticable. Coal-fired stations in the right places should be built, to give this coal industry a chance in the future, at the same time preventing this country from being held to ransom on energy supplies. That is my case, my Lords. I wish the Bill well and hope it will soon be on the Statute Book.
3.45 p.m.
LORD TAYLOR OF MANSFIELD: My Lords, may I say first of all how very grateful we are to the noble Earl for a cogent exposition of some of the clauses of this Bill, which, when we read them, appeared to be somewhat complicated. Speaking for myself, after the explanation the noble Earl has given, they are much clearer than they were. May I ask a question to which I think the noble Earl can get the answer if he does not aready have it in his mind? Prior to 1970 there used to be a little pamphlet produced by the Department giving a mine of information, a lot of useful statistics about global output, output per man shift, absenteeism, and every matter connected with the industry. How many of us used to receive that I do not know, but I have not had one since 1970. This pamphlet presented a picture of the coal industry which was easily assimilated. Could the Minister say whether that has gone out of production? If it has not, speaking for myself, I should be very pleased to have one in the future.
The most significant pronouncement made by the noble Earl was that this coal industry has an important part to play in the future. Some of us have believed that for many long years. May I also say that the industry has been confronted
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with deficits and financial liabilities. Before the beginning of the strike of 1972, with one exception, the mining industry every year has produced an operating profit, but it has been crippled by financial liabilities. The amount of interest that has been paid out since the industry came into public ownership is really fantastic, and if a new approach, first in 1965 and now through the medium of this Bill, had not been made, so far as this industry is concerned those financial liabilities would have continued like an albatross around the neck of the mining industry. Like the speakers who have preceded me. I give a hearty welcome to this Bill because I believe that it holds out a better prospect for this industry and charts a new course, and it seems to me that this Bill is an important milestone, landmark—whatever one likes to call it—for the coal industry of Great Britain.
May I with all sincerity say this to the Government. The financial proposals in the Bill are by no means ungenerous, but what is of outstanding importance is that it recognises the necessity for a forward look and for facing the realities of the not-too-distant future regarding fuel supplies and energy requirements. To me, that is one of the most important indications of the Bill. No nation, particularly a highly industrialised one with modern techniques and sophisticated machine power, can afford to ignore the fact that energy is basic to the maintenance and improvement of the standard of living of the people.
Take our own country as an example. I know that this is elementary—there can be no contest, no quibble at all about it—but every section of our industrial and manufacturing processes requires fuel of some kind. Further, every household, every office, every building and shop, needs heat and light, and modern technology is such that energy produced by natural fuels of some kind, solid or liquid, is a "must". I submit that there is no escaping that fact. I suggest that on that point there is complete unanimity. There may be a difference of opinion as to which fuel, indigenous or imported, should be preferred, but one factor stands out very clearly, and that is where the preference of every post-war Government has been: oil, most of it imported, has continued, as my noble friend Lord Blyton has said, to increase its share of

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Britain's energy requirements. In fact, in the last decade oil has increased its share of Britain's energy requirements from 24 per cent. to 46 per cent., and mainly at the expense of coal.
I have held the view for some years now that every post-war Government has been mistaken in placing too many eggs in the oil basket. Why has that been my view? I give two or three reasons. No. 1 is the political instability of the areas from which the oil comes. I think we have been lucky in this respect; there has only been the Suez crisis and the cutting of the pipeline across the Syrian Desert jeopardising our oil supplies from the Middle East. Point No. 2 is that this colossal importation of oil has affected our balance of payments. Point No. 3 is that it has meant the contraction of the industry, with the social effects which my noble friend Lord Blyton described. Those three factors have led me to the view that we have put too many eggs in the oil basket.
May I at this point make a brief reference to the National Union of Mineworkers respecting the consistency of its advocacy of an integrated fuel policy based on the maximum use of indigenous fuels. For more than twenty years this has been the line of the N.U.M.—and since long before the discovery of gas and oil in the North Sea. This welcome additional indigenous asset does not detract in any way, in my view, from the validity of the fuel policy which the union have put forward for so long. In October last year—and note that this is since the discovery of oil and natural gas in the North Sea—the National Union of Mineworkers issued a statement, and I quote merely the first paragraph:
"If current trends in the fuel and energy spheres continue, then Britain and the rest of the industrialised nations could be facing an energy shortage which would destroy the fabric of society as we at present know it."
They went on to say that there is no desire to exaggerate the situation, but simply to make out a case for increased coal production.
To learn what the trends were in this field of fuel and energy, I began a little research, and I sought knowledgeable and what I should regard as expert opinion on consumption and the reserves of fuel that would be needed to meet the energy requirements not only of the moment but
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of the future. My discovery was that energy consumption in the 50 years from 1900 trebled, but in less than half that time—that is, in 20 years—it trebled again. Present world energy requirements are increasing at the rate of 300 million tons of coal equivalent every year. This latter figure is the present combined output of coal in the whole of Western Europe.
The main increases in world energy use have been in oil and natural gas. However, world coal output has risen, except in Western Europe. It has been said by one authority that the decline of coal production in Western Europe must be regarded as misconceived. On the evidence that I have seen, energy requirements will go on increasing for the foreseeable future. May I give a figure that has been produced by the United States Department of the Interior and the United States National Petroleum Council as recently as 1971? They say that energy requirements in the world will double in the ten years between 1970 and 1980.
Now may I say just a word or two about fuel reserves, for the reason that projected energy requirements and fuel reserves are inseparable. I have found that few fuel economists could venture to say that our indigenous supplies of oil and natural gas will last much beyond the next 30 years at the present rate of consumption. Further, the United Nations Economic Unit has forecast that by the year 2,000 87 per cent. of all proven, probable and possible reserves of oil, and 76 per cent. of natural gas, would have been consumed, but only 2 per cent. of the reserves of coal here and in the remaining part of the world. If these forecasts proved to be correct so far as natural gas and oil are concerned, great emphasis, as my noble friend indicated, would have to be placed on nuclear energy or on the expansion of the coal industry, or both. Nuclear energy's contribution 10 years ago was negligible. In fact, until 1955 it was not even thought of as a possibility. Even to-day it is contributing only 3 per cent. towards our energy requirements. There may be problems—there have been problems—financial, certainly technical, and environmental, which no doubt have impeded the progress of nuclear energy.
Along with other noble Lords who have spoken, I very much welcome this Bill.

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It indicates to me, at any rate, that in Whitehall there has been a rethinking about the coal industry and the part it must play in energy requirements. To use the language of the Minister in introducing the Bill in another place on December 21, 1972, at column 1603 of the OFFICIAL REPORT:
"Our proposals will avoid contraction on a scale which would have been unacceptable on social grounds"—
and I think this is perhaps the most important factor—
"and would have left us dangerously under-insured against a world shortage of energy."
This Bill further spotlights and focuses attention on the important part which coal still has to play in energy requirements for a long time in the future. Since the end of 1956, almost twenty years ago now, the coal industry has had a very rough time in the sphere of contraction of output; redundancies, removals from one coal field to another, and the social consequences and dereliction arising out of the unprecedented contraction of the industry in some areas of the British coalfields has been alarming. It is no extravagant language to say that for almost twenty years the coal industry has had a severe battering, and in the process morale has been eroded. I do not propose, because it is so well known, to relate in statistical form the numerical decline in manpower and global output. The position was well put by the Vice-President of the National Union of Mineworkers at last year's Trades Union Congress. I quote his opening paragraph:
"In our opinion, the policies pursued by Governments who have allowed the catastrophic contraction of the mining industry to take place over the past years … will turn out to be penny wise and pound foolish and our nation will suffer as a consequence."
This statement was made before it was known what was in the mind of the Government and before the publication of this Bill. In December last year, prior to the publication of the Bill, there was no evidence, so far as my recollection goes, that there was likely to be any change in policy respecting the coal industry. In fact, quite the contrary, if the pundits of Fleet Street are to be taken seriously. A columnist in the Daily Telegraph had quite a lot to say after the miners' strike about the mining industry. I will only quote from the
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Sunday Times of February 20, 1972, a headline which said: "Farewell King Coal: the King is dead."
My Lords, after reading this Bill and noting the speeches of the noble Earl and the Ministers in another place, my conclusion is that there has been rethinking about the part which our indigenous solid fuel will play in the meeting of our energy requirements for the future. I believe this Bill expresses the justified apprehension respecting the danger of relying too much upon imported fossil fuels to meet the energy requirements of the future. One could say quite a lot more about that, but I want to ask the Minister one or two questions about Clause 1. What will be the saving to the Board in interest payments? I understand that the slate is being wiped clean, but there will still be an outstanding financial liability in the form of a loan of £375 million. Perhaps the Minister could give some enlightenment on that particular point. Then I would ask, what is meant by payments to the Board for promoting the Electricity Generating Board in England and in Southern Scotland? The position at the moment is that the Electricity Generating Boards were reimbursed themselves for the amount of coal burnt.
My Lords, this Bill, so far as I have been able to ascertain, is welcomed by all in the industry. I think all in the industry have made a contribution to it, the Board and the unions. It will be of assistance in arresting further decline of the industry, which in my view would be detrimental in view of the possibility of growth in our energy requirements and the possibility of relying too much on imported fuels. My Lords, I welcome this Bill this afternoon.
4.8 p.m.
LORD WYNNE-JONES: My Lords, I must apologise, especially to the noble Earl, Lord Ferrers, for not having been able to be present when he introduced this Bill. Unfortunately I had to be present at another meeting. There are one or two reasons why I feel that the Bill should be particularly welcomed. I think the Government are to be congratulated upon the Bill. In the first place, as has been pointed out, it helps to put the coal industry upon a good financial basis, not

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only in the sense of cutting off its liabilities for the past but also in giving it a good probable future. As other noble Lords have said, particularly the noble Lord, Lord Blyton, and the noble Lord, Lord Taylor of Mansfield, the coal industry is going to play an increasingly important part in supplying the energy of this country.
In the first place there is no doubt, as has already been said, that coal ought to play an extremely important part in the production of electricity. It is eminently suitable for the production of electricity. It is not suitable for driving steam engines—the efficiency is far too low; it is not suitable for the ordinary domestic fire—again the efficiency is low and a lot of dirt is produced. But it is eminently suitable for producing electricity. It may be that one ought to look a little further into this point. At the present time probably the cheapest way of producing electricity is to have the electricity station at the pithead. But if we do this we then have to face the high cost of distributing electricity.
It is interesting to observe that if it costs, let us say, £1 for distributing a certain number of units of oil by pipeline, it costs £3 for distributing the same amount of gas in thermal equivalents by pipeline and it costs £10 for distributing electricity by means of a grid. In other words, the distribution of electricity is much more expensive than the distribution of oil; which is one of the main reasons why oil has been so popular as a fuel. If, however, one were to use a pipeline for distributing a coal slurry, I believe all the evidence is that it would be comparable in cost with the distribution of oil. So it may be that it would be more economical not to try to site one's electricity generating stations near pitheads, but to site them closer to the consumer and to distribute the coal by means of a pipeline to the electricity stations. It seems to me that it is in exploring this type of scheme that we could probably make a distinct advance in cutting our energy costs. All this means a good deal of expenditure in investigation, and this Bill should help the Coal Board in carrying out further investigations into the most economical ways of utilising coal.
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I believe that it is also extremely important that the level and volume of research into coal and its uses should be maintained. It is well known that when an industry, especially an industry such as the coal industry, is faced with financial difficulties the first thing it will do is to cut its expenditure on research. It is therefore extremely valuable that in this Bill we have machinery for enabling the Coal Board to have resources which will help it to maintain research on coal, both in its own establishments and throughout the country, because it is only in that way that we shall get a proper utilisation of coal.
The final point to which I wish to make reference is raised in Clause 8 of the Bill, which interests me particularly: I refer to the question of coking coal. Here we have the link between the coal industry and the iron and steel industry. The importance of coking coal for the iron and steel industry is absolutely paramount. It is quite essential that we have good, hard coke produced for blast furnaces. In the old days, one had to go to those parts of the country where there was good coking coal. That is one of the factors that built up the reputation of the county of Durham from the coal industry's point of view. It had the best coking coal, certainly in this country and possibly in the world. It was superb coking coal. But as that coking coal has become exhausted we have found it absolutely essential to use other methods and by continued investigation it has proved possible to get just as good coking coal by blending other coals, which in themselves are unsuitable for coking. This has saved the situation in this country and elsewhere for the iron and steel industry. Therefore, I am particularly glad that in Clause 8 there is special reference made to
"… measures for securing supplies of coke for use in blast furnaces by the iron and steel industry in the United Kingdom",
and that there is to be made available a sum not exceeding £75 million for helping in the supply of coke for the iron and steel industry. I think that these are very important steps, and that it is excellent that we should have this Bill, which I strongly recommend to the House.
4.15 p.m.
EARL FERRERS: My Lords, I am very grateful to noble Lords who have

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taken part in the debate on the Bill, and for the welcome which they have given to it. Indeed, every noble Lord who has spoken has been grateful for the Bill and I should like to thank them for their remarks. The noble Lord, Lord Shepherd and the noble Lord, Lord Blyton, could not help twitting the Government about their change of heart. The noble Lord, Lord Blyton, said that he rejoiced in the Bill and I am glad that it has given him an opportunity for rejoicing. I think that the message to be taken from the Bill is not so much the fact that there has been a change of heart, but that the Government have done what they always intended to do, which was to ensure that the right thing was done for the coal industry in all the circumstances which obtain.
The coal industry has many peculiarities. It is a labour-intensive industry, it has faced mechanisation on a considerable scale, it has faced a contraction of demand through no fault of its own, and it employs many men in small localities which have few alternative methods of employment. The coal industry also produces a type of energy which is vital, and because one does not know what future requirements will be it is essential that the industry is put on a viable footing and kept there. As regards the contraction of the industry, it might be helpful to look at the figures for the years 1955 to 1971, because they are interesting. In 1955, industry used about 45 million tons and it now uses 13 million tons. In 1955, the railways used 12 million tons of coal and they now use 0·1 million tons. In 1955, gas-works used 28 million tons, and they now use 1·1 million tons. In 1955, the total production of coal was 229 million tons and it is now 128 million tons.
I give those figures simply because they are the result of a change of circumstances. Everyone knows what has happened on the railways, but the fact that they now do not buy coal does not mean that the coal industry is a dying one. That situation has come about because of a change of circumstances, and that is the type of problem which the coal industry has had to face. I agreed with the noble Lord, Lord Wynne-Jones, when he rightly said that coal is an excellent fuel for producing electricity, and that is one of the reasons why 70 per cent. of the electricity generated is produced from coal. To
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quote those same two years again, in 1955 the electricity industry used 43·5 million tons of coal and in 1971 it used 67·7 million tons, and that increase underlines the point which the noble Lord made. I think it was the noble Lord, Lord Blyton, who quoted the chairman of the Central Electricity Generating Board who said, "If the price is right". If the price is right, there can be opportunity for greater uptakes of coal, and that is one of the reasons why we have made provision in the Bill for the extra burn.
My Lords, the noble Lord, Lord Blyton, said that coal is better than atomic energy for the making of electricity. I should not wish to go into the arguments between the two different types of fuel—indeed, the three or four different types—used for making electricity, but I would confirm that coal is a vital component for the making of electricity. The noble Lord said, not unsurprisingly, that he hoped that Drax B would be a coal-fired station. This station is in the programme of the Central Electricity Generating Board, but they have made no proposals for the construction of a coal-fired station at Drax B, nor have they any firm plans for major station orders at present; but the support for extra coal burn, which is proposed in this Bill, is the best way, I would suggest, of supporting coal demand at the present time. The noble Lord also asked whether the redundant mineworkers' pensions scheme could be looked at, and looked at more generously. As I said in my opening remarks, a new scheme is being discussed at the moment with the boards and the unions, and proposals will be put before Parliament when those discussions have been concluded and at the appropriate time.
The noble Lord, Lord Taylor of Mansfield, whose knowledge of the coal industry, like that of the noble Lord, Lord Blyton, is deep and, if I may say so, much respected by us, asked what had happened to the coal statistics. I will see that the noble Lord receives a copy of the most recent statistics in order that he may be able to digest them, if that is the correct expression. He also said that the financial provisions in this Bill were not ungenerous. My Lords, the noble Lord, Lord Taylor of Mansfield, is not usually one for an understatement, but I think that on this occasion

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he was possibly guilty of that slight error, because if one takes the first two clauses and considers the amount that has been written off the coal industry's accumulated debts and the amount involved in writing down of their assets, they total to about £450 million. The total provisions allowed for in this Bill, coupled with those which they may be allowed if the provisions are taken to their extremity by order up to 1978, is of the order of £695 million. So this Bill, at its maximum, could account for a sum of £1,145 million. I think that the noble Lord, Lord Taylor of Mansfield, will agree that that is not an ungenerous sum of money.
LORD SHINWELL: My Lords, I am sorry to interrupt the noble Earl, and I did not want to take part in this debate—my noble friends know more about it than I do—but the noble Earl has referred to the argument by Lord Taylor of Mansfield that the financial provisions of the Bill are not ungenerous on the part of the Government and is now saying that he thinks they were excessively generous. Let me tell him at once that if, since nationalisation, the coal industry had received from the iron and steel industry a price which was reasonable, instead of the coal industry selling its product to the iron and steel industry below cost, then it would just have balanced the provision that the Government have made by offsetting the debt of the National Coal Board, as they propose to do in this Bill.
EARL FERRERS: My Lords, I should not wish to follow the noble Lord, Lord Shinwell, in his nuances as to what would have happened if people had paid more. I should think that if he had used that same argument on the domestic sector or any other sector he might have come to the same conclusions; but I cannot really see the noble Lord using those arguments at the time when he is suggesting that they should have been used. No, my Lords: I did not say that this Bill was excessively generous. I was agreeing with the noble Lord, Lord Taylor of Mansfield; and I said that I thought
1020
that his expression of "not ungenerous" was possibly an under-statement. But I accept the point.
The noble Lord, Lord Taylor, asked what would be the saving in interest charges. The answer is, about £25 million a year; and there will also be a saving in depreciation of some £17 million a year. He also asked about the sums of money that have been spent previously in coal burn. As the noble Lord knows—and, indeed, I think he said as much in his speech—the payments for extra burn were made to the Central Electricity Generating Board, and the 1967 Act authorised £45 million for this sum. In the event, only about £20 million was spent, and that was between 1967 and 1969. As the noble Lord appreciates, any money now spent on extra burn will in fact be paid to the Coal Board and not to the Central Electricity Generating Board.
I was particularly grateful that your Lordships should have given this Bill the welcome that it has received. We wish to do the right thing for the men in the coal-mining industry. We wish to do the right thing for the assisted areas. We wish to do the right thing for the industry as a whole, to put it on its feet and to make it as viable as possible. Equally, we want to do the right thing for the taxpayer and the consumer, and also to make provision for whatever energy requirements may be forthcoming in the unknown future. It is in order to try to accommodate all these different points of view that the Government have brought this Bill forward. My Lords, we wish the Coal Board well in its new task. We wish the miners well in their new task. We wish well, too, the relationship, to which I think the noble Lord, Lord Blyton, referred as "this amicable relationship" among the Coal Board, the unions and the Government. This Bill, I hope, is tangible evidence of our support for the industry and of our hope that the industry will be able henceforward to go on with sure conviction.
On Question, Bill read 2a, and committed to a Committee of the whole House.

PROTECTION OF AIRCRAFT BILL [H.L.]
4.28 p.m.
LORD DRUMALBYN: My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Lord Drumalbyn.)
On Question, Motion agreed to.
Clause 7 [Purposes to which Part II applies]:
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 1:
Page 7, line 12, at end insert—
("(c) of installations the purpose of which is to assist civil aircraft on the ground or in the air.")
The noble Lord said: My Lords, in rising to move the first of my Amendments, may I briefly step a little out of order and apologise to my noble friend Lord Drumalbyn for putting down my Amendments so late? As he knows, I was a little rushed in getting all the papers together and into the hands of the Clerks in time, and I am sorry, therefore, that my noble friend has not had very long to look at them. I hope that his answers or his reactions to my Amendments will none the less be favourable.
My Lords, Amendment No. 1, which I now beg to move, is to add to the installations and aircraft which, under Clause 7, can be affected by this Bill; and in so doing I have in mind installations which are not necessarily on airfields, which are not necessarily part of aircraft, but which are none the less vital to air navigation. I have in mind, for example, installations of radio aids, which are frequently located between airfields or at turning points on airways, which are not covered by paragraphs (a) and (b) of subsection (1). The nature of these facilities is such that they are often in remote locations and would, I submit, be quite vulnerable to attack. I think that the inclusion of this Amendment for their protection would improve the Bill.
THE EARL OF SELKIRK: My Lords, this seems to me a very sensible addition to the Bill and in line with the principles expounded to us. These installations are extremely exposed and absolutely vital,
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and I hope that the Government will accept the Amendment.
LORD HARVEY OF PRESTBURY: My Lords, I support the Amendment. It may well be that there are fuel installations a mile from an airfield and on rented land, or there might be lighting systems and so on. I think my noble friend has made a valid point.
LORD THOMAS: My Lords, I wish to support this Amendment. There are all kinds of things, such as radar beacons, which may be sited in remote places.
LORD BESWICK: My Lords, especially as I think I shall find it more difficult to support later Amendments in the name of the noble Lord, Lord Trefgarne, I hasten to say that I think he has something here which ought to be added to the Bill, and his Amendment has my support.
LORD DRUMALBYN: My Lords, in view of the unanimous expression of opinion I feel that I must say right away that we accept this Amendment in principle. We considered the matter previously and whether we should include air navigation facilities outside aerodromes. We decided not to because it would include the Civil Aviation Authority. But there is a strong case for taking this course, which we accept in principle. I would ask my noble friend to withdraw his Amendment because we have had only just enough time to look at it. As he knows, one has to make certain that an Amendment is in due form and we shall put down an Amendment at the next stage.
LORD TREFGARNE: My Lords, I cannot ask for more than that. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 8 [Power for Secretary of State to require information]:
4.32 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 2:
Page 7, line 34, at end insert—
("Provided that nothing in this Act shall require any person to whom this Clause is applied to provide information likely to prejudice his legitimate commercial interests.")
The noble Lord said: My Lords, this is the first of several Amendments which I have put down, and it seeks broadly to

1023
achieve the same end; that is, to preserve what I regard as the legitimate commercial interests of airlines and particularly of smaller airlines. The big Corporations, like B.O.A.C., B.E.A., or even British Caledonian, have enough strength, one feels, to be able to expose their commercial activities, and the names of their customers for example, without fear of jeopardising their commercial interests. With smaller airlines there are often cases where the names of their customers are confidential and if they lost even one customer their commercial position might be seriously threatened. I am concerned particularly about charter operators, where the major part of the capacity of an aircraft might be sold to one customer, and if the name were divulged the business might be lost to another airline. I shall be interested to hear the reaction of the noble Lord to this line of thinking, if not specifically to this Amendment, because it will affect what I shall have to say about my other Amendments which hinge on the same point.
LORD HARVEY OF PRESTBURY: My Lords, I wish again to support my noble friend's Amendment, although this one is rather more complicated than the previous one. I must declare an interest as I am a director of an independent air freight company. Competition among air freight companies throughout the world is very intense. They operate rather like cargo ships used to operate many years ago. The captain of the aircraft looks for business and takes on big responsibilities. It would be damaging to any British independent company, or indeed to a corporation, if the names of customers, or details of loads being uplifted, were divulged. I hope, therefore, that this matter will be given serious consideration.
LORD BESWICK: My Lords, may I make certain that the noble Lord, Lord Drumalbyn, will deal with the point about the confidential character of the information given? I find it difficult to understand how information given to the Secretary of State would be detrimental to the legitimate commercial interests of a company. I should have thought that if the Secretary of State were going to make any decisions about the matters affected
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he would need to have full information and, provided that it is confidential, I cannot see what harm that can do.
LORD THOMAS: My Lords, I suggest that this Amendment would not be acceptable to most of the commercial operators. In my view, physical safety is more important than commercial security. Like the noble Lord, Lord Beswick, I do not think that information given to the Secretary of State would be liable to leak back into commercial circles.
LORD DRUMALBYN: My Lords, I cannot be so forthcoming over this Amendment as the previous one for the reasons which have been indicated by the noble Lords, Lord Beswick and Lord Thomas. I hope that my noble friend Lord Trefgarne will not think me frivolous if I say that the whole purpose of these clauses is to make sure that people do not lose their customers. This must be the main point throughout the consideration of the Bill, and it will, I am afraid, be a recurring one in respect of the various Amendments. Protection against acts of violence is the whole purpose of Part II of the Bill. It is very much in the interests of air operators that this protection should be given, and it cannot be given completely if any information is held back.
The noble Lord, Lord Beswick, is right in thinking that the information sought will be treated in confidence. This information will be related to the purposes of the Bill, protection against acts of violence. The idea of seeking it is to make sure that the Secretary of State is informed of the security measures that are being followed wherever there may be a threat. He cannot tell in advance where the threat may arise. This information is being provided voluntarily at the moment; there is no difficulty about it. I do not understand my noble friend's misgivings in this regard. Surely he would agree that where commercial information is necessary for a proper appreciation of the security position it should, and indeed must, be provided. I hope therefore that the noble Lord will not press his Amendment.
LORD TREFGARNE: The noble Lord, Lord Drumalbyn, has been able to allay my misgivings over whether the

1025
Secretary of State would secure the information in such a way as to enable it to remain confidential. I am now convinced about that, and I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD TREFGARNE LORD TREFGARNE had given notice of his intention to move Amendment No. 3:
Page 7, line 40, leave out subsections (3) and (4).
The noble Lord said: My Lords, this Amendment to the same clause is an endeavour to achieve the same purpose as the previous Amendment. For that reason I do not propose to move it.
Clause 9 [Power to impose restrictions in relation to aircraft]:
4.40 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 4:
Page 8, line 42, at end insert—
("(1A) Any operator to whom this subsection is applied may decline to accept any searcher who is specified by the Secretary of State but who is not a constable where he believes his legitimate commercial interest is likely to be prejudiced.")
The noble Lord said: My Lords, although this Amendment is an attempt to meet the point we have been discussing I think it avoids some of the pitfalls which beset my earlier Amendment. I think also that its acceptance would achieve desirable ends. For example, the Secretary of State might wish to instruct police at London Airport, who might be employed by a major airline, to carry out searches in an aircraft belonging to the smaller independent airlines. Under the Amendment the operator will be able to insist that a constable, either of the airport authority police or of the local constabulary, should carry out the search. Otherwise, as I have said on the previous Amendment, information of a confidential nature (which I am not endeavouring to keep from the Secretary of State but only from other airlines) might be "leaked" to them. I beg to move.
LORD DRUMALBYN: My Lords, what is proposed by the Government is simply that it should be made possible to give directions to enable searches to be carried out. It is not a direction for the search to be carried out, but a
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direction not to permit persons to be allowed on the aircraft unless they have been searched. The Bill makes it clear that the direction could provide for a constable to carry this out or for other persons to be specified who might carry it out. It is not the intention for such directions to specify particular persons. In cases where it is not appropriate to specify constables it will allow the use either of the airline's own security personnel or those of other security organisations. When we are entrusting powers of this kind it is necessary to have people who are trained for the job.
The purpose of specifying other people is to ensure that if a direction is received to carry out searches, the people doing the searching will be people trained for the job. It will not be right for operators of airlines or of aircraft to go out and find anybody to do the job. I do not think that the situation envisaged by the noble Lord can arise. At present the airline operators decide who they will use on searches of their passengers and the Government pay. We would expect this process to continue; but if it did not the specification of the persons to be used in searching would be in general terms and would follow appropriate consultation. I do not expect that difficulty will arise in the way my noble friend suggests. Where necessary, searches are already being carried out using recognised methods. This will continue to be the practice in the future.
LORD HARVEY OF PRESTBURY: My Lords, I agree with what my noble friend has said, but there is one aspect which is giving rise to concern. It is the simple things that go wrong. At present Customs personnel have an absolute right to search an aircraft. There may be a danger in future from people impersonating them. Some form of identification is required. If a man wishes to cause trouble, to do damage or harm, he can dress in an appropriate uniform and copy the badges. I should like to see some more definite arrangements made to obviate impersonation as far as possible. Perhaps the noble Lord could look at that.
LORD BESWICK: My Lords, I follow the point that the noble Lord, Lord Harvey, has made on the security aspect. I should not have thought the point was

1027
covered by Lord Trefgarne's Amendment. I do not share the apprehensions of the noble Lord, Lord Trefgarne, in this matter and I would support what the noble Lord, Lord Drumalbyn, has said. At the same time, one has some sympathy with the general point which Lord Trefgarne has made about the need to maintain the confidential character of the information which might be obtained in one way or another by the Secretary of State. I wonder whether it may not be appropriate to put into the Bill (perhaps in Clause 8 or Clause 9) something which would give assurance to noble Lords that special steps will be taken, or every effort will be made, to ensure that such information as comes to the Secretary of State as a result of these emergency powers will be treated in a manner ensuring its confidential character. Would the noble Lord agree to have a look at that?
LORD THOMAS: My Lords, not only should a person be specified but he should also be identified so that the airline's own security people know what is going on. I would resist this Amendment.
LORD CAMOYS: My Lords, I have made a further experiment. In plain clothes with a rather fancy hat on, and making myself quite conspicuous, I entered London Airport. I was not stopped from going up to the roof and leaning over the V.I.P. entrance, from where I could have dropped a grenade. I feel that this aspect of security, about which we have spoken before, is very important and we must give more attention to it.
LORD DRUMALBYN: My Lords, I note what my noble friend has said. The severity of security measures will depend very much on the degree of "alert" at any given moment. We are now discussing searching before boarding aircraft rather than searching as a security measure in aerodromes. I can reassure the noble Lord that identification is one of the major security measures taken at airports at the present time. Identity cards are issued to all persons concerned. I think the main point we have to bear in mind here is that the directions in question will be given to the operators of the aircraft. It is for them to make their own arrangements for the searching for it will be up to them to do it. The other matter is that
1028
the directions are intended to ensure that whoever does the search is qualified for the purpose. We shall be coming to Clause 12, subsection (1) of which says:
"A direction under subsection (1) of section 9 or under section 10 of this Act may specify the … qualifications which persons carrying out any such search are to have …".
Subsection (7) reads:
"In this section 'qualifications' includes training and experience."
I do not think that my noble friend has anything to fear from the point of view of commercial confidentiality because this will be in the hands of the operators themselves.
LORD BESWICK: My Lords, I am not speaking again—this is Report stage—but asking a question. Will the noble Lord answer my question about some phrase or clause in the Bill which would give some assurance to Lord Trefgarne about retaining the confidential character of information gained here or elsewhere?
LORD DRUMALBYN: My Lords, I thought that by implication I had answered that question. I said that this was in the hands of the operators themselves. In cases like this, they are the people who are going to organise the searching of people before they go aboard an aircraft. If the noble Lord is considering the more general point of confidentiality under the whole Bill, I will willingly look at it to see just how that is covered.
LORD TREFGARNE: My Lords, I am not sure whether I should ask the noble Lord to respond to my point before he sits down, but I am still a little concerned, because although I accept what he says, that at this moment the operators make their own arrangements and produce suitably qualified people to conduct the searches, this clause empowers the Secretary of State to make a direction as to who shall carry out the search. As an operator, I am concerned that the Secretary of State may direct somebody to make that search, not only of passengers but also of cargo—and personally I am particularly concerned with cargo—who will of course pass on any relevant information to the Secretary of State, but might also pass it on to my competitors.
LORD DRUMALBYN: My Lords, perhaps I may intervene for a moment. I

1029
wonder whether my noble friend has understood the words in line 37. It says there:
"… in the direction have been carried out by constables or by other persons of a description specified in the direction …".
There is no question of directing particular persons to carry out the search.
LORD TREFGARNE: My Lords, I must say that that allays some of my fears. I was reading this at about 3 o'clock on Sunday morning, and I might have got it wrong. I will have to think about it a little further. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.52 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 5:
Page 9, line 8, at end insert—
("Provided that no operator shall be required to comply with a notice served under this subsection before the expiry of a period of 90 days beginning on the day that the notice was served.")
The noble Lord said: My Lords, this Amendment was considered by me at five past three on Sunday morning. However, I think I have got it a little nearer the mark than I had the last one. Subsection (2) of Clause 9 empowers the Secretary of State to direct airlines to carry out such modifications or alterations in their aircraft or to fit such apparatus or equipment as he may specify. I think that is an admirable provision. For example, he might specify certain firearms to be installed for use by the crew. I do not suggest that that would be a good idea, but it might be something that he would specify. I should like to submit, however, that operators ought to have some time in which to do this, and in my Amendment I have suggested a period of 90 days, because that is usually the period for which large transport aircraft are maintained: in other words, the aircraft normally go into the hangar for regular maintenance for periods of 90 days. It varies from aircraft to aircraft, but that is a typical period. I suggest it is right and reasonable that operators should have this time in which to make preparations for doing this work, and also should not be put to the inconvenience and great financial cost of having to do these installations at short notice, particularly, for example, at the hight of the summer, when charter operators, such as
1030
those the noble Lord, Lord Thomas, heads, might find themselves severely embarrassed by having to withdraw an aircraft for a few days to do some maintenance on it. I beg to move.
LORD DRUMALBYN: My Lords, first I should like to take the opportunity of saying to my noble friend and to your Lordships as a whole that it is not intended that directions should be given, except of course in an emergency, without consultation with those to whom they are given. The obvious reason for this is that one wants to make certain that whatever directions are given are practicable and can be carried out. I say that because it might turn out from such consultations that any particular level of time laid down in the Bill might not be appropriate. I entirely take my noble friend's point, that a reasonable time for compliance has to be given, but I am not sure that 90 days would be the appropriate norm, if I can put it that way, or that there should not be some flexibility. If my noble friend will withdraw his Amendment on the assurance that we accept the idea, we will try to put down an Amendment which I hope will commend itself to the House.
LORD HARVEY OF PRESTBURY: My Lords, I should like to agree with my noble friend who moved the Amendment, but I am unable to do so. The last thing that I want to see is aircraft grounded and kept out of the air when they could be earning revenue. It may be that a modification has to be carried out to the avionics or some part of equipment in the interests of the safety of the crew or passengers, and to put a hard and fast time of 90 days would be wrong. I would rather, as my noble friend, says, see this brought about by consultation and arrangement.
LORD THOMAS: My Lords, I think this Amendment is unnecessary, because one can only assume that the provision of any piece of apparatus that is required would be done in consultation with the A.R.B., or someone like that. The idea of flying an aircraft without an essential piece of equipment for 90 days is quite horrifying. I am against this Amendment.
LORD DRUMALBYN: My Lords, if I may intervene again, I do not think

1031
it is so much a question of flying the aircraft without an essential piece of equipment, but more the provision of some device which might be useful either to get rid of something you did not want on the plane or to prevent your getting rid of something that you wanted to keep—for example, allowing somebody to parachute out in flight. These are the kind of ideas that we had in our minds regarding modifications. As to the time, I entirely agree with my noble friend Lord Harvey of Prestbury that nobody wants to have his aircraft grounded, and for that reason it may be unwise to put in a definite time, except that once a time has been agreed upon it is desirable that within that time the thing should be done: in other words, there should be compliance with what has been agreed to. That is the sort of way in which we intend to try to devise our Amendment.
LORD TREFGARNE: My Lords, I am obliged to my noble friend for the friendly reception of the spirit of my Amendment, if not the words, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 6:
Page 9, line 9, leave out subsection (3) and insert—
("(3) Before giving any direction under subsection (2) of this section the Secretary of State shall be required to obtain the consent in writing of the Civil Aviation Authority.")
The noble Lord said: My Lords, in rising to move this Amendment I am seeking to establish that any modifications to aircraft or additional equipment fitted to aircraft should either comply with British civil airworthiness requirements or in some other way be approved by the Civil Aviation Authority. The Bill as at present drafted, and as I read it, merely requires the Secretary of State to consult the Civil Aviation Authority and to take account of any advice. In my Amendment I seek simply to ensure that the Civil Aviation Authority approve the modification or the additional equipment. For that purpose I beg to move.
LORD BESWICK: My Lords, I think someone ought to congratulate the noble Lord, Lord Trefgarne, on the simple way in which his mind works, and what I might call without offence the cool cheek
1032
of this wording. I should love to think that Secretaries of State could not get on with their jobs unless they had the consent in writing of some people they had appointed. At the same time, I agree—and I expressed agreement at the earlier stage—that it would be inconceivable that any modification to an aircraft would be permitted if it was contrary to C. of A. requirements. If the modification made the aircraft unairworthy, surely it would not get a C. of A. In effect, the Civil Aviation Authority would have the final word; but to put down in a Bill that the Secretary of State must have consent in writing from some organisation like this is, I should have thought, going just a little far.
LORD DRUMALBYN: My Lords, I do not think I need to add to what the noble Lord, Lord Beswick, has said. I really think my noble friend can rely on good sense in this matter. The final decision has to rest with the Secretary of State, but of course in a matter of this kind he would not disregard the advice of the very body which is responsible for issuing the certificate of airworthiness.
LORD TREFGARNE: Yes, my Lords; but we have appointed the Civil Aviation Authority as experts. The Secretary of State, in all his wisdom, is not necessarily an expert in these matters. The noble Lord, Lord Beswick, and I served on the Committee which set up the Civil Aviation Authority. We did not all agree that the Air Registration Board should become part of it; but it did. Now we give the Secretary of State power to overrule or neglect that advice completely, if need be.
The Bill contains some degree of safeguard. The Secretary of State is required to consult the Civil Aviation Authority and to take account of any advice given to him by the Authority. But as I read the Bill, that does not mean he has to obtain their consent to any instructions that he may give in relation to this clause. I cannot say that I am very happy about either the remarks of my noble friend Lord Drumalbyn or those of the noble Lord, Lord Beswick, for whose experience and wisdom in this matter I have a high regard. Nevertheless, I shall not seek to press the matter and would ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 11 [General power to direct measures to be taken for purposes to which Part II applies]:
5.1 p.m.
LORD STOW HILL LORD STOW HILL moved Amendment No. 8:
Page 10, line 27, leave out from beginning of line to ("the") in line 28.
The noble Lord said: My Lords, I beg to move this Amendment, and should like, if I may, to couple with it the following Amendments which really all go to precisely the same point: Nos. 9, 10, 11, 12, 13, 17 and 19. The object of the Amendment which I now move is to direct your Lordships' attention to the structure of Clause 11 and to submit to the Government that really it ought to be remodelled in order to import into it a much greater degree of precision as to the powers it confers.
I believe that your Lordships are all agreed, as appeared in the Committee stage of our discussions on the Bill, that one really is dealing with two separate categories of measure. There are emergency measures, and I think your Lordships all felt, and I certainly feel myself, that in so far as the Government are asking for powers to take emergency measures in order to achieve the purpose set out in Clause 7 of the Bill—that is, to protect aircraft and passengers from acts of violence—we as a Legislature ought to go very far indeed in trusting the Executive with wide powers for that purpose. They are measures which have to be taken at once, and they are measures which it may be urgently necessary to put into operation immediately in order to protect unfortunate people, perfectly innocent, who may be miles high in the air and wholly at the mercy of some half-crazy villain who seeks to execute his will on those persons. We go a long way in that direction. I believe your Lordships felt that in so far as the Bill purported to confer power for measures which were long term in their nature we should be much more careful both to define those measures and to give time for reflection and appeal against them by those affected.
Having said that, may I go back to the actual wording of Clause 11(1), which enables the Secretary of State to give
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directions to certain persons who are described—
"requiring him to take … such measures for purposes to which this Part of this Act applies as are specified in the direction."
Those words are absolutely general in scope. There is in them no limitation whatsoever. If one looks at the next subsection, one finds that a direction may include the imposition on the operator or the manager of an aerodrome to undertake guard duties and to provide the necessary personnel to carry out those duties. With that I have absolutely no quarrel at all. Those powers seem to me to be absolutely necessary: what I criticise is the extremely general scope of the words I first read out.
If one looks further on in the Bill one finds, as it were by a side wind, looking at subsection (4) of Clause 13 or at Clause 20, that those measures which can be included in the direction are intended to comprise the destruction of a building, the construction of a building, the alteration of a building or the removal of a building either on the area of an aerodrome or outside it. One finds that in so far as that building work may be included in a direction, it is subjected to some, though rather uncertain, limitations by subsection (6) of Clause 13. I said "uncertain"—for the moment, I do not discuss the detail of it—because subsection (6) seems to me, at any rate, to be very substantially qualified by subsection (2) of Clause 14, and whereas subsection (6) of Clause 13 seems to limit what the Minister can order to be done, when one looks at subsection (2) of Clause 14, that limit seems very substantially abated.
What I am therefore asking the Minister to do is to take this clause back and say what measures he means to be comprised within the general words which I have cited from subsection (1). I do not for a moment mean to say that those measures should not include the construction or destruction of any buildings: I concede that that may be urgently necessary. I have not the necessary technical knowledge and many noble Lords who have spoken in this debate know infinitely more about these matters than I do, so that I speak with the greatest respect to their experience which they bring to bear.
I accept that drastic powers of that kind may be necessary, but what I am criticising is the way in which the clause is

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drafted. It contains those very general words which we find, as it were by a side wind, looking further on to the clauses to which I have referred, include building work. There is no appeal given. The direction has just got to be carried out. My Lords, how far does it go? Do those very general words, for example, include a power to direct that somebody is to be deprived of his liberty, whereas the law apart from that would not allow him to be deprived of his liberty? If that is so, it seems to me that we are embarking upon a new and dangerous form of legislative enactment.
I am simply appealing to the Government to say what it is they think should be included in those words. If they wish the words to relate to the construction or destruction of buildings, let them say so. I accept at once that one cannot be too rigid in the development of our law. We are, as the years go by, confronted with new and different situations. We are now confronted with the situation of hijacking by utterly unscrupulous villains who will endanger the lives of other people for their own purposes, which may sometimes be idealistic but which are not infrequently simply for the purpose of gain. I quite accept that we must furnish those who are responsible for our affairs with far more drastic powers than would have been thought appropriate in the past. I do not quarrel with that, but I am appealing for precision in the formulation of our Statutes. There is no reason why we should not in our Statutes say precisely what powers they are to have, but in departing from the requirement of precision as a legislative body in entrusting powers to the Executive we are, I submit, embarking upon a dangerous course. I submit that that is precisely what we are doing by the wording which we have embodied in Clause 11(1).
Obviously the Minister cannot give a promise straight away to recast the whole of this clause. Speaking for myself, I shall be perfectly content if he will say that he recognises that there is some force in that argument, and that it ought to be given further consideration, consideration which will be directed towards a more precise formulation of the general—and I accept probably quite necessary—powers which it is sought by those
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words to confer upon executive Ministers and others. I beg to move.
5.10 p.m.
LORD HARVEY OF PRESTBURY: My Lords, we have listened to words of wisdom from the noble and learned Lord, Lord Stow Hill. If he is frightened, imagine how the rest of us feel about the wording of this clause! I know that my noble friend wants to do all he can to safeguard aircraft crews and passengers, but in my view this really is going far too far. Anybody reading Clause 13 would never go into business. If he were contemplating doing so, he would be advised not to go into the aviation business. What could happen to people investing their money, effort or time here is far-reaching, and I would ask my noble friend to try and condense this clause into something which makes sense to the average person.
LORD THOMAS: My Lords, I have followed with considerable care the closely reasoned argument of the noble and learned Lord, Lord Stow Hill. It both clarifies and fortifies the Bill, and I hope that the suggestions made by the noble and learned Lord will be followed by the Minister.
LORD DRUMALBYN: My Lords, I confess that I find myself somewhat at a disadvantage in arguing on drafting with the noble and learned Lord, Lord Stow Hill. I am also a little puzzled about his moving Amendment No. 8 and linking a whole series of Amendments, except by way of illustration. The Amendment we are dealing with, as I understand it, is to leave out the words:
"Without prejudice to the generality of the preceding subsection".
LORD STOW HILL: My Lords, I hope I am not conflicting with your Lordships' practice in intervening again, but may I answer this question? I apologise for not saying that the effect of all the Amendments I have put down is to cut out the general empowering words, and to limit the scope of Clause 11 to the providing of guard duties and the providing of personnel carrying out those duties. That was the drafting device I used. It is designed to support the argument that a further clause should be formulated and inserted in the Bill saying precisely what further powers the Minister feels ought to be

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incorporated into the Bill, and saying precisely what they are.
LORD DRUMALBYN: My Lords, I take that general point; but I should have been happier if the noble and learned Lord had amended subsection (1) rather than the opening words of subsection (2). He complained of the words in subsection (1), but he does not propose to amend those. I cannot see that the other Amendments he has proposed would have the wide effect he seems to intend.
The noble and learned Lord is going a little too far in quoting the words:
"… the Secretary of State may give a direction to any person who is … requiring him to take … such measures … as are specified in the direction."
Of course, he missed out the vital words:
"such measures for purposes to which this Part of this Act applies …".
We come back again, as we are bound to, to the purposes of the Bill, which are:
"the protection against acts of violence … of aircraft, and of persons or property on board aircraft, and of aerodromes, and of such persons or property … in any part of an aerodrome."
These are the purposes, and they are very limiting purposes. The noble and learned Lord spoke about the destruction of buildings. He linked the Amendment with this. He referred to Clause 13(4) and it is just as well to say that this is another very limiting factor. I will quote the relevant words:
"A direction … shall not be construed as requiring or authorising the operator of any aircraft, or the manager of any aerodrome, or any person acting as the servant or agent of such an operator or manager, to do anything which, apart from the direction, would constitute an act of violence".
From that are excepted the words to which he referred:
"except in so far as it requires any building or other works to be constructed, executed, altered, demolished or removed."
The reason for those words being there is simply that technically the removal or destruction of works would come under the Criminal Damage Act 1971. Technically it would be an act of violence under that Act.
The noble and learned Lord has asked in effect that Clause 11 should list all the various things that could be done in addition to the powers given in Clauses 9 and 10. But we are bound to come back to the fact that this clause deals
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with emergencies. I recognise that the noble Lord has distinguished between the emergency situation and what one might call the advance preparation for an emergency situation, but in an emergency it may be necessary to give directions of almost any character for the purposes of the Act to avoid these acts of violence. They will have to be carried out at very short notice; they will have to be comprehensive. On the other side of it—and we are talking about preparations for an emergency—I can only say again (and it is important to emphasise this) that in every case, as there is now without these powers when something has to be done, there will be consultation. On the other hand, the powers have to be there.
The noble Lord does not interpret the provisions regarding dealing with works in the same way as I am advised. It is important to note here that a direction may be given to a manager of an aerodrome in respect of works, whether they are to be constructed, executed, altered, demolished or removed, but he then has to use his best endeavours to see that those directions are carried out. He has no power to direct the landlord of a property outside the aerodrome, for example, to do anything at all. The landlord in giving consent will know that he will be entitled to compensation. It would not be practicable to list in Clause 11 all the things that the Secretary of State might give directions about. One cannot foresee everything he may have to give directions about in an emergency. As for the rest, it would be difficult to provide in one clause for the various powers and limitations of powers that are provided in the various clauses which follow. So I think the noble and learned Lord, who is a perfectionist, is asking for a very great deal of perfection if he thinks this could all be done in Clause 11. I really do not think it could be.
It is a little difficult to deal in advance with all the points that might be queried under one set of Amendments. Amendments Nos. 8, 9, 10 and 11 obviously hang together but we have not really discussed the others at the present time. I hope that what I have said will be sufficient to show your Lordships that we accept entirely the distinction between the emergency situation and the preparation for the emergency situation.

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In the emergency situation there will probably be no prior consultation because it will not be possible; in the preparation for the emergency situation there will be the very fullest consultation so that everybody knows what is likely to have to be done in an emergency situation, and nothing will be done that does not have to be done. The important thing here is that people are instructed to take such action as is practicable and necessary.
I hope that with this explanation the noble and learned Lord will feel able to withdraw Amendment No. 8, to leave out the words
"Without prejudice to the generality of the preceding subsection",
which are saving words which are so often included in Acts of Parliament.
LORD HARVEY OF PRESTBURY: My Lords, before my noble friend sits down, will he say exactly what is in his mind? Why might the manager of an airfield want a new building put up? Has my noble friend taken into account that the airfield may be on the British Airport Authority's ground and the operator would have no legal right to put up a building? And if he had the right, he probably could not afford to do so. This whole clause seems hamhanded, if I may say so, and I hope my noble friend will give an illustration of what is in his mind.
LORD BESWICK: My Lords, I think one of the most modest of the noble Lords in this House is my noble and learned friend Lord Stow Hill, and I suspect he knows a good deal more about the technical aspects of air transport than he lets on. But it does not require any false modesty for us to say that we are far below him in the appreciation of the use of words. Frankly, I listened to him and I am prepared to take from him a lot that I do not properly understand. In this case, I think the principle that the noble and learned Lord, Lord Stow Hill, and I are seeking to establish is agreed to by most noble Lords on both sides of the House. The powers are very wide, they are ill-defined and, so far as I can make out at the present time (although we shall come to Clause 20 later and there are some Amendments tabled to that clause), there is no question of appeal. There
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ought to be some appeal. Probably we could accept some of the radical powers with a little less doubt if we received some assurances that later in the Bill there was going to be some provision for appeal. Having said that, I recognise that these Amendments are complicated; they do hang together and it might have been easier for us to understand if we had rewritten the clause so that we could see exactly what was left when we had taken certain words out and put some other words in. I wonder whether the noble Lord, Lord Drumalbyn, would agree, if we were to withdraw these Amendments, not only to look at the clause again but to discuss with my noble and learned friend Lord Stow Hill what is involved and to see whether we cannot in some way meet the point.
THE EARL OF SELKIRK: My Lords, I hope the noble Lord will look again at what the noble and learned Lord, Lord Stow Hill, has said. This is more than just drafting. The noble Lord has said constantly, "There is consultation; there is emergency". I accept the Civil Aeronautics Authority, but I do not think the word "consultation" appears in this Bill at all. The word "emergency" does not appear in the Bill at all, or indeed anything like it. It is not a very limited power. This affects every single aerodrome in the country, which, so far as I know, could be brought to a complete standstill at any time, by a telephone message. We must consider whether this is entirely what we want. I am a little worried about the situation, and if the noble Lord will undertake to look at it I shall be very happy.
LORD TREFGARNE: My Lords, there are two points that I should like the noble Lord to clarify for me. First, when one is constructing a building under the direction of the Minister in a potential emergency situation, or an emergency situation, surely that situation will be long since past by the time the building is finished—or is that point again too simple? The other point on which I seek clarification is the definition of an "aerodrome". It may be in the Bill somewhere. Must it be a licensed aerodrome or can it simply be something that the Minister suddenly decides is an aerodrome for the purposes of this Bill? There may be a definition somewhere which I have missed. Perhaps the noble Lord would help me.
LORD DRUMALBYN: My Lords, I can certainly help my noble friend Lord Trefgarne on his last point, because in Clause 23 of the Bill there is a definition of what is meant by an "aerodrome".
LORD TREFGARNE: My Lords, the noble Lord is quite right. I apologise.
LORD DRUMALBYN: My Lords, I fully understand the feelings of noble Lords and of course I shall be perfectly willing to look at this matter again, and particularly to look at it in conjunction with the noble and learned Lord, Lord Stow Hill, and to discuss what could be done to alleviate the anxieties that have been expressed. But I hope noble Lords will not allow their fancies to run away with them. I really think my noble friend Lord Selkirk was going a little far in imagining that a single telephone call could bring to a complete standstill the whole of an aerodrome—unless, of course, there was a serious emergency there, and then it could, and probably should, be brought to a complete standstill. As for the rest, such as the preparations for an emergency in circumstances like that, it has to be remembered that security measures are pretty far advanced at the present time; that this has been done entirely by consultation; that this is the proceeding that we expect to continue and that we intend to use the direction powers only where there is a real need for them—and that is something that one cannot put in a Bill. This is a matter of trusting the Government to deal with emergencies, just as you trust the police to deal with emergencies. It is the same kind of operation.
I will, of course, look at this matter again. I confess that I am not absolutely clear what the noble and learned Lord, Lord Stow Hill, has in his mind, but if we can, between us, help to make the Bill clearer and to allay the misgivings on this subject we shall be very glad to do so. We do not want to stir up anxiety. I see that my noble friend Lord Harvey of Prestbury has now disappeared, but we do not want to have a situation in which people will be afraid to conduct civil aviation matters in any way at all. I do not believe for an instant that in this Bill we are doing anything to make them more reluctant to go in: quite the contrary. What we are seeking to do is to protect civil avia-
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tion operators of aircraft, those who fly in them and property that is carried in them, and the people who resort to aerodromes. This is the whole purpose, and if we can in any way get this point over and alleviate the anxieties, I shall be glad to do so if the noble and learned Lord will withdraw his Amendment.
LORD STOW HILL: My Lords, in view of what the Minister has said, if I may have the leave of the Committee to withdraw this Amendment I seek to withdraw it.
Amendment, by leave, withdrawn.
5.30 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 14:
Page 11, line 28, at end insert—
("(8) No direction given under this section or under Section 10 of this Act shall come into force before the expiry of a period of 30 days beginning with the day on which the notice was served. Such direction may however come into force at once where the Secretary of State specifies in his direction that matters of urgent national security are involved.")
The noble Lord said: My Lords, this Amendment adds a sympathetic purpose to the Amendments which the noble Lord, Lord Beswick, and the noble Lord, Lord Stow Hill, have just discussed but not moved. I seek to impose some restriction on the very wide power that the Secretary of State is granted under this Bill. At the same time I believe it is reasonable that he should have some power to achieve the purposes of the Bill when the situation warrants it. I do not pretend for a moment that my Amendment is perfect, but I believe that if we can provide for some delay between the serving of the direction under the Act and its coming into force, that at least gives the person upon whom the direction has been served time to appeal to an appropriate court to have the direction laid aside, if that is the appropriate thing to do, and if the direction is not, for example, for the purposes for which the Act has been passed. I believe that the spirit of my Amendment, if not the detail of it, has some support in your Lordships' House. I beg to move.
LORD DRUMALBYN: My Lords, this is an Amendment which has been put down at fairly short notice, and my noble friend will not be surprised to hear that I am not in a position to say that I can

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accept it, even in principle. I suggest one reason for that, namely, that it is very difficult to say, as he did, that there should be an appeal to a court on what is essentially a matter of tactical security. The courts are not really equipped to deal with that kind of problem. Of course, if the Secretary of State were to exceed the powers that are given to him in the Bill, then the matter could obviously be taken to the courts on an appropriate "prerogative writ"—which I believe is the right phrase.
I sympathise considerably with my noble friend in his desire to get some greater assurance on the way in which directions are to be given relating to longer periods—the period of preparation for emergency, as I said, rather than emergencies themselves—but at the moment I can only say to my noble friend that our view is that it would be a mistake for Parliament to try to tie the hands of the Government in this way. If we are to deal satisfactorily with emergencies and with the avoidance of violence, it is necessary to have the same kind of free hand as, for example, the police have elsewhere; and possibly in view of the nature of the threat, to have a special degree of powers to deal with it.
One recurring difficulty again is that my noble friend refers to a period of 30 days. Once again, if one had any kind of time limit that might be very awkward. There are different kinds of emergency. For example, there is the immediate emergency; then there is a "tip-off" that an emergency might arise in a week or so; and there is all this gradation of alert. It is a very difficult problem. We have thought about the problem and we have not been able to find a solution to it. We were hoping that Parliament would agree to give us the powers for which we are asking. am perfectly prepared to look at this point again. Perhaps my noble friend will withdraw the Amendment so that it can be given a little more consideration than it has yet received.
LORD TREFGARNE: My Lords, before the noble Lord sits down, and while I am willing to withdraw my Amendment, can he tell me what redress is open to somebody who gets a direction under the Act, if we do not amend the Bill as I suggest, and if it is
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passed as at present drafted? Can he go to the courts and, if he thinks fit, seek some form of injunction?
LORD DRUMALBYN: If he has reasonable excuse he can in some circumstances, but not all: not in the case of Clause 9 or in Clause 10 where he has to "use his best endeavours". He can in those cases avoid liability for having failed to comply with a written notice or direction. But for the rest, the other safeguard, which I have already indicated, is, so far as property outside the aerodrome is concerned, that a landowner cannot be compelled to reach an agreement for works to be carried out. On the question of works being carried out, we do not envisage, particularly outside aerodromes, directions being used to any considerable extent. One can conceive of the possibility that they might be if there a vulnerable point at the extremity of the airport where one wanted to clear land outside the airport and, for example, erect some kind of light there. All that is covered by "works". One might want to have an are light or something of that kind, so that a dangerous area could be lit up. That is the kind of thing that might be done outside. Within the aerodrome itself, again one must not let one's imagination run away with one. The type of things that may need to be done by way of preparation for an emergency will be the subject of very careful consultation within the existing airport security committees. Nothing is likely to be done without the most careful consideration. If, at the end of the day, a direction had to be given, there would be full compensation.
LORD TREFGARNE: My Lords, I think that the noble Lord gave an assurance when he spoke previously, that this matter of the question of what redress is available to somebody who feels aggrieved by the direction served on him, would be looked at again, perhaps more widely than the question to which my particular Amendment relates. On the basis of that assurance I shall certainly withdraw my Amendment. In the meantime, may I apologise to the noble Lord, Lord Thomas, for inadvertently calling him something different a little while ago. A man with so long and distinguished a career in civil aviation as him will inevitably be called wrongly occasionally, but

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I do apologise to him. I beg leave to withdraw my Amendment.
LORD STOW HILL: My Lords, before the noble Lord withdraws his Amendment, may I with great respect follow on what the Minister said. He said that a person affected by the Amendment first has the right to escape the consequences in a criminal court if he can show that he had reasonable excuse for so doing. Would the Minister kindly look at Clause 18(2) where he will see that:
"Any person who refuses or fails to comply with a direction given to him under section 9 or section 10 of this Act shall be guilty of an offence."
He has absolutely no opportunity of saying that he had a reasonable excuse. It is an absolute liability. The provision as to reasonable excuse does not apply to directions under Clauses 9 or 10.
LORD DRUMALBYN: My Lords, before the noble Lord leaves that point, may I say—and perhaps the noble Lord missed it—that I went out of my way to say "except in the case of Clauses 9 and 10".
LORD STOW HILL: My Lords, I missed that, and I apologise. But it is a very large exception, if one looks at Clause 9 or Clause 10.
Then the Minister said that in any event there would be the right of compensation. There is the right of compensation given by the Schedule on an application to the Lands Tribunal in the event of a direction which requires the removal or construction of buildings. But, so far as I know, there is no provision anywhere for any right of compensation in respect of any other direction. As I read it, the Bill has no such provision; I may have missed it, but I do not think so. I should have thought the noble Lord might wish to consider that before he asks leave to withdraw his Amendment. There should be such a right of compensation of some sort. Not only is there no right of compensation, but, as I read subsection (2) of Clause 14, it is precisely excluded. That relates to acts done in the United Kingdom, and the latter part of the subsection says:
"… and accordingly no proceedings (whether civil or criminal) shall lie against any person in any United Kingdom court by reason of anything done or not done by him or on his behalf in compliance with such a direction."
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The only exception is that contained in the Schedule, which requires the construction or demolition of buildings, if I read it rightly.
LORD DRUMALBYN: My Lords, when I referred to compensation I was talking about the construction of works. If the noble Lord will look at Clauses 20 and 21 he will see that there is provision there.
LORD TREFGARNE: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 12 [Matters which may be included in directions under sections 9 to 11]:
5.42 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 15:
Page 11, line 41, leave out subsection (3) and insert—
("(3) Before specifying any qualifications in accordance with subsection (2) of this section the Secretary of State shall obtain from the Civil Aviation Authority their approval in writing of the qualifications proposed to be specified.")
The noble Lord said: My Lords, this refers to an earlier point which I raised concerning the position of the Civil Aviation Authority, particularly in respect of any direction which the Secretary of State may give concerning the modification of aircraft or the installation of further equipment. I seek to secure by this Amendment that the qualifications of persons directed by the Secretary of State to carry out such work are approved by the Civil Aviation Authority. As before, the Secretary of State is required to consult the Civil Aviation Authority and to take account of their advice, but not necessarily, as I read it, to abide by their advice. It is for that reason that I have put down this Amendment. I beg to move.
LORD DRUMALBYN: My Lords, in a case like this the people who would know what the qualifications should be would be the Civil Aviation Authority, and therefore no doubt the Secretary of State would ask the Civil Aviation Authority what the qualifications should be and would accept their advice on this. The legal form of a clause does not always completely convey what the certain practice is likely to be. I really do

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not think my noble friend need have any concern about this.
LORD TREFGARNE: My Lords, I have only sought to simplify the words and make them more abundantly clear to those who would have to deal with these matters come the day. However, the noble Lord seems quite happy, and I have a feeling that he really seeks the same ends that I do, and for that reason I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 16:
Page 12, line 8 at end insert—
("(4A) No apparatus equipment or other aids may be specified under section 11 of this Act for use on or near aircraft unless the approval in writing of the Civil Aviation Authority has first been obtained.")
The noble Lord said: My Lords, this is a slightly different point, but one which will, I hope, commend itself to your Lordships. I am particularly concerned with search apparatus—those arches which we have all walked through at London Airport, which do, I believe, work on the basis of the magnetic effect of metallic objects about one's person. Magnetic apparatus is death to aircraft; it can upset all manner of equipment, compasses, radio equipment and so on. I seek to ensure that the Secretary of State will not inadvertently direct that such equipment is located too close to an aircraft or even on board, in the archway in the entrance of the aircraft, and thus upset the aircraft equipment. I hope this is a technical point which the noble Lord will be able to accept, at least in principle. I beg to move.
LORD DRUMALBYN: My Lords, I am obliged to the noble Lord for bringing up this matter, and I think what he has said is entirely proper. I do not think it necessarily would be the case that the Civil Aviation Authority would always be in the best position to advise on such equipment, although they would no doubt be consulted in every case. It might be, for example, that the manufacturers of the aircraft or the parts were themselves the best people to be consulted. I can assure my noble friend that consultation will take place before any equipment is
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brought on to or near an aircraft. Obviously this is the sort of thing which must be planned in advance, and before any new devices of any sort are introduced—whether they are in connection with search or otherwise—there would certainly be the fullest consultation. I doubt whether this is anything which one could really write into a Bill, and for the reasons I have given, I doubt whether it would be worth while putting in the provision that my noble friend suggests.
LORD TREFGARNE: My Lords, I am not entirely happy at that. Although I can accept that in regard to major airports, where there are any number of experts either working the search equipment or looking after the aircraft, nevertheless one can conceive of a situation where, at a much smaller local airport, the only person who is immediately available with the necessary knowledge is the man working the search equipment and he might well be unaware of the effects the equipment concerned is going to have on the aircraft equipment. That was the thought that really brought me to put down this Amendment. However, the fact that we have discussed this matter in your Lordships' House will, I have no doubt, come to the ears of the appropriate authorities, and for that reason I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 13 [Limitations on scope of directions under ss. 9 to 11]:
LORD BESWICK LORD BESWICK moved Amendment No. 17:
Page 12, line 33, leave out from ("direction") to ("shall") in line 35.
The noble Lord said: My Lords, when we considered this Bill in Committee we had great difficulty in getting the Minister to accept any additional words at all. We were told that it was quite unnecessary to add anything to the powers of the Secretary of State. Then the noble Lord had second thoughts, or his Government had second thoughts, and now we are almost overwhelmed by the additional words put down. In so far as it is possible to economise on words, I would be in favour of any Amendment which appeared to leave out something unnecessary. Frankly, I cannot

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see what these words which the Amendment proposes to leave out add to the Bill. The subsection reads:
"A direction (except in so far as it requires any building or other works to be constructed, executed, altered, demolished or removed) shall not be construed as requiring or authorising … anything which … would constitute an act of violence …".
Why do we not say that a direction shall not constitute an act of violence and leave it at that? The subsection goes on to say:
"… but nothing in this subsection shall restrict the use of force …"
So we are neither adding anything nor taking anything away by the words within the brackets, and if we could get the verbiage down I think it would make it easier to understand. I beg to move.
LORD DRUMALBYN: My Lords, with respect, these words are necessary, and the reason is a very technical one. The act of violence under Part II of the Bill is defined in wide terms and includes offences under the Criminal Damage Act 1971. For example, this means that any demolition of buildings or damage which may be caused in constructing a building would constitute an act of violence. We believe that it is important to have subsection (4) as a general limitation on the scope of directions which may be given, and also that the definition of an act of violence should be widely drawn. But this presents difficulties in relation to the construction and demolition of buildings and works, and that is why it has been necessary to insert the exception which the Amendment now seeks to remove. If the Amendment were accepted, it would be virtually impossible, as I understand it, to carry out any works at all that involve any kind of demolition, execution or even, possibly, construction.
LORD BESWICK: My Lords, what is the meaning of the words after the semicolon
"but nothing in this subsection shall restrict the use of force … or its use by any other person in the exercise of a power conferred by the following provisions …".
Can those include that of destroying, removing and demolishing?
LORD DRUMALBYN: My Lords, "the following provisions" referred to I think
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are the provisions relating to the powers of a constable to search—what was the old Clause 6 that has been transferred to a place that I cannot find at the moment.
LORD STOW HILL: My Lords, it is the same subsection.
LORD DRUMALBYN: My Lords, it was the old Clause 6, which has been transferred to Part III in the Supplementary Provisions. It is now Clause 17.
LORD BESWICK: My Lords, I still do not follow the noble Lord, but if he is satisfied I do not think we can add or take anything away. I remain convinced in the view that the words are unnecessary, but on the basis of what he said I withdraw the Amendment.
Amendment, by leave, withdrawn.
5.54 p.m.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 18:
Page 12, line 38, leave out ("apart from the direction").
The noble Earl said: My Lords, I beg to move Amendment No. 18. My arguments are the same as those of the noble Lord, Lord Beswick. I am moving to take out the words "apart from the direction". I do not know what they mean and it seems to me the clause would have exactly the same meaning if they were not there. As I understand it, the meaning is that no act of violence will take place except with regard to construction. How one performs an act of violence in construction, I do not know. Perhaps the noble Lord would look at the point, and also at the last sentence of the clause, because clearly it needs amending.
What is meant by "apart from the direction"? To me, it means that no act of violence will take place apart from those under the direction—in other words, if an act of violence is included in the direction, therefore it is permissible. There is an opposite explanation, which is difficult to follow, that "apart from the direction" cannot be an act of violence, or rather an act of violence cannot be an act of violence because no civil or criminal action may proceed under it. We might conceivably have two quite different meanings. I do not think it is important, but if we were to delete the words which I suggest, we should make

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the Amendment on page 12, to leave out "apart from the direction".
LORD DRUMALBYN: My Lords, I am told that this is essentially a drafting point, but that the words are put in to ensure that the direction cannot provide authority for a violent act within the definition of an act of violence in Clause 7 (2). May I give an example? If a direction required an airline operator to arrest anyone coming within 50 yards of his aircraft, the operator, if in fact he did so arrest someone, would have to establish that the arrest would be lawful even if there had been no direction; in other words, the direction does not create its own authority. The fact that there is something in a direction which might be interpreted as requiring an act of violence to be done does not authorise the doing of it.
THE EARL OF SELKIRK: My Lords, this is about as clear as mud. That means that if you instruct a man to arrest someone so that he does not get on the aircraft, then you must arrest him without the direction directing you to arrest him. I think we ought to look at this again. I see the point the noble Lord is making, but the words are extremely mystifying to me. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 14 [Operation of directions under Part II in relation to rights and duties under other laws]:
5.58 p.m.
LORD STOW HILL LORD STOW HILL moved Amendment No. 20:
Page 13, line 38, leave out subsection (2).
The noble Lord said: This Amendment really is rather in the nature of a probing Amendment and relates to Clause 14(2). If I may summarise that subsection, your Lordships will see that the effect of it is this. A direction has to prevail over any contract; it has to prevail in any principle or rule of law. Anybody who does anything pursuant to a direction is not to have an action brought against him in any court—no proceedings, neither civil nor criminal.
How far does that go? If one looks back at Clause 13 one sees nothing to prevent or restrict the use of force by
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a constable or by some other person in the exercise of a power conferred by the Act. Supposing quite unnecessary force is used. Is no action to lie against the constable or that other person? Supposing under the very general provisions of Clause 11(1) which the House has already discussed, someone is deprived of his liberty in circumstances, apart from this Bill, for which there can be no conceivable legal justification. He is so deprived of his liberty because a direction has been issued requiring that he is to be taken into custody, prevented from joining an aircraft, or something of the sort. Is the result to be that that person is to have no redress in any court of the land? He is not to be allowed to say, "The force you used was quite unnecessary; it has done me injury. You could have carried out the direction without the use of that unnecessary force, but you carried it out with a force which is quite unjustifiable."
Has a person who has been confined in some place by a constable or some other person for a quite unnecessary period of time as a result of a direction issued under Clause 11(1), to lie down under it? Is he to have no remedy at all in the courts of our land? If that is the effect of the subsection, it seems to me that it really is going a great deal too far. It infringes the extraordinarily important principles underlying our concept of personal independence and liberty.
My Lords, this clause is very widely drawn, and it seems to me that before a decision is reached upon it, the Minister should be able to give the House some explanation as to the limits of the complete indemnity which is conferred by the subsection on those Ministers who are to execute this direction. Because I submit that the clause is much too wide in scope, I beg to move this Amendment.
6.0 p.m.
LORD DRUMALBYN: My Lords, the noble Lord is perhaps of the opinion that the powers of direction go a good deal further than they in fact do. He talks of a direction requiring a person to be deprived of his liberty. I see nothing in the Bill which would give the Secretary of State any power to issue any such direction. If a person were found, on search, to be in possession of, for

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example, a weapon, then he would be committing an offence under the Act, and he could properly be detained. If a constable suspected, or had reason to suspect, under Clause 17 that a person had brought, or been responsible for bringing, a weapon or something of that kind into the aerodrome in his baggage, or to be carried on to the aircraft in some way or another, then again he would be guilty of an offence, and the constable would be entitled to arrest him. But there is no power on the part of the Secretary of State to direct that somebody should be arrested. The Bill itself contains the offences on which anybody could be prosecuted.
LORD STOW HILL: My Lords, may I interrupt to ask the Minister a question? The noble Lord says that there is no power to direct that a person is to be arrested. Will he say why the general words in Clause 11(1), of which I have already complained, do not confer that power?
LORD DRUMALBYN: My Lords, the noble Lord is referring to the words:
"requiring him to take … such measures for purposes to which this Part of this Act applies as are specified in the direction."
As the noble Lord has pointed out, this is qualified under Clause 13(4) as to acts of violence, including, presumably, arrest on a direction. This is something that a direction cannot do. It cannot require an act of violence of that kind.
For those reasons, I do not understand what the noble Lord has in mind here, or why he should want to leave out subsection (2). This subsection deals with the manner in which a direction is to take effect inside the United Kingdom. Its purpose is to ensure that in the United Kingdom, and within the limitations contained elsewhere in the Bill, the security measures required to combat any threat of violence against civil aviation, a threat which could affect millions of innocent people, passengers and air crews, are not frustrated or delayed, in these exceptional circumstances, by the normal and proper restrictions imposed by the law.
I admit that this is a strong measure, but the limitations make this subsection far less draconian than might appear when it is read in isolation. There are limitations contained in Clause 9(5) which require that only steps that are practicable
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and necessary should be taken. Clause 11(5), for example, prevents the giving of directions to search passengers or to modify aircraft. You do not give directions to search passengers; you give directions that passengers are not to be admitted on to an aircraft unless a search has been carried out, which is not the same thing. Again, there are the provisions in Clause 13(4) to which I have just referred.
In practice, I am advised that the only directions that are likely to be made which might override other Acts of Parliament are directions under Clause 11 to carry out works at aerodromes. Again, we hope that it will never be necessary to use these powers to override rules of law and contract, but circumstances could arise in which immediate action would be required. I know that, despite the limitations we have written in and the explanation I have given, this will be a difficult concept for the House to accept, but I hope all the same that noble Lords will agree that the very desperate nature of the cases with which we are seeking to deal requires very special measures when the delays of the law might be quite fatal.
LORD BESWICK: My Lords, I must say that the noble Lord is a wonderful advocate. I know few people opposite who can argue propositions quite so effectively as the noble Lord, Lord Drumalbyn. On the one hand, he is saying that here we may well be faced with a desperate situation, and that we must have the most complete powers. He described a little earlier on that we are here thinking in terms of an emergency, and that when an emergency arises it is absolutely essential to be able to do anything that we want. This is virtually the argument that the noble Lord has put hitherto. We are not disposed to argue against this. We say that if there is a genuine emergency the powers have to be at the disposal of the Secretary of State to deal with such an emergency. But suppose that there is an error of judgment; suppose that something is done which ought not to have been done, and suppose that we have a Minister who is not so reasonable as the present Minister, or indeed that there is a change of Government with new Ministers who are not nearly so nice and reliable as the present lot. Are there then to be no safeguards at all?

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It really is no use the Minister arguing that we are dealing with a person who may have something in his bag, or a person carrying a revolver when he ought not to be carrying a revolver. The powers contained here cover a much wider area than search for revolvers, or even the possibility of impeding someone going on an aircraft. They are very wide powers. When the noble Lord says that Clause 13(4) has a limitation on the use of violence, I must say that I do not follow this. The latter part of Clause 13(4) specifically says:
"nothing in this subsection shall restrict the use of force …"
Even though that may be some qualification in some cases, if it comes to a point where these wide powers have been wrongly used, it ought to be possible to go to a court of law for redress. If my noble friend agrees, I would think that this is an Amendment that we ought not to take back but one that we ought to press.
THE EARL OF SELKIRK: My Lords, if the Secretary of State cannot order an arrest, who can? Suppose he knows that somebody has a bomb, or that someone is determined to do damage at Heathrow: who is responsible? I have asked this question before and I want to know the answer, because these things happen. Only last weekend we had a case of a very desperate character. Who is in a position in the Government to take really stern action? It is no good passing this task on to a constable and saying that constables always do their duty; I am sure they do, but sometimes they want support in what may be a very desperate situation. The Minister has taken powers under this Bill, but I do not know whether he is covered or not. Apparently no proceedings will lie, whether criminal or civil. Perhaps action could be taken if desired. The other point which I shall bring up later, and which I should like the House to note, is this: this Bill may override any contract at all, and there is no provision whatever for any compensation for loss of contract. This action can take place at any aerodrome and affect anyone with freight, passengers, or anything else, and there is no provision whatever for compensation.
LORD DRUMALBYN: My Lords, with the leave of the House again, may I speak on this point of contract? Perhaps I am anticipating a little the Amendment that the noble Earl is going to move later. The point is really this. The chief kind of contract will be a contract for the carriage of passengers. In the normal way the contracts for the carriage of passengers issued by airlines provide an exclusion clause from the consequences of delay due to faults in the aircraft and so on, and also reserve the right not to admit anybody on to the aircraft despite the contract. It really does not carry the matter very much further to say that a direction may be given for the search of passengers as a condition of going on to the aircraft and for the delay or non-carriage of a passenger as a consequence. The airline itself, or the tourist agency can easily itself include conditions that are normally included, and these would be the conditions that would apply. That is the sort of contract that is involved. If there were no such exclusion clause or safeguard included in the contract the contract would be overridden by this provision, and surely rightly overridden, because what is being done is for the protection of the passengers themselves. There is no reason why they should be put in any better position for the delay of the aircraft or for not travelling than they would be if it were not possible for them to travel or they were delayed for any of the reasons for which provision is already made. Of course this kind of contract has to be expressed in broad terms in the Bill but it is limited all the time for the purposes of the Bill.
LORD BESWICK: My Lords, I am much obliged to the noble Lord for allowing me to interrupt him with a question. I take his point exactly up to there. If there was an emergency which you had to deal with, then contracts might well have to be overridden. But supposing there had been an error of judgment, as later events disclosed, would it not be right then to be able to start proceedings? In this subsection (2) it is specifically said that no proceedings would lie.
LORD DRUMALBYN: My Lords, may I come to that via the next point which my noble friend was raising?
THE EARL OF SELKIRK: My Lords, before the noble Lord resumes, may I just leave one thought in his mind? The noble Lord is talking about travel agencies and passengers. What if the noble Lord breaks open a warehouse, looking for something, and does not close it properly and a stealing takes place? Now this may be covered by insurance, but, quite frankly, this theft follows from the carelessness of the officers who are managing the aerodrome in not sealing it up properly. Those are the sort of things which can arise and someone's contract may go wildly astray. We can develop this point later, but I leave the thought in the noble Lord's mind.
LORD DRUMALBYN: My Lords, I should have thought that the normal provisions that apply to somebody who comes to read the meter would apply to a person at the airport. There is an obligation to leave the premises safe if one has broken into them and I think that would certainly apply.
I come to the next point. The noble Lord asked who is responsible. The Minister is responsible for giving the directions where directions need to be given—and I put that qualification in quickly. The people who are responsible after that are those who are appointed
to carry out the various functions. The Bill itself defines what the offences are and in the normal way in this country where somebody is guilty of an offence or is suspected of being guilty he can be dealt with. As I said, Clause 17 carries that a little further by enabling a constable to arrest on suspicion, and that sort of thing. I think both the noble Lord, Lord Stow Hill, and my noble friend Lord Selkirk are mistaken in thinking that the Secretary of State is going to say, in effect, "Get that man" and that that means that he is going to issue a direction that there is an emergency, bring into operation emergency proceedings and give any particular directions that may be necessary. The people who will be operating in the emergency will be people with powers to deal with the situation. As to the point which the noble Lord, Lord Beswick, raised, the position is the same as it is in any case where a constable or any person acting in the course of duty or acting on suspicion exceeds his legal powers or responsibilities.
6.17 p.m.
On Question, Whether the said Amendment (No. 20) shall be agreed to?
Their Lordships divided: Contents, 41; Not-Contents, 75.

CONTENTS

Bacon, B.

Hoy, L.

Shinwell, L.

Balfour of Inchrye, L.

Hughes, L.

Slater, L.

Beswick, L.

Jacques, L.

Stamp, L.

Blyton, L.

Janner, L.

Stocks, B.

Brockway, L.

Killearn, L.

Stow Hill, L.

Brown, L.

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

Taylor of Mansfield, L.

Champion, L.

Trefgarne, L.

Crook, L.

Maelor, L.

Watkins, L.

Davies of Leek, L.

Phillips, B.

White, B.

Douglass of Cleveland, L.

Popplewell, L.

Willis, L.

Foot, L.

St. Davids, V.

Wootton of Abinger, B.

Gaitskell, B.

Selkirk, E.

Wright of Ashton under Lyne, L.

Garnsworthy, L. [Teller.]

Shackleton, L.

Hale, L.

Shepherd, L.

Wynne-Jones, L.

Henderson, L.

NOT-CONTENTS

Aberdare, L.

Camoys, L.

Dudley, E.

Ailwyn, L.

Carrington, L.

Eccles, V.

Albemarle, E.

Cole, L.

Emmet of Amberley, B.

Alport, L.

Colville of Culross, V.

Essex, E.

Atholl, D.

Conesford, L.

Falkland, V.

Baldwin of Bewdley, E.

Cottesloe, L.

Ferrers, E.

Belhaven and Stenton, L.

Cowley, E.

Fortescue, E.

Berkeley, B.

Craigavon, V.

Gainford, L.

Brentford, V.

Daventry, V.

Gisborough, L.

Brooke of Cumnor, L.

Davidson, V.

Glasgow, E.

Brooke of Ystradfellte, B.

Denham, L. [Teller.]

Gowrie, E.

Brougham and Vaux, L.

Drumalbyn, L.

Greenway, L.

Grenfell, L.

Lyell, L.

St. Aldwyn, E. [Teller.]

Gridley, L.

Macleod of Borve, B.

Saint Oswald, L.

Hailes, L.

Mansfield, E.

Sandford, L.

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

Margadale, L.

Sandys, L.

Massereene and Ferrard, V.

Sempill, Ly.

Hawke, L.

Milverton, L.

Strathclyde, L.

Kemsley, V.

Mottistone, L.

Strathcona and Mount Royal, L.

Kindersley, L.

Mowbray and Stourton, L.

Lansdowne, M.

Napier and Ettrick, L.

Stuart of Findhorn, V.

Lauderdale, E.

Northchurch, B.

Thorneycroft, L.

Leicester, E.

Oakshott, L.

Vivian, L.

Limerick, E.

Onslow, E.

Waldegrave, E.

Lothian, M.

Rankeillour, L.

Young, B.

Lucas of Chilworth, L.

Ruthven of Freeland, Ly.

On Question, Amendment agreed to.

ROYAL ASSENT
6.25 p.m.
THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified Her Royal Assent to the following Acts:

Atomic Energy Authority (Weapons Group) Act,

Housing (Amendment) Act,

Glamorgan County Council Act.

PROTECTION OF AIRCRAFT BILL [H.L.]
Report stage resumed.
LORD STOW HILL LORD STOW HILL moved Amendment No. 21:
Page 15, line 16, after ("person") insert ("acting in that behalf with his authority").
The noble and learned Lord said: My Lords, I can move this Amendment very shortly. It would not achieve much of a change in the Bill, but would make it much more tidy and more in conformity with our ideas as to the criminal law. Clause 15 provides that if somebody gets into an aircraft and it is found that in his luggage there is one of the prohibited instruments—say, a toy pistol, or a make-believe firearm—the onus is on the part of the owner of the luggage to show that he did not put it in his luggage, even although somebody else did. What I am saying is not wholly academic, because some time ago there was a case rather like that when two men planted something of the sort in the baggage of two perfectly innocent women. If somebody's luggage is found to contain a
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firearm, it should surely be upon the prosecuting authority which accuses a traveller of having imported that firearm into his baggage to prove it. I dare say it would be quite easy to establish a prima facie case by saying that it could not be in the baggage unless you put it there yourself, but that might not be true, as in the case of these two perfectly innocent women. So the onus should be upon the prosecution to show that the pistol, or whatever it was, was put there with the authority of, or by, the passenger.
When that is shown the passenger, under the opening words of the first three lines of Clause 15, is provided with a defence. He commits no offence against the criminal law if he can show—the onus of proof being upon him—that he had some lawful authority or reasonable excuse. Clearly, if somebody else could put a pistol in his baggage he would be able to show that without any difficulty. But in conformity with our general principles of criminal law, and with the onus of proof, the prosecution should surely, in the first place, have to show affirmatively that the person against whom a charge is brought under Clause 15 put luggage on the plane, and put in that luggage, or authorised somebody else to put in that luggage, the pistol or whatever it may be which is the subject of the charge. When that has been shown by the prosecution, it should then be for the accused passenger to say, "Well, that may be so, and it may be a fact that there was a pistol in my luggage, but I did not put it there and that is my reasonable excuse within the meaning of Clause 15." In my submission to the House, that is how the onus of proof should be divided. My Lords, I beg to move.
LORD DRUMALBYN: My Lords, the noble Lord is of course quite right, that this provision alters the burden of proof.

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The courts have held that a person does not have an article with him if he does not know it is there, whereas the purpose of this subsection is to treat a person as having with him anything covered by Clause 15 which is in his baggage, or which he causes to be brought into an aircraft or on to an aerodrome, whether or not he knows it is there. As the noble Lord says, it is open to him to say that he had reasonable excuse for its being there in that he did not know that it was there. But in circumstances of this kind, where it is a question of protecting the lives of people going in aircraft, I put it to the House: if there is a weapon of some kind in the baggage of a person or in property that is being carried at his instance on the aircraft, is it unreasonable for him to have to show that there was a reasonable excuse for him to have it there? I should have thought that, in circumstances of that kind—and they are very special circumstances—it is reasonable enough that the onus of proof should be on him to show that he did not know the thing was there. Otherwise, in every case, of course he will say that he did not know it was there, and it is a very difficult thing indeed to discharge the duty of proving that he did. In these special circumstances, I commend the provision in the Bill to the House. I think it is the right course to adopt.
On Question, Amendment negatived.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 22A:
Leave out Clause 15.
The noble Earl said: My Lords, I move this Amendment only because I could not otherwise speak on Report stage. I sought at first to try to find if there was a lawful authority which could be adequately explained, and I came to the conclusion that there was not. I take it, for instance, that a gun licence is not adequate as a lawful authority by itself; and I came to the conclusion that probably the only lawful authority would be if the police or members of the Armed Forces were carrying weapons. At least, that is my interpretation. But I wonder whether it would not be reasonable to have some suggestion that, if anyone wished to carry a toy pistol, or possibly a form of weapon, for some reason, he should show it at once and leave it in the hands of either the stewardess or
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some other person, or possibly have a lock-fast place within the aircraft itself where it could be kept. Because people do want to carry weapons sometimes, and it seems to be that, for the smooth working of this provision, it would be better to have some easy way in which a perfectly innocent person could carry a weapon.
The other point I should like to make is this. It says in subsection (1)(b):
"in any other aircraft at a time when it is in, or in flight over, the United Kingdom, …".
Why do we confine this to the United Kingdom? Have we not still responsibility in this sphere for a number of other places, such as Gibraltar, the Seychelles, Hong Kong, Brunei and, so far as I know, the Associated Territories of the Caribbean? Is any provision made for these at all, or do they not come into the general purview of a Bill of this character? I beg to move.
LORD DRUMALBYN: My Lords, I should like to have an opportunity to look into the suggestion that my noble friend has made, that there should be some method of surrendering one's weapons, or what look like weapons. In point of fact, I think this is often done. I believe that hostesses collect toy pistols and things like that and deliver them back at the end of the journey. But I should like to look into the possibility of some provision being made for that here. I should also like to consider my noble friend's second point. I am not myself quite clear what the situation is. I rather suspect that this provision may be included in some other Act of Parliament under the definition of "air space", but if that is not so I shall certainly wish to look into it very seriously.
THE EARL OF SELKIRK: All these cases come up subject to, I think, aviation law, so there may be other provisions in this Bill which should be considered.
LORD BESWICK: My Lords, may I ask the noble Lord to answer the question which I put to him at Committee stage and which he did not answer? Suppose somebody was coming to shoot at Bisley and brought a rifle with him, quite properly. How does he secure lawful authority if in a proper case he wants to be allowed to take some sort of weapon on to an aircraft with him?
LORD DRUMALBYN: My Lords, I cannot answer the noble Lord as to what authority he can show, but presumably he has some authority of some kind for being in possession of the weapon. This was certainly so at school, I know. I ought to write to the noble Lord on this point. In further answer to my noble friend, I now have a message from the Box to say that the Bill can be extended to the Colonies under Clause 24(2).
LORD TREFGARNE: My Lords, before my noble friend sits down, may I ask him whether he will consider the case, allied to the point made by the noble Lord, Lord Beswick, of when, for example, a Member of your Lordships' House wants to go shooting in Scotland and takes his shotgun on the flight up to Edinburgh? My noble friend may not be able to answer that question now, but perhaps he will think about it and let us know later.
LORD BALFOUR OF INCHRYE: My Lords, I raised this particular point at Committee stage, and I am disappointed—bitterly disappointed—that the Minister has not come here with the information at his fingertips. I pointed out to him then that if someone has a shotgun and he is asked What is your authority?", he has the authority of his shotgun licence, which enables him legally to have it. If you have your shotgun in a case, are you or are you not allowed to take it? Who does, or who does not, give you authority to put it in the luggage compartment of the aircraft? Please could we have a reply to that question?
LORD DRUMALBYN: My Lords, I cannot see any reason why the licence itself should not be lawful authority to take it. Of course, if there were an alert, or something of that sort, one can be quite certain that special attention would be paid to these things. But I do not think that the difficulty that my noble friend envisages can arise here. If a man has authority to be in possession of a gun, obviously he will want to take it with him in certain circumstances, and I cannot see for the life of me why he should not be allowed to do so.
LORD BALFOUR OF INCHRYE: My Lords, may I ask one further question? At Committee stage I asked whether a B.E.A. traffic officer would be able to
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give lawful authority. Can my noble friend tell me whether he would or would not? If he would not, who would?
LORD DRUMALBYN: I am sorry, my Lords; I did not quite hear what my noble friend said.
LORD BALFOUR OF INCHRYE: If I arrive at London airport with my gun, I have legal authority to have the gun, and it can be carried on the aircraft only with appropriate authority. Under this Bill, has the traffic officer got the necessary powers to give that authority or not?
LORD DRUMALBYN: My Lords, I would certainly think so. I should have thought that guns were carried under special arangements at the present time. You do not take your gun and put it underneath your seat. There are arrangements for carrying gulls, surely.
LORD BESWICK: My Lords, if there are arrangements for carrying guns, would the noble Lord, Lord Drumalbyn, be good enough to tell us what they are? Because that will probably be the answer to the question that I put. We are not here talking about having a lawful authority to have a gun. Any crook who was going to do damage on an aircraft would presumably be sufficiently far-sighted to provide himself with some forged authority for carrying a gun. This is not what we are talking about. What we are talking about is having authority to take a gun on to an aircraft. If there is some sort of procedure by which the noble Lord, Lord Balfour of Inchrye, can be assured that before he sets out for Scotland, he will have something in his hands which will be accepted as a proper authority for him carrying his gun with him, then we ought to know what that procedure is.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I have taken rifles and guns on aircraft, and my experience has always been that they take the rifle or gun from you and place it in the hold of the aircraft. There has never been any difficulty, so far as I know.
LORD DRUMALBYN: My Lords, with the agreement of the House, may I say that I cannot see any difficulty here. There are two separate things. One is

1065
lawful authority and the other is reasonable excuse. If you have a licence, that is lawful authority; if you are going shooting, that is reasonable excuse.
THE EARL OF SELKIRK: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 16 [Inspection of aircraft and aerodromes]:
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 23:
Page 16, line 28, after ("any") insert ("aircraft").
The noble Lord said: My Lords, this Amendment deals with a point raised by my noble friend Lord Balfour of Inchrye in Committee on Recommittal. I am grateful to him for drawing attention to what was an inadvertent omission. The word "aircraft" should be inserted after the word "any" so that it will read:
"The powers conferred by subsection (3) of this section shall not include power for an authorised person to use force for the purpose of entering any aircraft building or works or entering upon any land."
My Lords, I beg to move.
6.42 p.m.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 24:
After Clause 16, insert the following new clause:
Parliamentary safeguards
".—(1) On or as soon as may be after the 1st of January, the 1st of April, the 1st of July and the 1st of October in each year the Secretary of State shall lay before each House of Parliament a report of any action he has taken under section 8, 9, 10 or 11 of this Act, indicating in particular whether any, and if so which, of the directions he has so given is still in force.
(2) If any direction given by the Secretary of State under section 9, 10 or 11 of this Act is in force as aforesaid, and he wishes it to continue in force beyond the last day of the current month of January, April, July or October, he shall lay before each House of Parliament, together with the report mentioned in the preceding subsection, an Order extending the operation of such direction for a further period of not more than three months after the end of the said month of January, April, July or October as the case may be: and any such Order shall be made by Statutory Instrument which shall be annullable by a resolution of either House of Parliament.
(3) Any direction made under section 9, 10 or 11 of this Act which is not extended by such an Order as aforesaid shall expire at the end
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of the said month of January, April, July or October as the case may be."
The noble Earl said: My Lords, we have now been discussing this very remarkable Bill for about two hours. The outstanding feature of the Bill, which is asking for unprecedented powers, is that it has no association with Parliament whatsoever. There is no provision of any kind that any Minister acting under the Bill should at any point whatever report to Parliament, let alone ask authority from Parliament for what he is doing. My Amendment really does two things. First, it says that the Minister will regularly report to Parliament on what action he has taken—particularly under Clauses 9, 10 and 11, by the provisions of which he can break any Act of Parliament he likes for the purpose of the Bill. Noble Lords may smile, but the purpose of the Bill includes any action taken at any aerodrome—or any potential action—so that anyone who merely looks like a ruffian comes within the general purview of the Bill.
The noble Lord was good enough to tell me this. He said that the Minister by a telephone message could bring any aerodrome to a standstill in an emergency. My Lords, what of this emergency? It is possibly a figment of his imagination; though it may be a reality—but it is purely in the Minister's mind. Not one word about it appears in any part of this Bill. The Minister can in fact create what I might call martial law at any time and not have to tell Parliament a word about it or have any obligation to get authority for it. And he can continue this martial law, according to the Bill, indefinitely, over any length of time he likes.
I ask this question. Do we really want to give any Minister permanent power to do this on a statutory basis? If I may say so I think it is an excessive power and I think it is quite unnecessary. My Amendment makes no alteration to the emergency powers: the Minister can still do anything he likes; but he must report from time to time what he has done under the operative Act. If he wants a direction to continue he must put forward a Statutory Instrument which would incorporate what is required so that it will become in a sense a permanent way of handling these things.
We do not know what a direction is. What we know is that it need not be written. That is quite clear from the actual terms of the Bill. I have used the words "telephone message". The Minister has not contradicted me. He says that any direction, a direction which can cut through an Act of Parliament, can break a contract, can avoid any rule of law, can be done just like that. I think that we are going a very long way. It is true that he cannot authorise an act of force but he can (the Bill says so) encourage a constable to arrest anybody or to use firearms—admittedly on his own responsibility—and he can be sued for doing so. But the Minister can give encouragement and something that comes very close to instruction.
When the Minister, the noble Lord, Lord Drumalbyn, opened the debate on Part II of the Bill he said that it was unprecedented. I think we would all agree that it is unprecedented. Nobody has any doubts about that. He went on to say that it will be used in an emergency and it will be used sparingly. There are no words to that effect included in any part of the Bill. We have tried to insert such provisos; the Minister will have no part of our efforts. I now ask that he should go one step further. Will he undertake to make some arrangement to report these actions to Parliament so that Parliament shall have some idea of what use has been made of this extraneous power? My Lords, if any lesson recurs in political history, it is that democracy surrenders powers when it is frightened. We are frightened. We surrender powers, powers that will be used for all sorts of purposes not envisaged in our debate to-day. This is history happening all over again. I ask that some provision be made for a proper report to Parliament. In that sense I beg to move.
LORD DRUMALBYN: My Lords, I must confess that my noble friend astonishes me. He says that he fears that history shows that these powers will be used for all sorts of purposes. If they were used for all sorts of purposes they would be going against the provisions that we are now trying to put through Parliament; because the purposes are closely limited to protection against actions of violence. There is no question of using these powers for all sorts of purposes. My
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noble friend has been a very distinguished First Lord of the Admiralty. I wonder what he would have thought had he been told to report on the security arrangements of the Admiralty to the Houses of Parliament every three months.
I do not understand my noble friend's anxiety on this score. It may be that there should be the usual method of reporting to Parliament. No doubt that is what will happen if public attention is directed towards any use of these powers. No doubt reports will be given to Parliament. There will be questions about the security measures taken. If there is anything like a threat of violence one would hope that those questions would be put and that Parliament would keep us up to the mark on it. But the idea that we should have to disclose our security arrangements every three months is a fantastic one.
I put it to my noble friend that he is going too far. How could you give any indication of the sort of direction which is given without revealing your security arrangements? How could you do that? There are lots of security arrangements now operating; they are good, they are voluntary. Why, because we have to take powers, should we then have to reveal the whole of these security arrangements? Let us take another aspect of the matter. Let us suppose you wanted to find out what the security arrangements were. All that you would have to do would be to organise a hoax and get knowledge of the direction. You then know what the security arrangements are and can go ahead with whatever you wanted to do. I think that my noble friend is being (shall I say?) too squeamish in this matter.
There are real, serious threats in the world now and we ought to take measures to deal with them. I am not out of sympathy with the idea that Parliament should be informed, broadly, of what is going on, but the idea that every direction should be reported and that we should say whether it is necessary to keep it on for another month, and bring it to an end at the end of four months, as I think it works out, would be rather absurd. I hope that my noble friend will not proceed with this Amendment because I think it would be unworkable. We are not here dealing with counter-inflation or something of that kind, but

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with a threat which may arise from time to time and totally unpredictable, against which we must have constantly secret provisions in order to deal with it.
LORD BESWICK: I congratulate the noble Lord, Lord Drumalbyn. He really has made a good case—and I mean that this time. On the other hand, I think he swept aside the argument of the noble Earl, Lord Selkirk, a little too readily. The noble Lord's honourable friend the Minister is arming himself with considerable and wide powers. Although it may well be that some of those powers will have to be exercised secretly, it is also the fact that the powers can affect millions of people. The number of people passing through aerodromes to-day is very great and to speak of millions is not an exaggeration. Moreover, there are hundreds of thousands of people who work within the confines of aerodromes over which the noble Lord's honourable friend is proposing to give himself power. In the circumstances, it is not unreasonable to expect that some report should be made to Parliament. If the noble Lord, Lord Drumalbyn, says that every three months is too regular, what about every year? Would he agree to that? Ought he not to have been a little more forthcoming in his reply? If it is not feasible to give every detail of everything which is done, could not something be reported?
Could we not have some report in more general terms and the sort of details that the noble Lord was talking about? In other words, I hoped that in reply to the case put forward by the noble Earl, Lord Selkirk, it would have been possible to say that maybe in this Amendment too much was being asked, but that it was recognised that Parliament was concerned with this matter and something would be done to give some sort of satisfaction in respect of the very proper fears which the noble Earl has expressed.
LORD DRUMALBYN: My Lords, if I may speak again, I said that I understood my noble friend's anxiety, but I also said that I did not see any chance of our accepting the Amendment in anything like its present form. It would be extremely churlish of me not to say that I would look at this matter again and take it up with the Minister for Aerospace who is responsible. I should like to do that, but I must say that I do it
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without commitment. I should not like to raise the hopes of my noble friend, or of the noble Lord, Lord Beswick, too high. There is always doubt about the best way of expressing accountability to Parliament. It is worth looking at from that point of view, I agree. These are wide powers, but I should not like to commit my honourable friend to any specific provisions or to say that anything would necessarily be written into the Bill. With the recognition that I am not out of sympathy with the need to keep Parliament informed about this subject, I hope that my noble friend will be willing to withdraw the Amendment.
THE EARL OF SELKIRK: My Lords, it is clear that the Minister is completely out of sympathy with the idea of keeping Parliament informed. There is no provision for that in the Bill, and clearly there ought to be. The example that the noble Lord gave about the Admiralty could hardly have been worse. If there had been more questions about security at the Admiralty when I was First Lord a lot of things might have happened that did not happen. The Government are taking immense powers which they wish to hold in secret. I think it completely wrong and I do not propose to withdraw the Amendment.
On Question, Amendment negatived.
Clause 18 [Penalties in connection with exercise of powers under Part II or under s. 17]:
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 25:
Page 17, line 40, after ("or") insert ("without reasonable excuse")
The noble Earl said: My Lords, there is a curious distinction between Clauses 9, 10 and 11 which we have discussed. One enables the accused to make an explanation about why he has refused a reasonable excuse and the other does not permit that to be a reasonable excuse. I should be grateful if the noble Lord would explain the distinction between these clauses. There may be a good reason but I do not see it. There are slightly wider powers in Clause 11 than in Clauses 9 and 10, but basically they are the same.
LORD DRUMALBYN: My Lords, I will endeavour to give my noble friend

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the explanation he seeks. It is true that a defence of reasonable excuse is provided in subsections (1) and (3) of this clause and in respect of refusal or failure to comply with the requirement under Clause 8 or Clause 16(2)(b) or with the direction under Clause 16. This is because it is conceivable that the person concerned may be unable to provide the information requested under Clauses 8 and 16(2)(b) or to fulfil a direction under Clause 11. In such circumstances we believe that he should be able to offer reasonable excuse as a defence. Because of the nature of the directions which could be given under Clauses 9 and 10 we consider the defence of reasonable excuse would not be appropriate.
Clause 9 can require an aircraft operator to take all such steps as are practicable and necessary not to cause or permit persons or property to come into his aircraft or to modify his aircraft. There cannot be a reasonable excuse for not taking all such steps as are practicable and necessary. If, in the case of searching, he does all that can be done to prevent entry, he will not have failed to comply with the direction. With regard to modifying aircraft, in addition again to taking such steps as are practicable and necessary Clause 9(3) requires the Secretary of State to inform the Civil Aviation Authority of any proposal for modification and to take account of the Authority's advice. It is implicit in this that consultation will take place which must inevitably involve the operator. In the case of Clause 10 the aerodrome manager is required only to "use his best endeavours" to ensure that searches are carried out. It seems to me that there can be no reasonable excuse for an aerodrome manager not to use his best endeavours. My Lords, I hope that I have made clear to my noble friend the distinction that the Government see between the two sets of cases and that he will agree to withdraw his Amendment.
THE EARL OF SELKIRK: My Lords, I thank the noble Lord for that explanation, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 20 [Compensation in respect of certain measures taken by aerodrome managers]:
7.0 p.m.
LORD STOW HILL LORD STOW HILL moved Amendment No. 26:
Page 18, line 34, at end insert—
("A direction under section 11 of this Act requires any measures to be taken consisting of the direction, execution, alteration or removal of a building or other works on land either within or outside an aerodrome, or where").
The noble and learned Lord said: My Lords, the object of this Amendment is to give a right of appeal against certain directions. It is part of a pattern of Amendments, the others being Nos. 27 and 28. I will seek to deploy the argument in support of all three Amendments. It is now common ground that a direction under Clause 11 can require measures to be taken for the construction and execution, demolition or removal of the building.
Clause 20, read with the Schedule, gives a right to compensation to any person affected if the result of carrying out the direction causes a diminution of the value of land in which he has an interest. The Amendments I bring to the notice of the House seek to extend that slightly by conferring a right of appeal against the direction itself. I will not go into the technicalities of the changes of wording proposed by Amendments Nos. 26 and 27, but if your Lordships would be so kind as to look at Amendment No. 28, your Lordships will see that the persons affected, or likely to be affected, by a direction which relates to the construction, execution, alteration, demolition or removal of a building or other works is to have a right of appeal to the Lands Tribunal. The Lands Tribunal, if satisfied that the direction is unnecessary or unreasonable, or otherwise unjustifiable or oppressive, can cancel the direction or amend it, or make it subject to conditions, and make such other order as seems just in the circumstances.
This Amendment seeks to invest the Lands Tribunal with the power to deal with appeals of this kind. Maybe other tribunals would be more suitable, but the Lands Tribunal is chosen because it is to the Lands Tribunal that, under the

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provisions of the schedule that goes together with Clause 20, the owner of land the value of which is affected by carrying out the direction has to go. It was thought convenient that if the Lands Tribunal deals with questions of compensation, it should be that same tribunal which is to be empowered to allow an appeal against the direction itself.
My Lords, I would venture respectfully to submit that the grounds which are set out in Amendment No. 28 are suitable grounds. The appellant would have to satisfy the Lands Tribunal that the direction in the circumstances was unnecessary or unreasonable or otherwise unjustifiable or oppressive. It would seem, so I would submit to the House, quite unreasonable that a person affected by such a direction who could satisfy the court that it is, in the terms in which I have described it, an unfair direction should have no remedy by way of appeal enabling him to get the direction cancelled or altered. It is to give him just that appeal that these Amendments are put on the Marshalled List. It is submitted that without the right of appeal the provision as to compensation may be a quite inadequate form of relief. I do not wish to repeat what I said earlier, but I would again make the distinction between an emergency measure and an emergency which is not of an emergency character. Clearly a measure which requires a building to be destroyed or constructed cannot be a measure which comes within the category of emergency measures. It takes time and it takes thought as to whether a direction requiring a change of this sort is really necessary or justifiable. It cannot be the case that it could be so urgent to demolish or construct a building that there cannot be reasonable time for an appeal with regard to direction to be heard. I respectfully submit to the House that this is a necessary addition to the Bill in order to make it fair in its operation as between the Executive and the subject. I beg to move.
LORD DRUMALBYN: My Lords, I must confess that I do not quite understand the purport of Amendments Nos. 26 and 27. I tried to work these out, but failed to understand how they fitted in. However, I understand the general intention to be that they pave the way for Amendment No. 28 and provide for an appeals procedure. I am not in the
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slightest ashamed of having to repeat the assurances that we wish to maintain a voluntary system of security, and that we are determined to use the powers sparingly and with care and responsibility. There is only one reason for this part of the Bill, and that is the protection of our citizens, whether they be airline passengers or air crew, and foreign visitors against violence. We hope that we shall never have to use the powers, but we must be prepared.
I take the noble and learned Lord's point that he wants to distinguish between the emergency and the preparation for the emergency, but I am not at all clear how this would be done by the Amendment. If I am right about that, it would mean that the Amendment strikes at the heart of this Part of the Bill. Even although in the Schedule it is referred to on the question of compensation, it seems a curious procedure to place before a body which is primarily concerned with valuation the responsibility for adjudicating on the Secretary of State's decisions and, to all intents and purposes, to supervise his policy in regard to security. This is what it would mean. It would be the Lands Tribunal that would have to decide whether it was necessary and reasonable, or unnecessary or unreasonable, to carry out a particular direction. Whatever form of appeal might be necessary, I should have thought that the Lands Tribunal was hardly the body to do that. I should have thought that it would have taken the view that where the matter is one of security, and possibly of tactical security, if I may put it that way, the Lands Tribunal would say, "We have nothing to say about that", and they would almost be bound to take the view of the Secretary of State as to the necessity for doing it. The mere fact of going to appeal in this way would simply involve delay, and might have even worse effects.
I am not saying that it may not be possible to arrange some way of questioning a decision of the Secretary of State. But I must point out again that the way in which that will be done is through consultation. No doubt in the form of preparing for an emergency, the plan to be adopted will be, as is now the case, a matter for the security committee on the airport itself, subject to the general directions that come down from the

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National Aviation Security Committee, of which there is a Department of Trade and Industry chairman. It is only in the last resort, where voluntary agreement cannot be reached, that a direction would be given at all. The position would surely be that there was an agreement in the Security Committee that something needed to be done in the way of construction and the person immediately affected objected because of his own personal interest.
I think we must accept that where the public interest is at variance with private interest in matters of considerable importance every attempt would be made first of all to reach agreement. It is only in cases where everybody was absolutely convinced that this was necessary that the direction would be given. Where it was given, I should have thought that in such a case the public interest should override the private interest. I do not know of any further appeal which would be useful in such circumstances, but I am quite certain that the Lands Tribunal would not be an appropriate body.
LORD BESWICK: My Lords, it seems to me we have a good deal in common with the noble Lord, Lord Drumalbyn. He cannot understand the words we put down, and we cannot understand words that he puts down, so we get along quite well. There is a principle here. It may well be that the drafting is not perfect—I can quite understand that this may be so—but the principle is one of some substance and I should have thought that the House as a whole, having listened to the arguments which my noble friend put, would agree with him. It is said by the noble Lord that the powers will be used sparingly and responsibly. We are not concerned in this House with whether powers are used sparingly or not; we are concerned with the powers themselves. In the future they may be used in one way or the other, and it does not matter at all how many assurances are given that the powers are to be used sparingly if in future under a different Government the powers are abused. We in these Houses of Parliament are supposed so to arrange the wording that we can ensure it is not possible to abuse the powers.
Again, my noble friend made absolutely clear that we are not here concerned
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with a Part I emergency—in other words, something which requires immediate action. We are concerned here with something which inevitably will take some time. The erection or the demolition of a building will not be carried out overnight or even necessarily in a week, so we are not asking for anything that is going to delay the implementation of security measures unreasonably. In those circumstances I should have thought that the possibility of appeal would do much to ensure that powers would be used sparingly and responsibly. If the noble Lord is able to assure us that the principle of appeal can be put into the Bill in some other form, all right; we will listen to him; but if he is not going to give that kind of assurance I think we should again divide the House.
LORD DRUMALBYN: My Lords, with the leave of the House, it would be foolish of me to say that we would not be prepared to look at this. I do not think the noble Lord would really expect me to say at this stage that I accept the principle and will introduce an Amendment. I hope he will be content with my assurance that we will look at this matter very seriously indeed to see whether there is some way in which we can meet the point he has made.
LORD BESWICK: My Lords, I seek leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 21 [Reimbursement of expenses incurred for purposes to which Part II applies]:
7.15 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 29:
Page 19, line 17, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, this Amendment is an attempt to further my own Parliamentary education and to seek a little educidation. To my simple mind, the clause as written imposes no obligation on the Secretary of State to reimburse the moneys described in the clause. It seemed to me better that we should write it in, as my Amendment suggests, and say:
"The Secretary of State with the approval of the Treasury shall, out of monies provided by Parliament, reimburse to any person …".

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I will not go on. This is a simple matter. There may be a good explanation as to why my Amendment should not stand, in which case I shall be glad to hear it.
LORD DRUMALBYN: My Lords, the first point is that "may" is the usual word that is put into a provision for a Government to make payments. I think in any case that where we are providing for the Government to reimburse the cost of aviation security it is more appropriate to give some latitude in this matter. But I hope my noble friend will take comfort from the fact that the Government are already making a large contribution to this by meeting the cost of British and overseas airlines in searching passengers and baggage at airports. Having made this notable contribution to the problem, I think perhaps it would not really be quite proper at this time, and particularly in this place, to seek to tie the Government in the way the Amendment proposes on a matter which is essentially one for another place. I may say that the Amendment as drawn would not commit the Government very much because it would still have to be enabled to pay only part of the expenses—and that might be a very small commitment indeed. That answer of course is a rather technical one, but the intention is in fact to provide for these payments to be made at the present time, and that is what is happening at the moment.
LORD TREFGARNE: My Lords, I fear that my Parliamentary education has got not one step further. However, I do not want to establish a precedent and, as my noble friend says, it is really a matter for the other place. Having ventilated this question, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 30:
Page 19, line 33, at end insert—
("(3) The Secretary of State with the approval of the Treasury may also, out of monies provided by Parliament, reimburse to any person any loss or expense incurred by that person and arising directly out of any direction given by the Secretary of State under sections 8, 9, 10 or 11 of this Act.")
The noble Earl said: My Lords, I beg to move this Amendment. Its purpose is to give the Government the opportunity in certain circumstances of recompensing
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people, who are neither operators of aircraft nor managers of aerodromes, who may suffer loss through directions given by the Secretary of State. This argument came up earlier in the discussion and I will not pursue it further now, except to say this. Supposing a direction demands that some building be searched, some boxes be opened or some damage done, and supposing the manager of the aerodrome refuses to rectify the damage he has caused as a result of the direction he has received from the Secretary of State. Clause 14(2) reads:
"… accordingly no proceedings (whether civil or criminal) shall lie against any person in any United Kingdom court by reason of anything done or not done by him or on his behalf in compliance with such a direction."
That means the man whose warehouse or property has been damaged as a result of the direction given by the Secretary of State has no remedy whatever. It may not happen often, but I am suggesting that Parliament should take powers to offer remedies in specific cases.
LORD TREFGARNE: My Lords, I rise to support my noble friend in his Amendment. There are undoubtedly a number of situations that spring to my mind which could cause a substantial loss to third parties, and which ought to be the subject of some compensation. Only recently I was asked to carry liquid nitrogen in specially constructed containers in an aircraft. Had the Secretary of State directed that those containers should be opened for inspection, all the liquid nitrogen, worth thousands of pounds, would have been lost, and the whole purpose of the exercise nullified. I suppose that the carrier in that case would have been liable for the loss of the nitrogen. He also would have had no redress under the terms of this Bill as it is presently drafted. I hope that the noble Lord will be able to give us some assurance in cases like that.
LORD DRUMALBYN: My Lords, I am afraid I cannot give an assurance, but what I can do is to look at the case made by my noble friends. The case that is being made is a consequential loss rather than a direct loss owing to compliance with a direction. I should like to look at that point to see what can be done. It has gone rather farther than I personally had contemplated.
LORD BESWICK: My Lords, the noble Lord. Lord Drumalbyn, is not in the habit of giving very firm assurances. I hope that he will do his utmost to go so far as he possibly dare towards an assurance in this particular case. This example of liquid nitrogen had not occurred to me, but I can think of all kinds of possibilities of damage to quite innocent third parties. It ought to be possible to see that they are provided with some compensation, if they can prove their case. I hope that the noble Lord will be able—if not to assure his noble friends—to give a feeling that he really is serious on this occasion and something will be done at a later stage.
LORD DRUMALBYN: My Lords, as the noble Lord will understand, I am not in a position to give an absolute assurance on this matter, but I will undertake to look at it seriously.
On Question, Amendment negatived.
Clause 23 [Interpretation]:
7.22 p.m.
TILE EARL OF SELKIRK TILE EARL OF SELKIRK moved Amendment No. 31:
Page 20 line 22, leave out from ("aircraft") to end of line 26 and insert ("which lands or takes off from an aerodrome in the United Kingdom for hire or reward.")
The noble Earl said: My Lords, this Bill deals with two types of aircraft: those registered in this country, and those operating in this country. In Clause 23 one finds a definition which includes words that I do not understand. One is the word "allocated", and the other is the phrase "in exceptional circumstances I suggest that it would be better to have in this Bill words which are comprehensible. I have modestly suggested words which I believe are generally understood, and I should be grateful if the noble Lord would consider it wise to have in the interpretation clause an interpretation which is generally understandable.
LORD DRUMALBYN: My Lords, a definition not only has to be capable of being understood but also has to be effective in what it seeks to achieve. This is not easy. The reference to
"… being allocated for use on flights …"
is required to ensure that an overseas airline operator who is operating air ser-
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vices to and from the United Kingdom can be served with a notice under Clause 8 seeking information about security procedures, despite the fact that he has no aircraft actually in the United Kingdom at the time. Under the Amendment a notice requiring information could not be given unless there was an aircraft within the United Kingdom. The reference to
"… otherwise than in exceptional circumstances …"
is intended to exclude aircraft which land and subsequently take off in the United Kingdom, but which apart from exceptional circumstances would not have Come to the United Kingdom. For example, over-flying aircraft which might land because of mechanical trouble, or aircraft diverted here from the Continent because of bad weather. We did not think that any directions need or should apply to aircraft in such circumstances. It is for these reasons that the definition is phrased in the way that appears in the Bill.
THE EARL OF SELKIRK: My Lords, the noble Lord has to operate this Bill, not me. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 25 [Short title and commencement]:
7.27 p.m.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved Amendment No. 32:
Page 22, line 41, at end insert—
("(3) This Act shall continue in force for the period of three years beginning with the date of the commencement of this Act and shall then expire unless Parliament from time to time determines, by affirmative resolution of each House, that it shall continue in force for a period of one year beyond the date on which it would otherwise expire.").
The noble Lord said: My Lords, the purpose of my Amendment is simple and direct: the noble Lord, Lord Drumalbyn, has fought tenaciously for the retention of the powers contained in this Bill. The purpose of this Amendment is to prevent the Executive having as a permanent part of our law the extreme powers proposed, which we fully admit are necessary for an emergency. There is no need for me to recapitulate the unprecedented powers. The noble Lord, Lord Drumalbyn, has admitted that this is a

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strong measure with powers to override contracts, rules of law, Acts of Parliament, planning, to demolish or remove buildings, erect buildings, or for the various purposes set forth in the Bill.
No one questions this need in an emergency, but there is a difference between the exercise of powers for an emergency and having these powers as a permanent feature on our Statute Book. The noble Lord, Lord Drumalbyn, said that these are only background powers, and that the voluntary processes for security will be carried out and continued as hitherto. But this Bill gives statutory authority to these exceptional powers for emergencies. As the noble and learned Lord, Lord Stow Hill, said the other day, Ministers can act oddly. In column 423 on February 26 he gave an example of what might happen. As a good Parliamentarian—I hope that I may make that claim, and I hope that the same description may be applied to Members on all sides of this House—I resist the Executive having these powers, and wish to ensure that Parliament can have a chance of reviewing these powers, and not allow for the Bill to be permanently on the Statute Book.
My proposal does not limit the exercise of the powers in an emergency; it does not limit the extent of the powers. It seeks to impose a time limit on them so that Parliament can look at them again to see how they have worked, whether any improvements are necessary, and to look at the powers again in the light of conditions which may be existing three years from now. We all hope that the emergency which we are facing at the present time will have passed. If it has not, Parliament can continue the powers; if it has, these unprecedented powers should not continue in the hands of the Executive. My Amendment is a reasonable proposal which I hope will commend itself to the House on all sides, and I hope that it will be accepted by Her Majesty's Government as something which is in accord with the spirit of Parliament. I beg to move.
LORD DRUMALBYN: My Lords, I would not for a moment contest that my noble friend's Amendment is a reasonable one on certain assumptions, but it is the assumptions that we have to look at. The assumption must be that it would be right for the duration of this Bill, when it
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becomes an Act, to be fixed for three years, and thereafter for it to be extended from year to year by Affirmative Resolution of each House. That course would be justified by the threat of hijacking and other acts of violence against civil aviation. It is not possible to say that the threat is likely to end in three years' time or that there will be no need to retain these powers thereafter. Nor would it be appropriate, with a Bill like this, to continue it for ever by an annual Affirmative Resolution of the House. The tendency generally is in the opposite direction: that there are annual renewals and eventually they pass into permanent legislation.
But there is also a technical reason why this would not be an appropriate proposition. The main and original purpose of the Bill was to enable us to become signatories to the Montreal Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation. In order to withdraw from that, we should have to give six months' notice. One might get into a peculiar situation if one had to give six months' notice of withdrawal and then we were going to continue by Affirmative Resolution from time to time. The two simply do not match. If you are going to have an Act giving authority to what is laid down in an international Convention, then clearly you must have an Act which will remain on the Statute Book until the time when you feel you can no longer adhere to that Convention (if that ever should arise), and then you can repeal the Act.
To continue in this curious, nebulous, half-way manner would clearly not be a practical proposition. I entirely understand the view expressed by my noble friend on this subject but I do not think it is the best way to proceed. It is conceivable, of course, that the present emergency will not last as long as three years; on the other hand one cannot say that it will last only for three years or that it will be appropriate in the circumstances, when the three years come to an end, to renew it year by year. It is much better to proceed in the ordinary way and simply pass the Bill as it is and, when the Act is no longer needed, to repeal it.
LORD TREFGARNE: My Lords, before the noble Lord, Lord Balfour,

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comes to withdraw or to press his Amendment as he decides, I should like to give him some support. I feel that there are many problems in connection with this Bill which we ought not to pass into a permanent feature of our legislation. The noble Lord, Lord Drumalbyn, has said on many occasions during this stage and the preceding stage that we are faced with an extraordinary security situation and we have to take extraordinary measures and that is the reason for Part II of this Bill. The misgivings which the noble Lord, Lord Balfour of Inchrye, and others have about the Bill and which no doubt have led him to table this Amendment relate to Part II of the Bill and not to Part I. Part I discharges our obligations under the Montreal Convention; Part II does not seem to have anything to do with the Montreal Convention. Indeed, it was only presented to us after we had considered the first Part of this Bill. I am reluctant to see the Bill become a permanent part of our legislation without some means of Parliamentary scrutiny at the expiry of what we now believe to be a state of emergency. I do not know whether the noble Lord, Lord Balfour of Inchrye, will press this Amendment, but he will have my support if he does.
LORD BESWICK: My Lords, I still have my doubts about allowing this Bill to go forward without any further control on the part of Parliament, apart of course from the possibility of repealing the Act. Very wide powers are being taken here and moreover their importance will lie in the way they are used. That is the aspect of the matter which troubles us. Not once but ten or a dozen times the noble Lord has assured us that they are going to be used sparingly and with responsibility. It may well be that this is how it will work out and everybody will be quite happy, in which case no doubt at the end of three years Parliament would approve the Affirmative Order and the power would be retained. When the noble Lord, Lord Drumalbyn, speaks about the ratification of the Montreal Convention he has a point, and in so far as we need these powers to enable Great Britain to ratify the Convention I think it would he unreasonable to expect an Affirmative Order each year to maintain those powers. So a doubt still remains in my mind.
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I do not know what the noble Lord, Lord Balfour, is going to do, but I believe that in one way or the other we must have some assurances that so far the noble Lord, Lord Drumalbyn, has failed to put over.
LORD BALFOUR OF INCHRYE: My Lords, the noble Lord, Lord Drumalbyn, certainly has a point which had not occurred to me on the Montreal Convention issue; nevertheless I still dislike, and I think the majority of your Lordships dislike, the Executive's having these powers as a permanent part of our Statute law. If I withdraw my Amendment it will be with the knowledge, which I hope has been conveyed to the Minister from every side, that we very much dislike what the Government have been forced to do; that we very much dislike any Government's having the powers to override Parliament and to do what is contained in this Bill. If we are forced to digest this very unpleasant political meal, let the Minister know that we ache very much internally as a result of his forcing it down our throats. I hope that in the period between now and the time the Bill passes into law there may be some new thought as to whether Parliament could not have some limitation of time on the functioning of this Bill when it becomes an Act. The drafting was impeccable. It may not be appropriate, but it was impeccable, because it was taken from the 1965 Rhodesia Act. An annual review may not be appropriate, but it might nevertheless improve upon the 1965 Rhodesia Act and bring in something new before the House finally parts with this Bill. With those words I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD TREFGARNE LORD TREFGARNE had given notice of his intention to move Amendment No. 33:
Page 22, line 41, at end insert—
("(3) This Act shall cease to be in force three years after the date of commencement.")
The noble Lord said: My Lords, clearly most of what could be said on this point has already been said and I do not propose to take the matter further. I am most anxious that the Government should think about the matter further. Clearly this Amendment has the same defect as that moved by the noble Lord,

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Lord Balfour of Inchrye, in that it does not allow for the problems created by the Montreal Convention. I shall wish to raise this matter again at Third Reading.

INSURANCE COMPANIES BILL [H.L.]
7.40 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF TRADE AND INDUSTRY (THE EARL OF LIMERICK): My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(The Earl of Limerick.)
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 11 [Grounds on which powers are exercisable]:
On Question, Whether Clause 11, as amended, shall stand part of the Bill?
THE LORD CHANCELLOR: Before my noble friend speaks may I intervene, partly to apologise for not having been present on the previous debate—but I assure the Committee that I have studied what took place with as much care as I am capable of—and because I could not help noticing that at the close of the proceedings last time the noble Lord, Lord Diamond, who then spoke for the Opposition, gave this advice to the Committee. He said:
"The debate has been very valuable and it seems to me that it would now he appropriate for us all to reconsider the various well-informed and well argued views that have been put forward, and return to this matter at a later stage. On that basis, I do not think it would be in the best interests of the Committee that we should debate at length the very important principle raised by this clause."—[OFFICIAL REPORT, 22/2/73, c. 351.]
I and my noble friends have been giving considerable thought to this matter and the conclusion we have arrived at tentatively (I do not know whether it will meet with the Committee's approval, and of course I am entirely in their hands) is that the advice given by the noble Lord Lord Diamond, is right and wise advice.
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There is a whole complex of inter-related if separate matters and my noble friend Lord Limerick has promised to bring the matters back for discussion to my right honourable friend Sir Geoffrey Howe. It would be a slightly academic question to examine again the principles of Clause 11 in the absence of the proposals, which I hope will be made and ready by Report, although I am not giving an undertaking to that effect, and I would rather hope, therefore, that the advice tendered by the noble Lord, Lord Diamond, on that previous occasion could now be accepted by the Committee.
THE EARL OF SELKIRK: May I ask one question? I do not want to violate what the noble and learned Lord the Lord Chancellor has said in any way, but there is one point, not a point of major principle, on which perhaps he could say something. I am told that many countries overseas have read that we are having an insurance Bill in this country. They have seen that certain powers about reinsurance exist there—they probably have not read them very closely, but they have asked this question, "Does the Government want to interfere in any way with a very delicate and important historical function in London of developing reinsurance on an international basis, all over the world?" This business is enormously valuable to us, both as a foreign trade invisible export and also, quite rightly, in the principles of insurance, spreads risks of a big disaster over an immensely wide area, from Tokyo to Chicago and elsewhere. If the noble and learned Lord the Lord Chancellor can give an assurance that it is not the intention of the Government to interfere with international reinsurance, and that possibly his intention is to develop and help it, then I believe that would be greeted overseas with much satisfaction.
THE LORD CHANCELLOR: I believe that I can give my noble friend the kind of assurance for which he is seeking. Reinsurance is, of course, a very valuable part of our invisible exports and of the functions of the City of London in relation to insurance, and the last thing which is in our minds is to reduce that source or that prestige value of the City of London. Our overseas earnings on insurance generally are of course, as is

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very well known, quite substantial, and reinsurance makes an important, although not the only, contribution to those earnings. Our view is that these earnings will not be affected by the Bill, although reinsurance companies will be dealt with in exactly the same way as other insurance companies. We believe, on the contrary, that this Bill will strengthen the position rather than weaken it. If we bear in mind what the Bill is for, I think we can see that that is so. We have sought to prevent failures of companies such as those which we have seen fail in recent years, and we think that if they were to continue without the reinforcement of this Bill that could in fact lead to some loss of confidence overseas to the detriment of both insurers and reinsurers; and it is precisely because we want to strengthen confidence in both classes that we have introduced this Bill, with whatever merits or defects it might have.
LORD BROWN: I did not quite understand whether the noble and learned Lord's opening remarks were directed to Clause 14, which we are now discussing. He did make mention of Clause 11.
THE LORD CHANCELLOR: I believe that the question which the noble Lord in the Chair proposed was, Whether Clause 11, as amended, shall stand part of the Bill? I was not seeking in any way to curtail discussion but possibly to make a suggestion as to the line the discussion would take.
LORD STOW HILL: I do not know whether from these Benches I might intervene shortly, speaking purely for myself, but in effect to answer what was put in the form of a question by the noble and learned Lord the Lord Chancellor. I should have thought, if I may respectfully say so, that the course which he has proposed is an extremely sensible one. Clause 11 raised, among the other issues at large in this debate, that which arises on subsection (1)(e). That paragraph introduces the whole complex of Amendments which deal with the question of natural justice and which have been compendiously referred to in the course of our debates as the "fit and proper person" clauses. When we were discussing those clauses earlier in the Committee stage of this Bill the
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Minister in charge, the noble Earl, Lord Limerick, stated that he would give very careful consideration to the arguments that were used; and the noble and learned Lord the Lord Chancellor has said that his right honourable friend Sir Geoffrey Howe is also concerned in that aspect of the Bill.
That being so, and speaking for myself—and I can only speak for myself—I very warmly accept the proposal made by the noble and learned Lord that we should put Clause 11 in cold storage, as it were, so that we can see what emerges as a result of the thinking of Ministers in view of the arguments that have already been pressed to the Committee on that clause. That is all I wish to say; but, speaking for myself, I entirely agree with the proposal made.
LORD ALDINGTON: I, too, welcome the line taken by the noble and learned Lord the Lord Chancellor. I believe that he will know that the point which the noble Lord, Lord Stow Hill, has made, is not the only point that arises on Clause 11. He will know that I was planning to rehearse my views on some of the other points. But I believe that he will know also that I have used the interval to see that his right honourable friend, and the noble Lord sitting next to him, were aware of what those points are. So, I hope that if I am now silent on those points it will not be taken to mean that I have not got quite a number of points.
The only other point I should like to make is that on the succeeding clauses, namely, Clauses 12 to 20, there are some points that one would want very shortly to raise, as Clause 11 now stands. If I may promise him this, he will be pleased: I will make the points very shortly, but I still think it right to put a marker down on those clauses so that it cannot be said when we come back to them on Report stage, whatever the new drafting of Clause 11 may be, that I have, as it were, acquiesced in some of the results that follow from some of the clauses. Subject to that (and I think that by nodding the noble and learned Lord indicates that he understands the point), I welcome what has been said.
LORD BROWN: It is always commendable for a Government to be prepared to reconsider, but I hope they

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are not going to reconsider to the extent of drastically weakening this Clause 11. I find myself possibly diminishing into a minority of one. I had the support of the noble Earl the Minister in the previous debate—or perhaps it was the other way round and I was supporting him. It is unfortunate to be arguing with one's own friends on these Benches. This call for natural justice is all very well. It is always a good cry to put up in this House at any time. But, without wishing to rehearse all the arguments, which I tried to deal with and the Minister himself dealt with at the earlier stage of the Committee, I would say this. The search for natural justice for the individual director of an insurance company has in the past often led to a great lack of justice for thousands of people who have paid premiums and who can ill afford to lose the money which they have paid out, because the insurance company has gone broke. It is not a matter of prophesying what might happen; it is a question of looking back to see what has in fact happened.
Although some very rigorous powers are available in the 1967 Companies Act, with which I am extremely familiar because I took that Bill through this House—and, I may say, with very little dissent from this House—it appears they have not proved sufficient. If there is much retreat from the underlying principle with regard to dealing with persons who are not appropriate to run insurance companies, we shall expose ourselves to another danger. There may be an element of injustice that can arise under the provisions of the Bill as it stands—I am not denying that for one moment—but if one has to choose between giving real natural justice in every case in order to avoid any injustice to insurance company managers or directors, and the other side of the penny is to risk thousands of people who can ill afford to lose their premiums, I prefer to protect the policy holder every time. I hope the Government are not going to weaken on this.
THE LORD CHANCELLOR: I am very grateful for what has been said by the noble and learned Lord, Lord Stow Hill, and my noble friend Lord Aldington and by the noble Lord, Lord Brown. I noted what the noble Lord, Lord Brown, had said on the previous occasion. I am not saying by any means that what will
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emerge will be exactly what has been proposed by my noble friend or by the Front Bench opposite. What I am seeking to do, or rather what my right honourable friend is seeking to do, or the Government are seeking to do, is to try to achieve a proper balance between two objectives, which I agree have some divergent possibilities; otherwise, I suppose we would not have had the debate last time. Quite clearly, this Bill has been brought in, and indeed the previous Bill, the part of the 1967 Companies Act which was brought in by the noble Lord, Lord Brown, was brought in because there had been scandals, and because not only are the rights of policy holders affected adversely but also it does in fact operate adversely to the prestige of this country as an insurance centre that scandals should happen.
I would not go quite so far as the noble Lord, Lord Brown, and say the powers were insufficient; what we have found is that the powers are insufficiently flexible. If you have power to stop a company altogether, which is what the Companies Act 1967 allows you to do, you can hardly say your powers are insufficient. But what in fact has been discovered, and what was brought out very clearly I think by the V. & G. Report, is that if your powers are too draconian (if I may use that phrase), you hesitate to use them before the damage is done. The Bill is designed to provide a greater range of powers, most of which are less draconian than those already possessed. I fully take the point which my noble friend Lord Aldington has taken. It was precisely because my right honourable friend was very much concerned, and has been made fully aware of the strength of feeling expressed from these Benches and the Front Bench opposite, that I made the proposal I did, and I am very grateful for what noble Lords have said.
LORD JACQUES: I would say two things very briefly. First of all, we should like to support entirely the statement made by the noble and learned Lord, the Lord Chancellor. The purpose of this Bill is to protect the policy holder. That should foster our interest in insurance and our insurance business rather than retard it. Secondly, the Opposition has moved three Amendments to Clause II, on subsection (1)(f), subsection (3) and subsection (4). We have not lost interest in

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these Amendments, but we have had assurances from the Minister that our view will be considered and something may come forward at the next stage of the Bill. We have accepted those assurances, and prefer to leave it there until the next stage.
Clause 11, as amended, agreed to.
Clause 12 agreed to.
Clause 13 [Requirements about investments]:
On Question, Whether Clause 13 shall stand part of the Bill?
7.55 p.m.
LORD ALDINGTON: I have one point only to raise.
Does my noble and learned friend not think these powers go a little wide? It seems to me, reading the Bill as it is now drafted, that the Secretary of State really has powers to intervene in the investment policy of any insurance company and to give it certain directions. I should have thought that that was wider than it need go, at any rate for part of the investments of insurance companies. It may be that there is a requirement, in order to protect policy holders, that investments representing liabilities and the solvency margin ought to be subject to surveillance and direction. But I would question whether investments representing surplus funds beyond that are properly within the power of surveillance of the Secretary of State. I would ask my noble and learned friend to think about that before Report stage.
THE LORD CHANCELLOR: Of course, what my noble friend has said will be conveyed to my right honourable friend, and I am sure he will give it full weight. I think what we have to remember in relation to Clause 13 is that the powers given to the Secretary of State under Clause 13 can be operated only on the grounds set out in Clause 11, and this effectively restricts them. If that is thought of at length, I should rather doubt whether they are as wide as my noble friend Lord Aldington thinks. For instance, the first ground under Clause 11 is that the company may be unable to meet its obligations. To make it realise part of its investments, or to restrict it from investing in a speculative fashion, I
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should have thought was the mildest possible sanction. Obviously these powers are strong. They are intended up to a point to be strong, but Clause 11 does restrict them. However, I do not want to say anything which would detract from what I said to begin with. My noble friend's point is noted, and I will see that it is conveyed to my right honourable friend.
LORD ALDINGTON: If I may make my point quite clear, of course I agree with what the noble and learned Lord the Lord Chancellor has just said. It all depends on the final wording of Clause 11, but at the moment Clause 11 gives the Secretary of State the right to use this power if
"it appears to him that there has been a change in the persons who are controllers of the company".
As the Bill is at present drafted—I hope that this will be altered—this means any change in the directorship of the company, and since that takes place every year, in theory the power is available. That is the main reason why I have taken this point on Clause 13.
THE LORD CHANCELLOR: I note that point and am grateful to my noble friend for making it.
LORD JACQUES: Our view is that the Clauses 12 to 20 are needed. What is required is a suitable Clause 11. We regard Clause 11 as not being satisfactory at the moment, but have no complaint with Clauses 12 to 20.
Clause 13 agreed to.
Clauses 14 to 17 agreed to.
Clause 18 [Acceleration of information required by accounting provisions]:
On Question, Whether Clause 18 shall stand part of the Bill?
8.0 p.m.
LORD CACCIA: On Clause 18 I would raise not a question of principle, but one of practicality. Accelerated information is required and in the general context of Clause 11 that is difficult to argue, because Clause 11 is going to be redrafted; but the requirements are for information to be provided within certain specified time limits. I think it is a fact that certain companies with worldwide interests may find it impossible,

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even with the best will, to fulfil the requirement here set out, if pressed to do so in any literal fashion. Therefore, I ask this question: does the Minister accept that there might be this theoretical difficulty for a world-wide company and, if so, is it reasonable to put in a Bill a requirement which in fact may not be practical for such companies to carry out?
Tim LORD CHANCELLOR: I am grateful to the noble Lord on the Cross-Benches for having raised this matter. I quite agree that if the power were used unreasonably, as in all the other powers, it could operate unreasonably. The experience of the V. and G. report, which the noble Lord is familiar with, was not so much that we do not possess adequate power to act, but that we do not operate it in time. If information is asked for, it is only too easy for a company trying to keep going when it ought not to do so, to give apparently plausible reasons for not giving information and so playing the Department along. I will see that my right honourable friend bears this point in mind, because many companies are of world-wide importance and would find a genuine difficulty here. But one has to remember that there is such a thing as original sin and it is the only doctrine of the Church that can really be established by experience.
BARONESS LLEWELYN-DAVIES OF HASTOE: Some of us dispute that.
THE LORD CHANCELLOR: We must be on our guard against it.
Clause 18 agreed to.
Clause 19 [Power to obtain information and require production of documents]:
On Question, Whether Clause 19 shall stand part of the Bill?
LORD ALDINGTON: We had a debate on some of the main points about this clause when we discussed Clause 11(3) on the last occasion. If we might look at this clause in the context only of the powers in Clause 11(1) for the moment, may I ask the Government one question; that is, is it necessary to have subsection (1)?
That subsection would seem to provide for periodic inspection and handing over of information. Subsection (2)
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would seem to give all the powers that are required. That is the point that I would take on this clause in the context of Clause 11, subsection (1).
If in the redrafting of the Bill Clause 11(3) remains as it is, I very much hope that the wide powers in Clause 19 will not apply in those cases. The noble Earl, Lord Limerick, in the Second Reading debate and in the early part of this Committee stage, made the point that it was valuable to have a power of what I might call random inspection of any company in order to cover up or camouflage inspections made of companies whose affairs were in doubt. I have some reservations on that. But even if one accepts that, does it follow from that that the Bill must give the Secretary of State power to have a wide-ranging inspection of all the affairs of insurance companies—and there are something like 700 of them, I think—who are not at the moment subject to any of the circumstances set out in Clause 11(1)? Would it not be better to limit the power of inspection to certain important matters, one of which might be the unclaimed loss reserves? There are technical points which can be considered by the Government between now and Report, so what I am suggesting is that if in the redraft of Clause 11, subsection (3) remains somewhat as it is, the Government should in this case specify the purposes of the inspection.
LORD JACQUES: We believe there are situations in which Clause 19 as it stands may be required, but we also believe that there are situations where it is not required. Can I refer the Committee to Clause 11(3)? That gives the Minister power to use Clause 19 against any company, a company of long standing and repute. It is our view that the powers of the Minister in Clause 19, subsections (2) to (6) are adequate for the purposes of this particular clause, and that there is no need to use the powers of Clause 19(1) in relation to Clause 11(3).
THE LORD CHANCELLOR: I know from what my noble friends have just been saying to me that these points are being very carefully considered by my right honourable friend, and should either my noble friend or the noble Lord, Lord' Jacques, wish to make any additional representation to him, apart from what

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they have said, which will be carefully noted, my right honourable friend will take it into account. I follow what is said about Clause 19(1). On the other hand, I was not absolutely sure that I had the point about Clause 11(1) quite right. I should not have thought that Clause 11(1) was the most likely ground on which one would seek information, because if one thinks that a company is insolvent, one is much more likely to move straightaway on to one of the more draconian powers. But if one looks at some of the other grounds—misleading or inaccurate information, or failure to satisfy a particular obligation, or failure adequately to reinsure risks—I think it will be seen that Clause 19 is relevant. I should have thought it was altogether too mild rather than too extensive for Clause 11; but again, I do not want to pre-empt what my right honourable friend may put about it. I know he is considering this matter both with my noble friend and with other insurance interests. Perhaps with that, my noble friend would for the moment be content.
LORD ALDINGTON: I should be absolutely content if I could avoid my noble and learned friend, misunderstanding me. Clause 11(1) includes paragraph (a), which is the reason for a draconian power, and paragraphs (b), (c), (d), (e) and (f), and when I was referring to Clause 11(1) I was referring as much to paragraphs (b), (c), (d), (e) and (f). I hope my meaning is now clear.
THE LORD CHANCELLOR: The mistake was mine.
LORD STOW HILL: May I raise one point, which I should describe as a civil liberties point and which the Committee may feel we should look at before passing it. Clause 19 provides that in certain circumstances answers must be given and information furnished. It is compulsive, and the person involved has no option. If one looks at subsection (5) one finds:
"A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him."
I presume that means not only in civil proceedings but in criminal proceedings as well. I agree that without such a provision Clause 19 would be far less effective than it is intended to be and, may I
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add, ought to be. What I would ask the noble and learned Lord is, are there precedents for answers which have to be given, as to which the person concerned has no option, being made available as evidence against him in criminal cases? There may well be—I am not saying for a moment that there are not—but perhaps that is an aspect of civil liberties legislation which we should look at. I should be grateful if the noble and learned Lord would indicate the Government's thinking on that point.
THE LORD CHANCELLOR: There are precedents. The obvious precedent that springs to my mind is the Bankruptcy Act 1914. I am sure there are equally precedents under the Companies Act, of which this is virtually an amendment. I cannot see that there is any objection to using information provided by a person on that hypothesis and saying, "Now we are going to assume that this is true. This is something you said. If it was not true, you ought not to have said it." I cannot see why a man should run away on the grounds of civil liberty from the prosecution's saying in a subsequent case, "What you have said is true. If you are to deny it now, it is an issue for the jury." That is really all that subsection (5) says, even in criminal cases.
Clause 19 agreed to.
Clause 20 [Residual power to impose requirements for protection of policy holders]:
THE EARL or LIMERICK THE EARL or LIMERICK moved Amendment No. 18:
Page 14, line 28, leave out ("and potential policy holders of the company from") and insert ("or potential policy holders of the company against").
The noble Earl said: Apart from a minor drafting change to bring the wording of the clause into line with that used in Clause 11(1)(a), the Amendment has a similar purpose to that proposed in Clause 11(1)(a) (Amendment No. 11); that is, to permit action appropriate for the purpose of protecting either present or potential policyholders but not necessarily both. Action to protect future policyholders may in fact be different from that required to protect present ones, even where both require protection, and the Amendment will permit this. I beg to move.
On Question, Whether Clause 20, as amended, shall stand part of the Bill?
8.15 p.m.
LORD CACCIA: This clause again refers back to the provisions of Clause 11, and as that is to be amended it is difficult to argue a special case. The clause is of an omnibus character and almost says, "Well, if we have not thought of anything that we might have thought of by which to catch people who will be a danger to the reasonable expectations of policyholders or potential policyholders"—that would be under Clauses 16, 17, 19 and so on—"let us have an omnibus clause to make quite certain that we shall be able to get them somehow or another". This form of general legislation is in itself not commendable if it can be avoided. I was wondering whether the Minister would be ready to look at it again, to see whether it would be possible to define a little more precisely what these residual powers would be used for.
LORD BROWN: I hope that the Minister will not look too seriously at it again. We have over 700 insurance companies, and each employs a large number of sometimes very clever people, and of a very large number of clever people there will be a proportion—let us hope a small proportion—who will spend their time busily thinking out ways and means of evading some of these restrictions, or indeed of cheating policy holders. If you do not have an omnibus clause in a Bill like this, then you simply wait until somebody finds a nice way of evading the law, and then you have to legislate all over again. This is a tiresome business with which you never keep up, as is the case with, taxation. You must have an omnibus clause to deal with extraordinary situations such as we meet when we come to a matter like this, or the matter that was debated this afternoon in this house on aircraft hijacking. Very similar sentiments were expressed all through that debate this afternoon. Because these are exceptional issues: one endangers life, and the other endangers the payments of sometimes poor people. I hope that the Minister will not take too much notice and that he will maintain the existence of this general clause.
THE LORD CHANCELLOR: I wonder whether the noble Lord, Lord
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Caccia, has reflected upon the context of this clause, which is really a safeguard, properly viewed, rather than an added danger to the incautious insurer. What we are trying to do is to avoid using the powers of Clause 12, which really are to put the company out of business. The purpose of these additional powers is to avoid using the draconian power of Clause 12, which is death to the company. If my noble friend will glance at Clause 11(5), he will see that we have provided that the general power, the residual power, contained in Clause 20:
"shall not be exercisable except in a case in which he considers that the purpose mentioned in that section cannot be sufficiently achieved by the exercise of the powers conferred by sections 12 to 19 below or by the exercise of those powers alone."
Really the first safeguard is that you have to be satisfied that one of the grounds in Clause 11 exists, and then the grounds in Clause 11 are further restricted by the provision of subsection (5), which says that you can only use it if it is the last resort.
I would agree that if it were not for the framework of Clause 12, which is the power that already exists and that we are re-enacting, one could put forward a case of the kind which the noble Lord has been putting forward. Clause 12 is much more savage and more specific than this, and the restriction is so severe that I should have thought that, viewing the matter from the point of view from which we are viewing it now, the "stitch in time mentality" is better than the "put the company out of business" mentality. Probably it was to the advantage of a company that might be in only temporary difficulty for the Minister to have a power which, if he did not use it, might lead him to move straight to Clause 12 and either stop the whole of the business or some part of it.
LORD ALDINGTON: May I say to my noble and learned friend that some of this is not appreciated. It was with the idea of the power in Clause 12 being too draconian, too drastic, that Clause 20 was there to try and find something short of death to the company. I just wonder if that is the case, if that is the main purpose of Clause 20 which I take from my noble and learned friend, whether the present words in Clause 11(5)

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are not misleading. I had supposed that when the words were
"… the purpose mentioned in that section cannot be sufficiently achieved by the exercise of the powers conferred by sections 12 to 19".
the power of Clause 20 was more drastic than anything in Clauses 12 to 19. Now I find that the object of Clause 20 is to produce something less drastic. If that is so, may I suggest to the Government that they might have another look at the words in Clause 11(5), and that I think would calm the fears which I have. Many of us were wondering what powers worse than death to the company could be used by the Government.
THE LORD CHANCELLOR: I take the very good debating point made by my noble friend. I cannot imagine anything worse than death to a company. There are fates worse than death which some of us might suffer in our bodies, but that incorporeal entity, the company, can hardly suffer a fate worse than death. I will bring my right honourable friend's attention to the point made by my noble friend, but as I read this Bill (I am afraid I had to do my homework in rather a hurry) I believe my explanation still stands in spite of this rather jolly point.
LORD HAWKE: I have been listening to this debate with great interest. This Bill contains draconian powers. If you admit that they are draconian powers in parts of it, why not have draconian powers in other parts, too? I think this is a very necessary hit of clause. The Secretary of State might require a company to put its premium up, which would be a great deal better than closing it down, but I do not think the argument that such-and-such a power is too draconian is really valid, in view of the tremendous draconian powers that exist all over the Bill.
Clause 20, as amended, agreed to.
Clause 21 [Notice of proposed exercise of power under section 12]:
LORD STOW HILL LORD STOW HILL had given notice of his intention to move Amendment No. 19.
Page 14, line 34, leave out ("power") and insert ("powers").
The noble and learned Lord said: Your Lordships will see that this Amendment stands in the names of the noble Earl, Lord Selkirk, and my noble friend Lord Diamond and in my name. I think I am the only one of the three present so perhaps I could indicate to your Lordships what would be my proposal with regard to this Amendment. I would ask leave in a moment or so to withdraw it, saying this about it. It is the first of a series of Amendments—there are a considerable number of them—which deal with a point which has already been mentioned to-day; namely the fit and proper person" point, or the "natural justice" point.
This Amendment is a paving Amendment to a number which follow. They are designed, as your Lordships may remember, to provide that the Secretary of State, if he wishes to declare somebody not a fit and proper person, must give reasons for his view, and also are designed to bring it about that the supposedly unfit person is to have a right of appeal. I would propose, if it would meet with the convenience of the Committee, that I would in a moment ask leave to withdraw the Amendment in view of the circumstance that the Government have undertaken to consider the matter; and I would at this stage also indicate what are the other Amendments which go with it in order that the Chair may have the knowledge when we get to those others that those Amendments, if called, would not be moved. If that would meet with the convenience of the Committee, may I give the numbers of the other Amendments involved? They are Nos. 20, 21, 22, 23, 24, 25, 26, 27, 29, 30 31, 33, 34, 35 and 47. They all go to the same points and would, if they are called in due course, either not move them or ask leave to withdraw them. Having said that, I ask leave to withdraw Amendment No. 19.
Clause 21 agreed to.
Clause 22 [Notice if proposed exercise of powers on ground of manager's unfitness]:
THE EARL OF LIMERICK: This Amendment recognises a printing error.
Amendment moved—
Page 16, line 9, leave out ("12") and insert ("20").—(The Earl of Limerick.)
Clause 22, as amended, agreed to.
Clauses 23 to 30 agreed to.
Clause 31 [Powers to make valuation regulations]:
8.29 p.m.
LORD JACQUES LORD JACQUES moved Amendment No. 32:
Page 24, line 31, leave out ("may") and insert ("shall").
The noble Lord said: This clause gives power to the Secretary of State to make regulations with reference to valuation of assets and liabilities. We feel that the Government have been somewhat reluctant to use their powers. This we think was shown in the V. and G. case, and we think they should now show they intend to use their powers. Regulations for the valuation of assets and liabilities are in our view absolutely essential if we are going to avoid deception of policy holders and potential policy holders. We therefore think that there should be regulations and seek to substitute the word "shall" for the word "may". I shall probably be told that the Government could be in default the same day as the Bill was passed. If that was thought so by the lawyers, I 'think we could find suitable words to ensure that there would be regulations without the Government's being in default.
LORD HAWKE: I would support the Amendment, provided that there are full consultations beween the Department and the British Insurance Association when the time comes for drafting the said regulations.
LORD BROWN: I, too, would support the Amendment. If a similar provision could have been made in the Companies Act with regard to the valuation of stocks, how wonderful it would have been for everybody! Unfortunately, it is not possible with different sorts of goods. But I assume that when one comes to value the assets of insurance companies, one is referring mainly to investments of one kind or another which have a public value; and there does not seem to be any reason why regulations should not be drawn up under this clause so that the valuation in the balance sheets of the insurance companies has a consistent relationship to the valuation placed on the companies by the
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public. This would seem to be introducing a measure of highly desirable uniformity.
THE EARL OF ONSLOW: I should like to support this Amendment. After all, the Committee of Lloyd's makes fairly stringent regulations as to what you may or may not have in your premium trust funds, and it would seem to me quite sensible that this sort of power should be used by the Government in regard to insurance companies because, as my noble friend Lord Hawke said, they are taking quite draconian powers over the whole insurance industry, anyway.
THE LORD CHANCELLOR: In spite of the pleas from almost every direction, I hope the noble Lord will not think it right to press this Amendment. I have seen acres of print expended by lawyers on the difference between "may" and "shall". "May" very often imposes a duty and "shall" does not always do so, and the consequences of not doing a "shall" are almost infinite in their permutations and combinations. Shall we have the admirable Mr. Raymond Blackburn bringing a mandamus before the Divisional Court, and going before Lord Denning if the Secretary of State is in default? This is not the way in which the regulatory powers can be used. A Secretary of State is not in the same position as Lloyd's, nor has an Act of Parliament quite the same standing as the immutable laws which Lloyd's makes for its underwriters and its brokers.
The clause would not be put into the Statute if we did not intend to use its powers, and I can assure the noble Lord who moved the Amendment that we do intend to use the powers. But it is not usual to expose a Secretary of State, or any Minister, to unnamed penalties if he does not use powers, which he has every intention of using, as soon as some people would like, and "may" is therefore essential. Moreover, if you did substitute "shall" for "may", where would you get to? I suppose that people could argue that, although he had used his powers, he had not used them up to the hilt; that is to say, there were certain powers which his critics thought were intra vires and which he thought were ultra vires, which he had therefore deliberately refrained from using within the terms of the clause. I suppose a

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great deal of litigation could take place about that.
I am bound to say that I have not studied this point at any great length, but I do not think I have ever seen a regulatory power of a Minister imposed with the word "shall" and not with the word "may". Although I have great sympathy with the noble Lord, and indeed with my noble friends and others who supported the sentiments which he uttered, I would think that simply as a piece of constitutional propriety we might stick to the terms of the clause. I do not think this is the moment to break utterly new constitutional ground, but I think we should be doing so if we acceded to the noble Lord's persuasion.
LORD JACQUES: Am I right in saying that the Government regard these regulations as necessary, and that as soon as is practicable there will be regulations?
THE LORD CHANCELLOR: Yes, I think that is a fair statement of the case. We shall of course have to consult with quite a number of people as soon as the Bill is passed, and the resultant regulations will be made as soon as practicable thereafter. I hope that that will satisfy the noble Lord.
LORD HAWKE: The noble and learned Lord will no doubt have a few hints and tips from the Commercial Union on the valuation of liabilities.
Amendment, by leave, withdrawn.
Clause 31 agreed to.
Clause 32 [Approval of person proposing to become controller of insurance company]:
On Question, Whether Clause 32 shall stand part of the Bill?
8.35 p.m.
LORD ALDINGTON: What I have to say really revolves around the interpretation of the word "controller". If the word "controller" in this clause is to be interpreted in the same way as the word "controller" in Clause 2, then my humble submission to your Lordships is that this clause makes nonsense of life. In effect, it requires that every year all the directors standing for re-election in a company have to submit their names
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for the approval of the Secretary of State and may have to wait for three months. I cannot believe that that is meant to happen, and I can only believe that the intention of this clause is to catch the real controller in the sense of somebody who has the full controlling power over the insurance company—perhaps a person as defined in Clause 2(2)(c). If that is the case, then I have no objections to the clause, but I should like to know whether that is so.
THE EARL OF LIMERICK: My noble friend is on to a good point. It is one which we have discussed and I think I have to concede—although I am not convinced—that his interpretation of "retiring directors" is right. But this is a matter into which we are looking and we have certainly taken on board what he has said. He is certainly correct in assuming that we are not attempting to catch the sort of case he mentioned.
LORD BROWN: Does not this difficulty draw attention to an omission which is much wider than this Bill; that is, the failure of industry and commerce to move to an exact definition of the terms which they consistently use? If one had the term of "chief executive", then what this Bill is aiming at is the chief executive if he is the man whom the board holds accountable for running a company within the terms of reference set by the hoard. This failure to define our terms results in its being almost impossible to draft clauses which are appropriate. I hope that the fact that there has been this difficulty will draw attention to the necessity for defining our terms in future—not that I suggest doing it in this Bill.
LORD ALDINGTON: With respect to the noble Lord, I very much hope that the Government will not take any notice at all of that suggestion. I do not think it is the fault of industry; I think it is the fault of the drafter of the Bill in using a word which is specially defined in this Bill to catch much too wide a net of people. That is all that has gone wrong. I do not think this clause is at all aimed at what is called the chief executive: I think it is aimed at somebody who has even greater power than the chief executive. Chief executives, as I understand the Companies Act, are responsible

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to their boards of directors, and their boards of directors have responsibility under this Bill and under the Companies Act to all kinds of people. I think the controller" here is meant to be the person mentioned in Clause 2(2)(c). If I am right about that, then I have no objection to the clause.
Clause 32 agreed to.
Clause 33 agreed to.
Clause 34 [Documents deposited with Secretary of State]:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 36:
Page 26 line 21, leave out from ("under") to end of line 22 and insert ("section 8 of the Act of 1958, including any document obtained under subsection (2) of that section;").
The noble Earl said: This Amendment makes no change to the substance of the Bill. It merely clarifies the drafting for the purpose of facilitating consolidation which, it is hoped, can be arranged soon after the Bill is enacted. I beg to move.
On Question, Whether Clause 34, as amended, shall stand part of the Bill?
LORD ALDINGTON: There is a very short point here which has been taken earlier. It relates to the desirability of publicity in all circumstances. My noble friends have stressed the importance of the Government having power to do things in such a way that they do not provoke immediate disaster for the policy holder and the insurance company. Immediate publication of certain documents in certain events might provoke exactly that disaster which my noble friends on the Government Front Bench have told us on many occasions they wish to avoid, so I wonder whether they might look again at the drafting of subsection (2), or indeed at the drafting of the whole of this clause, to ensure that publicity is not mandatory in those sort of circumstances.
THE EARL OF LIMERICK: Certainly we will look at the point which my noble friend has raised. I would just point out that the Secretary of State is not bound to make public the information which he gets under Clauses 6(5) and 7(2), but he has a discretion to do so. The extent and the form of the publicity will be among
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the matters for consideration with the industry when the contents of the regulations to be made under those two clauses are discussed with them, and of course we shall have regard to our watchword "Freedom with publicity", which involves a certain amount of publicity to justify the freedom.
Clause 34, as amended, agreed to.
Clause 35 [Treatment of certain business as or as not being ordinary long-term insurance business]:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 37:
Page 27, line 19, after ("27") insert ("(4) to (6)").
The noble Earl said: This is a purely drafting Amendment to remedy the inappropriate inclusion of irrelevant subsections!that is, subsections (1) to (3) of Clause 27—in Clause 35 (4), which, as amended, will still refer to the other subsections of Clause 27; that is, subsections (4) to (6). I beg to move.
On Question, Whether Clause 35, as amended, shall stand part of the Bill?
THE LORD CHANCELLOR: Perhaps I may take this opportunity to say that I made a passing reference to Lloyd's in reply to an argument put from behind me, and I ought perhaps, before doing so, to have disclosed that I am a name at Lloyd's. The Bill does not affect, it, but it does occur to me that, having referred to the matter, I should perhaps have disclosed it.
THE EARL OF ONSLOW: Perhaps I should also have disclosed that I am a name at Lloyd's as well.
LORD HAWKE: Is it advertising for the Lord Chancellor to say that he is a name at Lloyd's?
Clause 35, as amended, agreed to.
Clause 36 [Power to modify Acts in relation to particular companies]:
8.45 p.m.
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 38:
Page 27, line 37, after ("27") insert ("(4) to (6)").
The noble Earl said: This, again, is purely a drafting Amendment, similar

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to the last, to remedy the inappropriate inclusion of irrelevant subsections—that is, subsections (1) to (3) of Clause 27—in Clause 36(4), which, as amended, will still enable modifications to be permitted for individual companies in relation to the remaining subsections of Clause 27; that is, subsections (4) to (6). I beg to move.
Clause 36, as amended, agreed to.
Clause 37 [Application of Acts in relation to industrial assurance business]:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 39:
Page 27, line 43, leave out ("and sections 5 and 7") and insert (",section 5 of that Act so far as it relates to the form of abstracts and statements and section 7").
The noble Earl said: This is a somewhat recondite point, but I think I can explain it briefly. Under Section 5 of the Insurance Companies Act 1958 the triennial valuation of industrial assurance companies has to be made by an actuary with prescribed qualifications, and in that context "prescribed" means prescribed by regulations made by the Industrial Assurance Commissioner. But the business of industrial assurance companies need not be confined to industrial assurance business, and in practice all or nearly all such companies also carry on ordinary long-term business. There therefore seems little merit in excepting industrial assurance companies from the general rule that, as insurance companies, they should have actuaries with qualifications prescribed by the Secretary of State. The Amendment has the effect of conferring on the Commissioner the power to prescribe under Section 5 the form of valuation abstracts and statements, but leaves with the Secretary of State the power to prescribe the qualifications of actuaries. I beg to move.
Clause 37, as amended, agreed to.
Clause 38 agreed to.
Clause 39 [Insurance brokers]:
LORD JACQUES LORD JACQUES moved Amendment No. 40:
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Page 29, line 19, leave out ("may") and insert ("shall").
The noble Lord said: Clause 39 is concerned with regulations controlling insurance brokers, and again we have the question whether it should be "may" or "shall". Can I assume that the Government regard these regulations as necessary, and will make such regulations as soon as practicable? If so, I shall beg leave to withdraw the Amendment. I beg to move.
THE EARL OF LIMERICK: I am able to give that assurance to the noble Lord, comparable to the one given on the previous Amendment, Amendment No. 32.
Amendment, by leave, withdrawn.
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 41:
Page 29, line 21, leave out from first ("to") to ("and") in line 23 and insert ("make an offer or proposal or to take any other step with a view to entering into a contract of insurance with an insurance company;").
The noble Earl said: The present wording of Clause 39(1)(a) is inadequate, in that it does not take account of the many forms of preliminary action which may lead to the conclusion of an insurance contract. For example, in some cases the form or proposal completed by a potential policy holder, or perhaps by a broker on his behalf, may constitute an invitation to the insurance company to treat, rather than itself constituting an offer to the insurance company. The amended wording is so framed as to cover any conceivable arrangement involving an intermediary leading up to the possible conclusion of an insurance contract. I beg to move.
LORD JACQUES LORD JACQUES moved Amendment No. 42:
Page 29, line 27, after ("connection") insert ("and to other matters").
The noble Lord said: We on this side of the Committee are concerned not so much with the agent who is a full-time member of the staff of the insurance company, but with the insurance broker who acts for several companies and with the part-time agents such as the garage proprietor who is in a strong position to get business and whose main concern is not insurance. It is here that some control is necessary. There are many cases where a youngster goes to a garage

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and eventually buys a car. The garage proprietor says to him, "Now you will want insurance. You cannot go on the road without insurance. We can fix that up for you right away". Then they produce their proposal form and encourage the youngster to fill in the form. Then lie gets stuck halfway down and says, "What shall I say about this?". "Oh", they say, "Say Yes! If you say 'No' there will be a delay". Later he may have an accident and as a result of the advice given to him by the part-time agent he has given false information. In consequence he has no claim. We cannot see the great importance of disclosing connection; because everybody knows that the chap at the garage or the insurance broker has a connection with the insurance company and is getting a commission and that otherwise he would not be bothering about insuring the client.
THE EARL OF ONSLOW: May I interrupt? I think it should be made quite clear that insurance brokers are agents of the insured and not of the insurer. If the noble Lord, Lord Jacques, goes to an insurance broker, that broker is acting as his servant and not as the servant of the insurance company. I am sure the noble Lord understands that, but what he said could have been misconstrued.
LORD JACQUES: In the context of what I am saying, this is a purely technical point of law which makes no difference to the ultimate consequences. It is the ultimate consequences that count. Therefore, so far as connection is concerned we do not see a great deal of importance in that. We have no objection to its being disclosed; but everybody knows that the chap encouraging the insurance to be entered into is acting for the company and is going to get paid for so doing. What is far more important is that he should disclose to the potential policy holder the consequences of false information on the proposal form, what are the consequences of non-disclosure and what are the terms of the offer which is now to be made to the insurance company. These are the things that should be disclosed. Consequently we have suggested that in addition to "connection" there should be added "and to other matters", thus giving the Secretary of State power to deal with other matters in
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these regulations and to ensure that there is this kind of disclosure by the insurance broker. I beg to move.
THE EARL OF LIMERICK: The noble Lord, Lord Jacques, has raised an interesting point and has given some examples about which I should like to think. Basically, the question, not an easy one to resolve, is this: how much of this information should be given other than in the policy itself, which is the document of contract? I should like to consider whether it would be helpful for policy holders to prescribe this other information separately from the policy. I have another reason for asking the noble Lord not to press the Amendment at this moment. We hope shortly to receive recommendations from the Committee under the chairmanship of Sir Hilary Scott which is examining equity linked life insurance. It may be that some of these recommendations will be dealt with by Amendments to Clause 39. Bearing in mind what I have said and that I am willing to talk about the matter. I hope that I may ask the noble Lord not to press his Amendment at this moment.
LORD JACQUES: We still hope that the Secretary of State will take this power. That is all that this Amendment would do; it would add words to give the Secretary of State additional power to ensure that the prescribed disclosure is not only about "connection" but about "other matters" at the discretion of the Minister. With the assurances that have been given, I beg leave to withdraw the Amendment.
Amendment, by leave withdrawn.
LORD JACQUES LORD JACQUES moved Amendment No. 43:
Page 29, line 27, at end insert—
("() Regulations under this section may require the keeping by an insurance company of a register of persons so connected and may prescribe the information to be entered on it.")
The noble Lord said: Here we suggest that there should be regulations requiring an insurance company to keep a register of the persons so connected and the Secretary of State may prescribe the information to be entered in it. We believe that this would be one way of weeding out those people who act between the insurer and the insured and who are not the kind of people who ought to be doing that. If there is a register it would help

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a great deal. The burden of keeping the register should not fall upon the Government Department but upon the insurance company who use the agent or broker. I beg to move.
LORD HAWKE: This may be a very worthy Amendment. I am sure that most insurance companies must have a list of their agents; but the Amendment does not appear to me to say what is going to happen to the record when it has been prepared. It will not be of much use unless the general public are to have access to it.
THE EARL OF LIMERICK: Again I find myself in sympathy with the point put, although my noble friend Lord Hawke has voiced one of the doubts which I have about it. I think that this proposal could usefully reinforce our disclosure requirements. I am grateful for the noble Lord's welcome concern not to overload Government Departments. Following my noble friend Lord Hawke, I wonder whether the register kept in the company office would be of sufficient help to the public. What I should like to consider is whether the information to be recorded on that register should be deposited with the Department, perhaps on an annual and not on a "blow-by-blow" basis, so that a copy could be put on the company's file for general information. That would call for the Amendment to be redrafted, which I think it needs in any case. I would therefore ask the noble Lord not to press it at this stage.
LORD JACQUES: I gather that the Minister is not only in sympathy with the Amendment but wants to carry it a little further. In that case I have pleasure in asking leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 39, as amended, agreed to.
Clause 40 agreed to.
Clause 41 [Validation of certain group life policies]:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 44:
Page 30, line 2, after ("lives") insert ("or other event or events").
The noble Earl said: This is a minor drafting Amendment, associated with the
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Amendment to the Long Title of the Bill (Amendment No. 58), to make clear that Section 2 of the Life Assurance Act 1774 extends to certain group non-life policies as well as to certain group life policies. The Amendment in no way affects the substance of Clause 41(1) which, as it stands, already applies to non-life policies. I beg to move.
Clause 41, as amended, agreed to.
8.58 p.m.
LORD STOW HILL LORD STOW HILL moved Amendment No. 45:
After Clause 41 insert the following new clause:
Repudiation of liability
".Notwithstanding any rule of law to the contrary, an insurance company shall not be entitled to repudiate liability on a policy of insurance on the ground that the policy holder or any other person who effected the policy failed to disclose a fact or facts material to the assessment of the risk covered by such policy, if the policy holder or such other person, as the case may be, reasonably regarded such fact or facts as not being material to the assessment of such risk."
The noble and learned Lord said: The object of this Amendment is to give effect to what I think I can rightly describe as the principal proposal of the Fifth Report of the Law Reform Committee which was published as a White Paper in 1957. I think I should describe it as a tentative proposal because, if I may quote from paragraph 12 of the Report, those who sign it say this:
"It does not, however, seem to us that the mere fact that a branch of the law is theoretically open to criticism, or even that it is susceptible of abuse, in itself justifies a positive recommendation that it should be amended."
In the light of that, they do not actually recommend the change proposed in the Amendment which I put forward, but to use their language they say:
"We think that any or all of the following provisions could be introduced into the law and that no legal difficulties would arise in their application—".
They then go on to make the first of the recommendations with which I am concerned in this Amendment and which I will in a moment read to the Committee.
I am emboldened to make this proposal because the Committee which prepared the Report was composed of extremely distinguished members: lawyers who occupied the highest position on the

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judicial bench, and lawyers of very great distinction in the academic field. Many were Members of your Lordships' House, those whose names I will now read out. The late Lord Jenkins; the late Lord Parker, the Lord Chief Justice; the noble and learned Lord, Lord Devlin; the noble and learned Lord, Lord Diplock, and my noble and learned friend Lord Gardiner. They were all members of that Committee with other distinguished persons highly thought of in the academic field.
The Amendment deals with what is known as the doctrine of non-disclosure of material facts. To the extent that the law requires to be changed I must plead guilty to having raised the defence on innumerable occasions on behalf of insurance companies; and certainly on occasions I earned a rather severe look down his nose from the late Lord Goddard, who had rather strong views on this defence and who did not altogether approve of the advice that he thought I must have given to my clients—generally he was right. If I may seek to state the doctrine it is as follows. It is always said that the law of insurance is the law which requires the maximum good faith on the part of both the proposing insurer and the insurance company or the underwriter. As a branch of that law, it has been clearly formulated in the authorities that the following is the position: if the proposing insurer knows of a fact and the insurance company is ignorant of that fact, the proposing insurer is bound to reveal it, without being asked, to the insurance company, if it is a fact which would influence an ordinary prudent underwriter in assessing the risk which is proposed. The Committee may think of dozens of cases in which that sort of situation might arise.
In a large field of insurance law it does not arise in a practical form because the proposing insurer is required to fill in a proposal form in which he gives answers to the insurance company on matters they ask about in the form. Sometimes it is held that if he fills in the form the insurance company waives its right to be informed of other material facts which the proposing insurer knows of. But that is not of universal application and, broadly speaking, I think it is accurate to say that whether or not there is a proposal form the proposing insurer
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remains under that duty. If he knows of a fact which is material in assessing the risk he must, without being asked, disclose it to the insurance company whether or not he thinks, reasonably or otherwise, that it is material. He may think that it has absolutely nothing to do with the risk; nevertheless, if a prudent underwriter would say to himself, "This affects the character of the risk I am being asked to underwrite", and if the proposing insurer does not disclose that fact, the underwriter can, when he gets knowledge of the fact!perhaps after a loss has occurred—repudiate liability on the policy.
One must try to take a fair view of this matter. On the one side there is the proposing insurer who has knowledge of a fact which he does not know is material, and reasonably does not think that it could be. On the other hand one has the underwriter or the insurance company who, if told of the fact, would certainly think it material in that it would influence the premium or his judgment as to whether he would accept the risk at all. He might refuse it. Standing apart from that position one has to be fair to both sides. The loss has to fall on someone. Should it fall on the proposing insurer or on the insurance company? Suppose a loss does occur in respect of a risk which the insurance company would not have accepted at all had it known of the fact, but it was a fact which the proposing insurer did not think could possibly affect the risk. Who is to bear the misfortune? Is it to be the proposing insurer or the insurance company?
As the law stands at the moment, it is the proposing insurer who has to bear the loss. The underwriter or insurance company, when he or it acquires knowledge of the fact, can repudiate the policy. That may frequently happen—indeed it nearly always does happen—after a loss has occurred. In consequence, the proposing insurer has to bear the loss. He may be turned out of his house and home; it may be a heavy loss and a terrible misfortune to him. What does Justice really say in a matter of that sort? I hope I have got it right; I think I have. If I may quote from the Report it seems to confirm me:
"The effect of non-disclosure may be considered first, since it is a consequence of the

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general law relating to insurance contracts and does not involve any express term or condition. We take it to be well settled law—(a) that the duty of disclosure of material facts … applies to all classes of insurance and, (b) that the question in every case is whether the fact not disclosed was material to the risk, and not whether the insured, whether reasonably or otherwise, believed or understood it to be so."
The Report goes on later to say:
"The practical effect of the law on this point is that insurers are entitled to repudiate liability wherever they can show that a fact within the knowledge of the insured was not disclosed which, according to current insurance practice, would have affected their judgment of the risk. Whether the insuring public at large is aware of this it is difficult to say; but it seems to us to follow from the accepted definition of materiality that a fact may be material to insurers, in the light of the great volume of experience of claims available to them which would not necessarily appear to a proposer for insurance, however honest and careful, to be one which he ought to disclose."
I should add that they considered a number of other things such as arbitration clauses, proposal forms and so on. They then summarised their conclusions in this way in paragraph 11 of their Report:
"It appeared to us that such a state of the law, combined with the prevalence of such terms and conditions in insurance policies as we have described in the preceding paragraphs, is capable of leading to abuse, in the sense that a variety of circumstances may entitle insurers, after a loss has occurred, to repudiate liability as against an honest and at least reasonably careful insured. Material was available to us, in the form both of reported cases and of instances within the experience of those who supplied us with information, which showed that such abuses had in fact sometimes occurred. It was forcefully represented to us by those representatives of insurance interests who submitted memoranda or gave oral evidence that no reputable insurer would rely on a purely technical defence to defeat an honest claim. This may well be true, and we think that in general it is true, but it does not alter the fact that the ease with which a technical defence may be found means that in many cases an insurer is in a position to substitute his own judgment of the claimant's bona fides for that of the court."
If I may quote from my own experience, perhaps I may say that over many years of this class of litigation I always found that insurance companies were extremely jealous of their reputation. If the question whether a defence of nondisclosure (as we used to call it shortly) should be raised or not, got to (shall I say?) the policy-making section of the
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insurance company, they were extremely careful not to raise it if it could possibly be said that to raise it would in the circumstances be unconscionable. That I always found to be the case.
On the other side, I sometimes found that you might get a claims manager a long way from London, a long way from the board and a long way from senior executives, faced with a fairly small claim. He might perhaps have more regard to the individual case and less to the reputation of a large insurance company, and it never reached great heights and nobody knew about it; whereas if persons higher in the ranks of the insurance company had known about it they would have strongly repudiated the idea that any such defence should be raised.
Quite apart from that, with the best will in the world there are always cases as to which it is extremely difficult to say: Would it be conscientious in this case to raise the defence, or would it not? Often insurance companies came to counsel (for which I was extremely grateful to them), and often they got bad advice, I am sure—and I speak from experience; occasionally I received a reproof from the late Lord Goddard, who looked severely at me on occasions. Both sides, certainly counsel, did their best to see that a defence was raised only in a case where it could be properly raised. Unfortunately, opinions differ. In a given case, an honest insured might think it would be monstrous to raise it; and in the same case, equally honest insurers, including their counsel, might think it right and sensible that it should be raised. I sometimes felt that the insurance company did sustain harm. Their reputation was not served well on occasions when that sort of defence was raised, and perhaps it would have been better, on reflection, not to have raised it. But it is difficult to accuse those concerned. These questions are difficult matters of discretion and judgment, and both parties are trying to deal with the matter honourably, one with regard to the other. I certainly plead guilty in the matter; I am not trying to exculpate myself in the least.
What the Committee in those circumstances say in the form of their tentative proposal is
"We think that any or all of the following provisions could be introduced into the law

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and that no legal difficulties would arise in their application—
(1) that for the purposes of any contract of insurance no fact should be deemed material unless it would have been considered material by a reasonable insured."
In formulating this Amendment (my drafting is very imperfect) I have tried to give precise effect to that proposal. Your Lordships will see that I say that, notwithstanding any principle of law, an insurance company is not to be allowed to repudiate liability on a policy of insurance on the ground of non-disclosure—and these are the material words:
"if the policy holder … reasonably regarded such fact or facts as not being material to the assessment of such risk".
That, I think, would follow what the Committee recommended; and I would submit that it is fair.
One is really asking the question: where should the loss fall? Take the case, for example, where an insured person did not disclose some fact within his knowledge but reasonably said to himself—and I emphasise the word "reasonably"—"This obviously has nothing to do with it; it cannot possibly influence the nature of the risk." Where that is the situation, if a loss occurs and the insurance company gets knowledge of the fact that is not disclosed, in those circumstances they shall not be entitled to repudiate the policy. I hope that is a fair approach, and I am the more emboldened to put it before your Lordships because it emanates from this distinguished Committee. It is not simply my own idea, though I am bound to say that it accords with my own experience of these matters.
That is the proposal I have to make to your Lordships. I thought it right to propose it in the form of an Amendment to this Bill, which is designed generally to amend the law relating to insurance. Therefore it seemed not inappropriate to look at the recommendations which were formulated by this Committee some years ago and seek to embody by way of an Amendment what I think is the most important of their proposals. Certainly it is the least complex. The others, dealing with arbitration clauses and so on, are more complex and would not perhaps fit well within the context of this Bill. But this is a separate and distinct branch of the law which it has been thought—and I use those words
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deliberately in the light of the Report—is susceptible to change, and could be changed with advantage. Those are my reasons for proposing this Amendment, and I beg to move.
THE EARL OF ONSLOW: I very much hesitate to disagree with the noble Lord, Lord Stow Hill—he is far too clever for me to try that on—but one could say that there are rogues in the insuring public as well as a few rogues in insurance companies, and I should have thought that this Amendment would have given some people quite large opportunities for a little bit of fiddling. Secondly, as the noble and learned Lord, Lord Stow Hill, says, the vast majority of insurance companies do not use the excuse of non-disclosure unless there is a very sound reason behind it, and there is almost always a suspicion of something else as well. Thirdly, perhaps going a little way towards agreement with the noble Lord, where a contract of insurance is entered into the forms of proposal could have on them some more detailed clause or question, pointing out the advantages and disadvantages of the doctrine of utmost good faith and of the disclosure of facts.
LORD HAWKE: I think this Amendment is of the most glorious metaphysical character, and we could argue it until midnight, if we all had a go at it, but it seems to me that a great deal turns on the interpretation of the word "reasonably". It is perfectly possible to have grave doubts whether it is reasonable for a person to have made a disclosure or not to have made one. A very typical instance would be that of a person who has insured his house and subsequently has installed oil-fired central heating. He might not think it made the slighest difference to the risk, but the underwriter might say to him, "My experience of houses with oil-fired central heating is that they burn more easily than those that have not got it"—something like that. On whom is the burden of proof as regards what is reasonable? Has the insurance company to prove that it was unreasonable of the insured man to withhold these facts, or must the man prove that it was very reasonable of him to withhold them? I do not know whether the Department has had any discussions with the interests concerned outside this House on this particular matter,

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but I would humbly suggest that the noble Lord might withdraw his Amendment and my noble friend might take some counsel with the people who run the industry, to see whether it is practicable to do something of this nature.
LORD ALDINGTON: I almost hesitate to disagree with, and certainly to contradict, anything the noble Lord, Lord Stow Hill, may say to your Lordships on a matter of law, arising from his considerable experience in practising it. I think he would agree, however, that if he is going to alter the law he ought to alter it not only for insurance companies but for all insurers. Perhaps this Bill might not he the right place to do that. On the main point, one must be affected in one's judgment by the fact that a formidable body of lawyers—some of them no longer with us—of well-earned reputations known to your Lordships should reach this conclusion in 1957. One must weigh that up carefully in the balance. One must also weigh up the fact that though they reported in 1957, the pressure to implement that Report has not been very great, and that successive Governments over this considerable period of years—nearly 16 years—have not thought it right to proceed, and one can see why from the remarks made by both my noble friends who have just spoken.
One must realise and accept from the noble and learned Lord that sometimes this defence—because I think this is the evidence he gave to us—has been used in a way in which he and the friend of many of us, Lord Goddard, did not like. If that is so, anybody who was responsible for the company in those circumstances would regret it. From the experience I have of hearing about these things, my own feeling is that great care was taken before this defence was pleaded, and that it was pleaded only in cases where something material was not disclosed which would have affected the assessment of the risk. If that is pleaded in front of the court as such, I should have thought that gave the insured person a good safeguard. What the noble and learned Lord is proposing is to go a little further than that and turn it round from what might be reasonable for the assessment of the risk, to what an insured person, or a proposer for insurance, might at that time think is reasonably material
1120
for the assessment of the risk. That is the change. It is a small change apparently, but it might have the most devastating, effect—and this I have not had time to think out or seek advice upon—on the assessment of risks in the future. It is reasonable that we should all think about it further. It is also reasonable—and this I put to your Lordships—that a change of the law of this importance, affecting all insurers, not just insurance companies, might be better made in some other Bill than a Bill which is specifically confined to insurance companies.
9.24 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, if there is one thing that I agree about it is, as the noble and learned Lord, Lord Stow Hill, put it, that this is something upon which we should take counsel and, for all I know, counsel's advice. And as my noble friend, Lord Aldington, put it, it is something we should think about. The situation is this. The Department does not have the same richness of evidence and experience that the noble and learned Lord, Lord Stow Hill, enjoys. If one looks at the whole of the Report which came out in 1957 and to which he referred, one sees in paragraph 10 that this very distinguished body said that the legal interpretation of this particular point had been obscured and, indeed, occluded by the inclusion of these arbitration clauses which had prevented most of these cases coming to court in recent years. The Report then made the points in paragraph 11, the whole of which he read out but which, as I understand the Report, do not necessarily relate to the particular matter to which this Amendment goes, because there were three points in their recommendations. I do not know what material was available to them and I do not know how much of it went to this particular one of their three points. They then went on to say, in paragraph 13, that there was a new régime which had then come into existence whereby the arbitration clause was to be outlawed and they hoped, therefore, that these matters would get back to the courts, where I think on a point of this sort the argument really belongs, rather than in the arbitration tribunal.
About the same time there was an equivalent inquiry in Scotland which published a Report as Command Paper 330, and that one said—and I think the law

1121
on this point is probably the same in Scotland as it is South of the Border—that they did not find there was anything particularly wrong on this point. If one looks at paragraph 35 of that Report one can see that. What I do not know, and what I do not think anybody knows, is what has happened since this new arrangement between the British Insurance Association and Lloyd's to get rid of the arbitration clauses, and we do not know what the effect of it has been. With great deference to the noble and learned Lord, Lord Stow Hill, I believe that the time when he was doing the sort of cases to which lie referred us was a little while ago, and probably not since a new arrangement about arbitration clauses was entered into. Certainly the Department has not had many complaints about it since that time.
I know the two conflicting points of view and I think they must be very carefully balanced. On the one hand, you have the branch manager who takes this bad point when he ought not to, as the noble Lord described it. I think there is also the point raised by my noble friend Lord Onslow that this defence may be the last resort of an insurance company which is otherwise liable to be "taken for a ride" by someone even though they cannot in any other way prove it. These are two extreme points of view. Somewhere in the middle we have to get a balance between the interests of the insured not to have the liability suddenly repudiated for reasons which he thinks are unjust, and the insurance company or the insurer in general—because I take the point made by my noble friend Lord Aldington—who ought to be informed of the things they have discovered from long experience are relevant to the assessment of risk, even if the person who is proposing himself for insurance has no idea whatever that these things have been discovered and are relevant.
In the circumstances, it therefore seems to me that I must take this point of view and suggest this to the Committee. For a long period of time this doctrine of maximum disclosure or complete faith—and we must avoid the dreadful Latin phrases—has been built up by the courts (judge-made law) and the Report describes what the latest stage of it is. I have enormous faith in the courts and judges of this
1122
country to continue to develop the law in such directions as will bring general justice, and unless there is some indication that the law has got stuck in such a way that it is causing injustice I would hesitate to introduce legislation—and I have at the moment no information to suggest that the law has got stuck. I am quite prepared to receive such information and the Department will be delighted to be told of any circumstances where this has gone wrong. We should very much like to know of cases which have been settled; and we could no doubt be told in confidence about these because people might not wish to disclose the whole thing. But I think the burden of proof for putting this in the Bill must be on those who wish to do so. In fact, on the noble and learned Lord, Lord Stow Hill, who, with all the experience that he had when he was a distinguished practitioner at the Bar, could with advantage give us some more up-to-date information, if he is able to do so. Because that was what deterred the Law Reform Committee in 1957 from being more positive. They did not know what the effect of the new arrangement would be. They did not say that this ought to be done; they merely said in the end that it would be a possible and feasible change but not one that they actively recommended.
This is an early stage of the Bill and I am sure that it is right to consider this point. I do not know whether the context is altogether correct, but I do not wish to discourage discussion for that reason. What would be most helpful to the Department would be to have the up-to-date experience and advice of those who work in this field, and if we could have some of that we could see the extent to which there is a mischief here and whether it is a mischief which is so severe that it ought to be cured by legislation. Would the noble and learned Lord accept that invitation and see if he can provide us with some more up-to-date material? He will forgive me if I say that his material was from about the time of this report. Could my noble friend Lord Aldington think about it, and also my noble friend Lord Onslow, to see whether they have instances of this going wrong, and then could we come back to it with this fresh information and discuss it, if your Lordships wish, at the next stage of the Bill?
LORD STOW HILL: As the mover of the Amendment, I believe that I do not infringe your Lordships' rules if I address your Lordships again. I am most grateful for what the noble Viscount, Lord Colville of Culross, has said. I wish I could disagree with him when he said that it is a long time ago that I had anything to do with it. Unfortunately it is years and years ago, and I wish that were not true. The relevance of that remark is that, while I shall do everything I can possibly do to help, I do not think that I have sources from which I can cull more up-to-date information. I rely very much on the Report. It is a most difficult branch of the law. I do not put this proposal forward in any sense dogmatically, I hope. It is very difficult to try and devise a just system for answering the question, "On whom should the loss fall?" I ventured to declare a personal interest when I last addressed your Lordships on this matter, as a person extremely well disposed to insurance companies and having had a great deal to be grateful to them for. I add to that that possibly I am being of some slight assistance to them, because I think on occasions—and I emphasise "on occasions"—that sometimes harm was done to them when defences of this sort were raised which, on reflection, might better not have been raised. I do not seek to exonerate myself. I was in with them and I constantly raised such defences as seemed open to them. But the difficulty is that one gets a kind of ground on which it is difficult to say where the right lies? Should one raise or not raise a defence of non-disclosure? Insurance companies have been regarded by too many people for years as "fair game" and they are rather like the French adage:
"Cette bête est méchante—quand on l'attaque elle se defend."
One can sympathise with them, and I do sympathise with them. I put the proposal for consideration. I absolutely agree with the noble Viscount that this is a matter which one should not rush into. I would not have ventured to put it before your Lordships had it not been considered in the Report, written by such very distinguished members. I hope that I have achieved some useful object if I have given some ground for people to reflect on this matter and to see whether there
1124
is some useful approach and whether the time has come (in spite of what the noble Viscount said about the lesser use of the arbitration clause) for some change to be made. I do not assert or deny. I do no more than put the proposal for consideration before your Lordships as this is a Bill to amend the law of insurance and as one has had that very distinguished Report lying on the table now for many years past it seemed that it should be resurrected and considered. In saying that I am in a difficulty about furnishing up-to-date information, that of course is true, but anything I can possibly do to help in resolving this problem I shall be only too delighted to do. Having said that, may I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.36 p.m.
LORD JACQUES LORD JACQUES moved Amendment No. 46:
After Clause 41, insert the following new clause:
Forms of policy
".—(1) Regulations may be made prescribing forms of policy which shall be applicable in the case of such class or classes of insurance business as may be prescribed in the regulations, and it shall he the duty of insurance companies carrying on insurance business of that class or those classes (except in the case of such insurance companies as may be excepted by such regulations from the application of this section) to issue policies in that form to all persons proposing for such insurance at such rates of premium as are reasonable in relation to the risk covered by such policies:
Provided that no insurance company shall be under a duty to issue such a policy to any person or persons proposals from whom for policies of insurance in a form normally issued by such insurance company in relation to such class or classes of insurance business apart from this section would not have been acceptable by such insurance company at rates of premium applicable normally in accordance with the rates of premium ordinarily charged by that insurance company in relation to a policy of insurance issued by that insurance company in that form, and
Provided also that no insurance company shall by virtue of this section be under a duty to insure risks under policies in a form so prescribed which in the aggregate exceed the reasonable scope and capacity of the insurance business carried on by that insurance company, no account for this purpose being taken of policies of insurance issued by that insurance company in a form normally issued by that insurance company apart from this section in relation to the class or classes of insurance business in relation to which a form or forms of policy are prescribed by such regulations.
(2) If an insurance company wilfully makes default in carrying out the duty imposed on such insurance company by virtue of this section, the Secretary of State shall have power to withdraw the authorisation issued in relation to that insurance company under the provisions of section 61 of the Act of 1967."
The noble Lord said: May I point out in the first place that this Amendment is a purely enabling clause. In fact, we do not use the word "shall"; we use the word "may". It is an attempt to give the Secretary of State powers to consult with the industry and, having consulted with them, to frame regulations which would provide for some standard forms of policy which would be offered by the companies in addition to any other policies they wish to offer on the given risks. We have in mind standard forms which would give a well defined cover against familiar risks. For example, we would suggest experiment in the first place with the standard household policy, which would be comparatively simple. It would avoid policy holders finding they are not covered because they had not read the small print, or, as often happens, they had in fact read the small print but had not understood what it meant. The policy holder would know what he was going to get, and each company could charge its own rate of premium for the particular policy. That would make it very clear how far there was competition. If the companies were all charging the same rate of premium for the standard policy, then it would be clear that there was little difference between them.
This is not introducing a new element into consumer protection. Over the years it has been necessary for Parliament to lay down, for example, that many goods shall only be sold in certain units of weight, sometimes in units of, say, eight ounces, so that the manufacturer could not put up a package which had only seven ounces in it and deceive the public by pretending that it was an eight-ounce package that was being bought. The distinction between different policies covering the same risk is far harder to detect than the difference between a seven ounce package and an eight ounce package. In many cases you would in fact require a lawyer to tell you the precise difference between a policy offered by one company and a policy offered by another company. Consequently, we feel that if ever there was a field where this kind of simplification was needed, to en
1126
able the customer to make reasonable comparisons, and having made comparisons to make the choice, it is the insurance field.
We would admit that there are some difficulties in drafting legislation for this purpose. The noble and learned Lord, Lord Stow Hill, has been kind enough to draft the Amendment before the Committee, and it may be that he will wish to add to what I have said. We hope that the Government will see an opportunity here for experimenting with consumer protection in this field of insurance. We believe it could well be done in the case of some risks, particularly the household risks, and we hope, therefore, that this will receive sympathetic consideration. I beg to move.
VISCOUNT COLVILLE OF CULROSS: The noble Lord, Lord Jacques, cannot help but receive sympathetic consideration after that speech. I recognise the very substantial point of consumer protection in what he has put forward. My trouble is that I shall have to have a tutorial from the noble Lord, Lord Stow Hill, on some of the arcana of the drafting because there are bits of this that frankly none of us has altogether fathomed at the moment. I am sure there is nothing wrong with it, but we have been rather "thick" on this side of the House, and I will come to it in a moment.
The idea of an experiment in this seems to me to be a very sensible one, but whether it should be done by means of regulations and the whole machinery of government or not seems to me to be another question. It is comparatively simple, is it not, to take the case that the noble Lord, Lord Jacques, took about a house, the ordinary house, and the householder who wants insurance from the house burning down, who wants insurance from people breaking in and stealing things inside, from the roof blowing off in the wind and from something being dropped by an aeroplane and going down the chimney. There are one or two other things I have not for the moment thought of, but they are a familiar type of risk. When one gets to that stage, one thinks "Fine, it must be possible to invent a perfectly simple set of conditions with no appreciable small print at all."
My mind goes back to the autumn of 1969, when in the village just across the

1127
county border in Norfolk from where I live, there were a number of what I would consider to be very ordinary, pleasant, simple houses, some of which were built on the rising land and some of which in fact had been built on what used to be the estuary of the River Waveney. But this river had been embanked in the sixteenth century and there were sea walls. Normally speaking, this was a perfectly good field, and the water level was well below anything to do with the houses. Bnt, unfortunately, as your Lordships may remember, it rained rather a lot and there was a most mammoth flood and the water got out of the river. There are many other examples of this sort—I simply take one from personal experience.
How does one deal with the exceptions, the particular points that, in the case of an individual property, have to be covered, or the things the individual householder does not want to have cover for some reason? How does one deal with these in the standard policy? What I am afraid of is that although you put down the ordinary risks and the ordinary coverage in a perfectly simple form, in order to be universally applicable, and deal with any situation, with any sort of house in any particular place, the owner of which might want to take advantage of the standard policy, you would have so many exceptions and qualifications that you would get more small print, not less. I think there is something in this if the noble Lord will just consider the possible variations that one could get.
We have also this, have we not? The householder himself—I think the noble Lord suggested that this should be an alternative to the ordinary form of policy, the non-standard form—will want to have this alternative to the ordinary policy to which he can make such adaptations as he thinks fit. He may say that he does not want necessarily to cover the house so that if it burnt down the whole cost can be paid to him; the premium may be far too high. He may be prepared to settle for something else and build a smaller house. There may be occasions of all sorts. I know cases of this kind myself.
Therefore, we are going to have, are we not, the standard form which, even in the house world, I think I have demon
1128
strated to the Committee, could become quite complicated. We will have side by side with that the non-standard form which is obviously adaptable to meet the individual case either of the property or particular circumstances of the assured. We shall have to have special rates in some cases because of certain features of one sort or another. Most of that is dealt with in the first proviso. Could the noble Lord, Lord Jacques—and I do not ask him to give me a great explanation to-night—at some time be so kind as to explain the second proviso? It seems to me that we may have got it the wrong way round here. As I read it, the insurance company is not to be under a duty to take on risks which go, in aggregate, beyond its financial viability; but when you consider its financial viability you are not to take account of certain other policies. This way of drafting seems to me to be almost a requirement that the insurance company shall take on business beyond what it viably can handle in terms of money. I do not think that this is meant, but that is why I say that I do not understand the second proviso, and that I should need an explanation of it.
Finally, is it really necessary or sensible to provide in subsection (2) that in the case of a default the Secretary of State withdraws the authorisation? I do not think that this fits in with what has been said at this Committee stage. So far we seem to have been rather careful about occasions when various forms of control should be imposed on an insurance company, and if anything is draconian, this seems to me to be the case in point. Having said that, I am sorry that my noble friend Lord Aldington has gone for a moment, but I should have thought that we should be able to do on a voluntary basis the sort of experiment that the noble Lord, Lord Jacques, wants. I see no reason why one should not encourage simplicity. I believe it has already started in a number of fields. I am entirely in agreement with him that the sort of rubbish that lawyers like myself write in the small print is wholly lamentable and does nothing but harm, and the clearer and simpler way is better, because usually the simpler one makes it the more effective it is, and certainly it is much more easily understandable. I am entirely at one with him in this part of the campaign, but, on reflection, would

1129
he not agree that, instead of having rather a complicated piece of machinery (even if it is enabling), with one or two rather difficult technical points to which I have just drawn passing attention, we might explore this on an experimental basis with the insurance companies with the encouragement and assistance of the Department, and see whether we can make progress that way? If the noble Lord will consider that, rather than pressing ahead with this Amendment to-night, I am sure it is something we could happily talk to him about.
9.48 p.m.
LORD STOW HILL: My ego would swell to an inordinate size if I found myself giving tutorials to so distinguished a person as the noble Viscount who has just spoken, but of course I would do what I possibly could. I am sorry to keep disagreeing with him, but he said that the drafting was no doubt excellent and that it was his fault that he could not understand it. The position is precisely the reverse. I entirely agree with him that more of a consent basis would be preferable to the sanction proposals contained in subsection (2). This is simply a sketch and an attempt to work out a plan, and one works out a plan always, when one is in Opopsition, with the disadvantage of doing one's best without skilled assistance.
VISCOUNT COLVILLE OF CULROSS: May I just say that I remember the position only too well, and will the noble Lord please not consider that my criticisms of drafting were directed at him in any way. They were simply an attempt to show that there are difficulties in this which one has to take a certain amount of trouble to avoid.
LORD STOW HILL: I entirely accept that. I was speaking perhaps in a slightly lighter vein of humour. May I explain the object of the second proviso? Clearly you cannot expect an insurance company to undertake business which is in excess of its capacity, but, on the other hand, one has in mind possibly that an insurance company which is already fully stretched by the issue of policies in its normal form, at its normal rate of premium, to cover the particular risks which are in the classes concerned, might say" It is not the slightest good your giving a direction to us to issue
1130
these new standard policies under the regulations you made. We are already fully committed." Therefore one has to try to devise some method to bring it about that the insurance company must make an endeavour to comply with the regulation or directive by issuing the policies in standard form, and it should not be a complete answer on the part of an insurance company to say, "We are already fully stretched by the issue of our normal policies; we cannot comply with what you want us to do, so we are outside the scope of your proposal". That is the sole objective and the endeavour, perhaps rather clumsy, has been incorporated in the second proviso to exclude from the account the company's normal policies when you are asking the question, "Can it undertake any of the new standard policies?" That is the objective. I quite accept that probably it would not work and would need a considerable amount of amendment.
9.51 p.m.
LORD JACQUES: I think two issues have been raised: first of all, whether this should be done in the way in which the Amendment seeks or whether it should be done voluntarily. I should like us to look for a half-way house between the two. I should like to see a very simple clause in the Bill giving the Secretary of State power to pursue this matter and in due course to make regulations so that all companies fell into line with the standard policy when there had been proper consultation, but without the complication there is in the Amendment as it is now. A simple enabling clause assuming that any hedging or provisos could if need be go into the regulations and need not be in the Bill itself. I should prefer something in the Bill, but something quite simple.
The second issue that has been raised is what is to be done with the special cases. I think this whole problem should be approached in much the same way as the multiples have approached the sale of goods to the consumer, especially the way in which they have approached the sale of fashion goods to the consumer. They do not provide all sizes; they provide only the size which is in demand and which can be mass-produced economically. I should like to see it done in that way so that there was

1131
a standard policy that would fit most cases, but not necessarily all cases. The insurer would always have a way out: "Yes, you can have the standard policy, but in your particular circumstances the premium will be more"; because your Lordships will remember that I have stated ail the time that the insurer should be completely free to fix the premium.
So there are two ways in which to be flexible. The insurer can say, "The terms of this policy do not cover your circumstances, but I can offer you another policy", or he can say, "In order to get the policy in your circumstances the premium would be £x plus". I think there is plenty of scope for flexibility. Would the Minister give consideration to the possibility of a brief and simple clause in the Bill authorising the Secretary of State to consult with the industry with a view to there being common policies in addition to the policies issued individually by the companies?
VISCOUNT COLVILLE OF CULROSS: May I say that to do that one needs no legislative authority at all. There is no problem about the Department consulting with the industry to do the sort of thing which the noble Lord has been talking about. I do not think it needs regulations either. We could get an agreement. It would need to be an experimental one in the first place. I do not think we need anything in the Bill at all, but certainly I should like to consider this point with the noble Lord and with some of the ideas which I know he can introduce from his wide experience in meeting the demands of consumers of all sorts. But I do not think we necessarily need anything in the Bill, and from what the noble Lord has just said he would need to convince me that we should actually need legislative powers at all.
THE EARL OF ONSLOW: There is one other very important point to raise on this matter. The British insurance industry aims always to tailor-make its policies and I think, on the whole, that it does. Again, I have to declare my interest in that I work for an insurance broker. Lloyd's tend to say that they will insure anything, although there are exceptions to that, and that meets the point of the noble Lord, Lord Jacques, about all sizes in the fashion world. The industry
1132
tries to produce all sizes. Secondly, one of the main contentions which the British insurance industry is making when it goes into the European Economic Community is that it wants to be able to offer this "all sizes" form of policy—
LORD JACQUES: There is a misunderstanding here. I am not suggesting that the insurance industry should offer all sizes, because it is already doing that. What I am suggesting is that, in addition to offering all sizes, there should be a standard policy which is common to all companies, and because it is standard there could be comparisons of premium as between one company and another. In that way the consumer would be able to see how far there was in fact competition.
THE EARL OF ONSLOW: I take the noble Lord's point. Most insurance company policies vary slightly, but there is very little difference in the premium charged for them. But if we start trying to regulate the wording of insurance company policies by law or by directive, we get into the trouble which the British insurance industry is accusing some of the Continental insurance industries of getting into in the E.E.C., and stultifying competition. Having listened to most of what the noble Lord has said I am sure that that is not what he wants to happen.
LORD HAWKE: I agree with what my noble friend has said. There is intense competition and a great many of the policies are really, to all intents and purposes, exactly the same. Companies know that if they cut the rate then, sooner or later, they will go broke. The business is as fine cut as that and we have seen, as I said on Second Reading, that when you insure you pay for what you get. If you try to get cut-price insurance you will get cut-price treatment; and if the price is cut too much you will find when you make a claim that the gentleman is not there to pay you out. It is as simple as that. It is the most intensively competitive business in the world. I have been involved in it overseas, where the competition was such that the agents automatically gave away all their commission except for 1 or 2 per cent. When you have a low standard of living and so on, you can manage to live on that; but in this country it is not quite so easy. But the competition is

1133
quite intense and I really do not think there is the slightest need for this standard policy business. The policies will certainly not have any less small print than the present ones, and I cannot see that they will do any good whatsoever.
LORD JACQUES: If there is very little difference between the policies issued by the various companies at present, I should have thought the idea would be very easy to put into operation. As I understand it, the Minister would like to think about this matter between now and the next stage of the Bill, and we, too, should like to think about it. In the meantime, and on the understanding that we have not dropped the matter but are going to think about it, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clauses 42 and 43 agreed to.
Clause 44 [Minor and consequential amendments and repeals]:
10.0 p.m.
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 48:
Page 33, line 6 at end insert—
("() Any regulations made by the Industrial Assurance Commissioner by virtue of paragraph 6(2) of Schedule 2 to the Act of 1958 which are in force immediately before the passing of this Act shall, so far as they could have been made under subsection (1) of section 37 above, have effect as if made under that subsection.")
The noble Earl said: The effect of this Amendment is simply to preserve in force regulations made by the Commissioner under the powers conferred upon him by the Insurance Companies Act 1958 in so far as they would be within the powers conferred upon him by Clause 37(1) of the Bill. I beg to move.
Clause 44, as amended, agreed to.
Clause 45 [Interpretation]:
THE EARL OF LIMERICK: This Amendment, Amendment No. 49, rectifies a printing error. I beg to move.
Amendment moved—
Page 33, line 37, leave out ("(2)") and insert (1)").—(The Earl of Limerick.)
Clause 45, as amended, agreed to.
Remaining clauses agreed to.
Schedule 1 [Minor and Consequential Amendments]:
THE EARL OF LIMERICK: This Amendment, No. 50, again rectifies a printing error. I beg to move.
Amendment moved—
Page 36, line 35, leave out ("20") and insert ("19").—(The Earl of Limerick.)
Schedule 1, as amended, agreed to.
Schedule 2 [Repeals]:
THE EARL OF LIMERICK: With Amendment No. 51 I can conveniently take Amendments Nos. 53 and 54. These three repeals are all consequential upon the Amendment to Clause 37. I beg to move the three Amendments, Nos. 51, 53 and 54.
Amendments moved—
Page 37, line 13, at end insert—

("13 & 14 Geo. 5. c.8.

The Industrial Assurance Act 1923.

Section 18(1)(a)."

Page 37, line 45, column 3, at end insert ("Section 36(1).").
Page 37, line 49, column 3, at end insert ("In Schedule 5 the entry relating to section 18 of the Industrial Assurance Act 1923.").—(The Earl of Limerick.)
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 52:
Page 37, column 3, leave out lines 29 to 31 and insert—
("Sections 25 and 26. Section 28.")
The noble Earl said: The effect of this Amendment, No. 52, is to repeal Section 26(1) of the 1958 Act, which is now spent, and Sections 26(3) and 28 of that Act, which are consequently also spent. I beg to move.
Schedule 2, as amended, agreed to.
Schedule 3, [Application to Northern Ireland]:
THE EARL OF LIMERICK: Amendment No. 55, rectifies a printing error. I beg to move.
Amendment moved—
Page 39, line 21, leave out ("(13)") and insert ("(3)").—(The Earl of Limerick.)
THE EARL OF LIMERICK: This, again, is to rectify a printing error. I beg to move.
Amendment moved—
Page 39, line 27, leave out ("(a)") and insert ("(b)").—(The Earl of Limerick.)
THE EARL OF LIMERICK: This Amendment is consequential upon the Amendment to Clause 34—that is, Amendment No. 36. I beg to move.
Amendment moved—
Page 42, line 2, leave out from ("for") to ("in") in line 3 and insert (""8" there shall be substituted "19"; and").—(The Earl of Limerick.)
Schedule 3, as amended, agreed to.
Remaining Schedules agreed to.
In the Title:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 58:
line 3, leave out ("life").
The noble Earl said: This Amendment rectifies an error in the Long Title of the
1136
Bill in its description of the effect of Clause 41. That clause amends Section 2 of the Life Assurance Act 1774 by validating certain group policies, both life and non-life, and the reference to "life" in the Long Title needs to be deleted. I beg to move.
House resumed: Bill reported, with Amendments.

SLOUGH ESTATES (UTILITY SERVICES) LIMITED BILL [H.L.]
Examiners Certificate that the further Standing Order applicable has been complied with, received: Ordered to lie on the Table, and Bill committed to a Select Committee.
HUMBER BRIDGE BILL
Brought from the Commons; read 1ª, and referred to the Examiners.
GLAMORGAN COUNTY COUNCIL BILL [H.L.]
Returned from the Commons agreed to, with Amendments: the said Amendments considered and agreed to.