Lords Sitting of 6 December 1979

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Exeter.

ROYAL ASSENT
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Charging Orders Act,

Sale of Goods Act,

Justices of the Peace Act,

Greater London Council (Money) Act,

Sheffield General Cemetery Act,

Scottish Equitable Life Assurance Society Act,

Severn-Trent Water Authority Act,

Felixstowe Dock and Railway Act.

MUSEUMS: LOAN AND INSURANCE OF EXHIBITS
3.7 p.m.
Lord MONTAGU of BEAULIEU: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many claims have been made over the past five years for loss of or damage to items from the national museums on loan to other museums and exhibitions but indemnified by the Government for insurance purposes; and what was the cost involved.
Lord MOWBRAY and STOURTON: My Lords, no such claims have been made over the past five years in respect of loans from the national museums.
Lord MONTAGU of BEAULIEU: My Lords, I thank my noble friend for
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that Answer. In view of the negligible amount which past experience has shown to be involved in such indemnities, will my noble friend do his best to persuade the Chancellor of the Duchy of Lancaster to introduce an amendment to the Heritage Bill in another place so as to widen Ministers' discretion with regard to indemnifying objects and loans from private persons to non-national museums? Will he agree that such an amendment would be very welcome to the museum world and would also help to widen the spread of our national treasures to the Provinces and enable tourists and other visitors to appreciate them?
Lord MOWBRAY and STOURTON: My Lords, in the Second Reading debate in another place my right honourable friend indicated that, if such matters were raised, he would be willing to consider them during the Committee stage.
Lord FLETCHER: My Lords, in view of the noble Lord's original Answer, will he agree that all the national museums take special care when they send any of their items elsewhere; they take special precautions to ensure the safety of those items against loss or damage, whether in transit or on arrival?
Lord MOWBRAY and STOURTON: Yes, my Lords; I think that we can be very pleased and very proud that there has been such a good record in this respect.
Lord STRABOLGI: My Lords, does not this happen already? If a valuable work of art from a private collection is on loan to a national museum, is not that indemnified by the Government? It always used to be.
Lord MOWBRAY and STOURTON: Yes, my Lords. As the noble Lord will be aware, there is a case at present, namely, the Post-Impressionist Exhibition at Burlington House. At the moment it is a concession that the Government are giving; they are not statutorily bound to do so.
Lord STRABOLGI: My Lords, I congratulate the noble Lord. I am very glad that the Government have done something with which we can agree.

HOME DEFENCE
3.10 p.m.
Baroness EMMET of AMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps, if any, are being taken to bring our civil defence up to date, in view of the threatening attitude of certain countries towards nuclear warfare.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, we are taking a careful look at home defence arrangements to determine what improvements it may be possible to make.
Baroness EMMET of AMBERLEY: My Lords, I thank the Minister for his slightly encouraging reply. Will he agree that there is a certain urgency in this matter? In view of the steps that are now being taken as regards the Territorial Army, will he not agree that it would be as well to start on the civilian side?
Lord BELSTEAD: My Lords, I agree with my noble friend. For that reason a study at the Home Defence College in Yorkshire took place between 19th and 23rd November and was attended by representatives of both central and local government and representatives of other authorities. The results of that study will be taken into account as urgently as possible.
Lord GLADWYN: My Lords, will the Government not agree that in the event of general nuclear war the damage done would be completely irreparable, that most of us would be in the next world, and that therefore it is surely impossible to guard against this? On the other hand, is there not a considerable case for trying to organise some kind of defence—a home guard, if you like—against the possible use of paratroopers in a conventional war in this country?
Lord BELSTEAD: My Lords, I do not agree with the suggestion made by the noble Lord at the beginning of his question. For instance, most houses offer
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a reasonable degree of protection against fall-out. This can be improved by a variety of do-it-yourself measures. That is the fact. It was something that I had not realised. The Government have plans, as indeed did the previous Government, to make the general populace aware of what can be done, but it is a question of timing as to exactly when one lets people know what they can do in an emergency.
Lord CLIFFORD of CHUDLEIGH: My Lords, speaking as chairman of an organisation called the Devon Emergency Volunteers, may I ask whether it is not a fact that our experience is being sought in consultations by the noble Lord's department with regard to the plans that are going ahead at present for producing a better civil defence organisation? In considering the plans that are to be brought forward, will the Government bear in mind that this organisation should not be overloaded with bureaucracy. Finally, would it not be a good idea if civil defence, especially finance-wise and modern equipment-wise—that is, dosimeters, for example—were transferred from the Home Office to the Ministry of Defence?
Lord BELSTEAD: My Lords, the organisation which the noble Lord was mentioning, which of course has been doing valuable work in this field, has been able to talk to both my right honourable friends' departments, the Home Office and the Ministry of Defence. We shall certainly take into account what the noble Lord has said about the question of making sure that any arrangements for civil defence are not too top heavy from a bureaucratic point of view.
Lord PEART: My Lords, I hope the noble Lord is not going to be too casual about this. Here we are talking about the defence of the civil population. This is a most important matter. I hope the noble Lord realises that what he has said reflects a measure of complacency.
Lord BELSTEAD: My Lords, I thought that I had said to the House that a study had taken place at the Home Defence College representing all the people involved in civil defence. That is six months after this Government came into office. I am not aware that any similar

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study was undertaken by the previous Government.
Lord SHINWELL: My Lords, does the noble Lord realise the importance of this question? Is he aware that recently there was a television programme portraying what the USSR are doing in this matter? Their precautions are remarkable. The most remarkable thing of all is that they are not secretive about it. The authorities in the Soviet Union are informing the public of their intentions and of how they are prepared for any emergency. Is it not important that the general public in this country, apart from certain security matters, should be as fully informed as is possible?
Lord BELSTEAD: My Lords, I agree absolutely with what the noble Lord has said. I think a strong case can be made out that we have been unnecessarily secretive about what is being done in the civil defence field in this country. I assure the noble Lord, and indeed your Lordships, that this particular aspect, as well as others, was seriously taken into account in the study which has just taken place at the Civil Defence College.
Lord INGLEWOOD: My Lords, the noble Lord referred to plans which this Government and their predecessor had for making the public aware of many of the factors which have to be taken into account in the case of nuclear attack. Can he tell us why nothing has yet been done to make the general public aware of what their thinking is, and what they are doing about it? Is he further aware that I doubt whether there are six noble Lords in this Chamber now who have any idea of the thinking at Easingwold, or what sort of emergency plans the county councils and other are supposed to be preparing?—and time is not on our side.
Lord BELSTEAD: My Lords, if I may reply to my noble friend Lord Inglewood, I hope that he will not have the impression himself, or give the House the impression, which I would suggest to him is mistaken, that representatives or organisations who are involved in the civil defence field, particularly the representatives of the local authorities, have not had the opportunity to know what is going on at the Civil Defence College, where courses
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are held end-on. So far as I know, there is literally not a day during the year when a course is not being held at the Civil Defence College. As to the part of my noble friend's question—the follow-up to what the noble Lord, Lord Shinwell, said —about why the thinking of the Government is not made more widely known to the general public, I would point out that it is a question of timing. If Government are trying to give advice to members of the general public about what they should do in an emergency, surely it is important to know exactly when to give that advice. This, again, we are looking at as a matter of urgency.
Lord MOYNE: My Lords, may I ask whether Her Majesty's Government are bearing in mind the agricultural aspect —the effect of contamination on grass, cattle, and crops?
Lord BELSTEAD: Yes, my Lords.

RUSSIAN CHRISTMAS CARDS: DUMPING
3.17 p.m.
Lord BETHELL: 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 have contacted the EEC Commission over the dumping in this country of Christmas cards manufactured in the Soviet Union and whether in their view such dumping is illegal.
Lord TREFGARNE: My Lords, it is for the greetings card industry to decide whether or not to approach the Commission for remedial action, if it believes that it is suffering injury from dumped Russian-made Christmas cards. Officials of the Department of Trade are ready to give help and advice in the formulation of a case to put to the Commission, but it is for the Commission to investigate allegations of dumping and, if appropriate, to take the necessary action.
Lord BETHELL: My Lords, I am grateful to my noble friend. I wonder whether he has read EEC Regulation No. 459 of 5th April 1968, which indicates

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that it is up to a Member State to make representations to the Commission if there is strong evidence that dumping has taken place, if the price of the product exported is lower than that of a similar product in the country of origin? Will he study the evidence about the pricing of New Year cards—not Christmas cards, of course—in the Soviet Union, and come to a conclusion whether in fact dumping has taken place, and whether this is illegal?
Lord TREFGARNE: My Lords, we shall certainly keep our finger on the pulse in this matter but, as I said in my original reply, it is primarily for the greetings card industry itself to make representations.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware that the growing Christian kindness of the Russians in sending us such beautiful Christmas cards is in return for the cheap butter that his organisation is sending to them?
Lord TREFGARNE: My Lords, there is actually a serious implication to this because these cards bearing Christian messages are deeply offensive to some people. They are of course specifically designed for the British market, and indeed most of the cards are based on British designs and are thus comparable both to domestic and other imported cards.
Lord NUGENT of GUILDFORD: My Lords, do they include the message, "From Russia with love"?
Lord SAINT OSWALD: My Lords, do Her Majesty's Government not derive some comfort from reflecting that a similar dumping operation in Russia, unthinkable though it might be, with cards bearing the portraits of Lenin, Stalin and Beria would hardly find a ready market among the consumers of the Soviet?
Lord TREFGARNE: I am sure my noble friend is right, my Lords; but perhaps it is correct to note that these cards constitute only about 3 per cent, of the British market.

TERRORISM AND PLO AFFILIATES
3.20 p.m.
Lord JANNER: My Lords, I beg leave to ask the Question which stand in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a Statement on what steps they have taken together with other civilised nations in respect of the suppression of terrorism and how many terrorist organisations are connected with the Palestine Liberation Organisation.
Lord TREFGARNE: My Lords, we co-operate actively with our EEC partners and in a number of international organisations to contain and reduce the terrorist threat. There has been some evidence in the past of contacts between elements affiliated to the Palestine Liberation Organisation and other terrorist organisations. We have recently received an assurance from the Palestine Liberation Organisation leadership that any links which its affiliates may have had with the Provisional IRA have been severed and that neither the PLO itself nor any of its affiliates will establish or maintain any such links in the future.
Lord JANNER: My Lords, may I ask the Minister to realise that there is very grave concern in the world—not only here but throughout the world—about this vicious and criminal set of gangsters who are at the head of this organisation, and who are masterminding for other gangsters the kind of actions they themselves commit, and that they have killed more of their own Arab people than Jews? Is he aware, for example, that the places where they concentrate in carrying on their activities are places like Lebanon, right in the heart of a Christian population which hates them as much as anybody hates gangsters of that kind? Will he please realise that the kind of promise they make is something which cannot at the present time under any circumstances be accepted and that, in conjunction with about 10 other organisations, including the IRA, they have been committing and are continuing to commit crimes against civilians and very rarely, if ever, against any military forces?
Lord TREFGARNE: My Lords, of course we condemn terrorism wherever it may take place and under whatever guise, but the PLO itself is essentially a political organisation——
Lord JANNER: Rubbish!
Lord TREFGARNE: although I confess that the distinction between it and its terrorist affiliates is not always easy to draw. The Government condemn unreservedly all terrorist acts committed by organisations linked with the PLO.
The Earl of LAUDERDALE: My Lords, may I ask my noble friend to tell the House whether or not it is the case that Sir Ian Gilmour has met the PLO? And are we to understand from his earlier reply that assurances given by a terrorist organisation are in fact to be believed?
Lord TREFGARNE: My Lords, with regard to the meeting which was reported by my right honourable friend the Lord Privy Seal and an official of the PLO, it was a totally unplanned social encounter. It would be, I suggest, a gratuitous insult to refuse to acknowledge a fellow guest on such an occasion. It does not represent a change in the Government's policy under which recognition of the PLO and formal ministerial contacts remains difficult.
Lord PAGET of NORTHAMPTON: My Lords, having obtained such satisfactory assurances from the PLO, may I ask the Minister whether he will be seeking similar assurances from the Mafia and the urban guerrillas in South America?
Lord TREFGARNE: That is another question, my Lords.
The Earl of LAUDERDALE: My Lords, may I ask my noble friend to answer my supplementary question: Are we to understand that the assurances given by a terrorist organisation, whose industry is murder and therefore cheating, are to be believed?
Lord TREFGARNE: My Lords, we certainly welcome the fact that the PLO have given us these assurances. We shall have to see how they turn out.
Lord SHINWELL: May I ask the noble Lord to explain the statement which appears in the Press this morning that his right honourable friend the Lord Privy Seal is meeting or has met a representative of the PLO, and may we be told the reason?
Lord TREFGARNE: My Lords, as I said to my noble friend Lord Lauderdale, that was a gratuitous occasion when the meeting was quite inadvertent.
Lord JANNER: My Lords, may I ask the Minister once more whether he is prepared to take a strong attitude here against terrorism? Will he point that out with regard to the PLO, not only to this country but to the countries of the EEC who are taking attitudes, like the Lord Privy Seal took yesterday, to make the PLO, these terrorists in a civilised world, think that they are an accepted organisation?
Lord TREFGARNE: The noble Lord asks me to take a position on terrorism, my Lords. Of course I take a position on terrorism; we universally condemn it.
Lord GORONWY-ROBERTS:My Lords, may I ask the Minister to make it absolutely clear—I am sure he will—that, like their predecessors, this Government will take every opportunity, bilaterally and internationally, of denouncing terrorism wherever it arises for whatever pretext and by whoever is responsible?
Lord TREFGARNE: Yes, my Lords, of course I will.
Lord SAINT OSWALD: My Lords, have the Government noted that at the last session of the European Parliament in Strasbourg no fewer than three Motions were tabled and carried unanimously condemning terrorism, one of which specifically related to an Israeli citizen? Do the Government not think in contrast that the fact that Yasser Arafat, the arch-terrorist himself, was invited to appear at the rostrum of the United Nations— which he did with a pistol ostentatiously strapped to his thigh—has had the effect of lowering the dignity and significance of that body?
Lord TREFGARNE: My Lords, Mr. Arafat's appearance at the United Nations

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was some years ago and a good deal of water has flowed under the bridge since then. Referring to the point made by my noble friend about the European Community, under the auspices of Ministers, working groups meet to exchange technical experience and information about acts of terrorism and to facilitate police co-operation and training. Closer judicial co-operation is also being studied and the EEC agreement, sometimes known as the Belian Agreement, is intended to apply the European Convention on the Suppression of Terrorism among the Member States of the EEC. That agreement was signed in Dublin on 4th December and the United Kingdom has ratified the European Convention without reservation.
Lord WIGG: My Lords, as the suggestion has been made that there should be a personal condemnation of Yasser Arafat, may I ask the Minister to bear in mind the record of Mr. Begin when British soldiers were murdered by his organisation? Is he aware that it bodes ill for some of us who have to remember what happened in Palestine when the British Army was there to have to hear the one-sided comments today?
Lord TREFGARNE: My Lords, the noble Lord is of course quite right, but even more water has flowed under the bridge since then.
Lord DERWENT: My Lords, does my noble friend think that the noble Lord, Lord Wigg, really means that my noble friend the Minister should remember what happened at that time? I do not think my noble friend was born then.

THE CHRISTMAS RECESS
Lord DENHAM: My Lords, it may be for the convenience of your Lordships if I announce that, subject to the progress of business, the House will adjourn for the Christmas Recess on Thursday, 20th December and return on Tuesday, 15th January.

BUSINESS OF THE HOUSE
3.29 p.m.
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords,
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with the leave of the House I should like to make a Statement on the business of the House. Following representations from the Opposition, the Government have decided not to proceed with the Local Government Planning and Land Bill in the House of Lords. A similar Bill entitled the Local Government Planning and Land (No. 2) Bill will be introduced in another place. The Government will consider what other legislation might be introduced into this House.
Lord PEART: My Lords, may I say to the noble Lord that I feel very sorry for him? He is in a muddle with his business. I am not in any way blaming him personally, but this is a retreat.
Lord SOAMES: My Lords, it was to meet the strongly expressed desires of the noble Lord's honourable friends in another place that this was done.
Lord WIGODER: My Lords, may I say from these Benches how startled we are at the rapidity with which the Government have fled at the first whiff of grape-shot fired by a Labour Opposition which is itself in a state of disarray? May I ask the noble Lord the Leader of the House whether he will bear in mind that it is possible to operate a two-Chamber system of government only if this House receives a substantial amount of legislation early in the year, and is not left in the situation in which it has been repeatedly in recent years in which we receive a number of major Bills simultaneously towards the end of the Session when it is quite impossible to do our proper task of scrutiny?
Lord SOAMES: My Lords, I assure the noble Lord that he is preaching to the converted.
Lord SHINWELL: My Lords, is the noble Lord the Leader of the House aware that I personally approve of the Government's decision? If we, instead of the other place, are to deal with Bills, do not let them be too complicated. Give us nice, simple Bills which do not mean confrontation.
Lord SOAMES: My Lords, I have yet to see many of the Bills that are coming up this Session fall into that category.

THE CIVIL SERVICE: REVIEW DECISIONS
3.32 p.m.
Lord SOAMES: My Lords, with the leave of the House, I should like to make a Statement about the Government's review of the size and cost of the Civil Service.
We undertook this review for three main reasons. First, we believe that it is in the national interest to reduce the role of Government. Secondly, at a time when public expenditure as a whole has to be restrained, it is right that there should be a contribution from central Government administration. Thirdly, it is essential to examine any large organisation, public or private, from time to time and prune those activities which may have been undertaken for good reasons, but which are now less necessary.
This is a report on the progress that we have made so far. All Ministers have conducted an initial examination of the activities of their departments to identify the savings which can be made, whether by increased efficiency or by the abolition or curtailment of functions. As a result, we will be making savings right across the Civil Service. The scope for this varies between departments. At one end of the scale, the Department of Transport has identified savings amounting to some 18 per cent. In other departments the scope is much smaller, but even in the fields of law and order and defence, to which, as the House knows, the Government attach a particularly high priority, some valuable savings will be made.
This review will lead to annual savings in Civil Service staff costs of about £212 million, most of which will be achieved by the financial year 1982–83. The net effect on public expenditure will however be less than this because some of the savings will come from putting work, which will have to be paid for, out to the private sector. In terms of staff numbers, the savings total some 40,000. This is in addition to the steps we have already taken to reduce expenditure on Civil Service manpower this year, saving some 20,000 posts, making 60,000 in all. The Government's aim will be as far as
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practicable to secure the reductions by natural wastage.
The savings that will be made by departments as a result of the decisions I am announcing today will be shown in general terms in a table in the Official Report, and copies are available in the Printed Paper Office. Details of the savings are of course the responsibility of the departmental Ministers concerned.
These are the savings which it has been possible to identify reasonably quickly by examining a series of options across the Civil Service as a whole. The next stage will include a number of policy studies in some departments, such as the Department of Health and Social Security, and reviews of activities already set in progress, particularly in the Ministry of Defence and the Department of the Environment.
The search for greater economy and efficiency will of course go on throughout the lifetime of this Parliament. All Ministers will continue to keep the work of their departments under close scrutiny and the House will be kept informed of progress from time to time. Sir Derek Rayner will assist in particular projects to improve efficiency and get better value for money.
I will not try to predict the future size of the Civil Service, but we have reversed the major expansion which took place under the last Government. Our predecessors planned for a Civil Service of 748,000 by April next year. The numbers now stand at 712,000. As a result of our scrutiny, though there may be short-term fluctuations, the general trend from now on will continue downwards.
The size of the Civil Service must always depend upon the duties that the Government of the day ask it to undertake. The fact that this Government set out to identify areas in which the range of work can be narrowed, and to improve the efficiency with which the rest of the work is done, is no reflection on the conscientiousness and ability with which civil servants at all levels have carried out the tasks they have been given. I am glad to pay tribute to these qualities, as I am sure is the whole House.
The aforementioned table is as follows:

CIVIL SERVICE MANPOWER
TABLE OF SAVINGS

Department

£ million (at 1979 survey prices)

Staff (approximate)

Ministry of Defence Various economies and placing some work currently done in-house out to contract (in particular cleaning and catering); administrative economies from such measures as changing the arrangements for paying salaries and wages and for bill paying; further changes in arrangements for quality assurance, involving greater reliance on industry.

41·0

7,500

Foreign and Common wealth Office and Diplomatic Service Closure of some overseas posts; reduction in the size of the largest overseas missions and in staff numbers in the UK.

6·0

425

Overseas Development Administration Reductions in staff and programmes in headquarters and at the Scientific Units.

2·1

235

Ministry of Agriculture, Fisheries and Food Simplification of capital grant schemes and other minor savings.

4·1

470

Department of Industry Conversion of National Maritime Institute into a non-governmental Research Association or other industrial research laboratory; programme cuts at remaining Industrial Research Establishments; reductions in regional organizations mainly resulting from revised regional package; staff savings following expiry of Industry Schemes; and reductions in statistical, Establishment and support services.

7·9

1,290

Department of Trade Changes in companies registration; reduction in some export promotion and commercial relations activities and in various civil aviation and marine functions; continuation of transfer of work to the European Patent Office; abolition of the Metrication Board.

3·1

455

3.36 p.m.
Lord PEART: My Lords, I am grateful to the noble Lord for keeping me informed about this matter. As he knows, I was previously responsible for the Civil Service Department. I am worried that there might be savings at a cost to essential services. I hope that this matter has been considered carefully, and I should like to know what discussions the noble Lord has had and which unions are concerned. I get the impression that many members of the party opposite have always relished sniping at the Civil Service—conscientious men and women, many of whom will now probably lose their jobs. It is not easy for these people. I trust that there will be no endangering of essential occupations, and I hope that the noble Lord will comment on that.
Baroness SEEAR: My Lords, we on these Benches also wish to thank the
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Minister for the Statement and to say we hope that there will be an opportunity at a later date to discuss this matter in much more detail. The Statement that the Minister has made has roused a number of questions to which obviously he cannot at present give answers, but we hope that there will be an opportunity for answers later. The Minister has said that he will keep us informed. I feel that what the House needs is not merely information, but an opportunity to discuss what is going on. As I think is well known, there is great anxiety that economies may be made at the sharp end, out in the field, rather than in the administrative structure; and there is a very strongly held view, which may not be entirely justified, that the administrative structure is top heavy and that that is where a great many of the economies ought to be made.
The Minister has told us about reductions in size. He has told us that the Department of Transport has made a reduction of 18 per cent. I have done some very quick arithmetic, and it may well be wrong, but the overall reduction to which he refers averages I think about 8 per cent. It is open to question at least that we should know why in one department it is possible to make 18 per cent, reduction when the average is only 8 per cent. It suggests that in other departments there are further economies that could well be made. Even when the figures of the reduction are given, the reduced figure of Civil Service employment still represents 3 per cent, of the total of all persons employed in this country, and of course to this must be added the large numbers employed in local authorities.
The Minister's Statement referred not only to size, but to cost. Here I realise that I am on extremely delicate ground, but would it be too much to ask that at a later stage discussion can take place as to how salaries are arrived at? I know that the Pay Research Unit is doing a very thorough and conscientious job, but we are also interested in the way in which the findings of the Pay Research Unit are interpreted in the process of negotiation. There are many unanswered questions here, such as what adjustments are made for the security of the Civil Service, because we are told

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that in relation to this reduction it is going to be largely a matter of natural wastage. What adjustments are made for the fact that the pension scheme is non-contributory? What adjustments are made for the fact that the pension is inflation-proofed? There is a strong view—and this, too, is an argument for further discussion of this matter—that while, we all agree, we have a most excellent staff in the Civil Service, there are many people trapped in a system which greatly reduces its efficiency.
3.39 p.m.
Lord SOAMES: My Lords, I shall try to asnwer some of those questions. The noble Lord, Lord Peart, referred first to his anxieties that essential services might be cut. I can assure him that this is not the case. This has been avoided, I would say, almost at all costs. This has been a review by departmental Ministers throughout their departments, in response to a request, and the question has been asked: what would you have to cut if you were to cut X percentage out of the total of your staff costs? What would this involve? This was then looked at, and some things were immediately jettisoned, not even considered; others were considered and discussed and then jettisoned; some were accepted straight away and others were argued over, which is why it has taken a bit of time before I have come to the House. This has been an exercise which I think has been worth while. I also think that, certainly where I was concerned, and probably where the noble Lord, Lord Peart, was concerned, too, up till now Ministers (certainly this was the case for myself) have tended to concentrate on the policies of their departments rather more than on the administering of them, and to leave the administration to the Civil Service. What this exercise has done is to bring Ministers absolutely slap into this field, into the realisation of their being responsible for the administration and for watching over the efficient working of their departments. This is going to continue, and I hope have benefit in time to come.
As for sniping at the Civil Service, in my opinion there is a lot too much sniping at the Civil Service from all around the shop, and I certainly should not like to point the finger at any particular
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party. I think this comes from the body of opinion. The Civil Service is rather like mothers-in-law: it tends to be the butt for jokes. But, as I said at the end of my previous remarks, and I know the House will agree, I myself honestly believe (and I am lucky enough to have had the experience of seeing a number of civil services abroad at work) that ours is as good as any that can be found anywhere in the world—and I do not say that just because I am a Briton.
As to many losing their jobs, this will not be the case; many will not be losing their jobs. I cannot say that none will be losing their job—I cannot give a guarantee as to that—but certainly the major part of this exercise will be done by wastage; and, of course, if there are any who have to lose their jobs, then this will be done in as humane a manner as possible. As to what the noble Baroness, Lady Seear, said, listening to her I saw her point in asking for a debate on this subject, because she raised a number of points which, if I were to answer them, would really amount to my making the opening speech of a debate. So if the noble Baroness wants a debate perhaps she would go through the usual channels to get such a thing arranged.
Perhaps I could very quickly answer some other points. On pay, I really do not think that pay comes within this. This Statement is not about pay; it is about a reduction in the number of civil servants. The noble Baroness asked why the Ministry of Transport came out at 18 per cent, whereas the average, she said, was 8 per cent. Her arithmetic is pretty good. If you add together what we saved in the first few months and what I have announced now, it comes to something of the order of 8 per cent. The answer is that, as I said, we did not have a target. We did not say, "This is what we want to achieve and everybody has to hit that target". This was not what we said. What we said was, "We want each department to look to see where savings can be achieved and to judge what the effects upon the country would be in the event of those savings being made". It came out that this could be done more easily in the Ministry of Transport than in other departments. These reviews are being carried on, and it may be that others I may come into double figures, too; I

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cannot tell. But that is how it was done. It is not that one has done better or worse than another: it is how it came out at the end of the day after very long deliberations.
Lord GORONWY-ROBERTS: My Lords, may I, on a point of information, put this question to the Minister? He is aware, is he not, that already the Foreign and Commonwealth Office have over the past five or six years, pretty well voluntarily, effected very substantial savings in manpower and expenditure? Would he do his best to temper the wind of cuts to this already very shorn lamb, as the Diplomatic Service is already feeling inadequate to the purposes set to it? Secondly, on the question of a review of manpower and expenditure in the quasi Civil Service organisations—for instance, the British Council—were those included in this review, or are they being looked at separately?
Lord SOAMES: My Lords, the staff of the Foreign and Commonwealth Office has not been cut very substantially in this operation. The noble Lord, Lord Goronwy-Roberts, referred to it as a shorn lamb. I must tell the noble Lord that, having held discussions with almost every departmental Minister in this operation, there was hardly one which did not consider itself to be already a shorn lamb.
Lord GORONWY-ROBERTS: My Lords, would the noble Lord answer my point about the quasi Civil Service organisations, such as the British Council? Do they come into this review?
Lord SOAMES: My Lords, the British Council would have come under the Foreign Office review, I think—but do not hold it against me if I am wrong. I am now told, "British Council, et cetera, no".
Lord NUGENT of GUILDFORD: My Lords, is my noble friend aware that while I, like everyone else in this House, I think, am proud of the traditions and the service of our Civil Service, there is a general wish that there should be some relief from the very great burden of the existing staff of the Civil Service; that the review which my noble friend and his colleagues have carried out is one which
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everybody was expecting; and that the result of a reduction of about 8 per cent, seems quite reasonable? We are all aware that this will make for some disappointments in some places, but there are the classical aspects of the Admiralty, for instance, where we now have more administrators than we have naval officers and naval ratings. This kind of situation has inevitably grown up over the years, with Parkinson at work right through the whole scene. We all feel very grateful to my noble friend for the extremely difficult task which he and his colleagues have carried out in making even this 8 per cent. reduction, and we strongly support him in what he is doing.
Lord SOAMES: My Lords, I am most grateful to my noble friend Lord Nugent. Yes, we were absolutely convinced that this was a job which needed doing. It is not an easy one to perform. I am not saying that there are not areas where I am rather disappointed that we have not been able to go further, but this is not the end of the road. As I say, a number of reviews are still in train, and Ministers will be constantly watching to ensure the efficiency of their own departments, and for just the sort of situation to which my noble friend referred. I think this is a matter of balance. It is not as easy as it sounds, doing this operation. What had to be done was that tasks had to be taken away. There was a limit to how much you could do by, as it were, just cutting off fat, and tasks had to be reduced.
Lord PEART: My Lords, I appreciate very much what the noble Lord has said, but I am worried about one matter. The whole question of government stands on law and order and defence. Will there be any cut-back there?
Lord SOAMES: No, not in the front end, my Lords.
Lord TAYLOR of GRYFE: My Lords, in view of the desire of the Government to reduce the size and responsibilities of the Civil Service, will they review the decision to transfer the responsibility for monitoring the affairs of Rolls-Royce and British Leyland from the NEB to the Civil Service? These are major industries, and responsibility for so monitoring performance can add substantially to the numbers employed in these Civil Service Departments.
Lord SOAMES: No, my Lords; we would not consider that to be right.
Lord GLENK1NGLAS: My Lords, will my noble friend not agree that it is often we ourselves, here and in another place, who create all these jobs which have led to the expansion of the Civil Service? Would he, as a little encouragement here and in another place, further agree that there are a great many silly Questions which waste a great deal of civil servants' time?
Lord SOAMES: My Lords, they certainly cost a great deal of money.
Lord MACK1E of BENSHIE: My Lords, may I make a practical suggestion which is a very simple one: to transfer the civil servants who did the review in the Ministry of Transport to the other Ministriesand see what the result would be.
Lord SOAMES: My Lords, perhaps it is funny, but I did not think it was. The answer is, No, because this is not the way it happened. All the departments came up with what would need to be done if they were to cut their staff costs by a certain amount. It so happened that in the Ministry of Transport it was decided that more could be done than elsewhere. It was not a question of the civil servants in the Ministry of Transport coming out with more ideas than came out of other departments. It was that we found that more could be done with less damage there than could be done in other departments.
Lord LEATHERLAND: My Lords, may I ask the noble Lord the Leader of the House to what extent the savings in the Civil Service have been effected by transferring some of their functions to local government?—which will have the result of decreasing taxation but increasing the rates.
Lord SOAMES: My Lords, I think if it had been that to any marked degree I should have been misleading the House. I would not wish to do that.
Viscount MASSEREENE and FER-RARD: My Lords, is my noble friend aware that in 1939, when we had the greatest empire in the world, central Government had 100,000 civil servants in
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Whitehall, that today, with nothing but these small islands, the Civil Service numbers 800,000; and that, therefore, the majority of the country will fully back the decision of the Government in their action over this? In order that we employ some of these civil servants who may lose their jobs, can we not transfer some of them from the Ministry of Labour on to inspecting and trying to trace the thousands or tens of thousands of people who are evading tax by drawing the dole and other social benefits and at the same time working three, four or five days a week in lucrative jobs?
Lord SOAMES: In answer to the first part of my noble friend's supplementary question, the Foreign and Commonwealth Office is very much smaller today than was the Foreign Office, the Colonial Office and the India Office in times gone by. The increase in the Civil Service has come about by virtue of the fact that Governments over the years have to a greater extent increasingly, every year, touched the lives of the people at more points than ever before. That is where the increase has been and that is where we have had to look. In answer to the second part of my noble friend's supplementary question, the Department of Employment employ a number of people on a regular basis to do the job that he outlined so vividly.
Lord ORR-EWING: My Lords, is my noble friend aware that the biggest cut has been in the Inland Revenue? But is he also aware that, compared to the United States of America, we still have four times as many tax gatherers as they have per 1,000 of the population? Is this not an argument for not only going on cutting taxes but, above all, simplifying taxation so that it is easier to handle our taxation more efficiently with fewer civil servants? Would he bear in mind that, although the intended cuts are satisfactory here, it is not so in the local authorities where in the last year they have added 30,000 people to their numbers? Could he see what persuasion could be put on the local authorities by the Government for them to make equal cuts and thus keep rates increases down?
Lord SOAMES: My Lords, simplification of the tax structure is something which all Chancellors of the Exchequer

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have been after. They have not found it very easy. But simplification for the sake of simplification is an end well worth seeking and one which I have no doubt my right honourable friend will bear in mind. He is very well aware, from the expenditure point of view, how beneficial it would be if those departments for which he is responsible in the Treasury could be reduced. This is something that he has in mind.
As to the local authorities, as my noble friend will realise, there is a limit to which central Government think it right to impose their own views on local authorities. Through the working of the grant and so on, there are various ways (which we all know about) by which central Government can make their beliefs felt by the local authorities; but there is a limit. I do not believe that anybody in this House would think it right that central Government should tell each local authority how many people they should or should not employ.
Lord MONSON: Would the noble Lord the Leader of the House say whether the Government have given any thought to the idea of awarding substantial cash bonuses to civil servants who put forward specific ideas for cutting out waste and making economies generally, which are then adopted—as is frequently done in private industry by way of incentive.
Lord SOAMES: My Lords, I had not thought of that. Frankly, and I am not being pi here, I think that those civil servants in the departments with whom I have had contact in this exercise have genuinely gone about this exercise with a will. I do not think that they would have looked kindly upon the idea of cash benefits for it. I think they did it in the line of duty. May I suggest—and I do not know whether I can defend myself on this matter—that perhaps it would be of convenience to the House that we move on to the ordinary business of the day?

UNEMPLOYMENT
The CHAIRMAN of COMMITTEES (Lord Aberdare): 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 Bishop of Worcester be added to the Select Committee on Unemployment.—(Lord Aberdare.)
On Question, Motion agreed to.

SLAUGHTER OF ANIMALS (SCOTLAND) BILL [H.L.]
The LORD ADVOCATE (Lord Mackay of Clashfern): My Lords, I beg to move that this Bill be now read a second time. It is a consolidation measure consolidating a number of enactments relating to slaughterhouses, knacker's yards and the slaughter of animals in Scotland. It is purely consolidation and is intended to make no change in the existing law. If this Bill is approved by your Lordships, it will be referred to the Joint Committee on Consolidation Bills which will consider it and make its report to the House in due course. I beg to move.
Moved, That the Bill be now read 2a. —(Lord Mackay of Clashfern.)
On Question, Bill read 2a and referred to the Joint Committee on Consolidation Bills.

BAIL ETC. (SCOTLAND) BILL
3.58 p.m.
Report received.
Clause 1 [Release on conditions.]:
The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield) moved Amendment No. 1:
Page 1, line 9, leave out ("except in the special circumstances mentioned in") and insert ("subject to").
The noble Earl said: My Lords, I beg to move the amendment standing in my name and that of my noble friend Lord Mackay of Clashfern. This is purely a drafting amendment and no change of substance is involved. A very similar amendment was originally auggested by the noble and learned Lord, Lord McCluskey at Committee stage and I am particularly glad to take this opportunity to demonstrate our readiness to consider, and where appropriate accept, improvements in the Bill proposed by noble Lords.

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This amendment would make the Bill shorter and better.
The DEPUTY SPEAKER: My Lords, I must inform the House that, if this amendment is agreed to, I cannot call Amendment No. 2.
Lord McCLUSKEY: My Lords, I am happy to acknowledge that the Government have moved in the right direction here and improved the Bill. I need not rehearse what was said at the Committee stage. I acknowledge what they have done and I acknowledge, therefore, that my Amendment No. 2 becomes unnecessary.
On Question, Amendment agreed to.
[Amendment No. 2 not moved.]
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 3:
Page 1, line 17, leave out ("necessary") and insert ("reasonable").
The noble and learned Lord said: My Lords, I can deal with this amendment briefly because there was a similar amendment at the Committee stage (No. 5 of that Marshalled List) and I pointed out to the Committee that in my view there was no certain way whereby it could be secured that a person released on bail appeared at the appointed time at every subsequent diet of the case, and equally there was no certain way that a person released on bail could be prevented from committing an offence while on bail. I felt—if I may quote from a phrase frequently used by the noble and learned Lord the Lord Chancellor on other occasions—that the Government had rather "over-egged the pudding" here. I invited the Government to look at the matter again. This amendment removes the word "necessary" and substitutes the rather less strict word "reasonable" and will enable the Government to word Clause 1(2) in a rather better way. I should like to hear what the Government have to say. I beg to move.
The Earl of MANSFIELD: My Lords, the noble and learned Lord moved his amendment in terms which were commendably brief. As he wants to know
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what the Government have to say, I shall have to be a little less brief in order to fulfil his wish. The amendment would provide that the conditions imposed in the granting of bail should be those considered "reasonable" rather than "necessary" to secure the aims of bail. I have listened to the noble and learned Lord and, as he invited us to do at the Committee stage, we have looked at the matter again. I am bound to tell him that I remain unconvinced as to the merit of his amendment. I say that for a variety of reasons.
First, the words that appear in the Bill are designed to set a stiff test for the conditions which may be imposed by the court. As the clause stands, the court (and of course I include the Lord Advocate) would be prevented from imposing conditions which they do not consider necessary to secure the aims of bail in the case of the accused. The amendment would allow the court to impose any "reasonable" conditions even where it did not think them necessary in a particular case. In the Government's view this would be wrong. The system of release on conditions should be geared to achieving the aims of bail (as set out in Clause 1(2)) with the minimum of conditions which in the court's view are needed. The noble Lord's amendment could clear the way for a proliferation of conditions, all of them reasonable in themselves, but many of which might be unnecessary. In our view, this would only serve to confuse the accused and obscure those conditions which the court might have thought necessary. We want the new system to work fairly and effectively and, to that end, we think the test of necessity is the right one for the court to consider when imposing conditions. If there are too many conditions, then the risk increases of there being relatively trivial, technical breaches of bail conditions which would have to be looked into even if not prosecuted.
The noble and learned Lord mentioned that the court cannot know what conditions are necessary to secure that the aims of bail can be achieved. I accept that. But the court can surely be asked to form a view as to what conditions are necessary and to act upon that view. The sanctions exist in Clause 3 to deal with those cases where the court's judgment is shown by

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events to be wrong and the accused breaches one or more of the conditions of bail imposed.
My Lords, in this context all conditions which are necessary must also be reasonable but not all reasonable conditions will be necessary in every case. The amendment proposed could lead a court to encumber an accused with wholly unnecessary conditions of bail and could jeopardise the effectiveness of the new system. I hope that the noble and learned Lord will reflect upon what I have said and possibly see fit not to press his amendment.
Lord McCLUSKEY: My Lords, the noble Earl is to be congratulated. His explanation this time was considerably more convincing than it was the last time. It would be even more convincing if the clause were now to read:
"The conditions which the court imposes shall be only such as the court considers necessary".
However, this is a matter which properly lies within the Government's discretion. I do not propose to seek to divide the House and I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.5 p.m.
Lord MACKAY of CLASHFERN Lord MACKAY of CLASHFERN moved Amendment No. 4:
Page 1, line 19, leave out ("including every continuation of a diet").
The noble and learned Lord said: My Lords, I should like to explain Amendments Nos. 4, 7 and 9 together. The substantive point is contained in the third of these amendments, Amendment No. 9, which would provide for the Bill that the word "diet" is to be interpreted as including any continuation of a diet.
As now drafted, the Bill would require a person on bail to appear at the appointed time at every diet. If "diet" does not include each and every continuation of a diet an accused might argue that his obligations under bail were discharged when he appeared on the first day of his trial. If he absconded when the trial was adjourned from day to day there might be doubt as to whether he was liable to the penalties in Clause 3 for failure to appear. He would, after all, have appeared
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at the appointed time for the diet and although Clause 1 refers specifically to continuation of diets, Clause 3 does not. The Government are anxious to ensure that there should be no doubt that in such a case the accused would be liable to the penalties provided for failure to appear. Were doubt to remain, courts might order an accused to be held in custody during his trial where they would otherwise have been prepared to allow him to remain on bail and that would be quite undesirable.
The third of these amendments would provide a suitable general interpretation for "diet" for the Bill. The first amendment deletes words which would then be redundant. Since Clause 9 inserts new subsections into Section 296 of the Criminal Procedure (Scotland) Act 1975, it is necessary to include a specific parallel definition of diet in that section and the second amendment, to Clause 9, achieves this. I beg to move.
Lord McCLUSKEY: My Lords, may I simply acknowledge that the Government have in fact closed what might have been a loophole. I also congratulate the noble and learned Lord on the spirit in which he has done this. As I understand it, the purpose is to make it easier for the court to grant bail because it removes doubts about whether or not the person will be liable to the penalty if he answers to his bail on the first occasion but not on a subsequent occasion. For both these reasons, I commend this amendment to the House.
On Question, amendment agreed to.
4.9 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 5:
Page 2, line 13, after ("is") insert ("the only course").
The noble and learned Lord said: I shall, my Lords, move this amendment as briefly as possible because this was a matter that we discussed at Committee stage. I shall be explaining in relation to the next amendment rather more fully what the background to the Bill is. In essence, under the Bill, money bail is to be largely abolished. The Thomson Committee recommended that when I was in government, and the Government

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of which I was a Member agreed with that and our Bill sought to do the same.
In the present instance, however, the Government have decided to save money bail for a few very special cases. We do not now quarrel with the principle of that, and I simply offer these words as a further way of ensuring that money bail is limited to the one, two or three special cases which the Government have in mind Surely the Government could accept this amendment as one which tightens up these provisions to prevent the proliferation over the years of money bail in types of cases where the Government do not intend money bail to continue. I beg to move.
The Earl of MANSFIELD: My Lords, I am at one with the noble and learned Lord in his desire to, as it were, guide the courts into the position where they impose a requirement to deposit money as a condition of release only in the very small number of cases where this is appropriate. Nevertheless, I cannot support his amendment because I do not think it is as felicitously worded as perhaps he thinks.
In our view, the present clause achieves that aim and in fact the noble and learned Lord's amendment is ill-conceived. I say that because the imposition of a condition to deposit money is governed by the provision relating to conditions generally. Therefore Clause 1(3) must be read with Clause 1(2). A court is only permitted to require a deposit of money if it considers it a necessary part of the conditions to secure the aims of bail and appropriate to the special circumstances of the case.
With respect, I think this is a more desirable test than that proposed by the noble and learned Lord. Clause 1(3) makes it quite clear that where the court or the Lord Advocate imposes a requirement that the accused deposits a sum of money, the requirement is imposed as one of the conditions of release on bail. That is why I argue that the amendment is misconceived. You cannot, on the one hand, say that a requirement to deposit money is the only appropriate courseand, on the other hand, that such a condition is only one among a number of conditions. That is the effect of the noble and learned Lord's amendment and, with respect, I must say that it is illogical.
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In so far as the amendment might be held to have any effect, despite its illogicality, this could be unfortunate. The Bill will replace our present reliance on money bail as the only condition of release by a new system of conditions. A deposit of money will not normally figure as a condition of release at all and, if it does, it will, as I have said, be only one among several conditions. So I fear that the noble and learned Lord's proposal might lead a court to believe that it could impose a requirement to deposit money as the only condition of bail. The Government consider that a deposit of money may be necessary in certain cases but we are anxious to secure that it does not continue to be the single pre-requisite of bail in any case and, where it is required, it should be as one condition among a number. I suggest, therefore, that the amendment of the noble and learned Lord would suggest the opposite.
In conclusion, I would submit that the amendment is fundamentally incompatible with Clause 1 and, if enacted, would at best make a nonsense of Clause 1(3) and, at worst, lead to the return of money bail in virtually its present form, on one interpretation of the clause as it would then read. I hope that, for these reasons, the noble and learned Lord will be satisfied perhaps and withdraw his Amendment.
Lord McCLUSKEY: My Lords, I am certainly going to withdraw my Amendment, but I will not accept that I am such a bad draftsman that attempt after attempt of mine must produce all the dire consequences that have been predicted both at Committee stage and now. However, I do hope that somehow the courts, when they come to consider their proper duty in relation to the application of subsection (3) of this clause, will restrict themselves to the types of cases that have been mentioned in these proceedings and in another place. In that hope, I will, with your Lordships' leave, withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 3 [Breach of conditions]:
4.14 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 6:
Page 3, line 32, leave out ("2 years") and insert ("6 months").
The noble and learned Lord said: My Lords, this is an important Amendment and in moving it it will be necessary for me to take a little longer than I took with the others. However, the background can be explained very briefly. The present law in Scotland is that all crimes in Scotland excepting murder and treason are bailable. In the majority of bailable crimes the accused applies for, and is allowed, bail by the court. He is not, as used to be the position in England, required to find recognizances and sureties for large sums. What happens at present is that when the court grants bail the accused person is liberated from custody when he produces the actual sum of money fixed by the court. The average amount of bail in the mid-1970's, when the matter was the subject of some study, was £14. So it is hardly surprising that the vast majority found the bail money within a very short period of time.
Having found the money and been liberated, if the accused turns up for his case he gets his money back. Being Scots, 94 per cent, turned up to get their money back. If the accused did not turn up the court could order forfeiture of the bail money, although it was not automatic. It is obvious, therefore, that the average penalty for not turning up for your trial in Scotland was the loss of £14 or thereabouts: a monetary penalty. That was an even more modest penalty than it looks on the surface because it was usual, even if the accused turned up for his trial, for his lawyer to collect the bail money and apply it as a modest contribution towards the lawyer's fee. Accordingly, the accused knew when he turned up that he was not going to get his own money back. He knew in fact, when he lodged his bail money, that he had kissed it goodbye for ever. So the penalty in reality was no loss of anything at all—he lost it whether he turned up or not.
This Bill abolishes that system. Money bail is virtually abolished and is replaced under this Bill by a system of release upon conditions. We are all agreed about that. We are all agreed partly because the Thomson Committee, which I mentioned earlier—a distinguished committee which sat in Scotland and heard evidence from all interested parties over a period of years —recommended the abolition of money bail. In the last Parliament, we introduced a Bill which included provisions rather
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similar to these. That Bill fell with the dissolution of Parliament and the new system contained in this Bill is that accused persons may be released upon certain conditions and, if they do not comply with those conditions, they may be subject to a penalty. If they commit an offence for non-compliance with the conditions they may be penalised.
It is right that I should remind your Lordships of what was said by the Thomson Committee in relation to this matter. I need not read it all, but from paragraph 11.20 of the Thomson Report I quote:
"We are of the view that failure to appear in court at the appointed time without reasonable cause should be an offence. Non-compliance with any of the other conditions should also be an offence. Any such offence should be punishable by imprisonment for a period not exceeding six months or by a fine".
That is the penalty proposed by Thomson: six months or a fine. I would remind your Lordships that in England, under the Bail Act of 1976, the maximum penalty is 12 months. I do not say there is an exact parallel between the two systems but the maximum penalty in England is 12 months in a jury case. In the Bill which we introduced, in Clause 7 the maximum penalty was proposed as 3 months' imprisonment and a maximum fine of £200.
This Bill follows the Bill we introduced in all respects save one in this regard; that is to say, in this clause, Clause 3(3) in solemn proceedings—in other words, in jury proceedings—the maximum fine can be any sum at all (it is an unlimited amount) and the penalty for not turning up for a diet in that type of case is proposed as 2 years' imprisonment—that is 2 years which may be in addition to the penalties for the offence itself.
In my submission, that is wholly bad: first, because, as I have demonstrated, I hope, it is a very significant jump indeed from the present penalty that may be imposed. It is too much. Secondly, it massively exceeds the recommendation by the committee sitting under the late Lord Thomson, from which I have quoted. Thirdly, it gives the sheriff the power to send a man to prison for a total of four years—two for the offence itself and two for non-compliance with the condition that he should turn up at a diet for his trial. I acknowledge that under the Bill the sheriff has to treat these as two separate

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matters, but it gives him the power to impose four years' imprisonment on two occasions on the one offender in respect of an offence and a failure to turn up for his trial for that offence.
The powers of the sheriff are a very vexed and contentious question. It will fall to be debated by this House in the near future when the Government introduces the Criminal Justice (Scotland) Bill. I believe that it is a matter which must be looked at in a very wide context. It is wrong to give to the sheriff these additional powers by the back door and to allow these powers to be increased almost without debate. For these reasons, I believe that this amendment ought to be accepted.
There is another reason of which I must remind the House. The only real argument which was put forward by the Government on the last occasion was one which astonished me and which roused the noble Lord, Lord Mackie of Benshie, to intervene in the debate. If I may quote from col. 32 of the Committee stage— and I shall quote as little as I have to— on that occasion the noble Earl said this:
"The sentence in respect of failure to appear may even be the only sentence which can be imposed if, in certain circumstances, no trial can take place. For instance, I can illustrate it in this way; because an accused may fail to surrender to his bail witnesses may die and, bearing in mind the rules of corroboration, the case may well not be provable against him. He may never be able to be tried or, if he is,"—
and I ask your Lordships to pay particular attention to these words—
"he may inevitably achieve an acquittal simply and solely because he has in fact failed to turn up. In these circumstances—and this is a matter upon which we place particular reliance—if the seriousness of the matter is sufficient, it is only right that he should be liable to be sentenced to a substantial period of imprisonment".—[Official Report; 20/11/79.]
The core of that argument is plain. It is this: that if he does not turn up for his trial and if later he is acquitted of the charge which he would have had to face, the court might blame the acquittal on the fact that evidence which was available on the first occasion was no longer available on the second. That is in substance what the noble Earl said, and again I quote him:
"He may never be able to be tried or, if he is, he may inevitably achieve an acquittal simply and solely because he has in fact failed to turn up".
How could the court ever proceed to fix a sentence upon that basis? The court can never be shown that he was acquitted simply and solely because some evidence was lost in the interval. It would be a wholly unwarranted, unsubstantiated and unproved speculation as to what the effect of that missing evidence would have been, had it been available. Yet that was the noble Earl's basis for giving to the court power to impose a heavy sentence of two years.
May I remind your Lordships that the onus of proof in relation to this offence shifts to the accused. I specifically asked the Lord Advocate about that on the previous occasion and he acknowledged that the burden of proof in relation to "reasonable excuse" rests upon the accused man. I would invite your Lordships to reject this extraordinary argument of which I have reminded your Lordships.
May I deal with another aspect of it. Your Lordships may ask: Supposing an accused, facing a serious charge, deliberately fails to turn up. He decides to escape trial on that charge and deliberately decides not to turn up, and he is not caught until a much later date when the evidence against him has been materially weakened so that he cannot be prosecuted or, if he is prosecuted, cannot be convicted in respect of the charge—the kind of case which the noble Earl envisaged. Is six months a sufficient penalty? The answer to that, in my view, is, No, it is not a sufficient penalty. Indeed, two years may not be a sufficient penalty.
Let me give your Lordships an example. Supposing a man is accused of a brutal rape and assault upon an elderly woman and that as his trial approaches he becomes aware of the fact that she is dying; she is going to be available at his trial but she will not survive for much longer. So he deliberately jumps his bail and does not turn up for his trial; and the evidence of the woman is lost. One might ask whether in these circumstances six months is a sufficient penalty. The answer is, certainly not. But two years may not be enough, either.
The remedy is that in those circumstances the Lord Advocate can charge the man with the common law offence of an attempt to defeat the ends of justice.

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That entitles the court to take into account the whole circumstances and—what is very important—it puts the burden of proof where it ought to be in a serious criminal case; namely, upon the Crown. So if the Crown can prove these other circumstances and the man can be convicted of an attempt to defeat the ends of justice, the court, having the whole circumstances before them, can then decide upon the appropriate penalty—which may, of course, be considerably more than two years.
I brought forward that argument more briefly at the Committee stage and asked the noble Earl to think about it. I sought the advice of the Lord Advocate to confirm that in that type of case a common law charge of this kind could be brought, and I hope that he can confirm that this is so. If I am right about this—if those circumstances can be covered by a common law offence of the kind that I have outlined and the penalty can exceed two years—then it seems proper that in a case of simply failing to turn up for the jury trial, whatever disruption may be caused thereby, the appropriate penalty ought to be that which is recommended by the Thomson Committee; namely, a penalty of six months. In my submission, six months for that kind of case is enough. Surely Lord Thomson and his committee were right and we do not need to go to these extraordinary lengths.
May I make a special appeal to those who sit on both the Cross-Benches and the Liberal Benches, and indeed to those of independent mind in any part of the House, that unless this amendment is passed today the matter will be finalised today. If your Lordships were to pass this amendment, the Government might then seek to compromise. They could do so in another place and bring it back here. They could compromise with the English maximum, which is 12 months. This is the only way to give the Government a further opportunity to think about the matter. For these reasons, I beg to move Amendment No. 6.
Lord MACKAY of CLASHFERN: My Lords, as the noble and learned Lord, Lord McCIuskey, said in speaking to this amendment, its subject-matter is very important. Speaking for myself—and I can also speak for my colleagues in this
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matter—we have given very careful consideration to what was said when the matter was previously before your Lordships. I should also like to say that if this Bill passes into law it will be part of my responsibility to seek to administer it. In the past, at least, it has been the practice for the court very largely to follow the Crown decision upon whether or not bail should be granted. That is a reflection of the confidence which the court had in the exercise of the Crown's discretion in this matter, the Crown having a very full knowledge of the background to the case in reaching its decision. We are speaking here, of course, about practice in the past, not about practice under my responsibility—and for quite a period in the past during which the noble and learned Lord, Lord McCluskey, had responsibility for these matters. Therefore, in deciding what to do over the grant or refusal of bail, the court will be very much guided by the way in which the Lord Advocate and those administering the prosecution system in Scotland on his behalf seek to dispose of these matters.
The question now before your Lordships is: What is the appropriate maximum sentence for the offence of failure to appear at a solemn diet? We are not dealing here with a minimum or a prescribed sentence. We are dealing with a maximum; and within that, right down to zero, the court can operate. And in any sentence which the court imposes there will be a right of appeal. It is one of the most important features of any system that there should be a sufficiently large amount of discretion available to the court to enable the court to discriminate between relatively bad cases on the one hand and relatively trivial cases on the other. So that, speaking generally, if one can trust the courts—and I believe that the Scottish courts are worthy of trust—merely to increase the power of the court does nothing of itself. The court will exercise its discretion within those limits and, in my submission, wisely.
I should now like to try to look at the matter at a number of stages. The system with which we are dealing is one which in all ordinary cases will have as the only sanction for non-appearance the penalties with which we are now dealing, because the noble and learned Lord,

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Lord McCluskey, and ourselves are at one in thinking that money bail or a deposit of money should be used only in the most exceptional cases. Therefore, none of us wants in effect to add to the penalty the forfeiture of money, so the fine or imprisonment will be the only sanction available in practically every case.
The second point I wish to mention is that we are dealing here with solemn proceedings; these are proceedings which take place before either a sheriff, if it is in the sheriff court, or a judge in the High Court of Justiciary with a jury, if it is in the High Court, and, if the accused person fails to turn up for his trial the result is that first of all the judge will be there to deal with the matter where the accused has not appeared. Secondly, there will be summoned a number of potential jurors— ordinary members of the public brought along to perform their duty as citizens. The number of jurors that is at present required is 15 and of course, in making arrangements for bringing jurors along to the court, the court must have regard to the contingencies—the peremptory right of challenge, and so on—which exist in our law and therefore a considerably larger number than 15 are required to be cited in order that a jury of 15 may be secured.
In addition to the jurors in a solemn case there will very likely be a substantial number of witnesses, many of them ordinary members of the public brought in to take part in the administration of justice because they happen to have been connected with the case. I need not remind your Lordships that it is becoming extremely difficult these days to secure the co-operation of the citizen because of the difficulties which are often involved in giving evidence. One difficulty that I have heard a great deal about since I have taken office is that people are cited to appear before a court as witnesses in a matter in which they are performing a civic duty and then they find, for reasons which have nothing to do with them, that their attendance is not required that day and they must return at some later date. Therefore, I attach a great deal of importance in this connection to the inconvenience that would be caused to ordinary members of the public if an accused person does not turn up.
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In addition to ordinary members of the public, there are often police witnesses and police time is involved. In addition, one has to think of the legal representatives for the prosecution and the defence, the staff of the court, the officials of the court and the court accommodation itself. In matters of this sort in Scotland (and I think possibly also here), the system is to provide for relatively fixed diets for solemn matters and the more absolutely fixed diets we can have, the better, and I am sure that the noble and learned Lord himself would agree with that because that was a matter that he worked hard to achieve when he was in office. I strongly support it and I am doing my best to follow his policy in that matter. So one wants to have definite diets and therefore if the accused does not appear the result would be that the public resources would be, certainly for part of the day at best, wasted.
So, in my respectful submission, the failure to appear at a solemn diet is an extremely serious matter from the point of view of the dislocation it can offer to ordinary members of the public brought in to the judicial process in order to help in the discharge of their civic duties and I am sure that we want to do nothing to make that more difficult for ordinary citizens because we depend upon their co-operation to have a successful judicial system in this matter.
The next point I should like to mention is this: In considering whether or not to grant bail an important point must be what are the effects if the accused fails to appear? If one looks at this from the point of view of sentence, it might appear that the Government were seeking to go for something severe. Indeed, that was the burden of some of the comments that were made when this matter was discussed earlier, but there is another way of looking at it and this is the way that I would invite your Lordships to look at it because it represents my personal philosophy. It is highly desirable that bail should be available to the untried prisoner as freely and as fully as possible and accordingly, within reason, the more severe the sanction or abuse—because that is what we are talking about—the more one could grant bail responsibly.
I am trying to look at this from my point of view. If I have agreed, as the Lord Advocate, in a particular case that

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bail should be granted and the result is that very severe dislocation is caused to members of the public in the circumstances that I have already outlined, the question is whether my decision to agree to bail was a reasonable one. In my respectful submission, the stronger the sentence that is available, not actually in a particular case but as a maximum to the court, the more responsible I am in that situation in allowing bail more freely.
To bring this just one step further on; as we were saying earlier I think it is necessary that bail should be available from day to day once a trial has started. The practice in Scotland hitherto has generally been that in a serious case once the Crown has led all its evidence and the defence case starts, bail is withdrawn. Hitherto that has been the normal attitude of the prosecution and, generally speaking, the court goes along with that and bail is withdrawn because by that time serious consequences are building up in the whole loss—not only of the inconvenience which I mentioned earlier but all the earlier proceedings in the trial.
So far as I am concerned, I would very much like to see the practice of granting bail extended so that instead of withdrawing it when the Crown case was finished, in some cases at least (and indeed in as many cases as it was reasonably possible to do) the person who was being tried was allowed to continue on bail until the very end, when the jury's verdict would be returned. I believe that would be a considerable improvement on the present system. It would allow the person, if he was living at home, for example, to return there at night to be with his family, if that was his domestic situation at the time when his own case was being presented. Surely that is something which we should not lightly deny to an accused person. I believe that, if one is going to be responsible in granting that kind of extension of the present practice, one must be reasonably certain that the sanction against abuse, if that kind of approach is taken, should be reasonably severe. I think it would be much easier to justify as a responsible decision if the sanction were reasonably severe; in other words if the factors that an accused person had to weigh against absconding were reasonably strong in favour of turning up.
Of course, one can see that if a trial had gone on for some considerable time a lot of
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public money, witnesses' time, jurors' time, judicial time and so on would have gone into the trial, and the whole thing would be lost if the accused person failed to turn up and the trial had to be abandoned in consequence. So far I have spoken only of the case in which there is one accused, but one absentee could well be sufficient to cause the loss of the whole trial. So that also has to be taken into account. We are looking here for the maximum penalty; we are imposing a maximum, and we are, therefore, in my submission, right to look at the very worst possible case.
The noble and learned Lord has pointed out, perfectly correctly, as we would expect, that it would be quite possible in certain types of case to go for a common law offence of attempting to pervert the course of justice or something of that sort in circumstances such as he envisaged. It is obvious that, in every case where the accused fails to turn up and the trial has to be abandoned and then brought forward later, delay is possibly a cause of the loss of evidence, and that is really the point that my noble and learned friend was dealing with. The noble Earl mentioned this also on the last occasion when he was stating our position. The situation, so far as I can see, is that it is a very real possibility that when a trial does not go on on the date fixed for it there will be a loss of evidence, and that loss of evidence might be sufficient to make all the difference to the result. That is an important factor to be weighed by the prosecution and the court in deciding whether bail is to be granted. I would strongly urge upon your Lordships that within reason anything which tends to prevent the loss of evidence is something that your Lordships should support.
Your Lordships are not penalising anyone who is innocent in this matter. The person who does not abuse the system will not be affected whether the penalty is six months, two years or 20 years. It is the person who abuses the system who will be subject to this maximum penalty that the court can impose. Surely it is reasonable to give the court a reasonably wide discretion, in order that there may be in front of an accused person, when he is considering whether to turn up, a clear statement of a fairly substantial penalty to which he may be liable. The Lord Advocate could certainly prosecute on

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common law grounds in the sort of situation that the noble and learned Lord, Lord McCluskey, set out. But it has been the law in Scotland for a long time that that is possible, even where the statutory offence has a maximum penalty attached to it. If you can bring the circumstances under a common law offence, you can, as it were, circumvent— I do not use that in any sense that would suggest that the Lord Advocate would do anything improper—can produce a situation where the common law powers of the court (in the case of the High Court these powers are very substantial) could be invoked instead of the statutory powers, which are always limited.
The policy of my predecessors—and the noble and learned Lord, Lord McCluskey, was a participant in that—has been over the years to reduce that tendency so far as possible. If I may give an example, it used to be common practice to indict a driver who caused death by bad driving not only under the statutory offence of causing death by reckless driving but also under the common law offence of culpable homicide. But the practice has been to refrain from doing that, and, in my submission, that is a proper direction for practice to take. I would submit that where the facts come under a statutory offence it is the statutory offence that one should, generally speaking, use. Therefore, I submit to your Lordships that it would be right that the statutory offence should give as the maximum which the court could impose the power to consider the worst possible case, including such circumstances as the noble and learned Lord envisaged. I would hope that your Lordships would feel able to agree about this matter in the light of the understandings which I have sought to put before you about the way in which it would be desirable that this new system should operate. This is an entirely new departure so far as the law of Scotland is concerned. It is a new system, and I would like to see it operated to the full and as humanely as possible.
Some reference has been made to England, and I speak with diffidence about the position there. As I understand it, in England there is the possibility of a 12 months' sentence of imprisonment, but that is along with the results that can be visited on the surety if the person has
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not turned up; so 12 months is not the maximum penalty; it is the maximum imprisonment penalty but there are other penalties as well. I would submit, therefore, that that particular point is not a strong one. I think there may also be differences in relation to the amount of dislocation that would be caused; for example, the number of jurors cited in England and Wales as against Scotland may make a difference in that regard. I would hope that in the light of these assurances the noble and learned Lord would feel able to agree with us on this point, because I believe it would be very desirable that your Lordships should be of one mind on this matter.
Lord WIGODER: My Lords, I wonder whether the noble and learned Lord would be kind enough to give one small piece of information to an ignorant foreigner in these matters. If an accused person has failed to surrender to his bail and is then arrested and tried in a sheriff court or in the High Court under Clause 3(3) for having failed without reasonable excuse to appear, who determines whether there was a reasonable excuse? Is it the judge or the jury?
Lord MACKAY of CLASHFERN: My Lords, if the situation is under subsection (3) the tribunal of fact would be the jury under the direction of the judge. The offence which the prosecution has to prove is that the accused person has failed to turn up without reasonable excuse. The burden of proof is upon the Crown except in relation to the matter of excuse. In other words, the Crown has to prove that the accused did not turn up; once that is established it is for the accused to explain that he had a reasonable excuse for not doing so. But the tribunal of fact is the jury in that sort of situation.
Lord McCLUSKEY: My Lords, if I might deal with that last point, the only point in the case is whether or not the man had a reasonable excuse. It would be plain beyond peradventure that he had not turned up on the first occasion. The only point at issue is, did he have a reasonable excuse? Therefore, the onus in the only matter at issue rests upon the accused. That takes me back to the argument that the noble Earl, Lord Mansfield, advanced at Committee stage

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and which came out in a modified but none the less steely form from the noble and learned Lord the Lord Advocate. It is the argument that he put this way: if the Crown could not produce the evidence at the second trial that it was willing and able to produce at the first trial that might make all the difference to the result.
What I want to know is this—and I have had no satisfactory answer to this question. If the Crown comes forward with a charge of this kind and all it has to prove is that the accused did not turn up on the first occasion, and the accused has to try to show that he had reasonable excuse and he does not prove that he had a reasonable excuse, then the accused falls to be found guilty of the offence. What investigation can there possibly be to determine whether or not this is one of what the Lord Advocate described as the relatively bad cases? There is no evidence on the matter to enable the court to decide whether it is a relatively bad case or not. There is no way in which the court will be invited to read the evidence of the deceased witness or the witness who has emigrated to Brazil or to Southern Ireland and who cannot now be brought back.
So the very matter which makes the difference between the bad case, the relatively bad case and the not so bad case, is not a matter at issue in the trial, and the court, when it comes to consider the question of sentence, has no way of knowing. Does the Lord Advocate envisage that the judge will, at the end of a trial, ask the prosecutor, "Is this a bad case?" and the prosecutor will say, "It
is a terrible case", and the judge will then say, "Very well, two years"? That is no way to conduct a criminal trial,
I shall not go through the other matters. I accept, of course, that it is disgraceful that jurors and witnesses should be inconvenienced and that public expense should be caused. In England that is met with 12 months' imprisonment. The Lord Advocate said that the maximum here was two years, and suggested that in England it was 12 months plus the fact that the sureties might be penalised. The maximum here is two years plus an unlimited fine. So, there is no difference in that respect between the position in England and Scotland.
May I remind your Lordships of a point that I believe is of great importance? Your Lordships may feel that the Government have not properly reflected on this matter. It was not discussed at any length at all, I think, in the other place. The arguments have varied in reply to my point and they have not produced any justification at all for departing from the unanimous recommendation of the distinguished committee under the noble Lord, Lord Thomson. This is the only way that we can get them to think again and I invite your Lordships to accept the amendment. I beg to move.
4.51 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 56; Not-Contents, 81.

CONTENTS

Airedale, L.

Gregson, L.

Ritchie-Calder, L.

Ardwick, L.

Hale, L.

Sainsbury, L.

Aylestone, L.

Hatch of Lusby, L,

Scanlon, L.

Banks, L.

Henderson, L.

Seear, B.

Blease, L.

Hooson, L.

Shepherd, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Shinwell, L.

Bruce of Donington, L.

Jacques, L.

Stewart of Alvechurch, B.

Byers, L.

Janner, L.

Stewart of Fulham, L.

Castle, L.

Jeger, B.

Stone, L.

Collison, L.

Kaldor, L.

Strabolgi, L.

Cooper of Stockton Heath, L.

Llewelyn-Davies of Hastoe, B.

Underhill, L.

Crowther-Hunt, L.

[Teller.]

Wade, L.

Cudlipp, L.

Lloyd of Hampstead, L.

Wallace of Coslany, L.

David, B.

McCluskey, L.

Wells-Pestell, L. [Teller.]

Davies of Leek, L.

Mackie of Benshie, L.

White, B.

Donaldson of Kingsbridge, L.

Meston, L.

Wigoder, L.

Galpern, L,

Mishcon, L.

Winterbottom, L.

Gardiner, L.

Murray of Gravesend, L.

Wootton of Abinger, B.

Gordon-Walker, L.

Peart, L.

Wynne-Jones, L.

NOT-CONTENTS

Abinger, L.

Ferrers, E.

Nugent of Guildford, L.

Airey of Abingdon, B.

Fortescue, E.

O'Brien of Lothbury, L.

Alanbrooke, V.

Gainford, L.

Orr-Ewing, L.

Alexander of Tunis, E.

Galloway, E.

Rankeillour, L.

Alport, L.

Garner, L.

Redmayne, L.

Amherst of Hackney, L.

Gibson-Watt, L.

Reigate, L.

Ampthill, L.

Glasgow, E.

Ridley, V.

Balerno, L.

Glenkinglas, L.

St. Aldwyn, E.

Belstead, L.

Gray, L.

St. John of Bletso, L.

Berkeley, B.

Gridley, L.

Sandys, L. [Teller.]

Bessborough, E.

Hailsham of Saint Marylebone,

Selkirk, E.

Burton, L.

L. (L. Chancellor.)

Sempill, Ly.

Caccia, L.

Hanworth, V.

Skelmersdale, L.

Cathcart, E.

Hatherton, L.

Spens, L.

Clitheroe, L.

Hawke, L.

Strathclyde, L.

Cockfield, L.

Home of the Hirsel, L.

Strathspey, L.

Cork and Orrery, E.

Ilchester, E.

Sudeley, L.

Craigavon, V.

Inchyra, L.

Thorneycroft, L.

Cullen of Ashbourne, L.

Kilbrandon, L.

Trefgarne, L.

Davidson, V.

Kinnoull, E.

Trenchard, L.

de Clifford, L.

Long, V.

Tweedsmuir, L.

Denham, L. [Teller.]

Lucas of Chilworth, L.

Vaux of Harrowden, L.

Drumalbyn, L.

Lyell, L.

Vickers, B.

Dundee, E.

Mackay of Clashfern, L.

Vivian, L.

Ellenborough, L.

Mansfield, E.

Westbury, L.

Elliot of Harwood, B.

Massereene and Ferrard, V.

Young, B.

Emmet of Amberley, B.

Mowbray and Stourton, L.

Exeter, M.

Northchurch, B.

On Question, Motion agreed to.

Clause 9 [Police liberation or detention of children arrested]:
5 p.m.
The Earl of MANSFIELD The Earl of MANSFIELD moved Amendment No. 7:
Page 9, line 8, after ("diet") insert ("(including any continuation of the diet)").
Clause 10 [Sittings of sheriff and district courts]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 8:
Page 9, line 38, at end insert—
("(5) Whenever a court holiday is prescribed to occur on a Friday or a Monday with the result that the court would not sit on any of three consecutive days, the sheriff principal shall make arrangements for a court within the sheriffdom to sit at least once during such three days to entertain applications for release on bail.").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 8. Again, this was a matter which was fully explained in Committee and for that reason I can deal with it very briefly indeed. As your Lordships will appreciate
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this is a different matter from the matter we have dealt with hitherto, the question of bail. The position simply is that because the courts are no longer to be required to sit on a Saturday persons may find themselves in prison awaiting their first appearance before the court for a period extending from a Friday night until a Monday morning, instead of, as hitherto, from Friday night until Saturday morning. Therefore, because of the abolition of the Saturday morning sitting, the period in prison awaiting first appearance before the court is extended.
We accept that as a regrettable necessity, but if one also adds to that two-day period at the weekend a holiday which occurs on a Monday, one finds that the person arrested on a Friday night has to wait until Tuesday before he gets his first chance of appearing before the court and applying for liberation. Equally, if the holiday occurs on a Friday and he is arrested on a Thursday, he has to wait until Monday, three whole days.
I am not suggesting that my drafting is necessarily perfect here. What I do suggest is that there is a problem here which the Bill does not properly solve. I invite the Government to accept this particular amendment as being one way of solving it.
Your Lordships may recall that, regrettably, earlier this year we had a strike

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in Scotland which affected the courts, and during the period of the strike emergency arrangements were made, which worked very well, to deal with emergency cases. Surely some such arrangements could be devised by the sheriff principal in order to deal with those persons who have to face a three-day wait before they can make their first appearance before the court. That is all I ask, and I beg to move this amendment in order to achieve it.
Lord MACKAY of CLASHFERN: My Lords, the Bill as it stands contains ample power for the court to make the necessary arrangements because the court is entitled to sit on any day for the disposal of criminal business. Therefore, any special circumstances can be the subject of special arrangements. I would respectfully suggest to your Lordships that the matter is better left that way, with the sheriff principal in special circumstances having the responsibility of making special arrangements rather than attempting to lay down such rules as are before us. The rules that the noble and learned Lord has suggested could give rise to many practical difficulties; for example, the sheriff having a court in Aberdeen to deal with people who may be in much remoter parts of his sheriffdom, such as Benbecula or Stornoway. I respectfully submit that discretion is the better arrangement here.
Lord McCLUSKEY: My Lords, I do not propose to press this amendment to a Division. I regret that something has not been done in the Bill, but I hope and trust that the sheriff principals in Scotland will read what the noble and learned Lord has said here and what was said in Committee, and that when they find this situation arising—as it may rarely do, but it will arise from time to time— they will make special emergency arrangements under their general power in order to prevent the detention in custody for unduly long periods of people who have not yet faced any charge. With your Lordships' leave, I beg to withdraw this amendment.
Amendment, by leave, withdrawn.
Clause 11 [Interpretation]:
Lord MACKAY of CLASHFERN Lord MACKAY of CLASHFERN moved Amendment No. 9:
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Page 9, line 44, at end insert (""diet" includes any continuation of a diet.").
Clause 13 [Short title, commencement and extent]:
The Earl of MANSFIELD The Earl of MANSFIELD moved Amendment No. 10:
Page 10, line 19, leave out from ("instrument") to end of line 20.
The noble Earl said: My Lords, in effect, this amendment is in response to one proposed by the noble and learned Lord, Lord McCluskey, in Committee. He took exception to the opening words of the first clause of the Bill:
"After the commencement of this Act"
on the grounds that different parts of the Act might be commenced on different days. This amendment would provide that the whole Act would be brought into effect at once on a day fixed by the Secretary of State by statutory instrument. The Bill includes a reform of bail arrangements, and the abolition of mandatory court sittings on Saturdays, and because they are closely linked and we do not contemplate bringing one part of the package into effect without the other, the words which the amendment would delete are unnecessary and, as the noble and learned Lord has pointed out, conflict with the beginning of Clause 1. I beg to move.
Lord McCLUSKEY: My Lords, this is the last time that I shall be on my feet. I should like to acknowledge that the Government have met the criticism that I made, and I respectfully say so, in the most sensible way. With your Lordships' leave —because I shall probably not be available when this Bill comes up for its Third Reading—may I take advantage of this last occasion when I am speaking on Report to thank the Ministers for their courtesy and help and for meeting some at least of my points. I regret that they did not meet the main point, but I trust that the new system will work as well as we all hope it will, and I trust that in due course the House will give the Bill a Third Reading.

BILL OF RIGHTS BILL [H.L.]
5.6 p.m.
Lord WADE: My Lords, I beg to move that this Bill be now read a third time. This is an occasion for appropriate thanks to be expressed to all those who have taken part in the debates on the Bill, and that I gladly do. But more than conventional thanks are called for today. I have not only appreciated the courtesy that I have learnt to expect in this House, but I have felt greatly indebted to the constructive and helpful criticisms that have come both from those who are doubtful about the Bill and from those who support the Bill. At the same time, I think that a few words of gratitude should be expressed to my colleagues on the Select Committee for the work that they did which lasted for over a year. I have recently been told that the report and the volume of evidence, including that given by the noble and learned Lord the Lord Chancellor, is now compulsory reading for students in some establishments of higher education. What the students have to say about that I do not know, but the information might be of interest to those who served on the Select Committee.
As your Lordships know, there has been a great deal of literature written about this subject. Lectures have been given—including the great one by the noble and learned Lord the Lord Chancellor—books have been written and various other documents have been produced. In steering this Bill through the House, I have tried to avoid oversimplification, on the one hand, and excessive legal complexities on the other. I hope that I have not erred too much one way or the other.
At this final stage, I hesitate to arouse any question of controversy, but I respectfully suggest that some of the doubts that have been expressed about the Bill should have been directed to the signing and ratification of the European Convention rather than to the Bill. It was at the time of ratification that the vital step was taken, in particular when the high contracting parties—in our case that means the United Kingdom Government—under Article 1 undertook:
"To secure to everyone within their jurisdiction the rights and freedoms defined in Section 1 of the Convention".
912
To give added strength and meaning to that undertaking is the purpose of this Bill. That is what the Bill is all about.
There are, of course, constitutional implications. I have certainly not overlooked the proposal for an all-party conference. I have already said that that is being seriously considered. However, there is just one point I would make, and this is on my own responsibility. It is conceivable that difficulties may arise in achieving agreement on the terms of reference for such a conference, but I hope that no insuperable obstacles in that respect will arise. My immediate task today is to speed this Bill on its way to another place. I trust that the Members of another place will pay due regard to the great amount of time and effort spent by Members of this House on this subject.
I do not claim that this Bill will remove all the imperfections of our parliamentary system. For example, the noble Lord, Lord Carr of Hadley, brought out this point in the Second Reading debate. In supporting this Bill, he referred to four ways of gaining protection against the dangers of an elective dictatorship. His first was electoral reform for the Commons. I think he gave that top priority. Perhaps you will not be surprised to hear that I am inclined to agree with him. But, in support of this Bill, I would suggest that it could have an important psychological as well as legal effect if the Bill is placed on the statute book. In my view, any Government responsive at all to public opinion would hesitate before riding roughshod over the provision of this Bill.
Much has been said during these debates. I have been involved in it for three years now in this House. There is little to say that has not already been said, but in conclusion might I add a note of some historical interest. The well-known Bill of Rights of 1689 passed its Third Reading in this House on 23rd November 1689. Incidentally, that information was kindly provided for me by the Library of the House of Lords. I would not like it to be thought that I go around carrying all these dates in my mind. On 23rd November 1689 the Bill of Rights was passed, and it received its Royal Assent on 16th December of that year. That is approximately 290 years ago.

913
At the beginning of the last century an important Bill dealing with habeas corpus—not actually called a Bill of Rights—was passed. It received the Royal Assent on 1st July 1816. I hope that the noble and learned Lord the Lord Chancellor is not going to catch me out on these dates. Of course it passed through both Houses of Parliament before receiving the Royal Assent. In the latter part of this century, several attempts were made to get a liberty of the subject Bill accepted and, more recently, drafts of a Bill of Rights by myself and by others have been introduced. But this is the first time since 1689 that a Bill of Rights has reached the stage of Third Reading in your Lordships' House. I should, therefore, naturally rejoice and feel it a privilege if this Bill is given a Third Reading today, and in due course is sent on its way to the House of Commons. I beg to move.
Moved, That the Bill be now read 3a. —(Lord Wade.)
5.15 p.m.
Lord BOSTON of FAVERSHAM: My Lords, I shall detain your Lordships for only a minute or two, but lest it should be thought that silence from this particular Dispatch Box indicates a lack of interest in this important subject on this Bench, I intervene first to reassure your Lordships, and to confirm that we do indeed regard this whole matter of the protection and the advancement of human rights as of immense importance. Secondly, I recall that we have—especially my noble and learned friend Lord Elwyn-Jones—argued on previous occasions that we are not able to support this Bill of the noble Lord, Lord Wade, and incorporation of the European Convention on Human Rights into our law, because we have taken the view, and I am afraid still do, that we do not regard this as the best nor even a satisfactory way of advancing the cause of human rights.
So far as the advancement and protection are concerned, this is indeed something on which we are, all of us, united, whatever our view on incorporation and the Bill itself. If I were to use this particular occasion to repeat those arguments at any greater length today at this late stage in the passage of this Bill through your Lordships' House, I think that I might indeed
914
be in danger of infringing your Lordships' own human rights. Therefore, I shall detain your Lordships only to offer warm congratulations to the noble Lord, Lord Wade, on having piloted his Bill successfully as far as this through what have undoubtedly been difficult waters both here and in the Select Committee itself, and in a way which has made the voyage a pleasant one indeed, even if for some of us the ultimate destination would involve us in perhaps too much of a mystery tour or —not to labour the point too much, but to put it in another way—introduce a little too much uncertainty into our law. We on this Bench wholeheartedly and most warmly congratulate the noble Lord, Lord Wade, on his conduct of this Bill through your Lordships' House. Certainly, we on this Bench would not wish to stand in the way of its receiving a Third Reading, should that be your Lordships' wish.
5.19 p.m.
Lord MACK AY of CLASHFERN: My Lords, I too should like to join in paying tribute to the noble Lord, Lord Wade, who has, with such skill and perseverance, at the third attempt successfully guided this Bill through all its stages in your Lordships' House. I am indebted to him, as I am sure we all are, for the valuable contribution that has been made to the wider debate about the very necessary protection of the rights of the individual in our country.
The Government are committed, as my noble and learned friend the Lord Chancellor made clear at the Second Reading, to try to pursue this wider debate through the medium of all-party talks. I think that matters are at too early a stage for it to be useful for us to discuss the substance of the proposed talks today, but, as your Lordships are aware, the Lord Chancellor has already embarked, with the Opposition party leaders in your Lordships' House, on the first tentative steps towards such talks. If we are successful in getting these talks off the ground, we shall be in the happy position of having Lord Wade's hard work available to us at the outset, along with the valuable contributions of those other noble Lords who have taken part in the debates and in the Select Committee. I should like particularly to pay tribute on this occasion—not denigrating anyone else—to the work of my

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noble friend Lord Morris, who proposed amendments at the Report stage which commended themselves to your Lordships' House.
As to the Bill's future, that is of course a matter for the noble Lord, Lord Wade, and he has already spoken somewhat of that, but I think it would be only fair to repeat the vivid words about "an icicle in June" used by the noble and learned Lord, the Lord Chancellor on Second Reading when he said he could not see the smallest chance of the Bill finding sufficient Parliamentary time in another place to reach the statute book this Session. Having said that, I would add that I do not believe for a moment that noble Lords, and in particular Lord Wade, have wasted their time on this Bill. There are inevitably major problems involved in a Bill of this sort and though I would not suggest that Lord Wade has found answers to all of them, the discussions on the Bill have clearly taken us a long way down the road in many respects and perhaps highlighted quite a number of new problems for us, and for that I am sure we are all very much indebted to the noble Lord.
Lord WADE: My Lords, I am very grateful for the kind remarks that have been made. I shall resist the temptation to say anything more except that I hope the Bill will receive your Lordships' approval and be read a third time.
On Question, Bill read 3a, and passed, and sent to the Commons.

ISLE OF MAN BILL
Lord BELSTEAD: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Belstead).

REPRESENTATION OF THE PEOPLE (AMENDMENT) REGULATIONS 1979
5.23 p.m.
Lord BELSTEAD Lord BELSTEAD rose to move, That the regulations laid before the House on 22nd November, be approved. The noble Lord said: My Lords, it might be for the convenience of the House if I were to speak to all three sets of regulation which are on the Order Paper. Noble Lords will have observed that the provisions of all three sets are substantially the same. All the regulations amend existing regulations so as to remove the requirement that the names of Service voters and merchant seamen should be marked on the register respectively with the letters "S" and "M" against their names. As I am sure noble Lords are aware, there has been concern for some time among Servicemen and their families, that they are indentified by this marking. The fact that this dislike exists is in itself an impediment to electoral registration and, if Parliament agrees the regulations, I hope this will provide an encouragement for Service voters to register in greater numbers.
Noble Lords will also be aware of the concern generally that is felt by Servicemen and their families about voting arrangements. There will in fact be an opportunity for the House to consider this during the debate next week on the Second Reading of the Representation of the People Bill which is to be introduced by the noble Lord, Lord Lloyd of Kilgerran. I shall only say now that the Government fully acknowledge that concern and are glad of the opportunity both in that Bill and in these regulations to improve the electoral registration system for Service personnel and their spouces. I should also like to express our gratitude to those organisations, including for example all the trade unions and staff associations representing merchant seamen, who took a constructive part in the consultations we have had on this matter.
The second effect of the regulations applying to England, Wales and Scotland, but not Northern Ireland where there are no similar bodies, is that parish and community councils are added to those who are entitled to receive free extracts from the electoral register. At present, Members of Parliament, prospective

917
parliamentary candidates and their agents may receive free copies of the whole register and, in respect of their particular areas, local councillors and local election candidates or agents may receive extracts. The National Association of Local Councils have represented for some time that such free copies should also be made available to parish and community councils. The Government, recognising the value and importance of local councils, accept this and have incorporated their proposal in these regulations.
Those bodies entitled to a limited number of free copies may purchase, if there are sufficient available, extra copies at a special rate of 10p per 1,000 or part of 1,000 names; we do not propose to change that fee. But the third part of the regulations is a proposal to increase the fee for copies of the register to persons who do not qualify for free or discounted copies—for example, mail order firms and market research organisations—from 50p to £1 for 1,000 names. This is partly to compensate for inflation since the fee was last fixed two years ago but also because the Government do not see why central and local government, who produce the register for electoral, not commercial, purposes, and who bear equally the costs of electoral registration through the rate support grant system, should be asked to subsidise the private sector in this way. Ideally, we favour a discretion to each local authority to fix its own fees, as the costs of production of the register vary widely from area to area, but that would require substantive legislation for which there is no prospect in the present Session. In the meantime, therefore, we are proposing an increase in the fees so that local authorities may at least have some realistic reimbursement.
Moved, That the regulations laid before the House on 22nd November, be approved. —(Lord Belstead.)
5.28 p.m.
Lord BOSTON of FAVERSHAM: My Lords, I thank the noble Lord, Lord Belstead, for explaining these regulations. The argument that on grounds of security the letter "S" should be removed from the names of Service voters on the electoral register is very strong. In some ways I suppose some people might feel it rather a pity to lose that indication, and the letter
918
"M" from alongside merchant seamen's names, because it helps to draw to people's attention, including political campaigners, the need to ensure, for example, that any necessary help is given to electors in arranging postal and proxy votes. However, there is also the argument against those designations being continued in the register, that it is only in the case of Service voters and merchant seamen that occupation is mentioned and that either occupations should be given in all cases or in none at all, and there remain the overriding considerations of security which the noble Lord mentioned. I should perhaps say that I have spoken to my noble friend Lord Blease, who would wish to be associated with the point about security, especially in relation to Northern Ireland.
So far as the provision in the regulations for free copies of the register, or part of it, is concerned, that seems wholly admirable. As for the proposal for increased charges in the way Lord Belstead described, perhaps that can hardly be described as admirable, particularly by those who are likely to be affected, but it is undoubtedly a fact of life and it probably is right that there should not be a subsidy out of public funds for those particular, and especially commercial, purposes. It is not of course possible to amend the regulations, so they have to be accepted in their entirety or not at all, and especially in view of the security argument advanced, with which I certainly wholly agree, we on this Bench would not wish to stand in the way of the reglations.
Lord BANKS: My Lords, I should like to join in thanking the noble Lord, Lord Belstead, for his explanation of the regulations, and I wish briefly to say that we on these Benches fully support the three sets of regulations. The Represention of the People (Armed Forces) Bill [H.L.], which was introduced into this House by my noble friend Lord Lloyd of Kilgerran, would have allowed Service spouses to choose whether or not to be registered as Service voters, and so would have gone part of the way to doing what these regulations will do. As the noble Lord, Lord Belstead, has indicated, my noble friend will next week be sponsoring another Bill in place of that one, but I am glad that these regulations cover that part of the Bill which he originally introduced. He introduced that Bill because of the great

919
concern expressed to him by Service spouses on the security grounds which have been referred to already this afternoon, and I am glad that this matter is now dealt with in these regulations. I welcome, too, the importance which the Government attach to parish and community councils by providing for them to receive a copy of the register without fee.
Lord BELSTEAD: My Lords, I am grateful to both noble Lords for the welcome that they have given to the regulations.

REPRESENTATION OF THE PEOPLE (SCOTLAND) AMENDMENT REGULATIONS 1979
Lord BELSTEAD: My Lords, I beg to move that the regulations laid before the House on 21st November, be approved. —(Lord Belstead.)
REPRESENTATION OF THE PEOPLE (NORTHERN IRELAND) (AMENDMENT) REGULATIONS 1979
Lord BELSTED: My Lords, I beg to move that the regulations laid before the House on 27th November, be approved.— (Lord Belstead.)

ECC 8th REPORT: CONSUMER CREDIT LAWS
5.32 p.m.
Lord SAINSBURY Lord SAINSBURY rose to move, That this House takes note of the 8th Report of the European Communities Committee on the approximation of the laws of Member States, relating to Consumer Credit (5147/79) (H.L. 30). The noble Lord said: My Lords, this report is on the draft Directive on Consumer Credit, and I feel that, as on previous occasions, I have to apologise for the complexity of the subject matter, which has so many legal impliactions. It requires a lawyer's mind, which I have not got, but the
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committee was most fortunate in having the advice and guidance of Miss Smith, formerly legal assistant in Sir Charles Sopwith's office. Our report was published, as your Lordships will be aware, in July—too late for debate before the Summer Recess, during which time most of us had other things to think about.
Before dealing briefly with the report itself, may I, by way of introduction, refer to a recent survey by the Office of Fair Trading, which states that there has been a massive increase in the number of people using credit during the 1970s. A survey in 1969 showed that only 22 per cent, of adults were using some type of credit, while by 1977, 54 per cent, were using credit facilities. The number is undoubtedly growing all the time, and therefore consumer protection from unfair conditions of credit is of real concern to an ever-increasing number of people.
Turning now to the report itself, the committee fully endorse the aim of ensuring a minimum standard of protection for consumers throughout the community. In other words, we support the underlying principles of the draft Directive. Our main criticism is confined to the way the proposal attempts to put the harmonisation of consumer credit legislation into effect.
Most of the provisions in the draft Directive have their origins in the United Kingdom Consumer Credit Act of 1974. However, if the proposal in its current form were adopted, it would introduce rules and concepts which would be unworkable in practice, and which would actually impede the implementation of the United Kingdom Act. Our view is that the proposal should be confined to general statements of principle, and less formal means should be adopted for ensuring that these are put into practice.
I should now like to mention one or two of our specific criticisms. First, there is the usual problem we have in many Directives—that of definitions: in particular the definition of the terms "consumer", (which differs from that in the United Kingdom Act), "effective annual rate of interest" and "credit agreement." We are worried that the latter term, as defined in the proposal, would include purchases made with credit cards, such as Access or Barclaycard. As the proposal

921
stands, credit card transactions would have to be in writing, signed by both parties, and contain details of the credit given with related charges. This would clearly not be practicable in view of the large numbers of purchases made with credit cards. As we state in paragraph 13 of the report,
"The Committee can see no benefit to the consumer in such a result, and do not believe that it would work in practice. The consequence might be a grave disservice to the consumer if the use of credit cards were curtailed".
We were concerned that the draft Directive would not apply to agreements where the loan has to be repaid within three months. The consumers in the European Community Group gave evidence that considerable hardship could be suffered by consumers under short-term loans, often by small money-lending businesses, with repayment periods of as little as eight to 10 weeks at very high rates of interest. These would escape the provisions of the Directive, and the CECG said that they felt most strongly that to exempt such agreements was inappropriate and that a number of payments restriction would be a much fairer way.
Another matter of great concern is that no exemption is made in the Directive for certain low rate, essentially noncommercial agreements. This would create difficulties for organisations such as credit unions. These are voluntary savings and loan co-operatives which may not, by law, charge more than 1 per cent, a month in interest and are almost entirely run by volunteers. The Directive would lead to a great deal of extra paper-work which, we were told, would seriously interfere with the voluntary work of these organisations. The consumer is unlikely to be at risk under such agreements, and we therefore recommend that such low rate, non-commercial agreements should be exempted from the proposals' provisions.
The British Bankers' Association, in a written submission of evidence, expressed their concern about the requirement that consumers be informed in writing whenever there is a change in the rate of interest or the charges under an overdraft agreement. They state:
"Whilst it is fair and reasonable to reply to a consumer when he specifically requests information, it is an unnecessary burden to be obliged to
922
do so upon every occasion regardless of whether the consumer requires the information".
The committee considered this requirement to be unduly onerous, and felt that it could discourage banks from extending overdraft facilities.
There are many other detailed matters in the Directive that I could mention, but I do not want to speak too long and weary your Lordships. I am sure other speakers will cover the points which I have not covered. However, I should like to call your Lordships' attention to a matter which has arisen since the report was published. The chairman of the Mail Order Traders' Association has pointed out that there is no mention in the report of the problems of purchases under running accounts agreements, and the association would like the remarks in paragraph 13 of the report, which deals with credit card purchases, extended to cover running accounts purchases. Perhaps the noble Lord speaking on behalf of Her Majesty's Government would deal with this point, of which I have given him prior notice.
The Mail Order Traders' Association are also worried that the activities of mail order agents would be adversely affected by the committee's suggested rewording of Article 4 of the Directive. Article 4 in its present form allows,
"Member States to prohibit unsolicited visits".
In the report we recommend that the article be revised to read,
"Member States shall either regulate or prohibit unsolicited visits to a consumer at his home…".
We think that the association's anxiety is unjustified because the suggested revision, in addition to guaranteeing at least some protection to the consumer, leaves it to the Member State to decide what degree of protection is appropriate.
Before concluding, I should also like to mention the suggestion made by a witness from the Consumers in the European Community Group which the committee is recommending for consideration. This is that before a Directive is adopted each national Government should state, before final approval of that Directive, how they intend to implement it, either in an annexe to the Directive or in the Minutes of the Council of Ministers. In this way national Governments and the

923
Commission could discuss whether or not proposed legislation appeared likely to put into effect the general principles laid down in the Directive.
My Lords, the problem is not new. It has arisen in relation to other Directives. The point at issue is how harmonisation Directives can be both detailed enough to bring about genuinely harmonised standards in Member States but not so detailed or specific that laws have to be unnecessarily amended. It is a question of balance between general statements of principle and excessively detailed requirements, as proposed in this draft Directive. My Lords, I beg to move.
Moved, That this House takes note of the 8th Report of the European Communities Committee on the approximation of the laws of Member States relating to Consumer Credit (5147/79) (H.L. 30). —(Lord Sainsbury.)
5.47 p.m.
Baroness SEEAR: My Lords, it would be unwise for anyone speaking after so great an expert on this subject as the noble Lord, Lord Sainsbury, to go in great detail into the terms of the Directive, for it is a highly technical matter and he has explained its limitations and its strengths in a way that no one else in your Lordships' House, I think, could rival. I want to concentrate on the last point that he raised. Of course, nobody can be against the idea of protecting consumers in the area of consumer credit. The objectives of the Directive must be unchallengeable. But I think I have spoken in the majority, at any rate, of the debates on EEC reports, and on nearly every occasion I think we have had to say that the detail of the Directive is absurd in relation to the objective to be achieved. We have reminded ourselves again and again that a Directive is not a regulation; that, if it is supposed to contain a great deal of detail, this should be laid down in a regulation; and that the whole purpose of a Directive, in the wording of the Commission itself, is that it should declare the intention and leave to the different countries the detail as to how that objective is to be achieved.
We have said this again and again; and what I want to say to your Lordships this evening is that surely we could not have a
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better case than this for saying that we want to challenge the way in which Directives are coming forward. This is not a highly political matter; it is not a highly sensitive matter which is going to arouse a great deal of political animosity. That is the last thing we want to do in relation to the EEC at the moment. This is a perfect case for testing this matter, because we already have our own legislation. I understand from the noble Lord, Lord Sainsbury, that in fact our own legislation was drawn on in order to formulate the Directive. What could be more transparently ridiculous than, they having done that, we should then have to go to a great deal of expense and trouble to adjust back our legislation (which, so to speak, taught them their business, if I may be permitted to sound a little chauvinistic, although I am not in the least) in order to satisfy this Directive?
I implore your Lordships and the Government that we should not go on doing this. Let us take this case. How can we, not just go on talking about it in your Lordships' House but bring pressure to bear in Brussels so as to stop this happening? I do not know; it may be that the appropriate member of Government could talk to Mr. Roy Jenkins and say that this is ridiculous, that it is contrary to what the Commission is supposed to do in terms of the nature of Directives and that we want to find a better way. This kind of thing—and I speak as an absolutely committed European—is doing more harm to the standing of the European Community in this country than many other issues of far greater importance. If the anti-marketeers had set out to find a way of discrediting the Community they could not do better than produce some of the draft Directives that we have had before the House.
Can we not really this time, instead of just deploring it, do something? One possibility is that the Government should take it up with the Commission. I do not know the procedure, I do not know whether it is right to go to Mr. Roy Jenkins, but I should have thought it quite likely to be right; but if not to him alone, why not to him as well? I regret that the noble Lord, Lord Bethell, is not present. I was hoping that he would be here when we had this debate. We now have MEPs and in this House we

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have MEPs overlapping with membership of this House. Is this an appropriate matter to take up and push through the European Parliament? All that I am saying is this. Do not let us go on again wringing our hands and doing nothing.
Here in this report we seem to have, as the noble Lord, Lord Sainsbury, pointed out, in paragraph 29 two suggestions as to how we can overcome this nonsense. Can the noble Lord, Lord Lyell, give an undertaking that on this something will be done? The suggestion in the report is:
"… before a directive is adopted Member-States should state how they intend to implement that particular directive".
That is what Directives are supposed to be about, the report goes on:
"It would then be possible for the Council to determine whether particular proposed implementing legislation would in fact fulfil the purpose of the directive …".
Surely there is a line of action that can be pursued as a possible solution to the problem. It would be a valuable debate tonight, if, as the result of it, we resolved this time that we are going to take it up at the right level and do something about it.
5.52 p.m.
The Earl of CAITHNESS: My Lords, I support fully the words of the noble Baroness who has just spoken on this matter; but we have the report so I am going to go into some detail and shall run the risk of competing with the noble Lord, Lord Sainsbury. We are grateful to the noble Lord, Lord Sainsbury, not only for the work he has done in preparing this report on such a technical matter but also for raising it in your Lordships' House tonight. I should like to speak briefly to certain points raised by the draft Directive. I believe it is fundamental to any consideration of a Directive that, in the first place, everyone understands what is meant by the key terms. Definitions that are precise and will be interpreted in the same way by all Member States are essential to the sensible working of this Directive. This also forms the basis of harmonisation; but it soon became clear in evidence to the committee that the definitions in this Directive were open to different interpretations and, therefore, unless there are a number of changes to the document, it will not achieve the purpose for which it is designed.
926
For a start, the definition of "consumer" is complicated by the word "predominantly". This is misleading and I agree with the evidence that a change to the definition used in our 1974 Consumer Credit Act would be beneficial. The definition of "credit agreement" (Article 1.2(c)) is clearly capable of two meanings, as was pointed out in evidence which your Lordships will find on page 14 of our report. This is a point that must be clarified before the Directive is implemented. Next comes the difference in meaning between "effective annual rate of interest" and "annual rate of interest." This was a point that the noble Lord, Lord Sainsbury, raised. I am sure that your Lordships will be aware of the problem when you read Article 6. Paragraph 2(a)(iii) refers to the "effective annual rate of interest"; but paragraph (b) (iii), which relates to credit cards, refers to the "annual rate of interest"; and paragraph (c) refers to the "annual rate of interest and any other charges" as well as "the effective annual rate of interest". Evidently, there is a need for redrafting on these points in order to clarify exactly what is meant.
My Lords, it is probably unusual to wish to add to Directives from Brussels but there is a need to do so when it comes to defining supplier and retailer. Perhaps I can illustrate it in this way. If I go into a shop to purchase a television but cannot afford to pay for it, there are two ways of surmounting the problem. Icould arrange a personal loan from, say, a finance house. The money is lent to me; I purchase the television and, in this instance, the supplier is the same as the retailer. However, the retailer could say to me that he has a better agreement with the same finance house and it would be beneficial to me to use his hire purchase agreement. What, in effect, happens here is that the retailer sells the television to the finance house and I buy it from them. The finance house, therefore, becomes the supplier and is a different entity from the retailer.
Now, my Lords, what happens when the television goes wrong? Where is my redress in the second example? Is it with the finance house as the supplier or is it with the retailer? The Directive does not make this clear but it is basic drafting to differentiate between the two as this has a direct effect on the interpretation

927
of Articles 1.3 and 13.Perhaps my noble friend Lord Lyell would care to comment on this on behalf of the Government in due course.
My Lords, I now move on to another point mentioned by the noble Lord, Lord Sainsbury: Article 1(3)(b) relating to credit cards. At the moment, the Directive equates transactions under a bank credit card with the credit agreement itself. I understand that the credit card is basically an Anglo-American invention and is not widely used in Europe. Therefore, there is some difficulty in understanding the way it works and its benefits. Under the Directive every retail establishment—and there are in this country over 140,000 which use credit cards—would need to display detailed information concerning the various credit cards accepted and provide quotations on request. Every transaction would be subject to a long and complicated written agreement signed by both parties and containing a considerable amount of detail about the credit itself. In effect, the credit card system which we know would become virtually inoperable and this would have enormous repercussions throughout the country. I understand that there are negotiations in progress on the redrafting of this clause, not so as to make the credit cards above the law or exempt them from certain provisions of the Directive but just so as to allow us to continue to use them on the same basis as at present. Can the Government confirm that they are in agreement on this point and that they are supporting the negotiations taking place in Brussels at the moment?
There are a number of other points of importance that the committee raise. I should like to draw your Lordships' attention to two of them. First, in Article 4, the words "may prohibit unsolicited visits" should be changed to "may prohibit or regulate unsolicited visits", for obvious reasons. Secondly, it is envisaged that Member-States shall implement the necessary measures to comply with this Directive within 18 months. I appreciate that not all Member-States will wish to introduce legislation running to a basic 193 sections and five schedules as in our 1974 Act. But this matter is so technical that at least three years should be allowed for implementation.
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I believe that the Directive strikes the right balance between broad principles and detail and that, with certain amendments, it could prove beneficial, particularly if credit on an intra-Community scale increases. However, before that happens, it is fundamental to obtain unanimity on the definition and interpretation of the key words and phrases.
6 p.m.
Lord GORDON-WALKER: My Lords, I think we all have to thank our Select Committee for this report on consumer credit. I do not know how we could keep up with or even understand the EEC Commission reports but for our Select Committee. Because the Select Committee reports are so good and because we have a reasonable time to debate them —although, sometimes, we could perhaps do it a little earlier in the evening—I think that we have a considerable advantage over the other place. We make an important contribution to the discussions of this Commission's draft resolutions.
I should like to thank the noble Lord, Lord Sainsbury, for his very clear exposition of the report to the committee, of which he was the chairman. So thorough was his report that I only want to make a few general points. I do not want to cover the whole general ground again. The draft Directive is under Article 100 of the EEC treaty. This article is extremely wide and it should be used by the Commission with very great care and caution. All sorts of slight divergencies in the legislation of the various Member States could, to quote the terms of Article 100,
"… influence the free movement of goods and services".
The wide terms of Article 10 might mean or lead to the Commission sorting out matters to harmonise which could often achieve very little and cause a lot of concern and trouble. This has happened on a number of occasions.
This particular draft Directive is on the right side of the line but not by a very large margin. I do not think that it is as important as all that. The noble Earl, Lord Caithness, referred to definitions. I agree very much with what he said. It is a grave defect of a number of Directives—including this one—that they have either vague definitions or sometimes

929
no definitions at all. I agree with the noble Earl that there is no proper definition of the key word of this draft Directive, which is the word "consumer". It depends, as he said, on the very vague and undefined term, "predominantly". It takes the courts months to discuss what "predominantly" means. He said that there is no definition of another very important term, "the annual rate of interest".
I should like to turn briefly to two fundamental criticisms of the draft Directive which were made in evidence given to our Select Committee. First, the evidence by the Finance Houses Association (which appeared on page 20) which said:
"…this type of legislation may be striving towards an impossible goal, given differences in language and interpretation … and differences in trading concepts within member-States".
This seems to go so far that as it stands it would make almost all harmonisation impossible; but none the less there is some force in this argument. Member States do have different deep-rooted customs, traditions and histories. The supporters of supranationalism in the Community go much too far in favour of the concentration of power against Member States. In my view, there is no future in such notions as federation or confederation, though I have never understood the difference between the two. Such ideas seem to me impossible of achievement; it would involve an exercise of power over Member States which could never be tolerated by great and traditional nation-States.
Nowhere else in the world is there a close community of this kind consisting of independent and ancient nations. This does not mean that no progress towards greater union can be made; but it means that we must find a new type of evolution towards closer union than has been discussed in the main in the past, something which perhaps could be called parallel development. I do not think that the Community should attempt the impossible task of imposing rule over Member States. Its aim should be to achieve power about equal to those of the major States in the Community. The power of the Community and the power of Member States should then be exercised in parallel, not one over the other.
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This brings me to the second fundamental criticism in the evidence given before the Select Committee, this time by the Consumer Credit Association of the United Kingdom. At page 38 the Association quotes from the Directive as follows:
"… the provisions of the Directive can only be minimum provisions … member-States must be allowed to adopt more stringent provisions".
Then the Association goes on to comment on this:
"—which statement removes any likelihood of effective harmonisation and in our view, renders the whole exercise pointless".
That is a very strongly expressed view. In my opinion, on the other hand, the Commission's proposals for minimum provisions are the right way to proceed. It is an example of what I have called "parallel development". The Commission has a proper role in attempting to raise the general standards of consumer protection in the Community while leaving Member States like ourselves to achieve higher than these minimum standards. Therefore, while agreeing that the points in the Directive criticised in the report of the Select Committee should be amended or in proper cases eliminated, I support the recommendation of my noble friend Lord Sainsbury and the Select Committee that we should accept the general framework, the underlying principles and the approach of the Commission's draft Directive.
6.6 p.m.
Lord MOTTISTONE: My Lords, I should like to thank very much my noble friend—if I may so describe him in these circumstances of the EEC scrutiny committee— Lord Sainsbury for introducing this Motion, and also for the skill and wisdom with which he chaired the subcommittee which examined this problem on behalf of the Select Committee. It seemed to me that in the first instance this particular Directive must have been introduced because there was a need for it on the Continent of Europe. Sometimes—particularly in relation to consumer affairs—in this country we tend to forget that we have a common border in Ireland with other Community Members and we tend perhaps not to see quite as clearly as those which have their countries adjacent to one another the fact that they are sharing all sorts of services like shops,

931
credit arrangements, advertisements and newspapers on the borders between these countries. So it seems to me that perhaps this was the reason for having this Directive.
If it was not that, it seems such a puzzling Directive because it seems to learn from our Consumer Credit Act, but then to proceed to turn it upside down. Here I strongly agree with the noble Baroness, Lady Seear, that the Directive, as it turns out, is calculated to add fuel to the fire of the people who are against the Community because it seems such nonsense when translated into our terms. Therefore, it does much more harm to the Community than it should do, because people just cannot understand it.
With that background, it seems to me that it must be something to do with the Continent of Europe that was the cause of this. It was with that in mind that on page 5 of the report, in Question 19—and I shall read parts of it for the benefit of those who do not have the report—I asked the Department of Trade representative:
"Is this, when it comes into effect, going to make it easier for credit to be given across frontiers, as it were, to consumers, or is that more or less ruled out by the various caveats which are written into the context, and if not, why not?"
Not a very good question, my Lords, but it seemed to work at the time. It will be noticed that the reply was:
"I think that the Directive should make it a little easier to give credit across frontiers. I think though another reason for having it would be that up to now the consumer credit legislation of the member-States has grown up in its own way".
I will not go on with that answer.
I then asked another question:
"Is it more a good basis than a final solution, so to speak?"—
to which the Department of Trade representative said: "Yes". It seems to me that there is not very much point in this directive applied in its present form. It is not going to help our Community partners in Europe—not very much anyhow, if one is to believe the Department of Trade. It is certainly not going to help us. Here I would strongly support the first sentence of paragraph 28 of the report:
"The Committee consider that the present proposal would, if adopted in the form in which it is currently drafted, introduce rules and concepts which not only would impede the current
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progress which is being made in the implementation of the Consumer Credit Act in this country but would be unworkable in practice".
That is very firm and, I think, very right, on the basis of all that there is in this booklet. It seems that in this area of pursuing the interests of consumers, the Commission is perhaps starting to lose its way and I think there is a bit of evidence in this direction. It is not covered by the harmonisation part of the Treaty of Rome but by this very broad Article 100, which can mean anything to anybody. So one then wonders: what is the solution? It is here that I very strongly support the noble Lord, Lord Sainsbury, and the noble Baroness, Lady Seear. It is in our paragraph 29 with the recommendations by the consumers.
Before I move to that perhaps I might also direct your Lordships' attention to the views of the principal consumer organisation, that is the Consumers in the European Community Group, UK. On page 24, about a third of the way down, above the statement "DETAILED COMMENTS" they say:
"Adoption of the directive would mean little specific improvement for UK consumers who have the protection of the Consumer Credit Act 1974. but CECG believes it important that standards of consumer protection throughout the European Community should be brought up to the highest level".
That is absolutely clear. There is no doubt about it, and it would seem to me that one would entirely support it: indeed the Sub-Committee and the Select Committee have done so. But these very excellent consumers with a balanced opinion, which we in this country are privileged to have—I do not think the same degree of responsibility exists in other parts of Europe—have made a positive and forward-moving suggestion, which the noble Baroness, Lady Seear, at once latched on to as being a probable best solution. This is that where you are in an area in which you are using somebody else's legislation to bring everybody else up to the same standard and you are dealing with a subject which is not harmonisation, there is immense merit in producing a draft and inviting companies to say how they are going to match the needs of the draft.
I would suggest that that was the way the Commission tackles it in the first place; not only would it do itself a lot of credit but it would also probably write the

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Directive in a rather different form which would lend itself to the right sort of answer. It would not try to go into detail—a detail which, as my noble friend Lord Caithness has pointed out to us, is not very precise and therefore not as helpful as it should be. It would try to do that; it would produce a Directive which established broad principles—and in this report we have agreed that the principles are entirely to be supported—and would invite people to say how their present legislation matches up to it and, if it does not, what they are going to do about it. This is a wholly admirable method of approach; we might even stretch that to the harmonisation Directive, though there are obvious problems there. But certainly, in this whole field of consumerism and related subjects, it could have been applied, for instance, to the problem of misleading advertising, in which we had a very similar situation, where the Commission has tried to help us. I do not want to divert to that but it is a parallel, and the sort of solution which the consumers have suggested for this Directive would have suited that very well too.
I hope that somehow my noble friend on the Front Bench can trumpet this across the Channel to Brussels so that the message may get through strongly from, so far, three Benches. The noble Baroness, Lady Seear, the noble Lord, Lord Sainsbury, and I are all agreed on this point, and no doubt there may be other noble Lords of the same opinion. The Commission has a chance to recover some of its lost credibility in this country, and no doubt in others.
6.16 p.m.
Lord MISHCON: My Lords, in rising to make four points in this debate, I run the risk of consuming every bit of credit that your Lordships in your kindness would give me by way of patience, so let my say at once that at this hour I propose to make every one of those points as shortly as possible.
The first is to join with others who have expressed their gratitude to my noble friend Lord Sainsbury and the members of his committee for producing this report and to the noble Lord for the way in which he introduced it to us tonight. A lot of technical evidence was taken, as appears from the report. It was a very arduous
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task, and the noble Lord and the members of his committee are to be congratulated on the succinct way in which the report has been presented, on its clarity of language and on the recommendations made.
I move speedily to my second point, which is on the Consumer Credit Act 1974. It has been eulogised in the course of this debate, and rightly so. It consists of a very big structure of rules that have been made in that Act for the protection of the consumer. The one point I would make in regard to it is this: the Act was passed in 1974 and, admirable though it is, it has not yet been implemented. If I may, I would ask the noble Lord, Lord Lyell, when he comes to reply to give us some indication of when the implementation can be expected, because it becomes a little difficult for us to praise our Act and to say how fundamental it was to the consideration of the Community when, as I say, the Act has not yet been implemented.
My third point is respectfully to venture a difference with one of the recommendations made in the report. Your Lordships will have noticed that there is no upper or lower limit in the Directive by way of amount of a contract which is going to be governed by the Directive. Under, I think, Article 2(e), there is power for any Member State to provide for such maximum and minimum limits, but the consultation in regard to that has to take place with the Commission, and the Commission has to agree.
If you are to have minimum standards, I would have thought it very necessary that there should be consultation with the Commission. I can well understand the reason why different States would differ in regard to the upper and lower limits. Matters of inflation, economic conditions, and so on, in each State would vary, but it would be a very easy way for a Member State to defeat the minimum standards if you allowed complete discretion to the Member States to say what amount of contract on the lower or upper level should be governed by this consumer credit legislation. If your Lordships will refer for one brief moment—those who are fortunate enough to have this red-covered document—to page viii, you will see that, in regard to that, paragraph 16 refers to exemption (v), which deals with the

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amounts greater or lesser than particular sums to be fixed by the Commission for a Member State, after consultation with that Member State.
"On exemption (v) above",
the report states,
"it was the view of several witnesses that the fixing of upper and lower limits should remain the prerogative of Member States, which would set rates appropriate to the prevailing financial and economic conditions".
This would give no right that the Commission should be consulted or could disagree, and in my respectful view it would defeat the very object of the exercise, which is to set minimum standards.
I come quickly to the last point that I want to raise. May I express my profound and respectful agreement with all that was said by the noble Lord, Lord Sains-bury, the noble Baroness, Lady Seear, and other speakers relating to the form of both this and similar Directives. The point has already been made— therefore it is quite unnecessary for me to repeat it at length—that this is not even a harmonisation Directive. As the noble Lord, Lord Mottistone, emphasised, it is a Directive which seeks to set minimum standards. Therefore one would expect, as the report implies, there to be an expression of principles and not the detail that we have in this Directive.
If the noble Baroness will permit me, I want to add force to her argument. She started this desire for battle to be waged. Therefore I want, if I may, to supply a little ammunition. It is not only a question of it being unnecessary detail. It is not only that Member States have different traditions and different laws. It leads to delay as a result of draft Directives coming in and various Member States sending in their amendments. And finally it leads to nonsenses. I want to add to the ammunition by venturing to suggest that there are nonsenses in this Directive. That is what happens if you get into detail.
I shall mention just four examples. The first is Article 1(3), which deals with an agreement for the supply of goods or the provision of services on credit. It provides that such an agreement should be regarded as a credit agreement even where the credit agreement with the consumer is contained not in the agreement for the
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supply itself but in a legally separate document. In my respectful view, this article is basically unsound since it seeks to treat a supply contract, financed by a credit agreement, as itself a credit agreement where there is co-operation between the creditor and the supplier. Not only is it erroneous and pointless to designate the supply contract as a credit agreement, when often it will be only for a supply of cash, but it also has the disadvantage that all the requirements for the formalities of credit agreements and their contents will have to be duplicated in relation to the supply contract.
The second example is one which the noble Lord, Lord Sainsbury, has dealt with, and several other noble Lords have also referred to it. It is Article 6(2)(b), which relates to credit cards. I make an additional point which has not yet been raised—and I believe that I make it correctly—with regard to Article 6(2)(b)(iii), where there is a requirement that there should be a statement of the annual rate of interest and charges. And this relates to credit cards. I should have thought that an obligation to state "the amount of any charges" for a credit card is impossible to comply with, since the amount of the charges will not be known in advance of the use of the credit card.
I turn next to my third example. Article 9(1) provides in general terms that a credit agreement shall be void—and I emphasise the word "void"—from the time the creditor repossesses goods supplied under a credit agreement. As drawn, the article appears to apply even if repossession is pursuant to a court order. But that is not my major point. It provides, as I said, that the agreement shall be void. In English law, if an agreement is void it denotes invalidity from the beginning of the contract, with the consequence as I see it, that under our law sums already paid by the consumer would presumably have to be repaid.
May I give your Lordships my last example. Before I do so, however, and in order to show the uselessness and the nonsense of it—I say that with some amount of deference to those who have drawn up what is an amended Directive— I should like to point out that there is an Article 9(2) which should have been absolutely sufficient to cover this point. In simple language it states a principle.

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This is what the noble Baroness, Lady Seear, and the noble Lord, Lord Motti-stone, indicated. This is the principle. Article 9(2) says that Member States shall lay down rules to ensure that repossession of goods does not lead to unjustified disadvantages for any of the parties involved. What more could one want than that bit of guidance?
I turn, I promise, to my very last point and example and then I further promise to sit down. Article 14(1)(d) mystifies me. It says, in effect, that a banking company cannot extend credit unless it obtains and retains authorisation to carry on a banking business. It passes my understanding why the right to extend credit should be dependent, in the case of a banking company, upon its obtaining and retaining final authorisation to carry on a banking business. As I understand it, banking controls are designed to protect the public in relation to deposit-taking institutions. If an institution ceases, for any number of reasons, to be entitled to take deposits, that does not, as I see it, seem to be any good reason for preventing it from extending consumer credit when organisations which have not been involved in taking deposits are quite free to extend consumer credit.
I hope that I have supplied some of the ammunition which the noble Baroness and other contributors to this debate want for a battle which I believe is a worthy one; namely, to teach, with the utmost respect and courtesy, our brethren in Europe not to fire Directives of this nature at us.
6.29 p.m.
Lord BRUCE of DONINGTON: My Lords, I should like to reiterate the thanks which have been voiced this evening by so many speakers to the noble Lord, Lord Sainsbury, for having so adequately dealt with the report of the Select Committee. The Select Committee on the European Communities invariably examines with very considerable thoroughness those regulations, or proposed regulations, or Directives which come before it. As I have said on many occasions in this House, the Select Committee reports from this House as a consequence are held in very high esteem in Europe itself, and, of course, in the European Parliament.
There has been an astonishing degree of unanimity among all those who have
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spoken in this debate this evening and one is bound to ask the question—and I put it to the noble Lord, Lord Lyell, who is to reply—as to whether this proposed Directive is really necessary at all; as to whether the Government might consider causing instructions to be given at COREPER level and, if necessary, at Council of Ministers level to ask that this proposed Directive be withdrawn.
Quite clearly, it has sought to do two things at the same time—or rather it has sought to justify the proposed Directive for two different reasons. It first justifies it under Article 100 of the Treaty of Rome, which makes it desirable that Member States should, wherever possible, harmonise their laws. We have had a number of those in the EEC. There are regulations, which my noble friend Lord Gordon-Walker will recall, dealing with suggestions for the harmonisation or standardisation of mayonnaise throughout Europe and other matters of that kind. There has indeed been a tendency which has grown over the years for the Commission Directorates to put out proposed Directives almost for the sake of putting them out, regardless as to whether or not they are important.
Indeed, the Commission itself must be conscious of the fact that the main reason that it gave for bringing forward the proposed Directive was Article 100, because in its observations on the Directive it invokes the necessity for ensuring harmonisation in order to ensure that free competition is preserved under the provisions of the Treaty. It says:
"The fact that there are differences between the various laws therefore influences the volume and type of credit taken up by consumers and thus hinders harmonious development within the Community. Those differences also affect free competition between creditors. A competition which is protected from distortion is one of the fundamental principles of the Common Market".
So there is a suggestion all the way through that, unless a proposed Directive of this kind is enforced in the Member States, there will be a danger of distortion of competition.
As my noble friend Lord Gordon-Walker has pointed out, it is in fact self-contradictory in this particular respect, because under Article 14 of the proposed Directive Member-States must be allowed to adopt more stringent provisions if they consider them necessary for the protection

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of the consumer. On that basis, if one Member State adopts more stringent provisions than the other that will invalidate the very claim that is made as the purpose for introducing the proposed Directive; that there should somehow be an ironing out of differences for the purposes of avoiding distortion.
I would not wish in any way to add to the very pungent observations that have been made by the noble Baroness, Lady Seear, by the noble Lord, Lord Mottistone, by my noble friend Lord Gordon-Walker and indeed by the noble Lord, Lord Mischon. I agree with everything that they have said. I would leave this thought when considering whether or not we ought even to take this proposed Directive further. In great federations like the United States of America, which has the advantage of a common language, there is no such endeavour to impose within States a complete uniformity of standard in regard to matters of this kind. States within the Union are quite free to make their own particular provisions on matters of this kind, and in fact they do so. Therefore, I put it to the noble Lord, Lord Lyell, that it is for consideration as to whether this proposed Directive ought to be pursued at all; or, if it is to be pursued, as to whether it should be in such form as has been suggested by the noble Baroness, Lady Seear, as being purely a statement of principles to which Member States can conform, or as suggested by the noble Lord, Lord Mottistone, the question as to whether the Member States can be issued with a series of principles and then invited to say how they see the matter.
My feeling is—and I take note of the words of my noble friend Lord Mischon— that the Consumer Protection Act 1974 has yet to become operative. But I would trust that we would look at our own legislation. So far as I see, it is extremely comprehensive and affords much fuller protection than would be granted by conformity with the Directive. For the United Kingdom the Consumer Protection Act 1974 is quite sufficient for us, although we would welcome other Member States complying if they so desire.
6.38 p.m.
Lord LYELL: My Lords, the first thing I should like to do this evening is to
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thank the noble Lord, Lord Sainsbury, and his Committee for all that they have done in respect of this particular Directive and indeed in respect of all the other Directives that flood in from Brussels. In my past career on the other side of the House I had the honour to serve on one of the Scrutiny Committees and from everything that I heard all over Europe I would fully endorse the comments made by the noble Lord, Lord Bruce of Donington, on the high regard in which the reports from the scrutiny sub-committees are held all around Europe and indeed in your Lordships' House and in the other place.
I hope the House will bear with me if I go fairly carefully through the Government's views on the committee's report and indeed on the Directive. I will attempt to answer as many questions as I can. I feel rather like the boy, not quite on the burning deck, I hope, but in a fairly hot seat, and some of the questions which came in my direction I felt were rather technical. I shall attempt to answer them but if there are some omissions I would ask noble Lords who have taken part in this debate to bear with me and I will certainly guarantee that everything that has been said tonight will be carefully read and considered and I shall be in touch with noble Lords later.
The House would agree that consumer credit has long been the most important element in this country's consumer protection legislation. Even if we were to regard the usury laws as ancient history— and I believe they are—we have had legislation governing the activities of such bodies as the pawnbrokers—and I am not spelling that with three r's!—since 1872, and there is legislation governing the activities of moneylenders since the early part of the present century. There has been hire purchase legislation in the United Kingdom since 1938. The publication in 1971 of the report of the Crowther Committee provided the main basis to show that there was a need for comprehensive legislation to cover the main element of the Directive on which the noble Lord's Committee has reported, covering consumer credit in all its forms and the consumer credit industry in all its aspects. The outcome was that we have on the Statute Book the Consumer Credit Act 1974. The acceptance of a need for, and the enactment of, more comprehensive

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enabling legislation were a response to the growth in the volume and diversity of consumer credit transactions since the Second World War.
It would be true to say that a very similar development has unfolded in what are now the EEC countries. There, as in this country, consumer credit began to get under way effectively with such things as instalment sales, and as early as 1936 a chapter was inserted in the Netherlands Civil Code to regulate such transactions as these. Various other Acts and measures were passed in France and more recently in Denmark and Germany, as well as in Belgium. Therefore, it is not surprising that consumer credit found a place in the Community's first consumer protection programme, and that is what we are discussing tonight.
In seeking to devise a Directive on consumer credit, the Commission drew very heavily on our legislation and in particular on the Consumer Credit Act 1974. Because of this need to draw on our legislation perhaps the Commission may be a little upset at the volume of criticism that their proposal has received in the report of the noble Lords' Committee as well as the criticisms whichhave been flying around your Lordships' Chamber this evening. They may feel that the criticism is well based; perhaps they may feel it is unfair. The fact is that it is a very complex area, and experience with our Consumer Credit Act has shown that it is not at all easy to cater for different types of institutions and transactions. I think the speech of the noble Lord, Lord Mishcon, showed up this point more clearly than anything else.
Some of us might argue that consumer credit is a matter which could and would be better left to the Member States. I would not necessarily go that far, at least until the possibility of framing a Directive which would be acceptable to all the Member States has been fully explored. It was for that reason that I was very glad of the comments of the noble Lord, Lord Bruce, and indeed of the noble Baroness, Lady Seear, and I took very careful note of what she had to say. We do not have any statistics of intra-Community commerce in consumer credit but we believe that the potential of this commerce is considerable and the perpetuation of widely differing arrangements could be
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detrimental in the long term both to consumers' and to traders' interests. We also belive that it is noteworthy that many of the main credit grantors now have overseas connections and have European consultative organisations. In addition, now that exchange control restrictions have been removed, credit grantors in various Member States may wish to take advantage of the freedom of services provided by the Treaty of Rome to provide credit on a service basis to consumers resident in other Member States. Harmonisation in this particular field could prove to be a matter of importance where we have much to contribute in laying the foundations of such future community legislation as may be passed.
I hope the House will allow me to turn now to the Directive itself. It is a matter of paramount importance to bear in mind that the aim is to provide a minimum of Community-wide protection whileallow-ing Member States to have these more stringent provisions if they wish. I do take all the points that have been made about harmonisation, but I think that if we bear in mind that the main priority in these Directives, especially this one we are discussing, is the laying down of minimum standards of Community-wide protection, things will be a little clearer in our minds. If we put it fairly simply, as a general rule we should be able to retain a provision in the Consumer Credit Act 1974 if it gives the consumer in this country equivalent or greater protection than that in the Directive.
It may be argued that this really is not harmonisation. That is a valid point, but if Member States were not to be allowed to have more stringent provisions then harmonisation would be at the very considerable cost of reducing our protection to the level of the Member State which is prepared to do least to protect its consumers. We believe that harmonisation at such a cost would be wrong in principle and that the Commission were in this instance right to propose a minimum Directive allowing Member States to have more stringent provisions than required by the Directive.
The proposed Directive is in many respects not in terms which we can accept, and many criticisms, some major and some minor, have been made about it,

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both in the committee's report and particularly in the debate this evening. The Government certainly want to see the Directive amended in various respects, not just to achieve greater compatibility with the Consumer Credit Act but also to ensure that the Directive would be workable. I think that is the most important point that I would want to bring out tonight. We believe that some of the provisions in the Directive are far too rigid to provide any framework which is going to be realistic or workable. Certainly it is in the interests of our partners in the Community, as it is in our own interest, to have provisions which, while protecting the consumer, do not impose unnecessary or completely unreasonable requirements on traders.
Some of the deficiencies in these areas may stem from failure on the Commission's part to translate its concepts into suitable provisions. I do not mean translate so far as language is concerned; it is much more a concert of mind and a concert of will. We cannot be sure about these points until a meeting is held to discuss a proposal. We hope that this meeting is likely to be part of a working group set up by the Council after the European Parliament and the Economic and Social Committee have delivered their opinions on this Directive. It will be most interesting to see whether their opinions tally with those expressed here tonight.
We would then, after the opinions have been delivered, be able to obtain the reactions of our fellow Member States. We have criticisms of this Directive and so will they, particularly in view of the different legal systems in existence. It is the existence in Member States of different systems and different concepts which I believe will make it extremely difficult, though we hope not impossible, to get some of the provisions of the Directive expanded to extend the benefits of our own Act to European consumers. At the moment the essential thing is to get the basics of the Directive onto a solid and workable foundation on which we can build. The Government believe that it is vitally important in any legislation, national or supra-national, to get the definitions right. So much depends on them. I would question aspects of each of the definitions in Article 1 of the
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Directive, but I hope your Lordships will forgive me if I confine my remarks to three of them.
First, the definition of "credit agreement" has the effect of excluding from the scope of the Directive agreements where the principal and the interest are repaid in a lump sum. It appears that short-term loans are often repaid in that way. Pawnbrokers' loans provide a classic example of lump sum repayment agreements which our legislation regulates. It is true that because Article 16 of the Directive we are discussing makes this a minimum provision, we could retain the Consumer Credit Act provisions in relation to these special agreements. None the less, this seems to be a case where the definition is inadvertently far too limited.
The second example that I should like to give is the definition of the "effective annual rate of interest". We believe it to be much better to say "charge"—at least not necessarily to say that in a boisterous way, but possibly to explain it in a more definite way—rather than using the term "interest" as we do in the Consumer Credit Regulations of 1977 which define the total "charge" for credit. More important, the provision appears to require interest and all—I repeat, all— other charges to be taken into account in calculating the effective annual rate.
In theory the Directive is correct, but in practice this provision would be completely unworkable. Where the debtor has to pay a charge, let us say for insurance, to obtain the credit that he is seeking, he may be given the choice of source which is intrinsically desirable both by the terms of this Directive and in terms of our own legislation. But, if that happens, the creditor will not know when the agreement is prepared how much the debtor will have to pay, because probably the interset charges or the insurance might vary from debtor to debtor or perhaps the prospective customer, if he shops around, might get more interesting or competitive charges elsewhere. That is a relevant point, but we should not pursue it too far this evening.
Such charges as might be included in the definition will be unascertainable and our regulations exclude them from the total charge for credit. Of course, there are other charges which have to be excluded

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if the calculations are not to be over-complex and the resulting rate completely uninformative to the consumer and the customer. The Government think that some exclusions are essential and that, given the differences in law and practice between the Member States, those Member States should be allowed to make their own rules as to the items to enter into or to be excluded from the calculation in this particular definition.
The noble Lord, Lord Sainsbury, mentioned that the Mail Order Traders' Association had pointed out that the problem described in paragraph 13 of the committee's report applies to fascinating items called "running-account credit purchases" in general—I always think there is some element of the Wild West about that with Indians running about, but it does make sense if one reads the legislation—and not merely to credit purchases. We believe that that is a very valid point.
Paragraph 3 of Article 1 says that an agreement for the supply of goods or for the provision of services which is financed by a credit agreement shall be deemed to be a credit agreement. The consequence appears to be that what the Consumer Credit Act calls "secondary documents", such as the sales vouchers used in connection with a credit card, trading cheque, or mail order transactions, would have to comply with the requirements as to the content of agreements set out in Article 6. No one would deny that the appropriate requirements should apply to credit agreements proper, but to apply the requirements to secondary documents really would be a nonsense, and a major nonsense at that. We think it very likely that the provision does not accurately reflect the Commission's intention. But it is a matter which will be pursued vigorously when a Council Working Group is set up.
Article 2 is extremely important in that it defines the areas in which the Directive will not apply. I hope that this might relieve some of the anxieties of noble Lords so far as nonsenses have been expressed this evening. If the lines are drawn in the wrong places, the Directive will apply to transactions to which its provisions are quite inappropriate. I should like to mention three particular items as regards those exclusions.
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The exclusion at paragraph 1(c) is in respect of credit granted for a period not exceeding three months, and it is aimed at relieving ordinary trade credit from the restrictions of the Directive. However, we do not think this is the best method of dealing with trade credit and we do not agree with the Commission's explanatory note that the danger of a disadvantage to the consumer is minor. In our view there is considerable scope for abuse in the area of short-term credit, particularly in extremely high interest rates. I think that that was brought out in the report by the CECG. Clearly ordinary trade credit should be excluded, but we would prefer this to be done on the lines of the exemptions made under the Consumer Credit (Exempt Agreements) Order 1977, so that we would wish to see either an alternative or additional provision added to the Directive allowing an exemption in respect of agreements for the supply of goods or services where repayments are made in not more than a specified number of instalments. The simplest solution might be to permit Member States to specify the number, because different numbers may be appropriate in different circumstances and in different Member States.
In our Exempt Agreements Order we allow four instalments for most agreements for the supply of goods or services on credit. Often, however, goods or services are supplied under a running-account. Let us take as one example the milk bill. Another example is the electricity account. I should think that another example is that eternal chestnut the telephone bill. However, certainly in those cases our exemption is dependent on the requirement to repay the whole amount of the credit in one payment each period—it might be by the week; by the month; or by the quarter.
We are also very concerned that no provision has been made for an exemption for agreements for cash loans where the effective annual rate does not exceed a specified level. We believe that such an exemption is essential. Otherwise, as we have heard this evening, organisations such as credit unions and friendly societies, who make loans at very low interest rates, will be subject to all the provisions of the Directive and, indeed, to the resultant additional costs in observing them. In some instances that would result in the

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consumer having to pay more for his credit, and in other cases the facility might cease to be available altogether.
We are naturally glad that the Directive makes provision for upper and lower value limits of the agreements to which it will apply. That is in line—and we are pleased about this—with the £5,000 and £30 limits in the Consumer Credit Act. However, we are less happy with the proposal that Member States will not be able to fix their own upper and lower limits of value, but must rely on consulting with the Commission to set reasonable limits. I hope that that answers one or two of the points that have come my way on this particular question.
The provision in Article 5 which permits creditors to give, as they call them, "offers" or, as our Consumer Credit Act calls them, "quotations", is important because the diversity of the credit facilities available might well make it impracticable for creditors in this country to comply with the alternative requirements proposed in the article, of displaying their rates on their premises. However, the Government are very concerned that the Directive refers to "an offer which shall be binding" on the creditor if he were to grant the credit. At a time when in this particular Member State at least, interest rates vary frequently, it would be unreasonable to expect the creditor to give a binding offer, particularly without a time limit. We think that that is unreasonable and unworkable. Indeed, we would consider it better to rely on the supervisory provisions in Article 14 to ensure that creditors behave reasonably in giving offers or quotations.
We have heard that Article 6 sets out the requirements as to the content of credit agreements. The requirements appear no more onerous than those likely to be imposed by the regulations which are still being made, as the noble Lord, Lord Mischon, and others have pointed out, under the Consumer Credit Act. But, as regards that special direction, concern has been expressed—indeed, it has been expressed this evening and in the report by the noble Lord, Lord Sainsbury— that running-account credit for the sale of goods or services falls within paragraph 2(a) of Article 6. If that were so, it would mean that a separate contract
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would have to be entered into for every particular sale. That would place a very heavy, if not a completely intolerable, burden on mail order traders and other traders of that type. We do not think that that is the intention, but rather that running-account credit is covered by paragraph 2(c)—the general catch-all exemption—which, according to the Commission's explanatory note, applies to all types of credit agreement not expressly listed. But clarification will be sought in the Council working group when it is set up. In the past the Commission has assured the department that it is well aware of the usage of running-account credit and its importance to mail order traders.
The noble Lord, Lord Sainsbury, mentioned the submission of the British Bankers' Association and the committee's view on the requirement in Article 8 as to informing consumers when overdraft interest rates change. We agree with the committee that the requirements governing the giving to consumers of information about overdraft agreements should permit changes in the rates to be notified by advertisement in the Press.
The principle in Article 13, which makes a creditor jointly and severally liable with a supplier with whom he co-operates where goods or services are not supplied or the goods or services supplied do not conform to the agreement, is consistent with the "connected lender liability" principle which was enunciated by the Crowther Committee on Consumer Credit. It is also consistent with the Crowther view that the creditor and the seller are engaging in a joint venture which they hope will profit both of them. We welcome the inclusion of the provision in the Directive, but with reservations. We agree very much and very strongly with the committee that if one gives the consumer Community-wide protection as great as that laid down in Section 75 of the Act the limitation on the creditor's liability to repayment of the loan should be removed. The question of the extent of the liability is, however, a controversial one and we note that the committee suggests an upper limit of liability to protect a creditor from disproportionately heavy liabilities. This might make the idea more acceptable to our Community partners but, if it were carried into our

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legislation, it would diminish the protection to which Section 75 of the Consumer Credit Act entitles the consumer.
I think that a much less controversial matter would be to include in the Directive, if the right did not exist without an express provision, a right of the creditor to be indemnified by the supplier for loss suffered in satisfying his liability. Unlike earlier drafts, the proposal contains no provisions relating to the cancellation of credit agreements negotiated away from business premises. At present such provisions are left for the Directive that goes under the attractive name of "Doorstep Selling". We note that the committee suggests that the provisions should be removed from the latter Directive and incorporated in this Directive in so far as they apply to credit agreements. Whether or not this is the best solution is a matter requiring further consideration in the light of future developments on the doorstep-selling Directive—the need for which has often been questioned and nowhere more strongly than in your Lordships' House— but we completely agree that it is essential that there is no conflict between the Directives and that a situation in which the requirements of the one Directive are later superseded by those of the other is avoided.
I hope that the comments which I have made on individual articles have shown that there are real problems which the Government intend to solve if there is to be a workable Directive. We have no wish to over-emphasise these problems, but certainly we see no point in minimising them. Solutions may not be at hand, and I read with great interest the suggestions which the committee make in paragraph 29 of their report—to which my attention has been drawn by a number of speakers —to assist progress in harmonisation. We do not yet know how well the suggestions would fit in with Community procedures, but it is very clear that the suggestions in paragraph 29 have a much wider relevance than this particular Directive.
I should like to go through and answer some of the questions that have been raised. The noble Baroness, Lady Seear, if I understood her correctly, asked me to bring pressure to bear in Brussels to put a stop to Directives that are already covered. I shall certainly convey her wishes to the correct quarters.
Baroness SEEAR: My Lords, I am afraid that the noble Lord has misunderstood me. I should hate him to bring pressure to bear for the reason that he gave. The point of paragraph 29 is to ensure that, in fact, the purpose of a Directive is made clear; Member States then submit their proposals in line with what they are doing or intend to do, and it is then agreed that those proposals adequately meet the objectives. That is slightly different from what the Minister said.
Lord LYELL: My Lords, I hope that I may return that comment with the reply that I believe the noble Baroness has misunderstood me. I was not associating her point with Paragraph 29; I had finished with Paragraph 29. The point she raised very early on was that in general these Directives—and this Directive in particular—were somewhat unwanted, and she asked whether the Government could bring pressure to bear—I think that that was the gist of her comment—to stop these unwanted, unnecessary and otiose Directives coming. I shall certainly ensure that her views are passed on. It may be that it is not a matter for my department; indeed, it is far more likely to be within the province of my noble friend Lord Trefgarne and the Foreign Office at a diplomatic level. I take the point of the noble Baroness, but stress that it is not connected with Paragraph 29 of the report.
Lord JACQUES: My Lords, I still think that the noble Lord has misunderstood the point. The point that has been raised is that there should be a Directive —not that there should not be one—but that it should lay down principles and not go into too much detail.
Lord LYELL: My Lords, I see that I have been on my feet for a number of minutes and I hope that I have set out and stressed the Government's view that Directives should lay down minimum standards. I think that the noble Baroness, Lady Seear, quite fairly raised the point with me that some of the Directives, in spite of wishing to raise minimum standards, were muddled and woolly. I do not think that there is anything between the noble Lord, Lord Jacques, and myself and I hope that there

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is nothing between the noble Baroness and myself.
I hope that my noble friend Lord Caithness will let me write to him on the various definitions of "consumer" and possibly "retailer". However, my noble friend rightly raised one point. He asked about his television set. He said that he went to the retailer and found that the retailer was acting as both financier and retailer. If my noble friend consults Section 75, paragraph 1, of the Consumer Credit Act 1974, he will find that should anything go wrong with his television set or he is caused loss or damage, he may sue both the financier and the retailer, wholesaler, supplier, or whoever it may be, jointly and severally. I think that means that my noble friend would be able to find his losses satisfied either by one or both—there might be more than one— of the people concerned. However, it is a matter between the other parties to settle my noble friend's loss.
I am very grateful that the noble Lord, Lord Gordon-Walker, emphasised the harmonisation aspect. Again, I stress to him that these Directives lay down minimum standards. Perhaps I might call them a strategic plan. The implementation is the problem of the Member States. Certainly as regards the Directive which we are discussing tonight, we believe that the Consumer Credit Act 1974 is indeed a model for any type of consumer legislation throughout the Community. My noble friend Lord Mottistone raised the point of unworkable provisions in the Directive. Indeed, the Government take the view that the proper forum for discovering whether or not provisions can be made to work is the Council Working Group in Brussels. The Government will press very vigorously to ensure that the provisions in the Directive are not just useless, hot air, empty and woolly thinking.
The noble Lord, Lord Mishcon, was very kind and said he was going to raise a very few points. I do not think that I can answer all those points tonight, so I hope he will bear with me. I shall read carefully what he said. So far as paragraph 16 of the committee's report is concerned, the Government have taken note of his point. The consultation will take place, and the working party safeguards
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on our legislation will be certainly as strong as the legislation which is contained in the Consumer Credit Act 1974.
I hope I heard the noble Lord, Lord Mishcon, aright. He mentioned something about the implementation of the 1974 Act. So far as I understand, it is part of the statutes and the laws of this country. But would I be right in thinking that the noble Lord is alluding to various orders and updatings, secondary legislation, that is smoothing out several of these provisions? I notice that my particular copy of the Act has been amended by various other pieces of primary legislation, such as the Banking Act.
Lord MISHCON: My Lords, if the noble Lord is not completely out of breath, may I ask him this: I was talking about the implementation of the Act by the making of all the necessary regulations and orders under it. I wondered whether he could indicate when that final implementation is likely to take place.
Lord LYELL: My Lords, I am afraid that I do not think I can. Certainly not tonight. I think it is highly unlikely that it would be finally implemented. I hope that the Consumer Credit Act 1974 is in no way what I have been describing as woolly thinking, and is not subject to the criticisms that we have made of some of the more loosely worded Directives tonight. The principle is the same, that problems have arisen since 1974, and that we shall attempt to see that the Consumer Credit Act 1974 is continually revised and updated. I could not—certainly not tonight—give the noble Lord, Lord Mishcon, any guarantee as to when we would see the Consumer Credit Act as being in its final, perfect form. Nevertheless, I shall write to him later about that.
The noble Lord, Lord Bruce of Doning-ton, pointed out how the reports from the Select Committee were so highly thought of. I agreed with him very much indeed. I think that the noble Lord was very fair in asking me to push hard at Foreign Office and diplomatic level that we should see that these Directives were more relevant, and that we should have realistic and workable provisions coming across from Brussels. Indeed, this is one of the purposes of the working group.
I would not agree with the noble Lord, Lord Bruce, when he asked me about

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Article 100. I do not think that it necessarily compels us to dilute our legislation, or reduce our standards. I was interested with the noble Lord, Lord Bruce, in wondering how we pursued the Directive. I hope he might be satisfied with out view that it is really a statement— as indeed are all Directives—of principle, and that we hope there is unlikely to be any compulsion on us to dilute any of our consumer legislation, which we regard as a model in this particular area.
I have been on my feet a long time. I hope that the House will forgive me. Your Lordships will agree, and indeed the noble Lord, Lord Sainsbury, and his Committee will agree, that it is an intensely complicated and complex subject. Our participation in the work in Brussels will be with a view to achieving a workable Directive within a reasonable time. I hope that that is not woolly speaking from this Dispatch Box, but that is the Government's firm intention. I hope that we are able to carry it out. We hope that if the problems of devising a Directive acceptable to, and workable in, all the Member States were to prove serious, the Commission would be willing to consider alternatives such as just a recommendation to Member States. With that, I would conclude.
7.14 p.m.
Lord SAINSBURY: My Lords, at this late hour I will not detain you for more than a minute. First, may I thank the noble Baroness Lady Seear, and the various Members of your Lordships' House who have taken part in what I think has been a useful debate. May I thank you for unmerited but very kind references to my own role. I think that our debate tonight will have been really worth while if both the United Kingdom Government and the Council Working Party take note not only of our report but of the speeches that have been delivered in your Lordships' House.

CITY OF LONDON (VARIOUS POWERS) BILL
Reported from the Unopposed Bill Committee (on re-commitment) with amendments.
BRITISH RAILWAYS (No. 2) BILL
Committed to an Unoppposed Bill Committee.
UNIVERSITY COLLEGE LONDON BILL [H.L.]
Returned from the Commons agreed to with amendments; the said amendments considered and agreed to.
GREATER LONDON COUNCIL (GENERAL POWERS) BILL
Returned from the Commons with the amendments agreed to.