Lords Sitting of 23 March 1976

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

LICENSING COMPENSATION FUND
The Earl of KIMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the National Council on Alcoholism will be among those organisations consulted about the disposal of the £4,200,000 in the Licensing Compensation Fund.
Lord WELLS-PESTELL: My Lords, our consultations will in the first instance be with those directly involved in the operation of the funds, including the brewing industry and the licensed trade who have contributed the money. This in no way prejudices our eventual decisions about the disposal of this money and the purpose for which it should be used.
The Earl of KIMBERLEY: My Lords, I thank the Minister for that Answer. First, can he please tell me the names of the people with whom he has been consulting? Secondly, is he aware that I believe the Brewers' Society have been in touch with the Home Office over the disposal of this money, and have agreed that quite a large percentage should be set aside for licensed trade charities, such as research into alcohol abuse, and does he agree that the National Council on Alcoholism falls into this category?
Lord WELLS-PESTELL: My Lords, in reply to the noble Earl's first supplementary question, those who will be consulted include the Magistrates' Association, the Justices Clerks' Society, the Brewers' Society, the National Federation of Licensed Victuallers, the Licensed Victuallers' Society, the National Council of the Retail Trade and
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the National Association of Licensed House Managers. I would point out to the noble Earl that, as the money has been solely contributed by the trade, it is felt right that they should be the first to be consulted about its disposal. As I understand the situation, this is to some extent a matter for negotiation; hence the reason why we are taking this step. But the noble Earl will no doubt remember that the Erroll Committee made a very strong recommendation as to how the matter should be dealt with.
Lord AVEBURY: My Lords, if a substantial proportion of this money is to be made available for research into alcohol abuse, might it not be a good idea to consult the Medical Research Council at this stage? Also, can the noble Lord say whether legislation will be required for the ultimate disposal of the funds?
Lord WELLS-PESTELL: My Lords, my understanding is that there must be legislation. With regard to the noble Lord's first point, let me say here and now that, if it is felt desirable that other bodies should be consulted, I have no doubt in my own mind that the Government will consult them. The Government are sympathetic to the suggestion which I think underlies the noble Earl's Question, that some of the Fund should be considered for the purpose he has in mind.
Lord AMULREE: My Lords, there is a second council on alcoholism, the Medical Council on Alcoholism. Does the noble Lord agree that they might get some share of the money?
Lord WELLS-PESTELL: My Lords, if any money goes to research into alcohol abuse, those who are in the best position to use it for that purpose will no doubt be considered and consulted.
Lord SEGAL: My Lords, ought not the money to be distributed where the need is greatest, since many of the bodies on that imposing list mentioned by my noble friend are already well supported?
Lord WELLS-PESTELL: My Lords, they are being consulted as to how best this money should be dealt with. It does not necessarily follow that it will be going to them. It is a question of how best to dispose of it.

SOCIAL SCIENCE RESEARCH COUNCIL FUNDS
2.43 p.m.
Lord BROWN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in the light of the award to an Edinburgh University anthropologist of £6,000 to do research on "Selection of spouses in a specific population of Muslims in Delhi" and a second award to a Hull theologian to do research on "Interaction of Scientific and Religious beliefs of Thai scientists", they are satisfied that the Social Science Research Council is spending public money wisely.
The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Donaldson of Kingsbridge): My Lords, my noble friend's Question is in line with the tradition of poking fun at the various topics chosen for examination by social anthropologists, and indeed at social anthropology itself in my day, I remember that Lady Fraser's Leaves from the Golden Bough was a prime target. But I think the tendency culminated in Robert Benchley's immortal lecture on, "The Sex Life of the Polyp". In spite of this friendly ridicule, the subject of social anthropology has grown in stature and importance as a proper field of scientific research and a respectable discipline for university study, in which a number of British research workers have gained international distinction. I cannot believe that my noble friend is suggesting Government interference in the allocation of research funds by the Social Science Research Council. The Council consists mainly of highly distinguished academics, some of whom are scientists of international repute, and its allocation of about 2 per cent. of its total funds to this subject could hardly be criticised. If my noble friend wishes to discuss the value of any particular project selected for research, I suggest he applies to the Council itself, whom he will find well capable of defending its decisions.
Lord BROWN: My Lords, while thanking my noble friend for that reply,
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I am disappointed that he has cast an aura of respectability over these two awards. In the light of awards of this kind, and there are others as well, may I ask my noble friend whether he is prepared to recommend to the Secretary of State that he should consider the composition of the Social Science Research Council, over which I assume he exercises control, in order that a greater measure of wisdom may infect their decisions in future?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I can say without hesitation that my right honourable friend the Secretary of State who has made these appointments is well satisfied with them.
Baroness EMMET of AMBERLEY: My Lords, may I ask the Minister whether there is a periodic review of the way that the Social Science Research Council spends money so that the tax-payer may feel that his money is being wisely used?
Lord DONALDSON of KINGS-BRIDGE: My Lords, there is a body known as the Advisory Board of the Research Councils which fulfils this role.
Lord ANNAN: My Lords, may I ask the noble Lord whether he saw on television last night a programme called "Horizon" which paid tribute to the work of the great American anthropologist, Dr. Margaret Mead, whose researches years ago in Melanesia profoundly affected the view in our society of both family life and racial minorities and whether he would agree that we should understand that researches of this kind can affect our own decisions about our way of life? Having noted that point, would the noble Lord also agree that the principle enunciated by Lord Rothschild in his Report on Scientific Research—namely, the customer-contractor principle—might with advantage be brought to the attention of both the Science Research Council and the Social Science Research Council, although it is more difficult for them to apply this principle than the Medical Research Council and the Agricultural Research Council?
Lord DONALDSON of KINGSBRIDGE: My Lords, as regards the first part of my noble friend's intervention, of course I agree. I think that social anthropology is a branch of

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science that is of the greatest importance. It happens to be rather easy to make fun of. Regarding the Rothschild principle, it is very difficult to apply it without a clear identification of the customer but I will put this matter to my right honourable friend and find out whether he thinks that he can identify the customer.
Lord WYNNE-JONES: My Lords, would my noble friend agree that the Rothschild principle was supposed to apply to contract research between Departments and universities, not the Research Councils? Would my noble friend also reassure the House that the Government have no intention of interfering with the freedom of the Research Councils?
Lord DONALDSON of KINGSBRIDGE: My Lords, I hasten to give reassurance on the second point. There is no intention whatever of interfering in this way and it is entirely wrong to suggest that there should be interference. As regards the Rothschild principle, I think that the noble Lord, Lord Annan, was using it as an analogy rather than as an exact parallel.
Lord LEATHERLAND: My Lords, when the anthropologists have concluded their investigation into the selection of spouses in Delhi, may I ask my noble friend whether the Government will undertake a similar piece of research into the selection of spouses in Britain?—without, of course, any retroactive effect.
Lord DONALDSON of KINGSBRIDGE: My Lords, I think that the appropriate direction in which to launch this appeal would be through the Social Science Research Council.
Baroness GAITSKELL: My Lords, while thanking my noble friend for his Answer to the noble Lord, Lord Brown, it is out of character in terms of its pomposity regarding the Social Science Research Council. May I say—
Several Noble Lords: No!
Baroness GAITSKELL: I beg your Lordships' pardon. May I ask my noble friend whether or not it would be much better to look at more serious questions such as racial prejudice, which is on our doorstep, and racial strife in the international field?
Lord DONALDSON of KINGS-BRIDGE: My Lords, my noble friend Lord Brown referred to two projects. Each year there are approximately 20 projects and I do not think that one wants to feel that the approach is limited in any way.
Lord BROWN: My Lords, would my noble friend take it from me—
Several Noble Lords: No!
Lord BROWN: My Lords, does my noble friend understand that my Question is not a general attack on the field of anthropological research? Secondly, would he agree that there are limits to the type of research that can be sponsored by public money and that the two researches which excited this Question are over the limit? Does his Answer imply that there are no limits to the kind of researches which can be financed by the SSRC the exceeding of which will attract Her Majesty's Government's attention to the composition of the SSRC itself?
Lord DONALDSON of KINGS-BRIDGE: My Lords, this is the same question over again. The members of the SSRC are appointed by the Secretary of State and they are given complete freedom in the allocation of its funds. As I said before, there is a body called the Advisory Board of the Research Councils, whose business it is to supervise the spread of money between the different Research Councils; that is as far as the situation goes at the moment.

DEFENCE EXPENDITURE CUTS
Lord CHELWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they had full knowledge of the growing gap between the military capacity of the United States and the Soviet Union in trained men and weapons and the estimate that current Soviet expenditure on defence is approximate to an annual rate of 153,000 million dollars, as disclosed by the American Defence Secretary on 9th March, before announcing the latest cuts in defence expenditure.
Lord WINTERBOTTOM: My Lords, the Government are well aware of Soviet military capability, and drew attention to improvements to it in the latest Defence White Paper (Cmnd. 6432). The figure of 153,000 million dollars is from a Press report, and I do not know how it was arrived at. However the latest estimates put Soviet defence expenditure in dollar terms substantially higher than United States defence expenditure. As to the cuts in the United Kingdom, these were of support, not front-line forces, and did not impinge upon the essential elements of our contribution to NATO. They were made only after taking into account all the relevant factors, including the military balance and the state of the economy.
Lord CHELWOOD: My Lords, I am grateful for that disturbing reply. Does it in fact mean that Her Majesty's Government accept the official American view that if current trends continue the serious imbalance between Warsaw Pact forces and NATO forces will get dangerously larger? If that is the case, what on earth is the explanation of paragraph 50 of Chapter 1 of the Defence White Paper which, to help the noble Lord, I will remind him states flatly that there have been no significant changes
"in the political and military relationships between the Alliance and the Warsaw Pact"?
What can be the meaning of that other than a denial of the American analysis that the gap between the Warsaw Pact forces and the NATO forces is very large and very serious and will grow if current trends continue?
Lord WINTERBOTTOM: My Lords, Her Majesty's Government are not complacent and not unconcerned. However, the noble Lord's original Question concerned the relationship between United States and Soviet expenditure, and his supplementary question was based on the NATO and the Warsaw Pact expenditure. These two are not the same. If I may refer to a statement made by my right honourable friend the Secretary of State for Defence in the other place on 27th February, if we look again at estimated expenditure which is extremely difficult to estimate in precise terms, in 1974 NATO expenditure, not American expenditure, was 135,000 million dollars, whereas Warsaw Pact expenditure was 116,000
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million dollars, and in 1975 the comparable figures were 149,000 million dollars and 125,000 million dollars. On this estimate the expenditure of the Western Alliance is still higher than that of the Warsaw Pact countries.
Lord PAGET of NORTHAMPTON: My Lords, if that is so, is it not somewhat surprising that there should be such an enormous gap in the capacity of the Warsaw Pact and the NATO forces on the ground—a gap so large that any contribution, large or small, that we may make is totally irrelevant?—the more we provide would only mean the more we would lose in the first week.
Lord WINTERBOTTOM: My Lords, my noble friend is making his usual type of pessimistic statement. What we are doing is comparing not the position in Western Europe but the position overall throughout the world, and in my view there is no cause for undue pessimism.
Lord GLADWYN: My Lords, would the Government possibly consider inquiring of Mr. Gromyko, who happens to be here, why Marshal Grechko has recently stated that the armed forces of the Soviet Union, which admittedly already have a preponderance of power, should be further increased in view of the possible assault on the Soviet Union by the considerably inferior forces of the West?
Lord WINTERBOTTOM: My Lords, the statement of Marshal Grechko is certainly receiving the consideration of Her Majesty's Government.
Lord HALE: My Lords, would the noble Lord not agree that these figures now prove conclusively that a pacifist Britain would be militarily no weaker and morally much stronger?
Lord WINTERBOTTOM: My Lords, morals are fine, provided one can afford them. I would sooner we made our contribution to the defence of those values in which most of us believe.
Lord WIGG: My Lords, would the Minister agree that the comparisons which have been bandied about this afternoon are quite ridiculous unless one takes into account the different rates of remuneration of members of the armed forces of the United States of America and of Great Britain and the remuneration paid to the Russian forces? And is it not a

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fact that if the Conservative Party are now complaining of weakness of defence, they should be reminded that those who live in glass houses should not throw stones, because the weakness from which this country suffers is entirely due to that irresponsible, ridiculous and disgraceful Defence White Paper of 1975?
Lord WINTERBOTTOM: My Lords, I would agree with my noble friend in part of his question. Quantification is extremely difficult, particularly in terms of what one pays the private soldier. There are of course other factors which have to be taken into account. With regard to the second part of the question, I prefer to leave that until we have our defence debate.
Lord DUNCAN-SANDYS: My Lords, the noble Lord criticised the noble Lord, Lord Paget of Northampton, for his pessimism. May I ask the Minister whether he agrees that there is cause for grave concern at the growing imbalance between the forces of the West and those of the Warsaw Pact, and is he not showing a certain amount of complacency about it?
Lord WINTERBOTTOM: My Lords, concern, yes; pessimism, no.
Lord CHELWOOD: My Lords, I should like to return to my first supplementary question and ask the noble Lord to say straight out whether Her Majesty's Government accept the official American view, which I believe to be shared in NATO, that if current trends continue the serious imbalance between the NATO forces and the Warsaw Pact forces will grow dangerously larger? That imbalance is shown in Chapter 1 of the White Paper. In those circumstances, how can any responsible Government announce further defence cuts of more than £500 million over the next three financial years?
Lord WINTERBOTTOM: My Lords, we shall have an opportunity to debate this. The cuts were in the tail and not in the teeth, and this is something which the noble Lord should not forget when he considers the picture as a whole. It must be weighed in relation to the economic strength of this country at the moment.

EUROPEAN ASSEMBLY: REPRESENTATION
2.58 p.m.
Lord SHINWELL: 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 the Leader of the House whether members of the European Assembly selected by this House are expected to make reports on their activities and whether any reports have been made so far.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, there is no formal provision for any such reports. The House is grateful for the way in which noble Lords who are members of the European Parliament have kept us informed about EEC policies by participation in debate and through their links with the Select Committee of your Lordships' House on the European Communities.
Lord SHINWELL: My Lords, may I ask my noble friend whether the noble Lords who attend the European Assembly represent your Lordships' House or the respective political Parties associated with this House, and is there any truth in the statement that has been made that the noble Lords who attend the Assembly have reported to their respective political Parties but not to this House, and if so, can he explain why?
Lord SHEPHERD: My Lords, first, those noble Lords who attend the European Parliament do not represent this House, in the same way as Members of another place do not represent the House of Commons. We fulfil our obligations under Article 138(1) that the European Assembly should consist of delegates who have been designated by the respective Parliaments from among their Members, in accordance with the procedures laid down by the Member-States. Our procedures are based very much on the system of representation at WEU where the political Parties themselves have made their own nominations, and it is for the two Houses to ratify them in order that Members can go to the European Parliament, and are seen to be a Member of that particular House or Parliament.
Lord GLADWYN: My Lords, I report to my own political Party exactly what I have been doing in the European Parliament, and I imagine that the representatives of the Socialist Party and the Conservative Party do exactly the same. I do not quite know what is the effect of the question of the noble Lord, Lord Shinwell.
Lord SHEPHERD: My Lords, the noble Lord is not required to report to his own Party, as I understand it. This is something that his own Party may require of him, but it is not imposed by this House. I think that is all I can say on the matter.
The Earl of LAUDERDALE: My Lords, would the noble Lord the Leader of the House explain to the House how it is that when our delegates to the European Parliament are appointed by this House, as they are by Resolution, they do not at the same time, and arising out of that, represent the House?
Lord SHEPHERD: My Lords, they do not represent the House, and I do not believe it has ever been expected that they did. They go as members of their political Parties; they sit with those people sharing a view with them in the European Parliament, and there must be occasions in the European Parliament when representatives from this House may take a completely different view from others coming from within this House.
Baroness ELLES: My Lords, would the noble Lord the Leader of the House agree that the members of the European Parliament play a very full role in this House whenever there is a possibility for them to take part in debate? Similarly in the Select Committee, so ably presided over by my noble friend Lady Tweedsmuir of Belhelvie, members of the European Parliament invariably go and give evidence on matters of concern to this House, the other place, and the European Parliament.
Lord SHEPHERD: My Lords, that is so, and I fully acknowledge it. I only regret that the way in which we so arrange our business means that occasionally members cannot participate in the Business because they are required to be at the European Parliament. This is something we ought seriously to look at. It
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may be that if we were to set aside certain days during a month for matters dealing with the European Parliament, we might overcome some of these difficulties. This is something which could well be considered by the Committee which I hope will shortly be set up.
Lord SHINWELL: My Lords, are we to understand from that reply that the selection of those noble Peers who attended the Assembly was not endorsed by your Lordships' House? Are we to understand that therefore we have no control whatever over them? Are we to understand from that that they are there for as long as they like, and we have no means of withdrawing them at any time?
Lord SHEPHERD: My Lords, so far as the Labour membership is concerned, the names were approved by your Lordships' House, but were also approved by the Parliamentary Party at one of their formal meetings. I feel this is a matter we could more usefully debate when we discuss the question of direct elections to the European Parliament, because we may need to take account of an interim period prior to direct elections taking place.
Lord CHELWOOD: My Lords, in spite of the fact that the dual mandate imposes a heavy strain indeed, even on Members of this House, is it not possible that a sprightly young fellow like the noble Lord, Lord Shinwell, could quite easily carry this out, and could be relied upon to make regular reports to us?
Lord SHEPHERD: My Lords, I shall leave that to my noble friend. May I draw the attention of the House to the fact that 25 minutes for Questions is even worse than the complaint made last Thursday? May I suggest we move on to next Business?
The Earl of LAUDERDALE: My Lords, I think the noble Lord is trying to dodge the question which I have tried to put three times. Can he explain why, if these delegates represent their parties, they need to be appointed by this House? Perhaps he will answer that point on Monday.
Lord SHEPHERD: My Lords, I would be most happy to do so.

COMMODITY PRICES
The CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved on behalf of the Committee of Selection, That the Lord Thomas be added to the Select Committee on Commodity Prices in the place of the Lord Redmayne resigned.—(The Earl of Listowel.)
On Question, Motion agreed to.

CONSOLIDATED FUND (No. 2) BILL
Brought from the Commons endorsed with the Certificate of the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read 1a.

SOUND BROADCASTING OF PROCEEDINGS
Lord SHEPHERD: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it is desirable that a Joint Committee of both Houses be appointed to consider the implementation of the Resolutions of both Houses in favour of the establishment of a permanent system of sound broadcasting of their proceedings, and to make recommendations; and that a Committee of five Lords be appointed to join with a Committee of the Commons as such a Joint Committee.—(Lord Shepherd.)
The EARL of SELKIRK: My Lords, may I ask whether it is intended that this should be a temporary Joint Committee to set the system in being, or is it intended that this should be a continuing Joint Committee to keep the system under the general observation of Parliament?
Lord SHEPHERD: My Lords, I take the view that this is a Committee which will consider the setting up of broadcasting on a permanent basis. It would then be for Parliament to consider, as a consequence of that report—because we cannot anticipate what its recommendations may be—whether a further Committee should be appointed, or whether
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this Committee should remain in existence. Parliament will be required to consider the report of this Committee and it will then be for Parliament to consider what the future organisation should be.
On Question, Motion agreed to.

POST OFFICE (BANKING SERVICES) BILL
Report received.

COMPANIES (No. 2) BILL [H.L.]
3.7 p.m.
Lord WINTERBOTTOM: My Lords, I beg to move that the Bill be now read a second time. As this Bill is essentially an interim measure designed to deal with certain immediate problems, I should begin by putting it in the context of the Government's overall programme for the reform of company law. The basic principles underlying British company law were laid down last century by Gladstone, and have changed very little since then. As business has become more complex and the number of companies has grown, the ramifications of company law have spread and the legislation has become ever more sophisticated and extensive, but there has been no change in the fundamental approach. The emphasis is still on the protection of shareholders and creditors; the interests of employees and of the wider public are barely recognised. Of course, in practice, most companies do take account of these wider responsibilities, but company law does not require them to do so.
Company law is therefore long overdue for fundamental reform. That is why this Government on coming into office two years ago decided not to go ahead with the Companies Bill introduced by the Conservative Administration in 1973, and which had just started its passage through Parliament at the time of Election in February 1974. That Bill would have perpetuated the traditional attitude on company law and would have done nothing to further the fundamental rethinking which is so badly needed. The Government therefore decided to institute a wide-ranging review of the whole of company law. This is a major exercise and is still going on. It is inevitable that

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a review of this depth should take some time to complete, as it is essential that a reform which will affect the legal framework within the whole of the private sector operates should be thoroughly examined.
Central to this review is, of course, the question of industrial democracy. This is currently being studied by a Committee of Inquiry under the chairmanship of the noble Lord, Lord Bullock. The Committee's task is to consider how an extention of industrial democracy in the control of companies by means of representation on boards of directors can best be achieved. This brings into question such basic principles as the responsibilities and duties of companies and their directors, and the structure of company boards. The Committee's recommendations will thus lead to a major change in company law, and also to a radical change in the way industry is managed.
The Committee has put out a general invitation to submit evidence, and I hope that all interested parties who have not already done so will put in their evidence as soon as possible. In a debate of this importance, which raises so many complex and relatively unexplored issues, it is vital that all those who are able to make a contribution should do so. This is not just a form of words. Your Lordships' House is a storehouse of knowledge and experience, and any individual or collective contribution to the work of Lord Bullock's Committee would be most welcome. The Committee has been asked to report by the end of this year, and the Government intend to legislate as soon as possible thereafter.
Another subject which the Government are studying is the arrangements for the supervision of the securities market. The Government have been consulting interested organisations in the City and elsewhere and are now considering the views they have expressed. One of the topics which is being examined in this part of the review is ways of stamping out such abuses as insider dealing and warehousing. Any major companies legislation must clearly await the outcome of these inquiries, but, in the meantime, there are a number of urgent matters, mainly of a technical nature, on which legislation is needed now and which cannot safely be left until the longer term inquiries have been completed. It is
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these matters, none of which will in any way prejudice the outcome of those in-inquiries, with which this Bill is concerned. The Bill's aim is thus very limited. It is not a major reforming measure. It seeks only to deal with particular problems and abuses which all parties are agreed it is essential to tackle as soon as possible. Indeed, I freely acknowledge our debt to the Party opposite. Most of the provisions in this Bill were included in the Bill which they introduced in 1973. The provisions have been the subject of intensive consultation and will, I believe, be widely welcomed as a useful step towards the improvement and tightening up of company law.
Before going on to describe the Bill's provisions, perhaps I might pause to explain why it has the somewhat curious title—Companies (No. 2) Bill. About a week before this Bill was introduced in this House, a Member in another place obtained leave to introduce a Bill. His Bill, which is concerned with non-executive directors, is also called the Companies Bill, and as he got in first, the Government's Bill has become the No. 2 Bill. The Companies (No. 2) Bill has four main objectives. These are: first, to tighten up the requirements about the filing of company accounts and the keeping of accounting records; secondly, to strengthen the position of auditors; thirdly, to give the Secretary of State for Trade power to prevent a foreign company with a place of business in Great Britain from trading here under a misleading name; and fourthly, to deal with certain other relatively minor matters concerning Companies House.
The failure by very large numbers of companies to file their annual returns and the accounts which should accompany them on time has been a serious problem—indeed, a scandal—for many years and has been a matter of grave concern both to this Government and to their predecessors. Out of some 643,000 companies on the register, 186,000 are known to be in default to some degree in filing annual returns. This is despite strenuous efforts by the Registrar of Companies and his staff. The process of pursuing companies in default has now been computerised and this makes it possible to pursue companies much more promptly. Reminder letters are now normally sent out within two months of an annual return being overdue. If the return is still not

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filed, the directors are eventually prosecuted, or, if no reply whatever is received, the company is struck off the register.
The statistics are most interesting. Last year summonses were served on 2,440 directors of 989 companies in default and already this year 700 summonses have been served. In addition, 28,000 companies were struck off in 1975, and over 5,000 have been so far this year, because they failed to respond to the reminders in any way and are presumably no longer in business. This is, of course, only the tip of the iceberg. These represent only those cases in which repeated reminders failed to secure the filing of the annual return—which is naturally the object of the exercise. The longest part of the job is sending out the reminders, which are currently running at some 10,000 a week. Inevitably, such a mammoth operation is expensive. Currently, it costs about £500,000 a year.
But despite this impressive campaign, the defects in the existing law make it virtually impossible for the Registrar to ensure the prompt filing of accounts. He can pursue failures to file annual returns, but the accounts which should be annexed to them present much greater difficulty. There are two main problems: first, the obligation to file accounts only arises after the accounts have been laid before the company. As the Registrar does not know, and cannot find out without expensive and time consuming inquiry, whether accounts have been so laid, he does not know when or even whether accounts should have been filed with him. This makes effective enforcement impossible. Second, the present provisions allow the latest accounts on file at Companies House to relate in extreme cases to events nearly 3½ years old. This is quite unacceptable. Failure to file accounts promptly is not a mere technicality. Limited liability is a privilege, and those dealing with limited liability companies are entitled to prompt and accurate information about their financial state.
The Bill seeks to remedy this situation by creating a specific obligation to file a copy of the accounts within a fixed period after the end of the company's accounting reference period or financial year, and by providing for the determination and notification to the Registrar of each com-
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pany's accounting reference period. In future private companies will have to file their accounts within 10 months of the end of their financial year, and public companies within 7 months. Companies with overseas interests will be allowed 3 months longer. In order to underline the importance of prompt filing of accounts, and to provide an incentive to companies and their directors to comply with their obligations, the penalties are to be increased substantially so that every director who fails to take all reasonable steps to ensure that the accounts are filed on time will be liable to a fine of £400, plus £40 for each day of default, and the company itself will be liable to a civil penalty which will increase with the length of default, up to a maximum of £450. Clauses 1 to 8 apply these provisions to companies registered in this country, and Clauses 9 to 11 apply similar provisions to foreign companies which have a place of business here.
These provisions will enable the Registrar to identify defaulting companies immediately the default starts and thus to pursue them much more promptly and effectively. They will, however, naturally require some additional staff to administer. It is estimated that about 70 extra staff will be required once the system is in full operation. They will be mainly engaged in pursuing and prosecuting defaulters. There will be some relatively minor offsetting staff savings as a result of other provisions in the Bill, but there will be a net increase of some 60 staff at a cost of about £150,000 a year. Naturally, this increase has been rigorously re-examined in the light of the need to make cuts in public expenditure and manpower. The Government have, however, concluded that the prompt disclosure of accounts is of such importance as to justify the staff increase and that the necessary staff savings will have to be made in other areas of work.
The introduction of the new arrangements for the filing of company accounts will, of course, involve a great deal of work for the Registrar. The exercise cannot, therefore, begin until next year, when the Cardiff office is fully established. The move of the Companies Registration Office from London to Cardiff will begin in less than two weeks' time on 5th April, The various functions of the office are to

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be transferred to Cardiff in stages. The first stage will cover the section of the office dealing with new incorporations, changes of name and name inquiries. Company files will be transferred in three batches, the first in July, the next in December, and the final one in the following June. The main part of the move should be complete by next October, and the remainder by the middle of next year.
The move to Cardiff was dictated by the vast increase in the scale of operation. Last year 1,400,000 documents were received for examination and filing and 1,900,000 searches were made by members of the public. But the move, together with the associated microfilming of company files, will enable Companies House to provide a much better service to the public with faster and more convenient search facilities. There have been extensive consultations with the major users and the services to be provided in London and Cardiff both for searches and for filing documents have been designed with their requirements very much in mind.
Returning now to the details of the Bill, the next clause, No. 12, deals with accounting records. It is, of course, essential that companies should keep records which enable the directors to ascertain the financial position of the company at any time and which show what transactions it has engaged in. It is from these records that the accounts are derived. The unforeseen financial difficulties which many companies have run into partly as a result of inadequate internal accounting systems underline the need for companies to keep proper records. This clause therefore brings up to date and clarifies the existing requirements as to the keeping of accounting records and provides that such records must be preserved for at least six years.
Clauses 13 to 17 of the Bill are concerned with auditors. Little point will be served by ensuring that accounts are made available promptly to shareholders and the public if those accounts do not give an accurate picture of the state of the company's affairs. Auditors have an essential role in ensuring that accounts do indeed give a true and fair view and that companies' financial affairs are conducted with propriety. In the light of recent events, I do not think that I need to stress this point further. The Bill
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amends the law so as to strengthen the position of auditors and to ensure that they have the necessary rights and powers to carry out their functions effectively even when they run into difficult situations.
The first requirement is that those who audit companies' accounts should be properly qualified. The normal qualification is membership of one of the four recognised accounting bodies—the Chartered Institutes of England and Wales, Scotland and Ireland and the Association of Certified Accountants—which are listed in Clause 13 of the Bill. But the 1948 Act also allows the Secretary of State to authorise individuals on the basis of adequate knowledge and experience. This provision is highly anomalous as it enables a person to become an auditor without having first passed the stringent examinations set by the recognised professional bodies or indeed having passed any examinations at all. In view of the importance of maintaining high professional standards, the Bill provides that, one year after Clause 13 comes into effect, no further authorisations shall be granted on the basis of adequate knowledge and experience. The one year delay will allow those seeking authorisation on this basis a reasonably extended last chance to apply. The second change is that under Clause 14 auditors will in future have to be appointed or reappointed every year by the company at its annual general meeting. It is not right that an appointment of this importance, or the continuation of it, should as at present be automatic.
Clauses 15 and 16 represent a major strengthening of the position of auditors who come across evidence of malpractice or are in dispute with the directors about the propriety of particular transactions. Clause 15 provides that an auditor may resign at any time if, but only if, he makes a statement either setting out any circumstances connected with his resignation which he considers should be brought to the attention of shareholders or creditors or stating positively that there are no such circumstances. Clause 16 enables an auditor who has resigned to requisition a meeting of the company at which he can explain his reasons for resignation. These provisions will give a strong auditor a very powerful and effective

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threat in the event of a dispute with the directors and will force even a weak auditor to face up to his responsibilities as he will no longer be able to evade a difficult situation by quietly resigning and saying nothing.
The final change, in Clause 17, gives the auditors of holding companies the right to require the directors and auditors of subsidiaries to supply information about the accounts of those subsidiaries. This is necessary if the auditors are to be able to reach a properly informed view on the accounts of the holding company. These provisions are among the most important in the Bill. They have been worked out in consultation with the accountancy profession and will make a valuable contribution to ensuring that auditors are in a position to do their job effectively.
The Bill does not deal specifically with any of the accounting and auditing problems which came to light as the result of the investigation into the affairs of London and County Securities. The English and Scottish Institutes of Chartered Accountants have set up a Committee to look into the lessons to be learnt from this case. The Government are keeping in touch with the accounting bodies on this subject and are examining the specific recommendations made by the inspectors. If consideration shows that further legislation is desirable, amendments can be made to the Bill at a later stage.
Part II of the Bill I can deal with rather more briefly, I am glad to say. Clauses 18 to 20 make minor amendments to the law concerning notification to the Registrar of the names of a company's directors and secretary and the whereabouts of its registered office and are, I think, self-explanatory. Clause 21 is concerned with people who continually ignore the legal requirements regarding the filing of accounts and other returns to the Registrar. It is not acceptable that such people should be free to continue to manage companies with impunity. The Bill therefore provides that if a person has demonstrated through persistent default his complete disregard for the law, the Secretary of State may apply to the courts for an order disqualifying that person from acting as a director or taking part in the
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management of a company for a period not exceeding five years. This provision supplements the existing disqualification provisions in the 1948 Act and those proposed in the Insolvency Bill. It will provide a valuable additional sanction against those who regularly fail to file their accounts and will thus complement the penalties in the earlier part of the Bill.
Clauses 22 and 23 are concerned with the problem of foreign companies which trade in this country under misleading names. Although the names of British companies are subject to control, there is at present nothing to prevent a foreign company using any name it likes and this can seriously mislead those dealing with it. The worst examples have concerned small foreign companies trading under grandiose names which suggest that they are reputable banks. The Bill therefore enables the Secretary of State to prevent a foreign company which has a place of business in this country from doing business here under a name which he considers to be undesirable.
Clauses 24 to 26 deal with administrative matters affecting the work of Companies House, such as the use of prescribed forms and requirements as to the size, durability and legibility of documents. One particular point which I might mention is that the Registrar will be empowered, when he is in a position to do so, to accept information on microfilm. Clause 27 widens the Secretary of State's powers to prescribe by regulation the fees to be paid to the Registrar for the performance of his duties. This clause makes two main changes: first, it will enable the Registrar to charge a fee for services which are not statutorily prescribed but which he provides as a convenience to users; and secondly, it removes the existing limit on the fees payable for the inspection of documents kept by the Registrar. The latter fees were fixed at a maximum of 5p in 1844 and have never been raised. The time has come when they must be reviewed, although it is intended to continue to use registration fees to subsidise search fees to some extent as it is right that most of the cost should be borne by companies which wish to obtain the benefits of incorporation and limited liability. Any new fees or increases in existing fees will be subject to Affirmative Resolution. The

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remaining clauses deal with various supplementary matters which I do not think that I need go into.
My Lords, as I explained earlier, this is largely a technical Bill. Nevertheless, it deals with a number of important matters and in the fields with which it is concerned it will achieve a valuable measure of reform. It is because I believe this that I have spoken at such length. I commend the Bill to the House.
Moved, That the Bill be now read 2a.—(Lord Winterbottom.)
3.28 p.m.
Lord LYELL: My Lords, the whole House will be grateful to the noble Lord, Lord Winterbottom, and indeed to the Government, for bringing forward this Bill. Noble Lords will be aware, as we are this afternoon after the speech by the noble Lord, Lord Winterbottom, that a Companies Bill was proceeding through its various Parliamentary stages when the General Election of February 1974 was called. That Bill set out to effect a thorough and a sound reform of company law, but sadly the Government have taken two years to carry on this important work. While we are grateful for having the opportunity to discuss this Bill, we should remember that several recent cases have shown the urgent need to bring our company legislation up-to-date in all respects.
We recognise that the Bullock Committee is due to report later this year, and that it would be unwise for us to deal with the entire spectrum of legislation as it affects shareholders, directors, auditors and creditors when fairly drastic legislation could be necessary as a result of Lord Bullock's Report. The Government will, of course, wish to keep the Bill as uncontroversial as possible and we shall assist the Bill in its onward passage. There are, however, many general and more detailed points that the noble Lord, Lord Winterbottom, could explain to us and we hope that he will be able to give us convicing reasons why the Government have not taken the Bill to cover more points than it does at the moment.
The Bill is intended, of course, to cover most of the points that the Government consider are in need of amendment, but the first and most important question that
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we want to raise is: when are the Government going to take steps to consolidate company law? Noble Lords will be aware that anybody dealing with such legislation has to dart between the Companies Acts of 1948 and 1967 and has to amend both of those Acts as a result of small measures enacted between times by regulations. Indeed, anybody looking at this Bill will discover numerous occasions when legislation is by reference. The Government will, I am sure, admit that their programme is heavy—too heavy and too ambitious, we feel—but we are sure that the noble Lord, Lord Winterbottom, will notice that it is nearly 28 years since we last consolidated company law. This subject will become yet more complicated now that we have to harmonise our laws with those of the EEC. The noble Lord, Lord Mais, will be initiating a debate on this particular subject in about two weeks' time, so we can let that subject lie for the time being.
A problem which was considered in great depth in the Companies Bill 1973, yet has been omitted from this Bill, is the classification of a public and a private company. Such divisions between these two types will become absolutely vital, possibly in 1977—and if the noble Lord, Lord Bullock, reports at the end of 1976, as we hope—and the EEC Members are proceeding with such classification. Any company with a share capital, turnover or membership of above various carefully defined limits has to set up two-tier boards of directors, and shop floor participation is often compulsory. Many awkward and time-consuming duties must be performed by the management, far and away beyond what we are even likely to regard as reasonable.
Another problem that is touched on, but in the 1973 Bill and not in the 1976 one, is that of insider trading; Lord Winterbottom did mention it. Nevertheless, where persons are closely connected with the management of a company or in a position to be closely concerned with it, and these persons can take an unfair and unreasonable advantage over the shareholders, the work force and the creditors of that company, we believe that legislation is becoming more urgently required. And of all the problems connected with company management, this, we think, is the most difficult to define and, often, to detect. The Stock Exchange

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and the Law Society are already closely concerned with this problem, while the accountancy bodies have to deal with this and with new problems arising with incredible speed and regularity. We accept that definitions of what is adequate disclosure—what should be disclosed or not, who should receive confidential information concerning a company and how and when such information is released—will receive close attention from the noble Lord, Lord Bullock, and his colleagues, but we feel that the Government have missed the opportunity in this Bill to rectify some of the abuses that have been evident so far.
We come to some more detailed and technical points that could have been covered by the Bill but which so far are not mentioned. One of the first of these points is the definition of distributable profits. The Jenkins Committee stated in one of its recommendations that before revenue profits could be regarded as distributable in, possibly, dividends, past losses had to be recouped from revenue profits. This is reasonable and it is a pity that the Bill does not deal with this particular point. Capital profits are a little more complicated in that the rate of inflation endemic in the United Kingdom now makes nonsense of balance sheet values of assets. There have been too many cases in recent history of items being revalued upwards, the profit on such revaluation accruing to the shareholders; but, owing to some utterly unconnected event, the new value turns out to be unrealistic, and since the profit may or may not have been realised, either there is a major cash shortage in that company or the share values are needlessly reduced. This may be a technical point, but it is important.
There are many more detailed points, some more important than others, but we feel that the Bill has not necessarily followed the suggested measures in the 1973 Bill; perhaps the House will forgive me if I deal with these questions as they occur throughout the Bill which is before us. In Clause 1 we find that accounts have to be delivered to the Registrar and it is stated that they have to be printed. Perhaps the noble Lord, Lord Winterbottom, could reassure us that small companies, which must of course file a copy of their accounts to the
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Registrar, need not necessarily go to the expense of having these formally printed but possibly they could be allowed to deliver accounts in an acceptable typescript form and possibly even a good quality photocopy. In Clause 2 the Registrar is empowered to decide a company's accounting reference date. I regard this as a horrid term. Is it wise to make this particular date 31st December? Would it not help the Registrar, who will have the problem of sending out to companies possibly half a million reminders in each year, to fix the date for a company's financial year end at some other date, possibly 31st March? This would have the effect of lightening the workload on the Registrar at the particular year end. Could the noble Lord who is to reply give some indication as to the Government's thinking on this small point?
Clause 3 deals with the company's financial year end and any alterations that may need to be made to this date. What, however, will be the situation where one company joins a larger group and where this group's accounting reference date is earlier than that of the individual company which is joining it, because it seems to us that there will be two options? One option is for the company which is joining the large group to carry on its accounts until the reference date coincides with that of the group. This could mean a financial period of between 13 and 18 months. The other alternative is for the individual company to change its reference date backwards so that its accounts could be made up for a period of, say, between seven and 11 months. But either way there will be a distortion in comparing the individual company's reports and accounts. I think it is agreed that financial analysts and, indeed, members of the public are not afraid of simple arithmetic.
The second option which I mentioned—that of shortening the financial period of the year—is not at present covered in Clause 3. Do the Government believe that the Secretary of State should have power to authorise a company to produce accounts for, say, 10 months instead of a normal 12-month period? We should be grateful for any indication from the noble Lord. In the same way, should the Secretary of State have power to extend the financial period to more than 18 months, again to avoid the necessity of

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sending out two sets of accounts to the Registrar and, again, when this individual company is about to become part of a larger group? I am afraid that these are niggling points but they cause concern to those of us who are responsible for company administration.
Clause 6 contains some admirable proposals concerning time limits for filing accounts with the Registrar and the suggestions contained in this clause will make the task of keeping these files at Companies House up to date. This is not always the case at present and I hope that it it not ungracious to ask why the Registrar cannot be considered as another shareholder for the purposes of filing accounts and, indeed, receiving accounts. The generous time limits proposed in the Bill—seven months for a public company and 10 for a private one—could lead to even greater delays in filing accounts than take place at present. Why would it not be feasible to have the companies file accounts within seven days of these accounts being sent to shareholders? This would make company administration much easier as well as permitting the Registrar to have the accounts filed much earlier than at present.
I come to Clause 12 and the important regulations concerning accounts and what these should contain. Recent events in the commercial world have made the modernisation of these regulations very urgent indeed. We feel that Clause 12 contains implicit requirements for adequate information to be available, but we should like to see the regulations more explicit, spelling out in considerable further detail exactly what information must be available to the management—and, in due course, probably the work force as well—so that not only do the accounts and the accounting system provide what we in the profession like to call "a true and fair view" but also these accounts and accounting systems provide management with all the information which indicates the continuing profitability of the company and, equally important, its continuing ability to pay all its debts of all sorts as they fall due.
"A true and fair view," which has, up till now, been the accepted definition of a respectable set of accounts for a company, will show what has happened, whereas we feel that more explicit details as to the form of the accounts and the
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books of account will do much to prevent companies from getting into difficulties. We acknowledge that the Government have gone a long way to filling some of the more obvious gaps. Clause 12 contains detailed references to stocks in trade. One or two points of definition will need clearing up even on this. I understand that there is considerable difficulty in the accountancy profession as to "dealing in goods". However, I hope that these definitions will be cleared up and, indeed, I am quite sure that, as the Bill proceeds through Parliament, these points can be settled.
We believe that a great effort has been made to clear up the definition of the information which is mandatory in company accounting systems. I understand that in many cases where companies are in financial difficulties and also in cases where there has been evidence of fraud, the accounting records are not only years in arrears but the systems are woefully inadequate. For these important reasons, we welcome Clause 12.
At this stage in discussing the Bill, I have to declare my own personal interest. I am a member of one of the four bodies mentioned by the noble Lord, Lord Winterbottom—the Institute of Chartered Accountants in Scotland—but it is a number of years since I was involved in the auditing of public or, indeed, private companies. Clause 13 contains very important provisions concerning the qualifications of those who may and may not audit a company. The profession is very happy with these provisions and it hopes that the Government are likewise satisfied. However, I hope that the noble Lord who is to reply will be able to reassure us that the reciprocal privileges granted to members of the profession throughout the EEC will be continued. We welcome the clear definition of auditors' qualifications, and I can assure the House that all the professional bodies concerned are very conscious of their obligations and duties to everyone—the shareholders, the creditors and the general public at large.
Clause 14 brings us to the appointment of a company's auditor. I hope that the House will bear with me briefly as there are one or two complicated and rather technical questions which we hope that the noble Lord, Lord Winterbottom, will be able to answer either now or later. We

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welcome the repeal of Section 159(2) of the 1948 Companies Act, which will put an end to the automatic reappointment of the retiring auditor. Thus, the shareholders will have to take a positive step in appointing a new auditor who will act as their watchdog. There has been a feeling on the part of some company lawyers that automatic reappointment would be invalid where a firm had undergone partnership changes during the year, but these doubts will no longer exist as the company will have the chance to appoint auditors on a year to year basis and can then ask the auditors whether there has been any change in the firm during the preceding year.
Another and more important point regarding Clause 14 concerns the annual general meeting of the company at which the auditor is of course appointed. Many of these annual general meetings are very poorly attended and it would be quite simple for a number of directors and some of the shareholders present to pass an ordinary resolution among those members of the company who were present to the effect that the retiring auditor be not reappointed. We understand that such a manoeuvre is quite possible, in that Clause 14(3) does not preclude voting an unsatisfactory auditor out of office. Clause 14 sets out rules for the appointment of an auditor and presumably a company could appoint any other person who was duly qualified as an auditor under the heading of a "casual vacancy occurring". If that happened, aggrieved shareholders could call a further general meeting to fill the casual vacancy. That case would be covered under Clause 14(2) and the company would have a further chance at that stage to consider whether or not the retiring auditor should be reappointed. However, we do not wish to preclude the appointment of a new auditor by the directors when the current auditor has died or cannot continue in office. A casual vacancy can be filled, but the company members will have their opportunity to appoint a new auditor on a year to year basis at the next annual general meeting.
Clauses 15 and 16 are, we consider, some of the most important in the Bill. At last, an auditor can take steps at any time to notify the shareholders immediately of any malpractice that he
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discovers in the management of the company. If he wishes to resign at any time between annual general meetings, he is quite free to do so; but, if he is unwilling to continue to act as auditor to a company whose directors refuse to keep the accounting systems up to date or are involved in what he believes to be flagrant commercial malpractice, he may re sign also.
In either case, he must append a statement to his notice of resignation that there are no circumstances which he considers should be brought to the notice of members of the company or, indeed, of the creditors. The alternative is that there are certain facts which should be presented to the company and, in due course, to the creditors. In that case the company is obliged, under Clause 16, to call an extraordinary general meeting so that the auditor who has resigned can explain his reasons for resignation and can answer questions from the members. This is an admirable step and the professions are full of praise for the Government in taking this measure very seriously, because it gives considerably increased strength to the auditors and, we believe, much more power to individual members of the company to be informed before the management of a company can take steps or persist in commercial malpractice.
Auditors in general welcome these measures, but is it too much to hope that the clauses covering the resignation of an auditor could be extended to cover what I shall call "passive resignation"?—that is, where an auditor declines to allow his name to go forward for reappointment at the annual general meeting. I feel that the noble Lord, Lord Winterbottom, will allow that members of the company should have the opportunity of receiving a positive statement that all is well with a company's accounts and records.
While we are finishing these clauses, can the noble Lord, Lord Winterbottom, confirm that statements sent out to shareholders are privileged, albeit in a qualified way, as far as the views which the auditor is expressing statutorily are concerned? Simply, it comes to this: could an auditor be sued for libel by directors and others who might come under implied criticism in such a statement, especially when the fears expressed by the auditor are later

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found to be true? We should be grateful to have some confirmation from the noble Lord.
Two other small points arise on Clause 25. Can the government give an indication of the standard form of accounts, together with the size and the format, and can we be assured that the regulations will not preclude the efforts of companies everywhere in the United Kingdom to make their accounts and reports to the shareholders much more amusing, interesting, and informative, with, if necessary, photographs and pictures and details of the company's operations? We believe that this is very important to many shareholders, and let us hope in future that it will be important also to the employees and to members of the public.
Clause 25 also contains a small provision giving the company 14 days to comply with the regulations as to size, legibility and format. I believe that the noble Lord will agree that the printing of new accounts might take a little longer than 14 days. I wonder if he feels that the Secretary of State could have powers to extend this limit so far as may be reasonable—possibly to a month or six weeks.
Company law is a most complicated subject. I hope that it is not boring or dull. It can contain very great dangers. We believe that the Bill is admirable so far as it goes. However, as I have pointed out, there are items which we consider important and which are not to be found in the Bill as at present drafted. Doubtless the Government and the Department of Trade are waiting with great interest for the Bullock Report, as indeed are we. There is a great need for a major consolidation of company law for, at present, the secretaries of all companies—particularly the smaller ones—have to look at at least four Acts and numerous regulations.
Lord BROWN: My Lords, if I may interrupt the noble Lord for a moment, I have noted the pressure upon my noble friend to extend the purpose of the Bill in the early part of the noble Lord's speech, as well as the emphasis upon the question of consolidation. I should like the noble Lord to bear in mind when drawing up Amendments to extend the Bill that over a period of 40 years the Party opposite has never produced any
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major legislation on companies at all. The only two major Acts which are now in existence are the 1948 and 1967 Acts, both of which were introduced by the Party of which I am a Member.
A NOBLE LORD: Who scrapped the 1973 Act?
Lord LYELL: My Lords, with the greatest respect to the noble Lord, I must say that there was one Act in 1973, which was much more far reaching than the present Bill. The present Government, for reasons which seem reasonable to them—
Lord BROWN: But, my Lords—
Lord LYELL: May I finish what I am saying? I have given way once already, and I am coming to the end of my remarks. We believe that the 1973 Bill was as far-reaching as it could have been at that time. We accept that the Bill now under discussion is admirable, so far as it goes, but there are gaps. We consider that there are other points which are not covered in the Bill, and we simply regret that this opportunity has been lost to deal with these. Commercial life is very competitive throughout the world, and often the management of companies, who are responsible for handling the public's money, can be tempted. That is quite enough; there are risks. All of us here regard the need for updating these commercial company laws as paramount, and certainly for this reason we welcome the Bill.
3.51 p.m.
The Earl of LIMERICK: My Lords, I, too, am grateful to the noble Lord, Lord Winterbottom, for the helpful way in which he introduced this small, yet very important Bill. It is a Bill which I very much welcome, and my regrets are entirely not for what is in the Bill but for what is not in it. I am not embarking on any controversial course. The noble Lord said that company law was long overdue for fundamental reforms, and there are many who would agree that reforms are needed. I do not know how fundamental a reform has to be before it qualifies. Certainly when we were drawing up the 1973 Bill there were passages in it which, at the time, were regarded as controversial to a degree where one could hardly conclude that they were not

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fundamental. Nevertheless, I know what is in the mind of the noble Lord, and we shall await the further proposals.
The noble Lord went on to say that the 1973 Bill perpetuated traditional attitudes to company law and that there was not very much rethinking in it. I am glad to learn—indeed, one has been aware of this—that there was rethinking going on and that we may expect to hear more of this subject in the not too distant future. But I have a rather sinking feeling when I hear the phrase that a "thorough-going review is proceeding". We know that company law is always the Cinderella in any legislative programme, and we must all express the hope that these reviews will not be too protracted. Thus, whatever view may be taken about certain omissions, I think that I could refer to some technical points in the 1973 Bill which many of us would have wished to see reintroduced at this stage.
One point has already been mentioned by my noble friend Lord Lyell; namely, the distinction between public and private companies. There is also, for instance, the question of interests of directors in associated companies, the prohibition of loans to connected persons, and the question of a minimum paid up capital, which I should have thought was very much bound up with the provisions for strengthening the arm of Companies House in dealing with the plethora of registrations, the policing and the maintenance of records. There is also the prohibition of non-voting shares, the question that shareholders' consent should be obtained for the disposal by directors of the whole, or a substantial part, of a business or undertaking, and many other matters which I would classify together as "the rest of Jenkins".
The Jenkins Report contained much extremely useful thinking on company law. Some of the recommendations were legislated in 1967, but many of them were not. In 1973 we felt that it was almost the last opportunity to incorporate many of those useful measures. I can imagine the type of debate that has been going on about the length of the present Bill. Nevertheless, it must be a matter for regret that the opportunity for much tidying-up is being lost.
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The noble Lord, Lord Winterbottom, used a phrase that I myself intended to use. He said that limited liability was a privilege. I believe that this is at the heart of what we are talking about in a good part of this Bill. With that privilege are carried substantial duties. It becomes essential to control and deter frivolous registrations, to prune dormant companies from the register and, most important, to enforce timely filing of accounts and information, because this grants the privilege of limited liability, behind which those who register and run these companies have chosen to operate. This is the only protection to the creditors of the company, who can decide whether they would wish to deal with these people, notwithstanding that they are trading with limited liability. That point was very amply underlined by the figures quoted by the noble Lord, Lord Winterbottom, of the numbers of companies in default and the terrifying number of reminders which have to be issued from Companies House.
I should have wished to speak in the debate if only for what I am now to say; that is to pay a very warm tribute to the Registrar at Companies House and his staff. I had the pleasure of working closely with them for two years when I was at the Department of Trade and Industry. I believe that, in difficult circumstances, they have done a very good job which deserves our recognition and thanks, and that Mr. Westley is, at the same time, one of the most over-worked and under-appreciated of civil servants—
Lord DAVIES of LEEK: My Lords, may I interrupt the noble Earl for a moment? I wish to endorse completely what he said. But I wish to add, briefly, that some of us regret the movement out of London, in view of the importance of Companies House. I believe that this move will limit the amount of inquiries and work that can be undertaken.
The Earl of LIMERICK: My Lords, I am grateful to the noble Lord, Lord Davies of Leek, for raising that point, but I do not share his apprehension. On the contrary, when the filing section of Companies House has been moved, as it will be very shortly, to Cardiff, then, with a much more efficient mechanism for information retrieval, the whole process of inquiry will be speeded up. There

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will continue to be a London search office as previously, unless there has been a variation, of which I am unaware, in the proposals which were put forward. This was a point which was very carefully gone into, and no doubt the noble Lord, Lord Winterbottom, will say something about this in his winding-up speech. But I should be both surprised and disappointed if the move is not helpful to the users of Companies House. I spent last night in Swansea, and early this morning I came through Cardiff in the train; I thought that there would be compensations in being decentralised to Cardiff.
I now wish to echo the plea by my noble friend Lord Lyell for some form of consolidation. The situation is difficult for those in practice. I should say that, like my noble friend, I am a member of the Institute of Chartered Accountants in Scotland, although of a slightly more ancient vintage than he. Some of the points I intended to make have already been taken up by my noble friend, which is not surprising; we may even have had a similar inspiration. Thus I can shorten this section of my remarks. Perhaps the best way to illustrate what I have in mind is to point out that although the aims of this Bill are modest, as the noble Lord, Lord Winterbottom, said,—it being concerned with only four areas—it nevertheless requires 35 clauses, three Schedules and 40 pages of print. Much of this will have to be looked at by reference to other Acts of Parliament. It is becoming increasingly difficult for practitioners, and still more so for laymen, to find their way around in this jungle, and I hope that the question of consolidation has some priority in Government thinking.
I have from what is left by my noble friend just three points, which do not need any immediate reply. First, I wish to echo the point made by my noble friend Lord Lyell on the question of alterations to accounting years, and to say that I very much agree there may be circumstances in which a company would have legitimate grounds (perhaps when it has been acquired by another company) for wanting to be able retroactively to change its accounting dates, and I think that some discretion in the Secretary of State might give the necessary flexibility. Likewise, possibly in similar circumstances, I think that a company might be
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allowed a specific dispensation from the normal requirement that no accounting period should exceed 18 months in duration.
I would also echo that I believe we should consider whether there should not be some specific requirement for accounting records to be maintained in sufficient detail for directors of companies to assess current trading trends and, in particular, to satisfy themselves of the ability of the company to continue paying its debts. My last point—again, it is one touched on at greater length by my noble friend Lord Lyell, but I am dealing with only one specific aspect—is on the reappointment of auditors. I agree that there is an anomaly and that if an auditor decides not to seek reappointment at an annual general meeting there should be some comparable duty on him to explain the circumstance so that shareholders and others concerned with the company may satisfy themselves that nothing is amiss.
My Lords, I end by saying this, straying a little beyond the terms of the Bill in front of us, regarding the radically new approach to which the noble Lord, Lord Winterbottom, referred: fine—let us look at it; there is much that needs looking at. But may we please have a Green Paper and ample discussion? There are going to be complexities which will not be foreseen at the earlier stages, and they will take time to become apparent; and if we get to really far-reaching legislation, changing the relationship among shareholders, directors, creditors and so on, in addition to the Green Paper, in time to discuss it, may we have a draft Bill which can be commented on by those most interested before we have to deal with the matter in Parliament?
My Lords, the Bullock Committee has been mentioned, and many of us are contributing in some way to its work and are looking forward to its findings. But I think that many of us equally feel that if the Bullock Committee confines itself, as we hope it will not, strictly to its terms of reference, then it will produce a very disappointing and in many ways an unsatisfactory document which is not going to produce any sense of completion in its work and in the way people regard its work. It is a curious situation that we are in regarding the Bullock Committee in that the only way in which it can fulfil its objective, it seems, is to exceed

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its terms of reference. I believe that the members of the committee are very much aware of this point, and we shall await with great interest to see how they are able to deal with it. My Lords, these points are for the future. This afternoon I would wish just to welcome this small but useful Bill.
4.4 p.m.
Lord MONSON: My Lords, there has been a clerical error, as they say. It is I who put my name down to speak this afternoon, and not the noble Lord, Lord Molson. In consequence of correcting this, I am afraid I missed the first three minutes of the speech of the noble Lord, Lord Winterbottom, for which I apologise. Like other noble Lords who have spoken this afternoon, I warmly welcome this Bill. I have one or two minor doubts, which I hope the noble Lord will be able to assuage, plus one tentative suggestion. The doubts concern, first, the scale of penalties proposed in Clause 4(l)—£400 plus £40 a day. Such penalties are by no means too high where fraud is involved: but where fraud is involved there will surely be a prosecution and, therefore, separate or additional penalties. Where fraud is not involved, the omission is likely to be due to laziness, forgetfulness, illness or absence abroad, and I would think these penalties somewhat on the high side—particularly for a first offence—in such cases.
My feelings about this are reinforced by the requirements of Clause 25, which gives the Secretary of State power by Statutory Instrument to require the annual returns or the accounts to be produced on paper of a certain size, weight, quality, or colour, and with a certain size type or colouring of lettering. Therefore, if directors inadvertently send in their annual returns or their accounts on paper of the wrong colour or in type of the wrong size on out-dated forms, they will be in default and hence liable to a penalty. My second doubt—and this is a simple query—is in connection with the word, "printed" in Clause 1(7)(a). It specifies that there shall be delivered to the registrar of companies "a printed copy of every document." The Parliamentary draftsmen were unable to confirm whether "printed" included "typed". If it does not, I suggest it is
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rather burdensome upon small companies to have to print rather than type their annual returns.
My suggestion is simply this. The Bill before us deals mainly with the protection of creditors or potential creditors, rather than of the shareholder. Given that it is highly unlikely that there will be time within the next months, or even the next years, for the introduction of a full-scale Companies Bill, I should like to suggest a small, modest and straightforward amendment which would be of marginal help to small shareholders in public companies. It is not by any means without precedent to introduce into a Bill a clause rectifying a matter which is not directly connected with the main subject matter of the Bill.
When the majority of blue chip companies, the majority of second line companies, the majority of third line companies and the majority of investment trusts send out their annual reports enclosing proxy forms or proxy cards so that the shareholder can indicate his consent to the adoption of the report and the re-election of the directors, or when they send out similar cards in connection with raising the authorised share capital, reconstructing the company's capital, making acquisitions or disposals of subsidiaries and so on, in nearly all cases (or in the vast majority of cases, at any rate) these proxy cards and proxy forms are reply-paid.
I have made notes on companies whose annual reports I have had to study over the past months and, confining myself to household names only, I have to concede that certain companies—namely, British American Tobacco, Grand Metropolitan Hotels, Dunlop and Carrington Viyella—do not send out reply-paid cards. On the other hand, Associated Newspapers, the National and Commercial Banking Group, Guest Keen and Nettlefold, Shell, Debenhams, Trust Houses Forte, Burmah Oil, Coats Patons, EMI, Fairey, ICI and the Rockware Group do; that is 75 per cent. of the companies concerned. The proportion is much the same among second line companies, and even greater among investment trusts, where about 85 per cent. of firms do so. There does not seem to me to be any hardship in requiring the minority to fall into line with the majority here.

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We know that postal charges have gone up enormously in the past few years and are going to go up further, and it makes it that much more difficult for the proverbial widows and orphans—the people who cannot afford it; those who live a long way from a post office or in a country district, and who may not have a stamp—to exercise any control over a remote board of directors. It also redresses the balance slightly vis-à-vis institutional shareholders. It may be said—it has been said when I have suggested this privately before—that fewer than 10 per cent. of individual shareholders reply. Be that as it may, it is the principle that counts. I realise that the noble Lord on behalf of the Government could not possibly commit himself at this stage to approval in detail; but I hope that he will indicate in principle that the Government would keep an open mind if I put down an Amendment on these lines in Committee.
4.10 p.m.
Lord REIGATE: My Lords, since this is a Second Reading debate and not a Committee stage, I will not give the noble Lord, Lord Winterbottom, my views on the minor Amendments that might be made to this Bill. So far as I am concerned, this is an excellent Bill. My complaint is that it is an excellent little Bill. I should like in particular to echo every word of my noble friend Lord Limerick as to the summary way in which most of the provisions of the 1973 Bill have been abandoned. I shall revert to that in a few minutes.
The noble Lord, Lord Brown, is not in his place now, but I thought that he made a rather maladroit interruption in the debate by trying to make a Party point about company legislation. I forget his exact statistics, but I think it is worth reminding the House that the Jenkins Committee reported in 1962 and it was only five years after that, understandably, that we had the Companies Act 1967. Then we had the Conservative White Paper in 1972—or 1973, I am not sure—and the Bill which was introduced and abandoned in 1974. It is quite obvious that the timing of companies legislation—let us leave out the partisan matters—such as might be covered by the Bullock Report, the ordinary bread and butter
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legislation, will have to straddle the life of more than one Parliament. It is absurd to try to make Party points about the presence or absence of legislation—although I think in this case when legislation has been so summarily abandoned, as it was in 1973, one is in a position to point an accusing finger at the delay which is going to ensue.
For example, the 1973 Bill was an affair of 120 clauses and 11 Schedules; this Bill has 35 clauses and 3 Schedules. Heaven forbid that I should suggest that length is necessarily a test of merit in legislation, but it gives some idea of the number of issues which have been burked. When the noble Lord says that they are awaiting a comprehensive review, I cannot believe that, although there are parts of the 1973 Act that it would have been reasonable to leave out, many other parts could not have been brought in and adopted, as they have adopted in the Bill today. I think it is a sad reflection on what I can only describe as partisan views of the Minister to choose to take this course.
I am a little fearful as to when we shall get this Bill, if the Bullock Committee which is covering the very large side of what, in shorthand, is called "industrial democracy" is to report by the end of this summer and we are told we are going to have legislation in the 1976–77 Session. Perhaps the noble Lord will correct me if I misunderstood him, but it seems to me almost incredible that we shall have only such a very short time (and apparently no White Paper or Green Paper) to consider the implications of Bullock other than the Report itself. If we call the Report a Green Paper, we should, at least, need a White Paper on the Government's views and a long period of consultation in the drafting of the Bill. That is only for what I would call the industrial democracy side. What is going to happen to all the other things that have been left out of this Bill, some of which I will come to later?
I think that what has happened is tragic. It means, if I may say so to my noble friends who urged consolidation, that that is further off than ever. It would be absurd to consolidate at this stage or until we have this lengthy Bill before us.

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My Lords, I could have given a long list of the problems which have not been tackled. My noble friend Lord Limerick gave one or two. There are one or two others that I should like to add but I am in a little difficulty. I managed to get hold of a copy of the 1973 Bill only late yesterday. It is out of print in the Stationery Office; there is one copy in the House of Commons Library and that is in my possession at the moment. So far as I know, there is no other copy available. However, I can draw attention to one or two points. First, insider dealing. Have the Government no views on that? I realise that it is a complex, difficult and contentious subject, but have they no views on anything that may occur in that field? Now warehousing—to use that quaint jargon word. Is there no view on that? Non-voting shares. Is there no view on that? Are we all waiting for—I was going to say Godot—the Bill or the Report? Is there no attempt to tackle inflation accounting? Is that too large a subject for this Government to deal with in their own lifetime?
I could give a long shopping list of omissions. I went through the whole of the text of the Bill and I noted about 12 points which seem to have been left out but which seem to have been of a reasonably non-political nature and which could have been included. I must ask the noble Lord, Lord Winterbottom, to give me a definite answer about one of them. He will speak with the noble Lord, Lord Davies of Leek, at his back. Clause 103, together with Schedule 6 to the 1973 Bill, provided for the use of the Welsh language for purposes connected with the Companies Acts by companies whose registered offices are in Wales. Why has that been abandoned? Could they not have taken the glorious opportunity of giving a sop to the Welsh Nationalist vote? Why? Was there any harm done?
Lord DAVIES of LEEK: My Lords, the noble Lord cannot blame me for that. We should like it. But I do not see that it is necessary.
Lord REIGATE: My Lords, the noble Lord, Lord Davies of Leek, knows that I would not blame him for anything. He and I are old friends and I am probably one of the very few in this House who knows that, aside from being an eminent
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Welsh-speaking Peer, he is also an honorary chieftain in Western Samoa. I was present at his installation—and I have been looking for an opportunity for years to bring that into a speech. My Lords, I think this is a thoroughly disappointing Bill in that respect.
There is one other point that I would refer to. In introducing the Bill, the noble Lord drew your Lordships' attention to the ignominious fact that this was the Companies (No. 2) Bill. I hope that all of your Lordships have furnished yourselves with copies of the original Companies Bill introduced by Sir Brandon Rhys Williams into the other place. It received its First Reading—and having been introduced seven times before, that is quite an achievement—but it has not so far reached the stage of being given a Second Reading, and it looks as though it will be blocked by the Government's efforts. That is a pity, because it is a rather good Bill. It does one or two things which I should have thought anybody with a reasonably impartial approach would think at least worth discussing or the Government considering for incorporation into this Bill.
It is the first time, I think, that the role of the outside director—that is to say, the director without any executive duties—has been taken into consideration. The purpose of the Bill is to require each company of a certain size to have at least three directors without executive responsibilities. Furthermore, it imposes on those directors certain duties which I will briefly outline. One of them is to inform the shareholders publicly of their view of the management of the company and of their use of the company's assets. This would bring into effect in this country what is sometimes known as the management audit and therefore would obtain for the shareholders—and it follows, since it would be public, for the workers as well and, indeed, for all concerned with the firm—an independent view of the efficiency with which the enterprise is being conducted. I would hazard a guess that something on the lines of this Bill will ultimately come out of the Bullock Report, and therefore I should like to know why the Government, except for reasons of loss of face, have chosen to ignore the earlier Bill and why they will not consider incorporating in this Bill at least some of its provisions. However,

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of the Bill as a whole, I think we would all say that it represents an opportunity missed.
4.21 p.m.
Lord WINTERBOTTOM: My Lords, I should like first to thank the House for the very constructive approach which has been taken towards this Bill. As I said in my opening speech, it is a technical Bill. We are not operating in areas of Party political disagreement. What we are trying to do is to carry into effect as soon as possible those proposals of the Conservative Administration which are obviously of immediate importance and which can be carried through in the present Parliament to the benefit of everyone operating in this field. My note tells me that, in fact, the original 1973 legislation covered eight particular areas, of which we are dealing with three: the filing of company accounts, auditors and administrative matters concerning Companies House. These were in the 1973 Bill and are being included in the present one. Of the other five matters, the definition of public and private companies was mentioned by the noble Lord, Lord Lyell.
Then there is insider dealing and warehousing, which I touched upon earlier and which is obviously not something which will be overlooked when we come to the main legislation. The same can be said of disclosure. The noble Earl, Lord Limerick, mentioned the implementation of most of the remaining Jenkins recommendations. These are "unfinished business", and to them we have to add the very important findings of the Bullock Committee. The noble Earl, Lord Limerick, and the noble Lord, Lord Reigate, both stressed the need for an "early warning" to both Houses of the findings of the Bullock Committee and, indeed, of the proposals of the Government concerning company law reform. Certainly these proposals should receive the earliest possible publicity—perhaps first in the form of a Green Paper, followed by a White Paper and, as soon as possible thereafter, a draft Bill. This extraordinarily important new legislation—and it is delayed because it is so important and so complex—should be studied in a dispassionate and informed manner by both Houses of Parliament. I can give the House the assurance that a Green Paper on future company legislation
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will be considered and the views of your Lordships will obviously be studied by my right honourable friend the Secretary of State. Much, obviously, will depend on the report of the Bullock Committee, but it is the Government's wish to bring forward legislation in 1976–77. That is consistent with the wish for the widest possible debate to take place over the Bullock Committee's recommendations. At this moment, I cannot say whether a Green Paper or a White Paper would be more appropriate, but I am fully seized of your Lordships' views and I will see that my right honourable friend the Secretary of State is informed.
I hope that noble Lords will excuse me if I do not, at this stage, answer the very numerous points raised by the noble Lords, Lord Lyell and Lord Monson, and by the noble Earl, Lord Limerick, which are mainly appropriate for a Committee stage. The noble Lords have kindly said that I might write to them, but it would be useful for us to have a thorough discussion at Committee stage of this Bill because many technical matters are involved. We are in agreement over our aims, and all we are trying to do is to send the best possible Bill to another place. Therefore, I, for one, would welcome a very thorough study of the Bill during its Committee stage.
The noble Lord, Lord Lyell, among other speakers, raised several points of importance. One of them concerned the question of printing in Clause 1. Although this is a comfortable phrase for the draftsman it is probably extremely inconvenient for a small company with limited resources, and I take note of what has been said by noble Lords about this. The noble Lord, Lord Lyell, raised another point of extreme importance concerning Clauses 15 and 16 on the question of whether an auditor could be sued for libel as a result of having resigned and stated his reasons, or whether his view would be privileged information. This is something which I hope the noble Lord will raise during the Committee stage, and I shall then do my best to answer his points. What we are trying to do is to strengthen the hand of the weaker brethren. Powerful auditors from powerful companies are not afraid of standing up to their clients, but I am sure there are areas where an auditor would be only

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too glad of a little backing from legislation in facing some of his rather formidable customers.
Another suggestion I found extremely interesting was that we are reaching an era where, while dealing with our domestic legislation we have also to consider parallel EEC legislation at the same time. As your Lordships may have noticed from the Order Paper, we are to take the Committee stage and a debate on EEC legislation on company law in the same week. I had hoped that the two could be interrelated, which would give your Lordships' House an interesting "first". Unfortunately, the EEC legislation which we are to discuss refers to only one very small part of the area covered by this Bill. Nevertheless, that point made during the debate is interesting and may become of greater importance when we come to what may perhaps be called the main Bill—the one we are waiting for with interest on some sides and apprehension on all, because of the massive area it is likely to cover.
The noble Lord, Lord Reigate, mentioned the Conservative Administration's proposals, and caused me some worry in case I should still be here to deal with any future legislation on these matters. May I thank the noble Lord, incidentally, for introducing a light note into our discussions. I should also welcome translation of the various company documents into some less abrasive language than English, but at the moment we have to be content with our own English tongue.
My noble friend Lord Davies of Leek made an intervention about the move to Cardiff of Companies House. I thought this was a most ungrateful attitude towards something which I should have thought he would warmly welcome. He probably knows that the original intention was to send it to Newcastle, but at the end of the day it was decided that Cardiff gave us the best advantages.
Baroness WARD of NORTH TYNESIDE: My Lords, what a pity it did not go to Newcastle.
Lord DAVIES of LEEK: My Lords, I was not denigrating Wales or my nationality. I was thinking of the most use to the greatest public. Naturally,
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thinking of the best for Britain I thought that access by smaller companies was easier in London. Nevertheless, having listened to my noble friend on the reformation that will take place, I am sure that there will be excellent service from Cardiff.
Lord WINTERBOTTOM: My Lords, I should like to assure my noble friend that London search facilities will continue, because this is obviously most important. This will be made much easier by the microfiche documentation, which will economise in space and time. It is interesting that microfiching covers 640,000 companies, so this is obviously a mammoth task which must be spread over a couple of years. But I am confident that the services supplied by Companies House at Cardiff, plus the London search facilities, will in no way hinder the individual who wishes to conduct a search, and indeed will provide an even more efficient service than at present.
I should like to thank the noble Earl, Lord Limerick, for the very kind tribute he paid to the Registrar of Companies House and his staff. He speaks from knowledge; I speak only from hearsay. But they have served the country well, and I think that this is a very appropriate moment at which to express our thanks.
My Lords, there is very little else that I have to say now. As I said earlier, I look forward to a thorough scrutiny of this Bill during the Committee stage, because, although it is not as wide as certain noble Lords have indicated it might be, it is nevertheless useful and can be improved. For that reason, I look forward to the next stage of our discussions.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ANGLIAN WATER AUTHORITY BILL [H.L.]
4.33 p.m.
Lord DE RAMSEY: My Lords, I beg to move that this Bill be now read a second time. The new Anglian Water Authority stretches from the Thames to the Humber and from the Wash nearly to Oxford—a huge Authority, and a sitting duck for anyone to shoot at. I have a superficial knowledge of the whole area

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but, although I live in the middle of it, an intimate knowledge of only about 10 per cent., and that thanks to public work, farming, draining, hunting and a little sailing on Grafham Water. The Bill is not purely a navigation Bill, as your Lordships might think from looking at Part II, but covers all forms of sport or pleasure connected with water. Its object is to enable the Authority to carry out their responsibilities for recreation under the Water Act 1973, first by providing and improving the facilities; secondly, by holding the ring where there is a clash of interests, and, thirdly, by bringing administrative order out of chaos.
When the Authority were set up under the 1973 Act, no one anticipated that they would have to bring a Private Bill before Parliament to do these things. They therefore simply set up a recreational advisory committee, which in turn recommended local consultative panels representing all interests and covering, for example, the Great Ouse river system, Empingham Reservoir and the Essex and Suffolk Stour. But they soon received numerous representations, and it was then discovered that in nine cases out of ten nothing could be done owing to lack of powers. In other words, Parliament had placed a responsibility on an Authority without giving them the tools for the job.
Probably, many of your Lordships know more than I do about the problems involved. My main interest in water has always been land drainage and its connection with agriculture. But one interest in water impinges on another, and I have some personal experience of the problems which this Bill is intended to resolve. I will give one example. There is an area of approximately 140,000 acres in the Fens, known as the Middle Level Internal Drainage Board. It has some of the best coarse fishing in England and Wales, and busloads of fishermen come from Leeds, Sheffield and the Midlands to enjoy it, quite apart from the local associations, and on a busy day there are as many as 5,000 fishermen in the area. These fishing rights, which belong to the riparian owners—in some cases, the Board itself—are a source of sport and revenue with which other interests, particularly boating, could conflict. Agreement was arrived at between the fishermen, the boating interests and
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the land drainage interests to lay down a navigation route through the area, only to find that they did not have the powers to enforce it. This was obviously not Parliament's intention, but I will not weary your Lordships with repeated examples of frustration.
Turning to the contents of the Bill, Clauses 9, 10 and 11 in Part II deal by name with the three groups of recreational waterways, and these are set out in Schedule 1, Parts I, II and III. Part II of Schedule 1 contains the only example in the whole Bill of the Authority taking over an existing navigation body; that is, by agreement with the Middle Level Commissioners. Beyond these specified "recreational waterways", Clause 12 and Schedule 3 lay down a procedure whereby further rivers could be so classified. In all Clause 12 situations, the Secretary of State for the Environment will be the final arbiter—not the Authority—with an order procedure for a local hearing. The other substantial provisions in Part II, comprising the "navigation code" are those contained in Clause 20 covering charges, and Clause 21 covering byelaws.
To deal first with Clause 20, Charges, public money is at present wasted owing to the lack of a charges scheme; at least, that is the fair view of anyone paying the general charge who receives no benefit. The old age pensioner, the widow in her own cottage, will not be canoeing down the river, but at present she pays towards those who do, not because a canoeist is not willing to pay his way—he has categorically said that he is and wishes to do so, on the old adage of "He who pays the piper calls the tune"—but there is no means of demanding the money from him. Next year, there will be an estimated deficit of £439,000 on the water space or recreational account, which will have to go on the general charge. The cost of this Bill, if passed, will be recouped in three weeks, but the real point is equity.
With regard to Clause 21, Byelaws, all byelaws of a Water Authority are subject to confirmation by the Secretary of State for the Environment and the objection procedure. They cover all recreation, not just navigation, but they are applicable only to designated recreational waterways. Apart, therefore, from the specified waterways in the Bill, which I have mentioned

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under Schedule 1, an order will first have to be obtained from the Secretary of State to designate the waterway; then again the byelaws will have to have his confirmation—a double-barrelled safeguard. Bye-laws may not interfere with, say, the rights of riparian owners, or they become ultra vires. Subject to all these qualifications, the byelaws are none the less the sharp end of the Bill and the only means by which the Authority can hold the ring. Even the compulsory acquisition powers in the Bill are expressly limited to moorings and cannot affect other riparian owners. Falstaff declared,
"I will do nothing under compulsion."
If, however, any Petitioner or interest thinks that Clause 16 relating to compulsory purchase is not drawn tightly enough, I am authorised to say that the Authority are willing to redraft it to include any valid point.
Of the other subsidiary powers in Part II, nothing in this Bill will limit or even affect commercial users of the waterways, nor is a massive increase in staff contemplated under Clause 10, for instance, bailiffs and wardens—rather the contrary. Many of the existing ones, let alone any additions, will be paid for by the interests concerned. Incidentally, existing field staff and, above all, other water users are in practice the best gamekeepers.
Part III of the Bill seeks miscellaneous powers that are more appropriate for discussion at the Committee stage. The bulk of these miscellaneous powers have already been granted to some of the Authority's predecessors and thus apply to parts of the new area only—for instance, extending the agreed increase in the Waverley Committee's flood protection criteria along the Thames, which gives additional safety to the Palace of Westminster, to the whole of the Authority's coastline. Part IV of the Bill deals with "Miscellaneous and General", which is included in every Bill.
Nobody who really knows about the work that the Authority have put into it could accuse them of not trying to consult everyone's interests affected by the Bill. I will hand a list to the noble Earl, Lord Ferrers, who is, I know, concerned about this point. If they have failed anywhere, at least their endeavours, all made
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as long ago as last August, are on record for all to see, and they have given an assurance that local and regional interests will continue to be consulted before any of the recreational powers included in the Bill are exercised. If an association were slow to react until it came under grass roots pressure, the Authority could not be blamed. I am not claiming that the Authority are perfect. For instance, they never consulted the Harwich Port Authority or the British Docks Board, who are among the Petitioners, about existing navigation because it never occurred to the Authority that these interests could be affected.
The Petitioners as a whole raise three main points of principle. First, 12 Petitioners are concerned with navigation on estuaries. In Committee an Amendment will be introduced to Clause 12(1)(c) to exclude them. The Authority hope and have reason to believe that this will meet the objection. Perhaps the noble Lord, Lord Belstead, will be able to give us his opinion on this point. A second group of seven Petitioners fear that under Clause 12(1)(a) the Authority might seek to take over their navigation powers. The Authority have no such predatory intentions, but they are quite prepared to delete Clause 12(1)(a) at the Committee stage and to rely on existing legislation, if ever it became necessary.
The third objection of principle is raised under Clause 12(1)(d) by representatives of boating—and, they claim, of other interests also—to the effect that the Authority should not be allowed by the Secretary of State to vary or extinguish any right of navigation anywhere, regardless of anyone else's interest. I have here a letter, delivered to me on Sunday, from the National Federation of Anglers, Eastern Region, who have 40,000 to 50,000 members in the area. The letter ends:
"We hope therefore that Parliament will approve this important section of the Bill".
This is the clause which the noble Lord, Lord Harvington, is to move should be referred to the Committee for special consideration, about which I shall have more to say later.
If this Section were not agreed to, it would mean that the Authority would be incapable of holding the ring in the event of conflicting interests arising on

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some watercourses—in the interests, say, of Nature Conservancy, fishermen, scientists, or anyone else. Without this power, the only method at present available for this purpose, even on a minor watercourse where everyone agrees, is to proceed by Private Bill—a sledgehammer to crack a nut. It is the middle level example all over again. The Authority have expressed their willingness to discuss points of detail on any remaining Petitions to Part II or Part III of the Bill and to try to allay the anxieties either by explanation or by drafting alterations.
In conclusion, noble Lords will have noted that the powers sought by the Anglian Water Authority are permissive, like the greater part of all land drainage legislation. May I ask for your Lordships' patience as I pontificate for a couple of minutes on the advantages and disadvantages of mandatory and permissive legislation where water is concerned. It may surprise your Lordships—certainly it surprised me—to discover a few years ago that the first anti-pollution Acts were introduced in 1876—exactly 100 years ago—by Disraeli. They were permissive Acts. There were no votes in sewage in those days, any more than there are today, and the result was that nothing was done. It is a sad thought. We might have saved ourselves immense expenditure, loss of time, and so on, had those responsibilities been mandatory. Also, we should undoubtedly have had the cleanest rivers in Europe today. They have vastly improved, but at what a cost compared with 100 years ago. But there are votes in recreation. In fact, I have been given to understand that fishermen alone, numbering some 3 million—which is more than those who watch football at weekends—comprise the largest uncommitted vote in the country. They and other interests will bring pressure on the Authority, and that is what it is anxious fairly to be able to meet. It is not necessary, therefore, to make this legislation mandatory. On the contrary, it is far wiser to leave it permissive and to rely on consultation with all interested parties before action, if any, is taken.
Consultation gave rise to this Bill and consultation will continue to guide the Authority's actions. Local councils which have a great interest in these matters, in addition to individual consultations, have, as a group, a majority on
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the Authority. Lastly, the Secretary of State has the final say on all vital matters.
There seem, therefore, to be proper safeguards for the public interest to justify trusting the Authority with the recreation powers now sought in that interest. I beg to move.
Moved, That the Bill be now read 2a.—(Lord De Ramsey.)
4.49 p.m.
Lord STOW HILL: My Lords, I rise to move the Amendment that your Lordships will see upon the Order Paper, the effect of which would be that a Second Reading is refused to the Bill which we have had so fully and carefully explained by the noble Lord, Lord De Ramsey, who has just resumed his seat. I move this Motion in a sense rather interrogatively, for the following reason. A Green Paper has been published and it occurred to me when I studied that Green Paper—and I think it may be the view shared by some other noble Lords—that it might not be a useful occupation of time when the Government have so nearly committed themselves as they have in the Green Paper to a specific course of action (to which I will refer in a moment) to proceed further with the consideration of the present Bill. One issue therefore before your Lordships is whether or not the Bill should go further now.
A second question arises if your Lordships think that the Bill should have a Second Reading; namely, the Motion by the noble Lord, Lord Harvington, that the Committee be directed particularly to the provisions of Clause 12(1)(d) of the Bill. If your Lordships feel that the Bill should have a Second Reading, I should like to say here and now that I would support the second Motion to which I have just referred, in relation to the interests of the British Waterways Board. In this House one speaks entirely on one's own responsibility and none of us is a spokesman for any particular interest, but I have been approached by the British Waterways Board and it seems to me to be in the public interest that the point of view which they desire to express should be considered and ventilated before your Lordships' House.
In answer to what has been said by the noble Lord, Lord De Ramsey, may I start by indicating in a broad sense why the British Waterways Board feel concern

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and why if the Bill goes further they would desire to call attention to the dangers of Clause 12(1)(d). The noble Lord, Lord De Ramsey, has indicated the amendments that he and those associated with him would feel prima facie able to accept if that would allay anxieties, and I am sure those amendments would do a great deal of good. But they still leave Clause 12(1)(d) as the operative part of the Bill which occasions, at any rate in the minds of the British Waterways Board, considerable apprehension as to their own situation.
I should like to say one or two words regarding that before I return to the main object of my rising to my feet at the moment. As your Lordships will know, the Inland Waterways Board was one of the four major boards set up by the Transport Act of 1962. They had responsibilities of a very wide order, including responsibilities for inland waterways, and that was the situation until Section 104 of the Transport Act 1968 was put upon the Statute Book. Section 104 of the 1968 Act divided the waterways for which the British Waterways Board was responsible into three categories: commercial, cruising and the remainder. The Bill which your Lordships are at present considering, I would submit—and I think that I understood the noble Lord, Lord De Ramsey, to agree broadly but not entirely—as its main objective has tried to bring some more coherence and order into the administration of the recreational aspect of the waterways concerned. That means to say that the Bill is concerned with what the 1968 Act calls the cruising inland waterways. They are the ones that can be used for recreational purposes, and are so used.
If I may proceed a little further to adumbrate the anxieties which exist in the minds of the British Waterways Board, they are these: they have gone a long way in implementing their function regarding these recreational inland waterways, and they have a number in the area of the Anglian Water Authority. But it goes much further than that. Not only have they gone a long way, but there was put upon the Statute Book the British Waterways Act of 1971—three years after this division into three
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categories of waterways was brought about by the 1968 Transport Act—and the purpose of the 1971 Act was to vest specifically in them very wide-ranging duties, including registration, charges and all the rest, in relation both to pleasure boats and to house boats using the inland waterways for which that Board was responsible.
They have gone a long way in doing that and I would just add that of the waterways for which they are responsible three are recreational waterway complexes actually inside the area of the Anglian Water Authority—Fosdyke, Wytham and the Grand Junction Canal in part. Therefore the position so far as they are concerned is this: they have for years been doing their best to try to bring order and to regulate thoroughly in every sense the use of these waterways for which they are specifically made responsible, first by the 1962 Transport Act and then by the 1968 Transport Act. They engage staff, they have an elaborate organisation for that purpose and so far as one can tell that is working very satisfactorily indeed. In those circumstances they view with some not inconsiderable anxiety the provisions of Clause 12(1)(d) of the Private Bill which your Lordships are at present considering because they think that the system which they have been working upon for years, and which is functioning perfectly satisfactorily, ought not to be interfered with unless some affirmative and positive case can be brought forward to show that there should be some change in the arrangements under which the Inland Waterways Board at present regulate those recreational functions of pleasure craft and house boats. That is the general reason why I would support the Motion that the Committee's attention is specifically directed to Clause 12(1)(d) of the Bill. In a sense that is background material on the Motion that I am at present moving.
I will now turn directly to that Motion. I considered carefully whether I would be serving a useful purpose if I tabled a Motion to reject the Second Reading of this Bill, and I came to the conclusion that I would be so doing and that it ought to be done. My reasons were as follows: the Government have recently published a Green Paper I am quite conscious of the fact that a Green Paper is not the same in its intent as a White Paper. It

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does not set out decisions finally taken by the Government but it is designed to invite discussion on decisions which are adumbrated and described in the Green Paper. I respectfully submit to your Lordships that if one considers part of this Green Paper, at any rate, it is so near to the Government taking a decision of major importance in this field that it is rather pointless to go on with the Second Reading of a Bill which may turn out to be completely useless.
The gist of the decision, which I submit is of the greatest importance in this matter, is this. The Government feel that there is a good deal of disorder in the regulation of inland waterways. They have it in mind that there is a strong case for setting up a completely new authority into which the British Waterways Board will be "merged", as it is put in the Green Paper, and that the new authority is to take over and itself conduct all these inland waterways. If that is done, I should think that is obviously the most effective and sensible way of meeting the various points that the noble Lord who has resumed his seat put before your Lordships for consideration.
My Lords, I hope I will not be trespassing on your Lordships' time too much if I seek to justify what I have just said with regard to this Green Paper by reading an extract, which I am afraid is nearly a page in length, but which I hope your Lordships will think relevant. It is to be found at page 10 of the Green Paper. The passage reads as follows:
"The present arrangements for controlling navigation on rivers and inland waterways in England and Wales, which are extensively used for pleasure boating, are highly fragmented. The British Waterways Board…a nationalised industry, own or manage some 2,000 miles of waterway, about 1,000 miles of which are navigable. This includes 270 miles of navigable rivers, including the Severn and the Trent. The water authorities themselves are navigation authorities for about 500 miles of navigable river, including the non-tidal Thames. There are about another 500 miles of more or less navigable waterways, including a number of rivers and the Norfolk Broads, controlled by a variety of bodies such as local authorities and charitable trusts.
In the Government's view there is a strong case in principle for bringing together the management of most of these navigations in a new national navigation authority. Apart from the operational advantages which would result from unified management, creation of such an authority would lead to the introduction of a
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uniform registration and charging system and a national navigation code, so that boats could pass all along the waterways system on a single licence and be subject to the same regulations from one part of the system to another. At the same time, the canals controlled by the British Waterways Board form an intergral part of the water system of the country. The importance of many of them for water supply and land drainage makes it desirable to bring about a closer association between the Board and the water industry.
In the Government's view, the most promising way ahead would be to merge the British Waterways Board into the National Water Authority, which would become a national navigation authority. On this basis, the National Water Authority would be responsible initially for navigation on the whole of the British Waterways Board's present system together with those rivers on which navigation is at present the responsibility of the water authorities. It could in due course extend its control to other waterways which are important for navigation. Further consideration would need to be given to the question of the British Waterways Board's waterways in Scotland, bearing in mind that under the Government's proposals for devolution the Scottish Administration would take responsibility for inland waterways. The Government propose to start consultations immediately on the detailed implications of this proposal, in particular the financial arrangements that would have to be devised for the waterways, and the essential safeguards for the transfer of the British Waterways Board's staff; if these can be satisfactorily resolved the merger could take place as part of the general reorganisation proposed in this document. Such a merger would make it easier for the National Water Authority, in preparing a national water strategy, to give effect to the navigational and recreational elements of national water policy.
Merging the British Waterways Board into the new National Water Authority would make it necessary to consider also the future of the Inland Waterways Amenities Advisory Council, set up under the Transport Act 1968, to advise Ministers and the British Waterways Board in relation to the recreational and amenity use of the inland waterways, and the Water Space Amenity Commission, set up under the Water Act 1973 to advise Ministers, the National Water Council and the water authorities in relation to the recreational and amenity use of water space in England. There would clearly not be room for both bodies under the suggested arrangement."
My Lords, that is my case for suggesting that the Bill at this moment go no further. What is happening? The Government say that there is "a very strong case". Those are their words:
"….there is a strong case in principle for bringing together the management of most of these navigations in a new national navigation authority…. In the Government's view the most promising way ahead would be to merge the British Waterways Board into the National Water Authority, which would become a

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national navigation authority…. The Government propose to start consultations immediately on the detailed implications of this proposal….".
That is how it stands. I quite agree that the Government are not committed, but they have committed themselves to this at least: to the expression of a strong view in favour. It would be rather surprising if, presumably having given thought to the matter over a considerable period of time, they now decided that the whole thing was all wrong. Presumably they will go ahead and set up a new authority which will take unto itself all these duties and weld them together into a single, sensible, coherent whole.
If that is the situation—and I respectfully submit to your Lordships that I hope I have put it fairly and have not exaggerated—then I respectfully submit that the right course for your Lordships at the moment is to say: "That being the new situation which has now arisen, it is not expedient for this Bill at present to go any further", and that therefore its Second Reading should be refused. I beg to move accordingly.
Moved, As an Amendment to the Motion for the Second Reading, to leave out all the words after ("That") and insert ("This House declines to give a Second Reading to the Bill in view of the policy of Her Majesty's Government announced in their Consultative Document "Review of the Water Industry in England and Wales".")—(Lord Stow Hill.)
5.9 p.m.
The Earl of KINNOULL: My Lords, I rise to speak at this stage on behalf of my noble friend Lord Harvington, who regrettably is unavoidably absent at this stage of the discussions and, indeed, if he is not present at the appropriate time, I intend to move the Motion standing in his name. I regret he is not present, because my noble friend is undoubtedly a Member of your Lordships' House who brings to us a refreshing experience of water users and water lovers. He is not only vice-president of the Inland Waterways Association but, indeed, a lifetime friend of all waterway lovers.
The issue the noble Lord, Lord Stow Hill, has raised is, of course, a great deal stronger than the words of the Motion
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standing in the name of my noble friend. I always admire immensely the oratory of the noble Lord, Lord Stow Hill, as indeed exhibited today. He has put a dilemma before the House, and I very much hope that the noble Baroness, Lady Birk, will be able to throw some light on what has become a rather confusing issue. For here we have a very responsible authority who have apparently acted, in the words of the noble Lord, Lord Stow Hill, with extreme haste, and have possibly pre-empted the thinking and the future policy of the Government in setting up a National Water Authority.
The Motion standing in my noble friend's name is one which is designed not to conflict with the duties of the Select Committee, if this Bill should reach a Select Committee. It is, I hope, something which will commend itself to the House, should Lord Stow Hill's Motion fail, because I think this is a most important issue. The issue concerns the public rights of navigation, as the noble Lord, Lord De Ramsey, has indicated, under Clause 12(1)(d). It is an issue which, the House will recall, was debated at great length during the passage of the Transport Act 1968, and I apologise if I make almost the same impassioned speech now as I did then. The issue then was fought to a Division, and, indeed lost, I think, by one vote. The noble Viscount, Lord St. Davids, made a particularly powerful speech on that occasion, and I hope perhaps he will be speaking a little later.
Viscount ST. DAVIDS: My Lords, may I amend just one statement. It was actually carried to three different Divisions at different stages of the Bill. The middle one came out equal and was carried on the vote of the Lord Chancellor, and the final Division was won in this House but reversed in the other House.
The Earl of KINNOULL: My Lords, I am grateful for that intervention. I think that again shows the feeling of the House as it was then. The issue in 1968 was dealing with public rights of navigation granted by Statute which were to be transferred under that Act to the appropriate responsible authority. The reasons for the fears and the objections in 1968 were, first, that there would be discrimination of the users of the waterways—those, for instance, who used boats

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or went fishing or whatever; that there would be a discrimination by the authority responsible for the management of that waterway. It was felt that in view of the fact that there were these public rights of navigation they should not be interfered with. Secondly, and as important, there was the fear that the managing authority would levy very high charges. I think I should say that I have tried to find out whether these fears were well founded, and I am glad to say that, so far as I know, up to now there has not been a really bad case of these powers granted under Section 112 of the 1968 Act having been abused.
But the issue today is much wider, because under Clause 12(1)(d) the Anglian Water Authority may control not only the public rights of navigation granted by Statute, but they may also control another very important section, those rights which have been established by common law, established in some cases as far back as 1187, when the old maxim was "Once a waterway, always a waterway".
My Lords, there is an even more disturbing feature than that under this clause; that is, that the Anglian Water Authority may seek the permission of the Secretary of State to extinguish the public rights of navigation. This goes far beyond the Transport Act 1968, because never was the contentious word "extinguish" used at that time. I think it would be only fair to the noble Lord, Lord De Ramsey, to say that the Promoters of this Bill have tried already to meet some of the objections to the Bill. As the noble Lord will know, the Inland Waterways Association have been to discuss these points on a number of occasions, and I was glad the noble Lord made the conciliatory noise about further objection being met if necessary.
But I think it would be fair to advise the House that the issue of Clause 12(1)(d) at the present time is still an issue which has not been agreed; it is still an issue on which the Anglian Water Authority feel they cannot budge. Their argument, as I understand it—the noble Lord will no doubt be speaking later—is that they have inserted under Clause 12(1)(b) a provision that will give them power to create a public right of navigation, having just taken away or extinguished it so far as the Common Law rights are concerned;
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in other words, a quid pro quo. I do not think that is a very strong argument, and when he comes to reply to the debate I would ask the noble Lord, why do the Authority really want this power, why is it they have inserted this word "extinguish"? Is this really not too contentious, and what is wrong with the present system? I hope the onus will be on the Promoters of the Bill to show the real need. One has to remember that the Anglian Water Authority are not, as the noble Lord suggested, a "sitting duck"; I think they are an enormous autonomous elephant. The average individual, and indeed the average group of individuals, the users of waterways, will feel, I am sure, that any power as wide as extinguishing rights of users goes far too far.
I would draw the attention of the noble Lord to another objection under this clause, and that is that there is a feeling that the good work the Inland Waterways Association has done in the past, particularly in the restoration of canals, could be affected. I am sure the noble Lord knows that argument well. At the moment they have a right of navigation, a right to go in without very great legal difficulties to proceed with the restoration. It is felt that, if these rights of navigaion are withdrawn, despite the fact that the Anglian Water Authority may well be responsible and sympathetic, there may be difficulties in the future and long unnecessary delays.
The Inland Waterways Association, as the House will know, has a membership of such wide variety that they really do represent the consumers' interests. They have themselves restored a number of canals, particularly perhaps the most famous, the Lower Avon and Upper Avon, and indeed have restored a heritage back to this country. They, of course, deal all the time with their members on recreation, which, of course, is an enormously expanding interest. I hope that the House will look sympathetically at the Motion standing in my noble friend's name, if it comes to be moved. It is, I repeat, deliberately drafted not to interfere with the Select Committee's work or duties, but, with the support of the House, it could be an invaluable indication to the Select Committee of the genuine concern felt among the users of

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the waterways with regard to their ancient rights.
5.20 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, I intervene at this stage since I feel that it may be helpful to the House to know the Government's attitude to the proposals in the Bill. Far from even starting to be an expert on these matters on water as are so many Members of your Lordships' House, I seem to spend a great deal of time these days with "talking water" going under my many bridges. Basically our policy is to encourage recreation on and around water, and we welcome any proposals aimed at making a better use of available water space for recreational purposes.
Part II of this Bill falls broadly into three groups: the first updates very old local legislation relating to navigation already under the control of the Water Authority and of certain named navigations to be transferred to them; the second establishes an order-making procedure for creating new navigations, extinguishing others, or varying rights; the third provides bye-law making and other specific powers for the effective management of navigations under the control of the Water Authority. We have no objection in principle to purposes one and three. It is the second group of proposals, those for an order-making procedure, and more particularly its scope, which have attracted most of the objections from organisations already actively involved with recreation in Anglia. It seems to be this part of the Bill, Clause 12, which concerns my noble and learned friend Lord Stow Hill and the noble Lord, Lord Harvington, on whose behalf the noble Earl, Lord Kinnoull, has just spoken.
We have before us the proposition that paragraphs 26 to 29 of the recent Consultative Document on the review of the water industry, which favoured creating a national navigation authority, removes any need for this Bill. I do not agree with my noble and learned friend Lord Stow Hill on this, because the proposals for a national navigation authority put forward in the Green Paper are for discussion
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—and I would repeat that they are for discussion. They are not a commitment to Government policy, certainly not at this stage. No decisions have been taken and there is absolutely no Government commitment.
We have drawn attention in the Consultative Document to the point that responsibility for navigation on rivers and inland waterways is highly fragmented, as has already been pointed out. It is fragmented between the British Waterways Board, the water authorities, and a variety of bodies such as local authorities and charitable trusts. It is our view that there is a strong case in principle for bringing together the management of these in a new navigation authority. The most promising first step would be to merge the British Waterways Board into the proposed new National Water Authority which would then be responsible for navigation not only over the British Waterways Board's present system but also over those rivers on which navigation is at present the responsibility of the water authorities. In the longer term it would then be possible to extend control by the national navigational authority to other waterways which are important to navigation.
I would again stress that these matters are still in the nature of consultation, and again repeat that no decisions have been taken and that there is, as yet, no Government commitment. We intend to start immediately with the British Waterways Board a detailed examination of its implications. In my view none of this needs hinder the Anglian Water Authority's attempt to deal now with existing problems affecting navigations in their area. Nor need they hold back their longer-term proposals expounded in Clause 12; although I expect that they may want to review this part of the Bill both in the light of the very strong objections to it and bearing in mind last week's Consultative Document.
Taking all this into account, I hope that the House will decide, as is the custom of this House in any case with Private Bills, to give the Bill a Second Reading and send it to Select Committee where they will be able to examine in detail all the issues involved, taking account of the many points that have been made today, including Lord

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Harvington's proposed Instruction, if this is the wish of the House. In view of what my noble and learned friend said, I think I should point out that there are some important differences between Clause 12(1)(d) of this Bill and Section 112 of the Transport Act 1968: namely, the Act does not enable navigation law to be varied and cannot be used to deal with rights which exist by virtue of a "rule of law". Also, the Select Committee will have the added advantage of being able to hear expert evidence. My right honourable friend the Secretary of State has some reservations on the detailed provisions of the Bill, which are at present being discussed with the Promoters. He will be able to put the Department's comments to the Select Committee if the House gives the Bill a Second Reading.
5.26 p.m.
Earl FERRERS: My Lords, I have no doubt that when the noble Lord, Lord De Ramsey, and the Promoters came to look at this Bill they thought that they had a fairly harmless Bill to put forward. In fact, as the noble Lord has seen, he has a bit of a tiger by the tail. The noble Lord introduced this Bill in the clear and careful way which your Lordships would expect of him, and especially as this is very much a Bill which affects the rural countryside to which the noble Lord has devoted his life with such distinction. I suppose that I ought to declare an interest in so far as I live in an area which is covered by the Anglian Water Authority, and therefore in some measure I suppose I may be affected by this Bill, if only as a water rate payer. My noble friend Lord Belstead was here this afternoon, and the noble Lord, Lord De Ramsey, referred to him. He also lives within this area. He is sorry not to be here now and he has asked me to say to the noble Lord, Lord De Ramsey, and those with whom he had been associated, that the people involved with estuaries were particularly grateful for the attention which the Promoters have given to their particular problems.
The noble Lord, Lord De Ramsey, explained that there are many rivers within the area covered by the Bill, which are neglected and in regard to which powers for regulation are either
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inadequate or moribund. I accept that there is much strength in the argument that these rivers should be regulated by some overall authority and that the powers, where necessary, should be renewed or updated, and possibly regularised. Of course the Bill goes very much further than that. It gives the Anglian Water Authority colossal powers; ones which I venture to suggest are unreasonable and undesirable.
Although I hate to tell the noble Lord, Lord De Ramsey, this about the Bill, I think that the manner in which the Bill has been formulated leaves much to be desired, and I shall tell your Lordships why. One would have thought that if an authority wished to claim to themselves the huge powers outlined in this Bill, and to take to themselves the responsibility for navigation and, therefore, recreation on waterways, which, in many cases, is already being carried out by bodies already constituted to look after them, in order to get as much common ground as possible, great care would have been taken in consultation and negotiation before promoting such a Bill. The noble Lord, Lord De Ramsey, said that there has been a lot of consultation. I have no doubt that there has been. However, discussion is very different from seeing facts, and I wonder whether those with whom the Authority did the discussing ever saw the draft of the Bill.
This measure has in fact stoked up a nest of bees and has caused great distress among those who live in the area. No less than 25 petitions have been lodged against it. These vary from private individuals to the Friends of the Earth, yachting associations, Great Yarmouth Borough Council, Broadland, North Norfolk and Waveney District Council, Great Yarmouth Port and Haven Commissioners, British Transport Docks Board, British Waterways Board, Harwich Harbour Conservancy Board, Inland Waterways, National Coal Board, Peterborough Development Corporation and others—a formidable list, your Lordships might think, and if I were a Promoter I should not feel very proud of that. This is a list of people who are so concerned at the powers for which the Anglian Water Authority are asking in this Bill that they have felt obliged to go to the expense of petitioning Parliament against it.

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If I am critical of the Anglian Water Authority I should point out that I have been treated with the utmost courtesy by them in any discussions, letters and other correspondence I have had with them, and I recognise that they are genuinely endeavouring to carry out their responsibilities. But, as an example of the powers which are objected to, consider the powers in Clause 12(1)(a) which gives the Authority power to take over the functions and undertakings of a navigational authority, a conservancy authority or a harbour authority. This means that the Water Authority could take over the Great Yarmouth Port and Haven Commissioners, whose job, among other things, is to run the Norfolk Broads, which they do very well. The operation of the Ports of Lowestoft, Grimsby, Immingham, Felixstowe, Harwich and King's Lynn could all come under this Bill and could all be taken over by the Anglian Water Authority.
When the Great Yarmouth Port and Haven Commissioners objected to these powers they were told, as indeed the noble Lord, Lord De Ramsey, said this afternoon, "Don't worry, we have no intention of taking you over". But one wonders why they included the powers to do so. The Promoters were asked specifically if they would exclude the Port and Haven Commissioners but they declined to do so, and the provision has caused so much anxiety that I am glad that the Anglian Water Authority have decided to remove it. They wrote to my noble friend Lord Belstead and they sent a copy of the letter to me in which they explained their reasons. According to that letter, they were removing Clause 12(1)(a),
"…in the knowledge that other similar provisions were in existence should the Authority at some future date decide to avail itself of them…."
Noble Lords will perceive, therefore, that although the Promoters are prepared to exclude the offending clause, they are not prepared to exclude their intention, and in my judgment the Petitioners are completely justified in remaining apprehensive about the Authority's long-term intentions.
Of the 25 Petitioners, some are concerned with the provisions in one part of the Bill and others are concerned with the provisions in other parts of it,
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and I gather that the Promoters, seeing that the Bill has upset so many people, have been busily engaged in negotiation with the various Petitioners, and rightly so, in trying to meet their points and in trying to prepare Amendments to the Bill to satisfy them. But, of course, the Private Bill procedure, as I understand it, requires the Promoters to negotiate with the Petitioner on only that part of the Bill with which the particular Petitioner is concerned, and a Petitioner will not know what arrangements have been made between the Promoters and other Petitioners, whose interests are in other parts of the Bill, and nor do your Lordships.
There is no Marshalled List of proposed Amendments in the Private Bill Office; I make no complaint about that because the system does not allow for it. Nevertheless, I have a list of proposed Amendments to one part of the Bill, and it reads like this:'
"Page 4, line 3, at the end insert 'whether by virtue of this Act or some other enactment.'
Page 9, leave out lines 29 to 33.

line 34, leave out (b) and insert (a).

line 36, leave out (c) and insert (b).

line 39, leave out (d) and insert (c).

Page 10, leave out lines 16 and 17.
Page 34, delete lines 29 to 31."
These proposed Amendments would totally alter the effect of the whole Bill, and they are only some of the proposed Amendments to one part of the Bill. I have no reason to believe that there are not similar Amendments to other parts of the Bill.
One is bound to ask your Lordships, therefore, what it is we are supposd to be considering. This Bill, as it is, presumably is presented to Parliament, but now we find that it is only a ghost Bill of what in fact, on second thoughts, the Promoters wish to see because they realise that their Bill has caused such a row that they must alter its provisions. They have signified to individual Petitioners how they intend to alter portions of the Bill, but they have not signified this to Parliament—because they cannot.
It is clear that the Promoters have put before Parliament an ill-considered and ill-prepared Bill. They have not, to put it neatly, done their homework. What they should have done is to iron out the

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differences of opinion and they should have negotiated fully with those concerned the points of common but conflicting interest before presenting the measure to Parliament, and causing a lot of people, including themselves, to go to a lot of expense. To do otherwise, I would suggest, reflects discredit on the Promoters and treats Parliament with scant courtesy.
I have queried vigorously the justification for the Bill. The Anglian Water Authority have a number of very onerous responsibilities; they have to deal with water supply, water conservation, sewerage, land drainage and the prevention of pollution. But the Bill, which is a quite substantial measure, is about something different; it is about recreation, and that is all. It does not give the Authority powers to dispose of sewage or enable them to supply vast cities with water. It gives them huge powers just to organise boating and fishing. And even if these powers are justified—and I do not think they are—I frankly do not think that we can afford them. Lord de Ramsey said that it would not increase the cost. I think that he even said that it would decrease the cost. I am sure that he said that with great conviction, but I am bound to say that we have heard that before and, with great respect to the noble Lord, I just do not believe that it would, particularly as, when I asked how many people had been or would be taken on as a result of the Bill, I was told that no extra people had been taken on and that no estimate had been made of the numbers who might have to be taken on as a result of the proposals in the Bill.
I do not think that we can afford it and I do not think that the Anglian Water Authority can afford it. When 60p of every £1 which they receive from rates goes to pay interest on borrowings, which they inherited, I feel that they should think again and expend their energies organising those of their responsibilities which are of infinitely greater proportion. The Bill is costing the Promoters an estimated £15,000. The Yarmouth Port and Haven Commissioners alone have allowed £10,000 in their budget to petition against it and I do not know what the other 24 Petitioners have allowed.
I sometimes wonder whether our public bodies are going crazy. At a time when
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the country is in a monumental economic crisis and when public spending has, by all accounts, got out of control, nobody seems to say, "No. However good the project may be, we cannot do it now." We have walking around East Anglia at the moment three scruffy characters balancing a yellow pole on their heads, and for this some ass has given them a grant of £395. Here, we have the Authority spending vast sums of money on promoting contentious legislation and making other people spend equally vast sums objecting to it. It is no defence to say that the Water Act 1973 gives a duty to the Authority to promote the Bill. It does nothing of the sort. It allows the Authority to take such steps "as are reasonably practical" to provide for recreation.
I do not believe that the Bill can be considered reasonably practical either in cost or in content. If it goes through, it will set a precedent which other water authorities will doubtless follow. Then, to cap it all, along come the Government and, so to speak, put the boot in. Last Thursday they produced the green document to which the noble Lord, Lord Stow Hill, referred and from which he quoted. I should like to re-emphasise two points, one of which the noble Lord made and one which he did not. Paragraph 27 says that:
"…there is a strong case in principle for bringing together the management of most of these navigations in a new national navigation authority."
That is what the Government think. I accept that it is for discussion, but it is clearly what they think.
Then, in paragraph 39, they go on to say—and this is far more weighty—
"…there are very strong arguments against any further radical changes either in the authorities' powers, or in their areas, in the near future."
I thought that the noble Baroness, Lady Birk, would have reiterated that, but she did not. What she said was that the Government were quite happy to see the Anglian Water Authority go ahead with the Bill. I accept that the Green Paper is a Consultative Document, but for those strong words to be put into it would indicate that the Government at least consider that there are strong arguments as to why such a Bill should not go through.
Baroness BIRK: My Lords, what I said was that the Green Paper was a Consultative Document. As I understand it, we are tonight discussing whether the Bill should get a Second Reading and should then go to a Select Committee. We are not deciding whether it should be enacted or what should finally happen to it. All I was arguing on behalf of the Government was that since this was a Consultative Document and since the Bill was a private one, brought forward not by the Government but privately, the Government were not raising any objection or, to paraphrase what the noble Earl said, "putting in the boot" or trying to stop it. However, I am certainly not giving it any particular blessing or saying anything more or less than that.
Earl FERRERS: My Lords, I am grateful to the noble Baroness for that indication but, with the greatest respect, that is exactly what we are discussing. We are considering whether this should be allowed to go forward, even if it goes only so far as a Select Committee. I accept the noble Baroness's reasoning that the Bill should go to a Select Committee, but I should have thought that the Government would have been a little more explicit as to whether they think that the Bill, as such, is the right kind of thing for a private authority to produce when the Government's own discussion document indicates to the contrary.
The combination of the contents of the Bill and the way in which its preparation and presentation to Parliament have been, as I feel, mishandled; the fact that it has succeeded in upsetting so many people who are likely to be affected by it right across the board, and the fact that it has attracted a substantial trail of petitioners (this is almost like a veritable wailing wall), taken together with the publication of the Green Paper, makes me quite certain that the Bill should not become law. I wonder whether the most sensible course, and the cheapest in the long run, would not be for the noble Lord, Lord De Ramsey, to withdraw his Bill.
If he does not do so, I should be bound to address myself to the Amendment of the noble Lord, Lord Stow Hill. I feel that that Amendment has much force and it certainly commands my sympathy. On all counts, except one, I feel motivated to support him. The single exception is that one must recognise that this is only a
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Green Paper for discussion. It is not a White Paper indicating intention. It may take some time for such a White Paper to come along. The Green Paper therefore does not indicate the Government's committed intention though, even if it did, I am not entirely satisfied that the idea would necessarily appeal to me.
On the other hand, it is the convention of the House that Private Bills are not opposed and that the Select Committee is the place where the arguments should be thrashed out. Despite what is, to me, a waste of time and money and despite the inappropriateness of the Bill, I therefore feel that the Bill should be allowed to go forward to a Second Reading. As a result, I could not vote for the Amendment of the noble Lord, Lord Stow Hill, if he should press it to a Division. On the other hand, I am not particularly minded to see the Bill go forward if the noble Lord, Lord Stow Hill, does press the Amendment. I should therefore abstain.
5.48 p.m.
The Lord Bishop of LONDON: My Lords, my interest in the provision of amenities for water recreation stems from the many hours which I, as a young man, spent on the river. Some few of those hours provided pleasure and many others provided physical distress and discomfort. That interest was sharpened by the discussions of the Select Committee of your Lordships' House on Sport and Leisure, of which I have the honour to be a Member. One of the major matters which was impressed upon us was the importance of the provision of proper facilities for recreation on our waterways. It was recognised that in this small island which is so overpopulated we have very few opportunities for recreation on the water and that it is therefore of vital importance that we should preserve every opportunity that is available. We noticed that the desire for recreation on water was one of the major growth areas in the search for recreation.
Thus, in paragraph 172 on page lix, where we were discussing the desirability of grants in aid for water recreation, we referred to the
"upsurge in this form of recreation",
and noted that,
"The use of water for recreation is arguably the major growth point of all forms of leisure activity."

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Later in our Report we noted the great difficulties in the legal interpretation of rights of way over water and hoped that there would be a proper rationalisation of the legal requirements to control navigable waterways. Thus, we noted,
"At a time when navigation for pleasure on inland waterways has overtaken commercial carriage the rights of navigation cannot be allowed to rest on an antiquated basis which is becoming increasingly irrelevant. The Committee consider that the legal status of rights of way and rights of navigation over water should be reviewed and that the Government should investigate whether the de facto right of navigation enjoyed on cruising waterways can be converted into a right de Jure—they note that in August 1972 according to the Consultation Paper issued by the Department of the Environment it was the Government's intention to set out in legislation clear rights for the public, in suitable craft and in a suitable manner, to navigate all commercial and cruising waterways."
I understand that nothing further was done along those lines, and therefore that makes those concerned with the provision of waterways for recreation all the more sensitive to this matter of the provision of navigational rights.
I have been much perplexed as to how it would be right to vote when these issues are presented to your Lordships' House, for I have a great deal of sympathy with the Amendment which the noble and learned Lord, Lord Stow Hill, has tabled. On the other hand, generally speaking, this Bill is probably a good Bill and at any rate ought I think, as the noble Baroness suggested, be allowed the courtesy of this House not to oppose a Private Bill on Second Reading. I very much sympathise with the apprehensions of the Inland Waterways Association about the provisions in Clause 12(1)(d) which would give to the board the right to extinguish navigation rights. I can quite understand that when so many of these privileges and opportunities are in peril and in jeopardy, the very concept of one of these authorities having the power to extinguish rights gives rise to considerable anxiety.
I share the view of the noble Earl, Lord Kinnoull, to ask why the authority is insisting upon the insertion of this clause? I understand that it has been a matter of considerable negotiation, and there has been a good deal of give and take between the Inland Waterways Association, as one
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of the objectors, and the board, but they have refused to budge on this issue. I do not think that this can be regarded in any way as an unimportant issue. Not only is it applicable to the waterways controlled by the Anglian Water Authority but as has been pointed out, and as I have been reminded, this is the first Bill to be brought forward by one of the water authorities. Therefore, if this Bill becomes law, it will undoubtedly be regarded as a pattern for other authorities when they seek legal powers. Therefore, if the power to extinguish navigation rights is provided in this Bill, we shall be providing the same kind of rights all over the country for any authority which wishes to seek these powers. For that reason I shall not oppose the Second Reading, but I shall most strongly support the instruction which the noble Lord, Lord Harvington, seeks to require of the House when the Bill goes to Committee.
5.53 p.m.
Lord SOMERLEYTON: My Lords, the Anglian Water Authority Bill as deposited includes a clause—Clause 12—which inter alia enables the Secretary of State, on the application of the Authority, to
"transfer to the Authority…the functions and undertaking of a navigation authority, conservancy authority or harbour authority in relation to any waterway in so far as the functions are exercisable and the waterway is situated in the area of the Authority;"
This power, if exercised, would wholly destroy the functions conferred by Parliament on the Great Yarmouth Port and Haven Commissioners who, by their various Acts and orders obtained since 1886, have efficiently and successfully carried out these functions for well over a century. I understand that the Promoters have recently issued a statement in which certain Amendments to their original proposals are made, and whilst these may be acceptable in part there are still certain matters which need clarification.
I should declare to your Lordships' House that I am a member of the Great Yarmouth Port and Haven Commissioners, and therefore am in the area of the Anglian Water Authority, but I am greatly concerned that the powers and obligations put upon them by Parliament, and faithfully exercised over the years should be capable of being extinguished, taken over, or modified, not by another

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Private Act of Parliament, with all that that entails, but by the Minister of State making a decision as to where the Commissioners' powers start and finish and where the Anglian Water Authority may subsequently hold jurisdiction.
Surely, my Lords, what was given by Parliament should be taken away only by Parliament after the same searching, critical and procedural way in which the rights and obligations were originally and jealously conferred. The justness and correctness of this seems apparent to me, and I find it hard to understand why it is that the Anglian Water Authority should find it impossible to accede to the Commissioners' request that the navigational functions now exercised by them should not be specifically excluded from its Bill and not made subject, in any part whatsoever, to a Ministerial direction.
It cannot be that the Anglian Water Authority feel that it could improve on the way the Commissioners manage their affairs, for I have it in writing from the Authority's legal department that—and I quote:
"I see no reason why the Authority should think of seeking an Order under Clause 12 in the foreseeable future in respect of what is the largest and best managed recreational waterway in this country."
Is it right that the Commissioners' undertaking, or any part of it, should be included in the Bill just to keep things uniform, because the very size of the Anglian Water Authority demands a uniformity of action and organisation which leaves no scope at all for the individualism and flexibility which is the hallmark of an efficient, though not necessarily a giant, undertaking?
The Great Yarmouth Port and Haven Commissioners are a local body composed of many people who have a vast range of experience covering all the many aspects affecting the port of Great Yarmouth and the Norfolk Broads. It is extremely difficult for me to understand what advantages could be gained by transferring any of the navigational functions they carry out so well to an authority, the headquarters of which is situated no less than 100 miles away and which has to look after water supply, sewerage, sewage disposal, fishing and recreational interests in an area stretching from the Humber in the North, to the Thames in the South, and Westwards so
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far as Northamptonshire. In any event the water authority has been operating for only less than two years. Only a few days ago the Department of the Environment, together with the Welsh Office and the Ministry of Agriculture, Fisheries and Food, produced a Green Paper, which has already been mentioned by the noble Earl, Lord Ferrers, and other noble Lords in which great organisational changes are suggested for the future navigational and recreational functions not only of all the water authorities, but of those now exercised by other bodies throughout the country.
Paragraph 26 of this document makes specific reference to the Norfolk Broads, where the Commissioners operate, and while I do not intend to comment on the matters set out in the Paper, I am firmly of the opinion that it would not only be wrong, but highly unproductive at the present time, for the Anglian Water Authority's Bill to go on to the Statute Book when the whole structure of water navigation and recreational functions is being considered on a country-wide basis.
My Lords, the date for comments on this document's proposals is as soon as July of this year, which is only four months away, and the Government propose to examine the submissions made, and subsequently to bring forward early legislation to give effect to its various proposals. It may well be advisable for the noble Lord, Lord De Ramsey, to withdraw the Bill in its entirety until more is known of the overall national plan, and the Commissioners would certainly not be averse to this suggestion.
6.0 p.m.
The Countess of LOUDOUN: My Lords, I should like to begin with a short extract from the Civic Trust's citation when the British Waterways Board received a Special Heritage Year award in 1975 for their continuing contribution to conservation. I quote:
"It is the Board's responsibility to maintain this extensive network of canals and rivers, to improve bridges and canalside buildings and to develop the network's potential for recreation and amenity use.
"This commitment has been met and fulfilled with an exer-expanding success. Public participation in and enjoyment of the canals has greatly increased. Concurrently, the Board has pursued a continuing policy of improvements to their property, coupled with other environmental improvements.

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"It is heartening, after the long years of neglect and apathy, to see these policies now bearing fruit. The Board deserves our gratitude".
I think this demonstrates the great service the British Waterways Board are performing for the community with regard to the waterways vested in them, and we should bear this in mind when considering the Bill before us.
There have been 25 Petitions lodged against this Bill, which in itself gives some indication of the amount of opposition it has aroused. I understand that the Water Authority now propose to delete Clause 12(1)(a) from the Bill, and to exclude estuarial waters from the effect of Clause 12. But this would still leave difficulties for the British Waterways Board, who are one of the petitioners against, because parts of their system are within the area of the Water Authority, and although they have no commercial interests in this area they are concerned with recreation and amenity on these waterways; that is, the Fossdyke and the Witham Navigations and parts of the Grand Union Canal, which are all cruising waterways. There is also a part of the Grantham Canal in the area, which is a remainder waterway. Public rights of navigation do not exist on the Grand Union and Grantham Canals, as these were abolished under Section 105(6) of the Transport Act 1968. The British Waterways Board have complete control of these waterways and have a licensing system for pleasure craft which use them. But Common Law rights of navigation arising from customary usage exist on the Fossdyke Navigation, which dates from the Roman occupation, and on the River Witham Navigation. The Board have a registration scheme for pleasure craft using these navigations derived from the British Waterways Act 1971, so there seems to be no justification for the proposals of the Anglian Water Authority in Clause 12 of this Bill.
Within the limits of the resources and finance available to them, the British Waterways Board have provided adequate opportunities for recreation and amenity on these waterways in accordance with the statutory duties laid upon them by the Transport Acts 1962 and 1968. During the debate on Lord Fever-sham's Bill, the spokesman for the Department of the Environment, the noble Baroness, Lady Birk, indicated that
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she shared the British Waterways Board's view that there should be a national navigational authority. She also said that navigational needs are best served by firm co-operation among statutory bodies, volunteer groups and central Government. Now the Government have published this Green Paper, which seems to bear out the suggestions made by Lady Birk. In view of the Government's proposals in this document (which, if carried out, would make the Anglian Water Authority Bill superfluous), and in order to save both time and money, I shall support the noble Lord, Lord Stow Hill, if he should decide to divide the House.
6.4 p.m.
Lord NUGENT of GUILDFORD: My Lords, may I begin by declaring my interest in this Bill as chairman of the National Water Council? However, perhaps I should explain that that Council has no statutory responsibility for what the Anglian Water Authority do, although I might hear something about it in due course. But I think I can, without offence to the Addison convention, perhaps add a word to this interesting discussion. I should like to begin by congratulating my noble friend Lord De Ramsey (because I am sure nobody else will) on the extreme charm and clarity with which he moved the Second Reading of this Bill. I may say, as noble Lords of course well know, that all Private Bills, if they are opposed, have to be moved by a noble Lord, and that has not been a task which noble Lords are particularly enthusiastic to undertake. In this case I suspect that one or two of them were aware that there was some opposition brewing in some quarters, so again I thank my noble friend Lord De Ramsey.
All I want to say about the Anglian Water Authority can be said very quickly. They cover the largest geographical area of any water authority in the country, and I suppose they have more water recreational interests overall than any other water authority in the country, great though the others are. As my noble friend Lord Ferrers rightly acknowledged, in this huge area, which stretches from the Humber down to the Thames, there are many waters and many streams which are under no proper management or control at all. Added to the navigational interests and the fishery interests, we have

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here an area which I suppose is the richest in the country for wild fowl interests, for bird watching. Everything connected with water recreation is probably at its highest in this area.
So here this water authority, with enthusiasm for their tasks, set out with their board, consisting of 35 members, more than half of whom are elected from the local authorities in the region, and they form a water recreation committee. These people, with enthusiasm, rightly set about their job, and they see an absolute host of problems in their huge area with conflicts steadily developing—particularly, of course, conflicts between fishermen and navigation, because navigation is still an expanding recreation, and we all welcome its expansion—as more and more boats of all shapes and sizes tend to move up more and more pieces of water. The Water Authority clearly have a duty to try to cater for the interests of all these water users, and to reconcile their conflicts. So this committee, setting out to do their job effectively, think that they should promote a Private Bill in order to give themselves the necessary powers to do it. This is the background to it, my Lords, and I suggest that they deserve to be taken in good faith. They have been given the stick very hard by my noble friend Lord Ferrers for their lack of consultation. They assure me that they have consulted far and wide, but evidently they have not satisfied all interests, because there it is, they have 25 Petitions.
Here perhaps I might turn to the wise words spoken by the noble Baroness, Lady Birk, on behalf of the Government, in regard to the consultation paper, on which the noble Lord, Lord Stow Hill, rested his case for suggesting that the Second Reading of the Bill should be rejected. This is only a consultation paper, and I feel sure that your Lordships will accept the advice of the noble Baroness that a consultation paper may take some time before it turns into legislation. It may change in form before it eventually becomes legislation. Of one thing I am certain, and that is that the noble Baroness, looking at next Session's legislative programme, will see it well filled already by her colleagues here and in another place and will realise that, when the time comes to form a national
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water authority which is to be a national navigation authority, not only will the number of navigational interests affected be considerable but the length of the debates which will go on in this connection will be not inconsiderable, both in this House and in another place. Therefore, it looks to me as if the whole Session will have to be cleared in order to give sufficient Parliamentary time to get through it. That would seem to me to indicate that the legislation to implement that part of the consultation paper, at least, is likely to be at any rate further than the next Session, which possibly will put it on to the one after.
What it means—I am sure noble Lords will have taken the point—is that the Anglian Water Authority have a problem here and now and they have put before us their ideas of how they should be given additional powers to deal with it. I hope that that might be looked at on its merits in Select Committee. I would hope that we might follow the advice of my noble friend Lord Ferrers, even if it were reluctantly rung out of him, that it is our custom to give a Second Reading to a Bill and that therefore this Bill, much though he loathed it, should go to a Select Committee so that its merits may be considered. I would hope that so far as that part of it is concerned, that advice will be taken.
With regard to the Instruction—and here again we had some helpful words from the noble Baroness, Lady Birk—in fact Section 112 of the 1968 Act is not exactly the same as paragraph (d); nevertheless, I would hope that my noble friend Lord De Ramsey will be prepared to accept the Instruction for I am sure it can but be helpful to the Select Committee to look carefully at this. I think the point was made on all sides that the particular word "extinguish" in paragraph (d) was one that made everybody jump. I do not believe for a minute that the Regional Water Authority have any such intention in their mind. I would hope that, despite the fact that the Regional Water Authority have incurred some criticism in a number of quarters, they have good intentions—and this is very much in the terms of the right reverend Prelate the Bishop of London and his report. It is the responsibility of the Water Authority; they have the general responsibility for developing and

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for making clearer and more defined all the facilities for water recreation. This is what they are trying to do. Obviously, they put their foot in it, in more than one place. But I have had to deal more with East Anglia in regard to land drainage than with navigation and I have always been conscious that there you have a peculiar form of person with webbed feet; that he is a very sensitive chap where water is concerned. I think that the debate in your Lordships' House has fully confirmed that impression. I hope that your Lordships will be willing to give this Bill a Second Reading, so that it may then go to a Select Committee and any further defects that exist can be removed.
6.13 p.m.
Viscount HANWORTH: My Lords, I rise briefly to make three points. First, I would reinforce what has already been said about Clause 12(1)(d) which is the ability to extinguish navigation rights. Inland waterway recreation is a tremendous growth industry and it is not a rich man's hobby at all. A vast number of people now hire boats and a tremendous effort has been put into recovering many of our waterways. People have spent weekends and have supplied money and have done everything they possibly could to try to recover some of our waterways. It would be a tragedy—if there were not really the strongest reasons—to extinguish any navigational rights at this moment. It would be quite wrong in my opinion to give the say so on this just to this Authority. I know that it has to be approved by the Ministers, but in my opinion that is quite an insufficient safeguard. It would be only too easy for them to find that the cost of maintaining some waterway when they were suffering from a shortage of funds was such that they decided to close it. There are other competing interests and the two put together might result in a closure which should never have occurred. When we consider the River Stour, that has, up to date, been a trust and they have maintained it as far as they possibly could. There is no guarantee whatsoever that when it is taken over, as is proposed in this Bill, it will be maintained to the same standards or even that it will not be closed.
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Finally, the bylaws, which I do not think have been mentioned, are quite extraordinary. They provide almost every power that could be wanted. They enable the Authority to do almost anything and provide a virtual closure if they wanted to—and this, again, on their own. If we take another example of what has been done elsewhere, there are the most stringent precautions. The Water Resources Act 1963 provides that, first, they must publish in the London Gazette and send a copy to the local authority of what they propose; and if there is any opposition they must hold a local inquiry. Only a month after this publication can it be sent to the appropriate Minister as Ministers for confirmation. There is nothing about that in the Bill. They can do just as they like. Taking it all in all, in my opinion this is a very ill-considered Bill. I do not believe it could be satisfactorily altered in Committee, and I suggest that on balance we should do better to throw it out at Second Reading.
6.16 p.m.
Lord FEVERSHAM: My Lords, I rise towards the end of a long list of speakers, perhaps at the very tip of the tiger's tail which the noble Earl, Lord Ferrers, felt had fallen into the grasp of the noble Lord, Lord De Ramsey. I shall endeavour to be as brief as possible but I am afraid not quite so brief as the noble Viscount, Lord Hanworth. From my activity a year ago in introducing a Bill on this subject, Members of your Lordships' House will be aware of my interest in the navigable waterways of this country. I have been involved in this subject for nearly 12 years. I have been involved in my capacity as a journalist, both as a staff reporter for the magazine, Motor Boat and Yachting, and as a freelance contributor to the Daily Telegraph on waterways topics. I have been involved as a boat owner, as a member of the Inland Waterways Association, as a member and patron of the Derwent Trust and as a member of the Parliamentary Waterways Group.
From these years of involvement with the subject, I have learned two things above all else: first, that since the war the official and Governmental attitude towards navigable waterways has been inconsistent, unsatisfactory and bungling; and second, the fact that we have

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any navigable waterways left at all is due largely to the battles waged by the founders of the Inland Waterways Association—and it would be proper here for me to mention the name of Mr. Robert Aikman. The fact that we continue to have this marvellous asset is due tot the continued voluntary and enthusiastic campaign of the Inland Waterways Association, its branches, its offshoots and associated bodies.
When I talk of official and Governmental bungling I refer primarily to the attitude of Whitehall and of central Govment. In this respect I would say that whatever position Britain holds today in the international league tables of this and that, there remains one league over which we continue to reign with an Imperial majesty as we have done for the last 50 years. As a nation, we remain at the top of the league of nations which display idiotic behaviour towards inland waterways. Central Government, to use that term collectively to represent all our national leaders since the war—and this is the sort of advantage that one has on the Cross-Benches—have demonstrated constant embarrassment on this issue. This embarrassment has only been surpassed in duration by major procrastination, punctuated with the introduction of footling measures. If embarrassment, procrastination and footling measures could be entered for a competition like vegetable marrows, then post-war central Governments would win a prize for their treatment of our navigable inland waterways.
My Lords, how do they manage it? How have they succeeded in perpetuating this prolonged policy of failure? I doubt whether we shall ever learn the secret processes developed over the years in the inner sanctums of Whitehall which contribute to the breeding of such success. There are certain ground-rules to waterway bungling which have become apparent. Do not lead with the problem on its own or as a whole. Treat the waterways as part of a transport policy or leisure policy or, as in this latest case, as part of a water policy. Or, if you want to grow a really competitive bungle, mix all these matters into a truely gruesome cocktail. If any new policy shows signs of promise, as in the case of Mrs.
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Castle's efforts in 1968, then ensure that no demonstrative action is taken to carry that policy through to its logical conclusions. Under no circumstances discuss the shaping of policy with those who know anything about it—the Inland Waterways Association or other voluntary associations concerned with the matter—unless forced to do so; and bear in mind the statement that "too little and too late could be worse than never". Finally, whatever you do, never recognise the potential of our inland waterways for either transport or leisure. Do not spend any money on them. Never do more than dream for a moment that our waterways could form a kind of linear national park leading out into the countryside from the urban centres which cry out for such a link, forming key leisure arteries for our urban population. Under no circumstances consider the freight-carrying possibilities of our waterway network, as almost every other European country has done.
I felt it important to repeat once again the dismal policies of past Governments, from which stems this Bill of the Anglian Water Authority, if only to encourage the present Government to tackle the problems in a new way; and in this respect I am very glad that a number of people today have mentioned the Consultative Document, A Review of the Water Industry in England and Wales. I shall not make further mention of it today myself, except to say that it contains a very interesting word, which is "merge". I have always had my doubts about that word, and no doubt a number of people, including the British Waterways Board, will have a close look at the definition of the word "merge". There will be discussions in due course on this document and so I shall not talk about it any longer. However, I should like to encourage the Government in the views they have put forward in that document for discussion.
Let us examine the role of water authorities in these matters for the moment. The water authorities took an interest in navigation on certain waterways as a result of a bungle of bungles. In 1972 the Department of the Environment—which God preserve!—produced a wholly admirable plan to vest important functions of water provision and sewage disposal in regional water authorities. To

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these proposals they tacked a lunatic scheme, without first consulting anybody who knew anything about it, so far as I can discover, to abolish the Waterways Board and carve up the canal system between the new water authorities. Thus they hoped, at a stroke, to transfer the duties of navigation to bodies primarily concerned with water and sewage. This thinking was so muddled that it clearly exceeded the ill-defined boundaries within which muddled thinkers are allowed to operate. Hasty alterations had to be made at the last minute—and I am glad to hear laughter from the Conservative side of the House, because this measure happened to be one introduced by a Conservative Government—to the master plan. A compromise was achieved; British Waterways Board was saved, and the new water authorities assumed the responsibilities of certain well-established river authorities concerned with navigation, such as the Thames Conservancy, and a more misty role in connection with navigation on certain other waterways which came under their jurisdiction.
In, I suppose, an effort to sort out some of this mess, the Anglian Water Authority has brought this Bill before us; but the process of these developments has been unsatisfactory in the extreme or, to put it in another way, in the words of Mr. Dennis Howell, the right honourable Minister of State, Department of the Environment, as reported in The Times—though he may, of course, have said nothing of the sort:
"What the Tories did"—
and of course he would say that—
"was to create ten national industries at regional level. That was nonsense."
I agree with him so far as navigation is concerned. I am not qualified in any way to go with him further. In general, however, and in view of the Government's intention to review the structure and activities of the water industry, I submit that it would be unwise to support this private endeavour at legislation from the Anglian Water Authority at this time; for until such time as the central Government really come to grips with this problem I cannot see a national progressive policy towards the amenity use of our available water-space.
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In this connection, perhaps I might mention the National Water-Space Amenity Commission—they have not been mentioned today, so far as I am aware. This Commission was a device thrown up by the 1972 bungle of bungles. It labours on in an unfortunate position as a national advisory body which has not been given the wherewithal to pursue a national policy and which pursues an adroit public relations campaign, spearheaded by its excellent magazine, edited most expertly by my old friend Mr. Hugh MacKnight. Perhaps I might also mention the British Waterways Board, which is the nearest thing we have to a national navigation authority and which also labours on in an unfortunate position where it is not given the wherewithal either to pursue an aggressive national policy or properly to maintain, in my view, that major part of the national network it already controls.
This little private measure we have before us today merely seeks to contribute to the long and unsatisfactory history of our inland waterways. I should like to draw attention once again to Clause 12(1)(b), which embodies a proposal which further endangers the ancient rights of navigation upon our inland waterways, as a number of your Lordships have said. I suspect that such a thing should not be allowed to slip through our Parliamentary system by means of private legislation. I shall certainly support the noble Lord, Lord Harvington; and the noble Earl, Lord Kinnoull, who has spoken on this matter.
Perhaps I might also draw attention to Clause 40, which provides for the cost of this Bill to be paid by the Anglian Water Authority. The noble Earl, Lord Ferrers, had certain things to say about that. With this clause in mind, it seems to me very easy for water authorities—or, indeed, for local authorities or for any of the great corporations of the State or indeed of private enterprise—to finance private legislation or litigation out of their vast financial resources. It becomes harder and harder financially for individuals, groups of individuals, or voluntary organisations to oppose whatever is proposed by these great corporations or to put forward their own proposals. I consider this to be a great and growing injustice in our society.

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Finally, perhaps I might make some observations upon one last conclusion I draw from the appearance of this Bill and the opposition by a number of your Lordships to a certain clause in it. If the Inland Waterways Association—"the volunteers", if I may call them that—and the Anglian Water Authority had carved out an understanding between themselves embodying a measure of mutual trust and respect, I very much doubt whether we should be discussing this matter in this way today. Clearly it has not happened in this case, and I know of other areas where no understanding of this nature has been achieved. It has been said that the reorganisation of local government and of the water industry has created in these times of economic uncertainty a great deal of ill-feeling between the public and the Administration. To a certain extent, I think that is true. It is also true that within the reorganised administrative systems there exists a range of unattractive, unhealthy and costly antagonisms and power struggles. For instance, metropolitan districts do not seem to get on terribly well with metropolitan counties, and nobody I have ever met who is not a member of a water authority has ever had a good word to say about water authorities.
I have been rather harsh today, perhaps, on civil servants, or the Administration, or whatever you care to call it, whether in Whitehall or elsewhere. In one respect I make no apologies for so doing, in that it is the civil servants who are largely responsible for designing in detail these new systems. It is also up to the civil servants to make these systems work, so far as they are workable. I have the greatest respect for civil servants as individuals: they have a very difficult job to do, and by and large they undertake their tasks with great fortitude and to the best of their abilities. However, they occupy a position of great responsibility in our society, and consequently behind the scenes they occupy a position of considerable power. It is right that they should command our respect, and it is very worrying if the situation arises, as it has recently in the country, when the public seems to suffer a loss of respect for the Civil Service. It is pathetic that advertisements should appear in our national newspapers, as
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they have done recently, putting the case for the civil servants against criticisms that they feel may have been made against them. Such a move is a mis-judgment by civil servants of the situation. To regain the confidence of the public, the Civil Service must seek to create an element of human understanding which, perhaps, it has never had before, but which is required in the bureaucracy of our new administrative systems.
I will give your Lordships an example of what I mean. I live in a small town called Helmsley in the North Yorkshire Moors National Park. It is a three-road town and one of the roads enters the town round a very dangerous bend. Three years ago, the highway authority produced plans to straighten out that bend. The plan involved culverting and covering over a small, alas! unnavigable, inland waterway—a beck rambling down the centre of the street; a feaure of great and loved historical and environmental importance in Helmsley. The highway authority required to buy from me some land bordering a field, to enable them to execute their plans. I tried in every possible way to get them to alter their plans, in order to save the beck. I offered to sell them land on the other side of the road. I suggested the rerouting of the beck and so on. I resisted the sale of my land to the point immediately prior to a compulsory purchase position—to no avail. They would not alter their plans.
A fortnight ago, the bulldozers arrived and started operations, with resulting outrage and pandemonium among the citizens. The vicar offered to sit in the stream if it would help. Although I must say that I was rather tempted to do otherwise, I advised against it. Within 48 hours, in response to public opinion, the officials arrived on the site. Within another 48 hours, a formula was found for saving the beck by rerouting it. The officials visited the parish council to discuss new plans—all this in the middle of the road improvements taking place. This instance proves to me that bureaucracy need not be inflexible or inhuman. The North Yorkshire Highways official responsible was one Mr. Bishop, whose name should be set up in lights atop the Department of the Environment, because here is a man who has shown what may

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be achieved through a touch of understanding and humanity for the public by the civil servant. Here is a man who has proved that things which were not possible three years ago are possible today. Here is a man who opens up the possibilities within the grasp of those concerned with developing the amenity use of our water-space, including the Anglian Water Authority.
The development of our waterspace for recreation since the war has depended largely upon the volunteers, the amateurs, the part-timers, the clubs and the individuals. There is a vast wealth of enthusiasm and energy which can be channelled from the public into their continued development, even—and I say this to the noble Earl, Lord Ferrers—in these difficult economic times. The greatest danger of all to the future of our society in general, and today specifically to our waterways, is the capability of vast new corporate empires, embodied in local government, and organisations such as the Regional Water Authorities, to crush that great flair for initiative and self-help inherent in the British individual. So far as the Yorkshire Water Authority and the Yorkshire waterways are concerned, that danger is apparent. The fact that the noble Earl, Lord Kinnoull, has made the case today on behalf of the Inland Waterways Association reflects the fact that the danger is not entirely absent from the affairs of the Anglian Water Authority.
In the circumstances, I hope that if this Bill is to proceed through further Parliamentary processes, it will be the subject of very careful scrutiny indeed; and in view of the very powerful case made by a number of noble Lords, that even if it goes further this Bill is unlikely to be moulded into anything that will eventually pass into legislation, I support the noble and learned Lord, Lord Stow Hill.
6.34 p.m.
Viscount ST. DAVIDS: My Lords, I shall not detain your Lordships for long. I have great sympathy with the Anglian Water Authority. who have inherited a very considerable portion of a very nasty mess, and the fact that there are eight other Authorities each with some part of this mess is part of my case this evening. My view of what has been happening not only to our inland waterways
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but to all the other amenities which we now expect—angling, nature conservancy, preservation of our wild birds and so on—is that these have all been mishandled in much the same way, and they are all involved together. My view of the mess that has been made is very much that of the noble Lord, Lord Feversham, who has just been putting the point so very cogently.
I do not think we ought to let this Bill have a Second Reading tonight, and this is my reason. This is a very considerable job. It will need a great deal of doing, and we must get it right. If we leave it to the Anglian Water Authority to do it, they will no doubt have a very good shot at it and clear their own yard arm in some manner. We shall then presumably have eight more Bills from the other eight areas.
Lord NUGENT of GUILDFORD: We shall not.
Viscount ST. DAVIDS: My Lords, the noble Lord, Lord Nugent, says that we shall not. But have they no problems? Is the Anglian Water Authority the only one of the nine who have these problems? We know that it is not. In a lesser degree, these problems apply to all the other eight and, presumably, they all have to start spending money on the same process. What is more, there is a point which has not yet been made and which has brought me to my feet. I want to see the whole business done generally and nationally. I believe that in its provisional proposals the Green Paper is sensible and right. I want to see a national navigation permit for all boats. I want to see these problems sorted out between all the amenity interests. I want to see it done nationally, and the sooner the better. In my opinion, if we stop the Anglian Water Authority from doing what they intend, they will then go and knock on the door and cry on the shoulder of the noble Baroness, Lady Birk, and I am sorry to burden her with that. Not only will they do that, but so will the other eight authorities. This is what I call putting on pressure. Politics is a matter of pressure. Pressure is something which you put on in order to get things done, and the very finest pressure we can put on to get something done in this matter is by leaving these unfortunate Water Authorities to hammer on the door of Lady Birk and

623
her associates until something is done. Therefore, let us say tonight "No, this must not be done in these bits and pieces. We want it done nationally, and the best way to do that is to stop it being done piecemeal now."
6.38 p.m.
Lord HARVINGTON: My Lords, if I may, I should first like to apologise most sincerely to all of your Lordships for not being here to move the Instruction standing in my name. Unfortunately, that was due to a late arrival at London Airport—something from which I am sure many of your Lordships have often suffered—but I do apologise. I should particularly like to apologise to the noble Lord, Lord De Ramsey, whose speech I missed. In fact, it was the only one I missed, because I was in hiding behind the screen where one can hear rather well.
I shall not delay your Lordships for many minutes. The case for the Instruction to be passed has been made out most ably by so many speakers this afternoon. In fact, the longer the debate went on, the more I began to like the Instruction. I thought I liked it a lot to start with, but I liked it more and more as the debate went on, and then when I heard what fell from the noble Lord, Lord Nugent, I really rejoiced,
"And even the ranks of Tuscany, Could scarce forbear to cheer."
So I think your Lordships will feel that you want to pass this Instruction this afternoon. I feel, unlike the noble Lord, Lord Nugent, that paragraphs (a), (b) and (c) of subsection (1) of Clause 12 give all the powers necessary for an Authority, such as the Anglian Water Authority, to do what they want to do in consultation with the Minister. I hope that the House will realise that fact. May I thank very warmly indeed my noble friend Lord Kinnoull for so kindly stepping into my place and moving, much more ably than I could possibly do, the Instruction standing in my name. One aspect which grieves me about our debate this afternoon is that on this occasion I feel that I cannot support—I was going to say my noble friend and only the exigencies of Parliamentary etiquette prevent me from calling him "my noble friend"—the noble Lord, Lord Stow Hill, in moving the rejection of the Second Reading of the Bill. I do not believe that would be the right course to
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take, and in view especially of what has been said by the noble Lord, Lord Nugent of Guildford, I for my part do not wish to do so. I hope, however, the House will do what has been suggested both by the noble Baroness and also by the noble Lord, Lord Nugent of Guildford: that if the Bill gets a Second Reading it should then proceed to pass the Instruction standing in my name.
6.41 p.m.
The Earl of LISTOWEL: My Lords, I am sure that your Lordships will agree that we have listened to a number of cogently argued and well-informed speeches canvassing exhaustively the merits and demerits of the proposals in this Bill. At this stage of the debate it would be difficult to add anything to these arguments and, fortunately for me, it is not my duty to the House to do so. It may, however, be for the convenience of the House if I made some observations on the procedural aspects of the Motions which the House has been discussing.
The noble Lord, Lord De Ramsey, has moved the Second Reading of the Bill. The effect of the Amendment of the noble Lord, Lord Stow Hill, is to deny the Bill a Second Reading, so I will, if I may, deal first with the Amendment of the noble Lord, Lord Stow Hill. I would say at once that for this House to refuse a Private Bill a Second Reading is not unconstitutional. The House has the power to do so but it has been done only on a very few occasions in the past—in fact, only four times in this century and never since the war. It was last done on the North Devon Electric Power Bill in 1937. To complete the information for your Lordships, I should add that the ground upon which it was rejected was that the Bill introduced a new principle. This has not been done in the present Bill.
The background to the practice which the House has almost invariably adopted in giving Private Bills a Second Reading is that, in doing so, the House is doing something qute different from what it does in giving a Second Reading to a Public Bill. In the case of a Public Bill the House is approving the principle of the Bill; but in the case of a Private Bill, when your Lordships give it a Second Reading it amounts to no more than a decision to refer all the questions raised

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by the Bill, and, of course, by any Petitions there may be against it, for consideration by a Select Committee. Such a Committee deals not only with particular matters in clauses but, if the scope of the objection is sufficient, with the whole policy of the Bill.
I should like to mention very briefly the origins of this procedure. Until about 1820—in the 18th century Private Bill business occupied Parliament more considerably than Public Bill business—it was the universal practice and the right of the Promoters of every Private Bill to appear at the Bar of the House and present their case there in person. Thereafter, for practical reasons, with the growth of public business the procedure had to be altered and the present machinery of the Select Committee was devised. These Committees are semi-judicial. They hear evidence and decide upon the evidence, just like any court of law. I venture to think that in the past this has proved a satisfactory machinery for dealing with these matters.
There are few issues on Private Bills which the House can decide satisfactorily without the benefit of hearing parties and witnesses—that is, the Promoters of the Bill, the Petitioners against the Bill and any witnesses whom they may wish to call to give evidence on their behalf. This cannot be done on the Floor of the House. It is therefore the usual practice for the House to allow Private Bills to proceed to Committee. As several noble Lords have mentioned, there are no fewer than 25 Petitions against this Bill, so there is no doubt that it will be very exhaustively considered if it is allowed to go to a Select Committee. The Select Committee will have to consider the need which the Promoters will wish to establish for the provisions of the Bill in the context of the objections which will be raised against it by the Petitioners.
This brings me to the Motion which has been moved in the name of the noble Lord, Lord Harvington, who has immense experience of these matters from his office in another place, providing that an Instruction should be given to the Select Committee. A number of these 25 Petitions deal, among other things, with
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Clause 12(1)(d) of the Bill which, as your Lordships have heard, provides for the Anglian Water Authority to make orders with regard to recreational waterways. Therefore, the Committee will in any event—that is to say, even if the Instruction had not been moved in the name of the noble Lord—consider the matters raised in the Instruction, but I can see no procedural objection to the acceptance by the House of the noble Lord's Instruction.
My advice to the House would therefore be like that of the noble Lord, Lord Nugent of Guildford, the noble Earl, Lord Ferrers, the noble Baroness, Lady Birk, and the right reverend Prelate the Bishop of London, that the Bill should be allowed to proceed to a Select Committee and, if the House agrees, that the Instruction should proceed in the same way.
6.58 p.m.
Lord DE RAMSEY: My Lords, I am very grateful to the noble Earl, Lord Listowel, for dealing so clearly with the procedural position. I had a note to say something about it, but clearly it is wholly unnecessary for me to do so. When I heard that a Green Paper was coming out I could not help wondering, like the noble Lord, Lord Stow Hill, whether or not this would make unnecessary the Anglian Water Authority Bill. Therefore I obtained a copy of the Green Paper at the earliest possible moment. I was also given to understand that there was nothing in the Anglian Water Authority Bill which pre-empted the Green Paper, and I was very grateful to hear the noble Baroness, Lady Birk, confirm this when she mentioned it. Even if this Green Paper recommendation, which will certainly cause a great deal of interest, were to be accepted as Government policy, the work that the Anglian Water Authority have done on this Bill will not be wasted; all of it will be required.
I should like to say a few words on the Instruction that has been moved in the name of the noble Lord, Lord Harvington. In the noble Lord's unavoidable absence, the noble Earl, Lord Kinnoull, dealt most ably with it. I fear that I must repeat that this is a recreation, not a navigation Bill. The

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anglers, above all, confirm that Clause 12(1)(d) is essential for the Authority to be able to hold the ring. By its sheer size and weight a boat is bound to dominate, if allowed to do so, any other interest. I feel that your Lordships have spent a great deal of time upon this matter and I do not wish to waste any more of it. Therefore, I will come quickly to the point and say that although I am convinced that the Authority must oppose the matter in Committee, if noble Lords accept that this clause requires special consideration the Authority will be happy to make their case before the Committee and will not oppose the Instruction moved by the noble Lord, Lord Harvington.
Finally, I feel that in fairness to the Authority I must answer some of the criticisms made by the noble Earl, Lord Ferrers. Clearly, he feels most strongly, most sincerely, and most indignantly on the Bill. I am not suggesting that he has engendered more indignation than he can conveniently consume, but I am suggesting that he has made mountains out of molehills. He referred to my catching a tiger by the tail, but I can only say that it was a paper tiger. Great play was made on twelve Petitions against Clause 12(1)(a) as a result of which—I think I am correct here—it was withdrawn. That is not correct. Clause 12(1)(a) was not withdrawn because of twelve Petitions. If the Association was slow off the mark and it did not get down to grass roots, then the Authority are not to blame if at a very late date the Petitions are accepted. On the contrary, they should be commended for accepting them and taking steps to meet them. I will say nothing further on the criticisms, but I felt that in fairness to the Authority I should try to defend them.
6.52 p.m.
Lord STOW HILL: My Lords, I rise only to make a very few observations. As I pointed out earlier, if your Lordships feel that the Motion is one you should not accept I will certainly myself vote in favour of the Instruction moved by my noble friend Lord Harvington. I have broken the rules of the House, but I hope your Lordships agree with me.
I want to make only one or two observations on what was said by my
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noble friend on the question of the procedure of the House. Procedure cannot be absolutely rigid. As he said, the procedure has, on occasion, been breached when necessary. The advice that he gave to the House was that if this Bill went to a Committee there could be arguments by counsel and there could be evidence given by expert witnesses which would show that the Bill ought not to proceed further in the Committee. In this particular case what on earth are the expert witnesses to say? I suppose they are to say that a Green Paper was published and in that Green Paper it was stated that the Government are very much attracted by the idea of a national authority, and because the Green Paper has indicated that as being the Government's view it is a waste of time going on in the Committee, doing what the Government wish to do under the umbrella of a national authority. If that is the procedure which is to be followed, I respectfully suggest that it should not commend itself to your Lordships. This is just one of the cases where there are special circumstances which, in my respectful submission to the House, justify making the procedure a little more elastic in order to meet a completely new situation.
In those circumstances, having listened very carefully to the debate, and being in the difficult position in which Members of your Lordships' House not infrequently find themselves, of having to ask oneself how one can best facilitate the deliberations of the House and assist the House to arrive at a conclusion that it would wish to arrive at on the balance of the arguments, I have come to the conclusion, rightly or wrongly, that I ought to invite the House to say whether the Bill should proceed further now or that it should not receive a Second Reading.
The DEPUTY SPEAKER (Lord Segal): My Lords, the original Question was, That this Bill be now read a second time, since when an Amendment has been moved to leave out all the words after "That" and insert the words printed on the Order Paper. The Question is, That this Amendment be agreed to?
6.55 p.m.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 19; Not-Contents, 61.

CONTENTS

Broadbridge, L.

Hanworth, V.

Somerleyton, L.

Campbell of Eskan, L.

Inglewood, L.

Somers, L.

Colville of Culross, V.

Loudoun, C. [Teller.]

Stanley of Alderley, L.

Feversham, L.

Lyell, L.

Stow Hill, L. [Teller.]

Foot, L.

Onslow, E.

Trefgarne, L.

Greenway, L.

St. Davids, V.

Vickers, B.

Greenwood of Rossendale, L.

NOT-CONTENTS

Allan of Kilmahew, L.

Killearn, L.

Parry, L.

Amulree, L.

Lauderdale, E.

Platt, L.

Auckland, L.

Lee of Newton, L.

Rankeillour, L.

Aylestone, L.

Listowel, E.

Rathcreedan, L.

Bacon, B.

Llewelyn-Davies of Hastoe, B.

Ritchie-Calder, L.

Barrington, V.

London, Bp.

Rusholme, L.

Beswick, L.

Lonsdale, E.

St. Just, L.

Birk, B.

Mackie of Benshie, L.

Segal, L.

Blyton, L.

Macleod of Borve, B.

Shepherd, L. (L. Privy Seal)

Champion, L.

MacLeod of Fuinary, L.

Slater, L.

Collison, L.

Maelor, L.

Stewart of Alvechurch, B.

Davies of Leek, L.

Margadale, L.

Strabolgi, L.

De Ramsey, L. [Teller.]

Maybray-King, L.

Taylor of Mansfield, L.

Dulverton, L.

Mottistone, L.

Tranmire, L.

Dundee, E.

Northchurch, B.

Wade, L.

Elwyn-Jones, L. (L. Chancellor.)

Northfield, L.

Wigoder, L.

Falkland, V.

Norwich, Bp.

Willis, L.

Harmar-Nicholls, L.

Norwich, V.

Wilson of Radcliffe, L.

Harris of Greenwich, L.

Nugent of Guildford, L.

Winterbottom, L.

Henley, L. [Teller.]

Oram, L.

Wynne-Jones, L.

Hylton-Foster, B.

7.7 p.m.
On Question, Bill read 2a, and committed to a Select Committee.
Lord HARVINGTON: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an Instruction to the Committee to whom it is committed that they should give special consideration to Clause 12(1)(d) to satisfy themselves that it does not constitute an undesirable extension of the powers and functions of Water Authorities, especially having regard to the fact that Section 112 of the Transport Act 1968 gives them all the powers they need in this respect.—(Lord Harvington.)

COUNTY OF SOUTH GLAMORGAN BILL [H.L.]
Reported from the Select Committee (on Recommitment) with Amendments; a Special Report made, and to be printed.
RAILWAY CLEARING SYSTEM SUPERANNUATION FUND BILL [H.L.]
Examiners Certificate that the further Standing Orders applicable have been complied with: Ordered to lie on the Table; Bill committed to the Committee on Unopposed Bills.
PREVENTION OF TERRORISM (TEMPORARY PROVISIONS) BILL
Returned from the Commons with the Amendments agreed to.