Lords Sitting of 6 February 1979

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

COLLEGE OF ST. MARK AND ST. JOHN: SITE USE
Lord CHALFONT: 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 are satisfied that plans for the future use of the site of the College of St. Mark and St. John in Chelsea are consistent with the maximum benefit of the local community.
Baroness DAVID: My Lords, the primary responsibility for determining the future use of the site lies with the Royal Borough of Kensington and Chelsea, who are the local planning authority. It is for that council to take account of the interests of the local community when considering any proposals to redevelop the site which may come before them.
Lord CHALFONT: My Lords, while thanking the Minister for that Answer, may I ask the Government whether they are aware that there is very great concern among the residents of the Borough of Chelsea about the future of this distinguished and historical site, which is the last portion of the estate of Thomas More? Are they aware that the Royal Borough of Kensington and Chelsea have stated that this site should be reserved for educational or institutional purposes? Will Her Majesty's Government exercise some supervision over the proceedings to ensure that this comes about? May I further ask whether they will ensure that the scheduled buildings in this beautiful site are preserved in whatever form of development takes place, and that the open spaces are preserved for the use of the residents of the borough?
Baroness DAVID: My Lords, I am sure the Government have much sympathy with everything the noble Lord has said, but the decisions must be made by the GLC, who own the site, and the Royal Borough of Kensington and Chelsea, who deal with planning permissions.
The Lord Bishop of LONDON: My Lords, is the noble Baroness aware that this very successful and important college was compulsorily acquired against its wishes in order to build a motorway that has never been built, and that therefore there is a very strong moral case for this site being used for educational purposes, especially when there are such distinguished buildings as the chapel and library on the site?
Baroness DAVID: My Lords, I have great sympathy with what the right reverend Prelate has said—I am aware of all those things—but I must again say that the decision is not with the Department but with the owners of the site and the borough.
Lord DUNCAN-SANDYS: My Lords, is the Minister aware that interest in this matter extends far beyond the Borough of Chelsea?
Baroness DAVID: Yes, I am, my Lords.
Lord ANNAN: My Lords, in view of the fact that the company to which the GLC originally awarded the site and Chelsea College have reached agreement in principle on a scheme whereby the company would sell the site to the college and the college would sell a comparable site in South London to the company which they could then develop for residential purposes, may I ask the noble Baroness to use her best offices with the GLC to persuade them not to auction this site? May I further ask her to commend this scheme to her right honourable friend the Secretary of State for Education and Science, so that she could persuade the Treasury to allow the college to keep the proceeds of the sale of their South London property to pay for the site of St. Mark and St. John?
Baroness DAVID: My Lords, I am aware that Chelsea College are having discussions with the firm in question. I

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cannot interfere with the rights of the GLC, as owners of the site, to make such arrangements for sale; they must do what they think fit. I understand that they intend to allow adequate time for investigation into planning requirements and finance when fixing the date of the auction. I very much welcome this and hope it will provide opportunity for further discussion. As for finances, in accordance with normal Government accounting arrangements, the proceeds of any sale of other properties acquired by Chelsea College with public funds would have to be returned to the Exchequer. It is however possible for the college to be allocated an equivalent amount to enable it to acquire the Marjohn site, and I am glad to say that such a course has been agreed in principle. I must emphasise, however, that this is subject to a more detailed investigation, and the college will in due course need to establish its case for a special allocation.
Lord WYNNE-JONES: My Lords, I congratulate my noble friend on the dexterity she is showing in answering Questions. Is she aware that the original development plan zoned this site for educational purposes? Would she confirm that no alteration in such a plan can be made without the consent of the Minister concerned? Therefore, is it not still a matter which affects the Government? Would she agree that this site is not only one of great historical significance but one of considerable beauty, and that it would be a tragedy if it were turned into a developers' paradise as opposed to a citizens' paradise?
Baroness DAVID: My Lords, I certainly agree about the historic importance and the beauty of the site. I know that it is zoned for educational purposes, and that is why planning permission would have to be sought for any other use. This is the question which the Kensington and Chelsea Borough Council have to decide. I must confess that I am not absolutely certain about the position regarding the permission of the Government, but I shall make inquiries and write to my noble friend.
Lord FLETCHER: My Lords, will the noble Baroness consider that whatever may be the powers of the GLC and the
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local authority, the Minister may, under the legislation relating to historic buildings and sites, have powers to prevent an unsatisfactory development of the site?
Baroness DAVID: I take note of that point, my Lords.
Lord ROCHESTER: My Lords, will the noble Baroness undertake to convey to her right honourable friend the Secretary of State for the Environment the strong representations which have been made this afternoon from all sides of the House, with a view to seeing that if at all possible the Greater London Council might favourably consider a bid from Chelsea College for the site?
Baroness DAVID: My Lords, I shall certainly do that, with great pleasure.
Viscount BLEDISLOE: My Lords, will the noble Baroness—
The LORD PRIVY SEAL (Lord Peart): My Lords, I think that we have had a good run on this Question, and I hope that noble Lords will appreciate that there is important Business to follow.
Viscount BLEDISLOE: My Lords, I have a question of which I have given the noble Baroness notice, and so perhaps I may ask it—
Lord PEART: No, I am sorry.

RHODESIA: PROPOSED ALL-PARTY CONFERENCE
2.45 p.m.
Lord SAINT OSWALD: 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 are their intentions with regard to convening an All-Party Conference to negotiate the form of peaceful transition to majority rule through universal suffrage, as they have proposed, in view of the repeatedly expressed willingness of the Executive Council of Rhodesia to attend such a Conference avoiding further damaging delay.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the Government have accepted the advice of Mr. Cledwyn Hughes that a meeting of all the parties now would end in failure. We shall continue our efforts to narrow the differences between the parties and to prepare the ground for a successful conference at the earliest opportunity. My right honourable friend the Foreign and Commonwealth Secretary has recently held consultations on Rhodesia with Mr. Vance in Washington.
Lord SAINT OSWALD: My Lords, I think it will surprise the House that the noble Lord should not have taken the occasion to refer to the recent referendum in which the white population voluntarily handed over to black majority rule. In the light of that entirely favourable and satisfactory decision, and in the shadow of the vindictively negative remark of the Government on this occasion, will the noble Lord agree that I am reasonable in taking it that unless the Marxist forces are triumphant the Government will not be satisfied in any solution for Rhodesia-Zimbabwe?
Lord GORONWY-ROBERTS: My Lords, with regard to the last part of the noble Lord's supplementary question, my answer is, certainly not; that is not the criteria on which Her Majesty's Government's policy in regard to Rhodesia is being operated. Every action of ours has been designed to draw all parties concerned to the negotiating table. As to the impact of the recent elections in Rhodesia, I would ask the noble Lord to consider—
Lord SAINT OSWALD: They were not elections—
Several noble Lords: Order, order!
Lord GORONWY-ROBERTS: With regard to the recent elections, which presumably were held in a reasonable and quiet manner, I would ask the noble Lord to consider very carefully whether those elections, based on the present constitution, will command support in Rhodesia as a whole, from all the people of Rhodesia, or indeed in the international community and the international authority as a whole.
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Both those criteria must be satisfied by any elections held in Rhodesia.
Lord SHINWELL: My Lords may I ask my noble friend whether he is aware—as I am sure he is—that there has been a great deal of talk about the promotion of a successful all-party conference but so far without much success? Let us suppose that in the absence of a successful conference in the foreseeable future—I hope that this will not be regarded as an ill-founded or merely hypothetical assumption—elections take place in Rhodesia shortly with a decision that the proposed Government should be acceptable, which means no discrimination of any kind. Would it not be desirable then to consider both ignoring the whole question of illegality and the like and assisting in the stabilisation of the newly-found, created Rhodesia?
Lord GORONWY-ROBERTS: My Lords, certainly my noble friend lays down the requisite basis for such a procedure, and I find it very difficult to disagree with him. The trouble is that free and fair elections in Rhodesia cannot be held without the co-operation and the support of all the parties concerned; and some of them are outside Rhodesia, perforce. Secondly, conditions in Rhodesia, in the absence of the goodwill of all concerned, in a country 90 per cent. of which is under martial law, are hardly conducive to free and fair elections. So one could go on. The first requirement is to get all parties together around a table to negotiate, in good faith, a transitional régime—and I will not delay the House on the details; the House understands this perfectly well—so that proper elections, observed and attested by an international body, can be held, fully supported by all the people of Rhodesia as to their conduct and their outcome.
Lord HOME of the HIRSEL: My Lords, is the noble Lord not in effect saying that, as long as Mr. Nkomo refuses to join in any negotiations, that amounts to a veto on any progress in Rhodesia at all, and is that not a totally sterile and hopeless position for the Government to adopt?
Lord GORONWY-ROBERTS: My Lords, it must be the aim to get all the substantial parties to the situation to any

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meaningful negotiation, and that must include Mr. Nkomo. It may well be that at the moment Mr. Nkomo is recalcitrant on attending such a meeting. He has changed his mind more than once. Indeed, I am told that the Salisbury Group is at the moment prepared to attend such a meeting, but throughout most of last year they stood out against it. We must never assume, in regard to any of the parties concerned, that what they say now is necessarily what they will always say.
Lord PAGET of NORTHAMPTON: But, my Lords, what was the point of the Cledwyn Hughes mission? Will the noble Lord tell us, now that he has had the Cledwyn Hughes mission, that Cledwyn Hughes has told him that they will not come to a conference and that the Popular Front, in view of the relations between Nkomo and Mugabe, is not an alternative Government but only an alternative civil war? He will recognise that, within the human condition, government is the alternative to anarchy and that Smith is the best Government they have got.
Lord GORONWY-ROBERTS: My Lords, if I may reply to my noble friend, the point of the Cledwyn Hughes mission was to find out on the spot whether an initiative by the British Prime Minister calling a conference in London of all those concerned had a hope of succeeding. I recall that on the other side of the House—it may not be in this particular House—it was said, "This is a once-and-for-all move; we had better find out if this can succeed". Mr. Hughes applied himself in a painstaking and thorough manner to this one question, and made an objective and well presented report saying, "It is not on at the present moment, but when circumstances are more propitious then Her Majesty's Government, and the Prime Minister in particular, would be well advised to grasp the opportunity immediately"; and the plan is to respond entirely in those terms. As soon as the circumstances are propitious, the Prime Minister, with my right honourable friend, will move to convene such a conference, and I hope it will be in London.
Lord GLADWYN: My Lords, are Her Majesty's Government aware that we on these Benches feel that there is in fact no prospect of a successful outcome
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to any all-party conference until such time as the present régime in Rhodesia admits that there is a quite undue white preponderance for participation in the prospective new constitution, and are prepared to modify their view in that respect?
Lord GORONWY-ROBERTS: My Lords, the noble Lord makes a bull point. It is a fact that the much-vaunted constitution and electoral and parliamentary arrangement has built into it a wholly repugnant preponderance based on racial prejudice.
Several noble Lords: No!
Lord PEART: My Lords, I hope noble Lords will feel that I am under some difficulties. There are two more Questions, two Statements and a lot of business still to come. I would hope that noble Lords will appreciate this. Let us proceed.
Lord SAINT OSWALD: My Lords, we are talking about the future of a country.
Lord PEART: My Lords, I accept that, but the noble Lord knows that he can raise this again.
Lord GORE-BOOTH: My Lords—
Several noble Lords: No!
Lord PEART: My Lords, I hope we can proceed. I think I have the feeling of the House on this. I think so, really.
Several noble Lords: No!
Lord PEART: My Lords, I hope we can proceed.

ARGENTINA: ARMS SALES
2.55 p.m.
Lord AVEBURY: 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 is their policy on the licensing of arms sales to Argentina.
Lord GORONWY-ROBERTS: My Lords, in accordance with our general policy, each proposal for the supply of defence equipment to Argentina is considered against all the factors involved, including the relevant political, strategic and economic considerations.
Lord AVEBURY: My Lords, is the Minister aware that this is very much the same as what Mr. Ted Rowlands said to me when I met him on 2nd May last year and what he reiterated when he wrote to me on 6th June and 14th July, but that since those dates the United States Congress has passed a resolution under the Federal Assistance Act 1961 prohibiting all sales of defence equipment to Argentina, and all credits for arms sales, and bringing to an end all military assistance? In those circumstances, would it not be an unfriendly act if a Government such as the United Kingdom Government were to connive at arms manufacturers stepping in to fill the breach created by this American policy?
Secondly, may I ask the noble Lord whether we could not take this opportunity, considering that the Americans have scaled down the sale of arms to Latin America as a whole, to try to get together with our American allies and bring to an end the arms race, which has proved so damaging to the economic development of the sub-continent and which has brought in its train the possibility of hostilities—as, for example, in the case of the Beagle Channel—which would be damaging to the future prosperity and survival of the inhabitants of the whole continent?
Lord GORONWY-ROBERTS: My Lords, on the first point raised by the noble Lord, of course our own approach to questions such as this is different. We apply certain well-defined criteria relative to the country and to the item proposed for exchange. This is not quite the American position, and I see no essential dichotomy between the American practice and the British practice. We certainly have the same objectives in mind; namely, to limit the transfer of arms from one country to another.
That brings me to the second point made by the noble Lord, and I very much welcome what he said. The Mexican
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proposal to limit the supply of arms in Latin America and the Caribbeans is encouraging. Her Majesty's Government hope that the countries concerned will agree on a restrictive régime covering a range of arms of different kinds. Moreover, the United Kingdom would be willing to consider formally the question of participating in any discussions resulting from this initiative. There are a great many of us, in all parts of the House, who believe that the regional approach to the sale and purchase of arms is a very promising one, and the Mexican initiative deserves every support it can get.
Lord PAGET of NORTHAMPTON: My Lords, will the noble Lord tell us whether decisions of this sort by Her Majesty's Government are dependent upon their rating of the relative horribleness of the Governments of Chile and Argentina?
Lord GORONWY-ROBERTS: My Lords, as I said in my original Answer, a number of political, strategic and economic considerations are applied to the transfer of arms and defence equipment generally to any country. The situation in that country, its relation to us, our own proper economic interests and, of course, the question of human rights come into the general consideration. It is not a perfect set of criteria, but it has worked reasonably well and is reasonably applicable to different countries with different circumstances, and indeed to different items of proposed purchase.
Lord AVEBURY: My Lords, while warmly welcoming what the Minister has said about our response to the Mexican initiative, may I press him to consider again the possibility that we might harmonise our own policy with that of the United States, bearing in mind that it is going to be very much easier for the two Governments to reach an agreement on the limitation of arms sales and that, while our interests may be marginally different from those of the United States, the paramount interest that we both have is the prevention of military conflict in the sub-continent?
Lord GORONWY-ROBERTS: My Lords, we are in constant and close relationship with the United States of

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America. I am one of those who persist in referring to the state of affairs as a special relationship. Long may it continue! There is no reason why we should not discuss their policy in respect to a specific country—we are constantly doing this; and not just in respect of Argentina—or why they should not consult us about our policies. That goes on. However, I hope that the noble Lord will not detract from the value of the second part of his supplementary question. He knows as well as I that the previous Mexico initiative resulted in the Treaty of Tlatelolco, which had very important nuclear results and was a multilateral one. While there is scope for bilateral talks, discussions and decisions, we must never lose sight of the larger possibility of multilateral agreements resulting in definite covenants.

UNITED KINGDOM/ARGENTINE SCIENTIFIC RESEARCH SCHEME
3.1 p.m
The Earl of LAUDERDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the term "scientific research" describing the scheme for co-operation agreed in principle between the United Kingdom and Argentine Governments on 20th December includes exploration of the continental shelf for hydro-carbons; what is the precise geographical area to which the agreement relates; for what period it will operate; and at what intervals Her Majesty's Government will report results to Parliament.
Lord GORONWY-ROBERTS: My Lords, this scheme relates to co-operation in scientific research activities in and around the Dependencies of the Falkland Islands. It is not concerned with the Falkland Islands or with exploration for hydro-carbons. As I told the House on 16th January, it would be premature for me to give any further details of this scheme until our deliberations have been completed.
The Earl of LAUDERDALE: My Lords, while thanking the noble Lord
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for that Answer, may I ask, if it does not relate to hydro-carbons, to what it does relate?
Lord GORONWY-ROBERTS: My Lords, it relates to a wide range of scientific questions, from meteorology to Antarctic questions generally. It is the kind of question that arises in conditions and circumstances of this geographical sort. The scope of the discussions, while not including hydro-carbons, is sufficiently wide not only to offer hope for development in the Dependencies but also perhaps to give added strength and confidence to the larger discussions which are proceeding amicably between us and Argentina in regard to the future of the Falklands.
Baroness EMMET of AMBERLEY: My Lords, will the Minister take into consideration the fact—and I have just come back from Argentina—that I find that the handling of the situation there by our representatives with the Argentinians on all sorts of matters is being extremely well conducted?
Lord GORONWY-ROBERTS: My Lords, I am most grateful to the noble Baroness who, as we all know, has extensive experience of Latin America. I shall be delighted to convey what she has said to my right honourable friend.
Lord ELTON: My Lords, does the ambit of these discussions cover the status of meteorological stations on the outlying outposts of the Falklands; and does this contribute to the greater discussions that he was speaking of?
Lord GORONWY-ROBERTS: Yes, my Lords. I am glad that the noble Lord has, if I may say so, put his finger on the value of these talks. The illegal station in South Thule remains illegal. We have asserted, and continue to assert without reservation, our claim to sovereignty over South Thule, as indeed over these Dependencies generally. However, any discussions specifically aimed at advancing matters in the Dependencies can only help to resolve not only the disagreement about the station in South Thule but, as I said, the larger question of our relations with Argentina, a country with which, historically, we have for many years enjoyed close and fruitful relations.
Lord HARMAR-NICHOLLS: My Lords, in the overall, do the Government regard the sovereignty over the continental shelf around the Falklands as being British, without any sort of qualification?—so that we know where we stand.
Lord GORONWY-ROBERTS: Yes, my Lords.
The Earl of LAUDERDALE: My Lords, can the noble Lord answer the rest of my Question which related to the period during which this agreement operates and the intervals at which Her Majesty's Government will report to Parliament?
Lord GORONWY-ROBERTS: My Lords, I am afraid I did not catch the end of the noble Earl's supplementary question.
The Earl of LAUDERDALE: My Lords, it is on the Order Paper. The Questions are: For what period will this agreement operate; and at what intervals Her Majesty's Government will report results to Parliament?
Lord GORONWY-ROBERTS: My Lords, I apologise to the noble Earl and to the House. It is impossible at the moment to say for what period any agreement that arises will operate. As to the intervals at which we shall report to the House, I can only say that we will report to the House if and when agreement is reached and as frequently as the House feels that the Government should do so.
The Earl of LAUDERDALE: My Lords, is this agreement of indefinite duration?
Lord GORONWY-ROBERTS: My Lords, I should like to respond; but I am afraid I am not in a position to give even an approximate guess about this.

EX-PRESIDENT BHUTTO
3.9 p.m.
Lord ELTON: My Lords, I beg leave on behalf of my noble friend Lady Elles to ask Her Majesty's Government a
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Question of which she has given Private Notice—namely:
"To ask Her Majesty's Government what representations they have made to the Government of Pakistan seeking clemency on behalf of former President Bhutto".
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, my noble friend Lord Goronwy-Roberts will, at a convenient moment after 3.30, answer in the form of a Statement the Question asked by the noble Lord, Lord Elton, on behalf of the noble Baroness, Lady Elles. This will be followed by my noble friend Lady Stedman repeating a Statement on pay in the water industry.

SHOPS (SUNDAY TRADING) BILL [H.L.]
Lord PONSONBY of SHULBREDE: My Lords, I beg to introduce a Bill to amend the Shops Act 1950 to 1965 in relation to Sunday trading and Sunday employment in shops; and for connected purposes. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Ponsonby of Shulbrede.)
On Question, Bill read 1a, and to be printed.

INVERCLYDE DISTRICT COUNCIL ORDER CONFIRMATION BILL
Brought from the Commons; read 1a, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
SOLICITORS IN THE SUPREME COURTS OF SCOTLAND ORDER CONFIRMATION BILL
Brought from the Commons; read 1a, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.

CUSTOMS AND EXCISE MANAGEMENT BILL [H.L.]
CUSTOMS AND EXCISE DUTIES (GENERAL RELIEFS) BILL [H.L.]
ALCOHOLIC LIQUOR DUTIES BILL [H.L.]
HYDROCARBON OIL DUTIES BILL [H.L.]
MATCHES AND MECHANICAL LIGHTERS DUTIES BILL [H.L.]
TOBACCO PRODUCTS DUTY BILL [H.L.]
EXCISE DUTIES (SURCHARGES OR REBATES) BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I understand that no Amendments have been set down to the seven consolidation Bills in my name on the Order Paper and that no noble Lord has indicated a wish to move manuscript Amendments or to speak in Committee on any of these Bills. Therefore, unless any noble Lord objects, I beg to move that the Order of Recommitment in respect of each of these seven Bills be discharged.
Moved, That the Order of Commitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

LAND REGISTRATION (SCOTLAND) BILL [H.L.]
Report of Amendments received.
Clause 21 [Registration]:
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey)The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): moved Amendment No. 1:
Page 2, line 27, leave out ("is") and insert ("has been").
The noble and learned Lord said: My Lords, the object of this Amendment is simply to make a grammatical improvement. It helps to make it clearer that in Clause 2(3) we are talking about the situation which obtains once an interest in land has been registered and is on the Register, as distinct from Clause 2(1), which deals with the first entry on to the Register of an interest in respect of which there has been no entry before. I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 2:
Page 2, line 29, after ("creation") insert ("or transfer").
The noble and learned Lord said: My Lords, the interests in land referred to in subsection (3)(a) may be transferred as well as created. The Amendment simply narrates that fact.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 3:
Page 2, line 29, leave out ("related").
The noble and learned Lord said: My Lords, at the Committee stage the noble Lord, Lord Campbell of Croy, pointed out to us that this word was possibly superfluous and might be confusing. We agree and, as it is dispensable, we should like to dispense with it. I beg to move.
Lord CAMPBELL of CROY: My Lords, may I thank the noble and learned Lord. I am grateful for the response in acceding to a point which was raised at the Committee stage.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 4:
Page 3, line 6, at end insert—
("( ) In this section, "enactment" includes sections 17, 18 and 19 of this Act.").
The noble and learned Lord said: My Lords, Clause 2 as originally drafted was by amendment at Committee stage split into two clauses. As a result, the reference to the term "enactment" is now found only in Clause 3, which originally formed the latter part of Clause 2. Clause 2 therefore requires its own reference to "enactment" and the Amendment supplies this in appropriate terms for this clause. I beg to move.
On Question, Amendment agreed to.
Clause 3 [Effect of registration]:
3.13 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 5:
Page 3, line 29, leave out ("is") and insert ("has been").
The noble Lord said: My Lords, this is an Amendment which is similar to Amend-

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ment No. 1, which has been moved by the noble and learned Lord. It seemed necessary as it is in the same sense as the Government's Amendment No. 1; the wording of the Bill is similar at this point. Unless the Government have some reason against it. I would have supposed that this Amendment should be made as Amendment No. 1 has been made.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 6:
Page 3, leave out from beginning of line 30 to ("to") in line 31.
The noble and learned Lord said: My Lords, the Amendment, arising from a suggestion from the Law Society of Scotland, removes some unnecessarily restrictive words. There is, we are persuaded, no reason why an obligation to assign title deeds and searches should have no effect only when an obligation arises on any of the events referred to in Clause 2(1)(a) or (3) of the Bill. The intention is that any obligation of this nature, however arising, shall be of no effect when the necessary conditions as to registration are met. Accordingly, I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 7:
Page 3, line 34, leave out ("cease to have") and insert ("be of no").
The noble and learned Lord said: My Lords, again this is simply a drafting Amendment which I hope expresses the intention of the clause more accurately; that is to say, the existing obligations shall have no further effect and any new obligations (which would otherwise be imported by Clause 16) shall have no effect ab initio.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 8:
Page 3, line 41, leave out ("16").
The noble and learned Lord said: My Lords, I can deal with this Amendment quite shortly. Clause 3(5) before amendment contained the words "under any enactment or rule of law". This sub section relates to assignations of title deeds and searches, and before amendment
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it was necessary to include Section 16 as a relevant enactment. An obligation to assign title deeds and searches is, by the amendment to Clause 3(5), no longer restricted to obligations under any enactment or rule of law, so the reference to Section 16 in Clause 3(6) is no longer relevant. I beg to move.
On Question, Amendment agreed to.
Clause 4 [Applications for registration]:
3.16 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 9:
Page 4, line 26, leave out from ("application") to ("on") in line 31 and insert (", after examination by the Keeper, is accepted by him, or
(b) where the application is not accepted by him on the grounds that it does not comply with subsection (1) or (2)(a) or (d) above but, without being rejected by the Keeper or withdrawn by the applicant, is subsequently accepted by the Keeper").
The noble and learned Lord said: My Lords, this Amendment arises out of a useful discussion which we had at the Committee stage which followed other discussions which were taking place with the Law Society. When an application arrives at the Registry it is received by the Keeper and entered in the application record. After a delay which will usually be a few days but could extend to a longer period, the Keeper examines the application. At that stage he either accepts the application, rejects the application, or holds it for further evidence or information from the applicant, which when forthcoming will enable the Keeper to accept the application subsequently.
At any time before the completion of registration the applicant may withdraw the application. If the application is rejected by the Keeper or withdrawn by the applicant it cannot retain the date of its receipt as its date of registration. If the application is subsequently accepted by the Keeper without having been rejected or withdrawn it will retain its date of registration, being the date of receipt. I believe the Amendment clarifies the position accordingly as regards receipt, acceptance, rejection, withdrawal and subsequent acceptance. I am grateful to those, including the noble Lord, Lord Campbell of Croy, who have drawn our attention to the need for improvement in this regard. I beg to move.
Lord CAMPBELL of CROY: My Lords, we are grateful to the Government for having put down this Amendment which meets the point raised and discussed at the Committee stage. It appeared then that clarification was needed on what constituted immediate acceptance by the Keeper of an application for registration and we went over the question of what happened physically to a document when it was delivered to the Keeper's office. The noble and learned Lord has now agreed with the matters which we raised then. I suggest that the document would certainly have to be examined before being accepted, so I naturally welcome the words now proposed to be inserted in the Bill.
On the other hand, the applicant would expect a receipt for the document after he left it in an outer office, if he was delivering it by hand, and that might have been deemed to have been acceptance unless this had been clarified. We also welcome the distinction now being made in his Amendment between rejection by the Keeper and withdrawal which would appear to be an action by an applicant. I suggest that the drafting has been much improved by his and other Amendments of a similar kind which the noble and learned Lord is tabling. I suggest the House should agree to this Amendment.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 10:
Page 4, line 34, leave out subsection (4).
The noble an learned Lord said: This Amendment is related to Amendment No. 12, and Amendment No. 29 is a consequential Amendment. It is perhaps rather more significant than the ones we have been dealing with hitherto. At the Committee stage, the Committee were not in general opposed to the principle that it would be appropriate to show in the Land Register those who have the title to land which extended to more than two hectares. This was thought not to be an improper public purpose of the Land Register. On the other hand, there were objections which were formulated by the noble Lord, Lord Campbell of Croy, and others, about the fact that the cost was going to fall upon the person who registered his land when the purpose was
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properly a public purpose. It was also thought—and I agreed with this at the time—that it might well be cheaper for the Keeper to do the necessary measurement rather than for the individual proprietors to do so.
Accordingly, it is now proposed—and this Amendment has the purpose of achieving this—to delete subsection (4) from Clause 4 and then, by Amendment No. 12, to put the obligation on to the Keeper. That means he will do the measurement that is required and he will have to incur the cost. Of course, the cost will then fall upon all those who use the Register in Scotland, and accordingly it will be spread on the public. I believe that these Amendments, taken together, will meet the objections hitherto stated, and I beg to move.
Lord CAMPBELL of CROY: My Lords, this is an Amendment which was moved by me at the Committee stage and so I am naturally very pleased to see that the Government have tabled and moved exactly the same one. The Government have concluded, from what the noble and learned Lord has said, that the Keeper can, over the period while the Register is being compiled, himself record the measurements to the necessary degree of accuracy which can in due course provide a picture of land ownership in Scotland. I will not repeat the arguments which I used at the Committee stage but I will remind your Lordships that the main point was that this Amendment will obviate unnecessary expenditure falling upon individuals in a haphazard way. I say "haphazard", because it could be simply a matter of mischance with an area that had never had to be precisely measured before even though it had changed hands. The Government, clearly, have looked at this carefully in the three weeks since the Committee stage and we are grateful to them for the Amendment.
On Question, Amendment agreed to.
Clause 6 [The title sheet]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 11:
Page 5, line 34, leave out from ("land") to end of line 36 and insert ("which shall consist of or include a description of it based on the Ordnance Map,").
The noble and learned Lord said: My Lords, I beg to move this Amendment. In principle it is the same as an Amendment (No. 19) which was moved by the noble Lord, Lord Campbell of Croy, at Committee stage. That Amendment was not pressed and was in fact opposed by me rather more vehemently than I opposed most of the others. But, having regard to the value of second thoughts, we have now looked at this again. We acknowledge that it is an acceptable and useful Amendment for the avoidance of doubt and, in the conciliatory mood we are in as regards this Bill, I am happy to move this Amendment, which achieves the purpose which the noble Lord sought.
Lord CAMPBELL of CROY: My Lords, again I am grateful to the noble and learned Lord for having accepted this Amendment and again it indicates the virtue of time being given for second thoughts. I myself always believe in trying to give the Government as much time as possible to have such second thoughts, and in this case that has been successful.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 12:
Page 5, line 36, at end insert ("and, where the interest is that of the proprietor of the dominium utile or the lessee under a long lease and the land appears to the Keeper to extend to 2 hectares or more, its area as calculated by the Keeper;").
The noble and learned Lord said: My Lords, we have already spoken about the substance of this. This is the Amendment which has the purpose of confining the disclosure of two hectares or more in a title sheet when the interest in the land is that of a feuar or a long leaseholder. These are the category of proprietors who are normally described as "landowners". The second purpose is to place on the Keeper, and not on the applicant, the duty of identifying land affected by this provision and of calculating its area; so this is really a substantial Amendment in relation to the duty of the Keeper. On this occasion I should like to express my gratitude to the noble Lord, Lord Campbell of Croy, for his help in relation to this and various other matters which I have been referring to and which I shall continue to refer to
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during the course of the Report stage. I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 13:
Page 6, line 26, at end insert—
("In this subsection "overriding interest" does not include the interest of a lessee under a lease which is not a long lease.").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 13. It is associated with the next Amendment, No. 14. These are both made in response to a point made by the noble Lord, Lord Campbell of Croy, at the Committee stage; namely, that the only application of the definition of "over-riding interest" was to subsection (4) of the clause. The first Amendment therefore ties the definition to subsection (4). Amendment No. 14 is consequential and, by removing subsection (6), removes the now superfluous definition from its existing position. I beg to move.
Lord CAMPBELL of CROY: My Lords, I should like particularly to thank the noble and learned Lord for having accepted the suggestion I made at the Committee stage. I recognise that it is not strictly necessary but I think it will help those who are going to have to work with this Bill when it is enacted later; and so, as I say, I am grateful to the noble and learned Lord.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 14:
Page 6, line 33, leave out subsection (6).
The noble and learned Lord said: My Lords, as I said earlier, this Amendment is consequential. I beg to move.
On Question, Amendment agreed to.
Clause 7 [Ranking of titles]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 15:
Page 6, line 36, leave out ("title") and insert ("deed").
The noble and learned Lord said: My Lords, the references to "title" or "titles" in this clause in every case mean

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"title to an interest in land", except in the case of the reference replaced by the Amendment. This reference is to an actual document and the Amendment, I hope, makes that clear. I beg to move.
On Question, Amendment agreed to.
3.27 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 16:
Page 6, leave out lines 42 and 43.
The noble Lord said: My Lords, I beg to move this Amendment and in doing so I would suggest that Amendments Nos. 17 and 18 should be discussed with it, as they all go together. The Bill as now drafted deals with a situation in subsection (3) where two registrations are received on the same day. Subsection (4) governs ranking between deeds in the Land Register and the Register of Sasines.
Amendment No. 16 and the other ones which I would wish to move would add provision for another situation: that is where registration in the Land Register and in the Register of Sasines is on the same day. This therefore makes provision complete, as we see it, for all the possibilities likely to occur. If the Government accept the wording of the Amendments, and if they accept Amendment No. 16, I am advised it will not be necessary for me to move Amendment No. 17 because that will automatically be carried out in the reprinting of the Bill.
Lord McCLUSKEY: My Lords, I am happy to say that the Government would ask the House to accept this Amendment and those related to it. We accept that the point outlined by the noble Lord, Lord Campbell of Croy, is a sound one and we were able to discuss it most helpfully with the Conveyancing Committee of the Law Society last week. We are grateful to him and to them for suggesting this change and I would commend it to the House.
On Question, Amendment agreed to.
[Amendment No. 17 not moved.]
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 18:
Page 7, line 3, at end insert—
("(4) Where the date of registration or recording of the titles to two or more interests
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in land is the same, the titles to those interests shall rank equally").
On Question, Amendment agreed to.
Clause 8 [Continuing effectiveness of recording in Register of Sasines]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 19:
Page 7, line 10, leave out from ("by") to ("has") in line 12 and insert—

("(i) an instrument which, having been recorded before the commencement of this Act in the Register of Sasines with an error or defect; or

(ii) a deed which, having been recorded before the commencement of this Act in the Register of Sasines with an error or defect in the recording,").

The noble and learned Lord said: My Lords, in moving this Amendment, may I draw attention to the fact that Amendment No. 20 is connected with it. As presently drafted, these subsections of Clause 8 might mean that any deed which has been recorded in the Register of Sasines with an error or defect may be re-presented after correction and recorded of new under Section 143 of the Titles to Land Consolidation (Scotland) Act 1868.
The relevant provisions of Section 143 are, in fact, less sweeping and are contained in the Amendments. Only where the writ presented is an "instrument", as defined in the 1868 Act, can an error or defect in the writ itself be corrected and the writ recorded of new. The definition covers only a particular class of deeds. A deed which is not an "instrument", as defined in the Act, may be re-recorded only if the error lay in the actual recording procedure, and not in the substance of the deed. My Lords, I beg to move.
Lord CAMPBELL of CROY: My Lords, again I have cause to be grateful to the noble and learned Lord for having considered this point since the Committee stage, because Amendment No. 19 was moved by me then and Amendment No. 20, which brings in the 1868 Act, is clearly supplementary to it. The noble and learned Lord has explained the need for this Amendment, so I need not go over it again, but commend it to the House.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 20:
Page 7, line 16, at end insert—
("In this paragraph, "instrument" has the same meaning as in section 3 of the said Act of 1868.").
The noble and learned Lord said: My Lords, this is the associated Amendment. I beg to move.
On Question, Amendment agreed to.
Clause 9 [Rectification of the register]:
3.31 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 21:
Page 7, line 32, leave out ("(2)") and insert ("(3)").
The noble and learned Lord said: My Lords, at the Committee stage the present subsection (2) of Clause 9 was added, and this is simply a drafting Amendment to replace an incorrect reference to a subsection. I beg to move.
On Question, Amendment agreed to.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 22:
Page 7, line 32, after ("(2)") insert ("and (3)").
The noble Lord said: My Lords, this is a paving Amendment for the substantive Amendment, No. 23. Therefore, with the permission of your Lordships, I should like to speak to both Amendments. I have tabled Amendment No. 23 again, because the Government undertook to reconsider it, particularly in the light of a point raised at the Committee stage by the noble and learned Lord, Lord Fraser of Tullybelton. The intention behind the main Amendment No. 23, is to remove any possible ambiguity in making clear that the relevant part of Clause 9, which is subparagraph (iv) of subsection (3)(a), is subject to the law of prescription. At the Committee stage, the Government agreed that the point was correct, but they thought than an Amendment of this kind was not necessary, because they felt that there should be no ambiguity arising.
I must inform your Lordships that, up to today, this has been a matter upon which the Law Society of Scotland have taken a different view from that of the Government, and that they attach impor-
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tance to ensuring that there is no possible doubt in the final form of the Bill. Since the Government have not put down an Amendment today, the only way of raising the matter was for me to put down my Amendments again, and we shall be interested to hear what are the latest views of the Government. This is a matter to which the Law Society of Scotland attach some importance, and naturally they, as well as we on this side of the House, will be interested to hear what are the Government's latest conclusions, the important point being that there should be no doubt whatever that the law of prescription does apply here. My Lords, I beg to move.
Lord FRASER of TULLYBELTON: My Lords, I have had some communication with the noble and learned Lord, Lord McCluskey, about this matter. He has been good enough to write to me with his views, which I appreciate, but I am still inclined to agree with the Law Society of Scotland that there is just an element of doubt as to whether the law of prescription is clearly preserved by this subsection. I would therefore support the Amendment. I am personally quite open to persuasion that it is unnecessary, and it may be unnecessary, but there is a risk and the Law Society are anxious about it. I see in the recommendations of the Henry Committee, which dealt with this matter, that they also particularly mentioned the law of prescription as being preserved and unaffected by this. But I cannot see any harm in the Amendment, and my present view is that it would be better to make the change.
Lord KINROSS: My Lords, before speaking in support of this Amendment, I should like, with your Lordships' permission, to say that I was unable to attend the Second Reading or the Committee stage of this Bill, the latter through illness, although as a member of the Law Society of Scotland I should have liked very much to do so. However, I fear that my contribution would have been minimal, because conveyancing was never my strong suit. In my case, however, this did not matter greatly, because for some 45 years Professor George Henry, the chairman of the committee which made the latest report that has given rise to this Bill, and I have been

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associated together in the same firm, for 33 of them as partners; and who better to turn to for help in conveyancing matters?
But that is not all, because Mr. Denys Andrews, who is himself an expert conveyancer and is presently the President of the Law Society of Scotland, is also a partner of mine and has taken a great deal of interest in this Bill. He has been the leader of the team and has attended many meetings with the noble and learned Lord, Lord McCluskey, whose knowledge of conveyancing is not so limited as he modestly made out during the earlier stages of this Bill.
Turning now to this Amendment, I subscribe to the view which has been expressed by the noble and learned Lord, Lord Fraser of Tullybelton, that it is by no means clear that the rules as to prescription apply and I feel that the insertion of this Amendment would make the position doubly clear. If members of the Law Society, who are conveyancers, do not think that it is plain, how are the lay members of the public to understand it? Therefore, I ask that the Government accept this Amendment either at this stage or, perhaps, at a later stage.
Lord McCLUSKEY: My Lords, we are certainly at one on this point that there should be no doubt, and to that end discussions have been taking place for a long period of time. I am not prepared to sit as a kind of judge in this field, and the discussions are to continue. Indeed, this matter is one of three which are on the agenda for a meeting on Thursday, when I hope that men of good will and expert conveyancers on all sides will be able to come to an agreement about the matter, and that I shall be able to come to the House and satisfy all and sundry.
Amendment No. 22, to which we are speaking, is simply, as the noble Lord, Lord Campbell of Croy, has said, a paving Amendment in relation to the main one, No. 23. We see it at the moment, although this is still a matter upon which we are not yet finally decided, as an Amendment proceeding upon an assumption that we will not accept; namely, that the Lands Tribunal, the Keeper and the Court are somehow relieved from being bound by the law of prescription by what is contained in this Bill. We see that there is a possibility of some harm here—
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and the noble and learned Lord, Lord Fraser of Tullybelton, mentioned the possibility of harm—because this Amendment would have the effect of making a title inviolate after prescription, whereas such a title is itself subject to prescription under a competing title.
Were this Amendment to be accepted in principle, and we made reference to the law of prescription, that would, perhaps, apply to a large number of Acts on the Statute Book—the Succession (Scotland) Act 1964, the Bankruptcy Acts, the Companies Acts and many more. However, that is still a statement of a not finally decided position. Therefore, may I ask the noble Lord not to press his Amendments Nos. 22 and 23 at this stage but to withdraw them. I hope that when we come to Third Reading we shall be in agreement and that then we shall be able to take this as a short Amendment.

EX-PRESIDENT BHUTTO
3.40 p.m.
Baroness ELLES: My Lords, with the leave of the House, may I say that I regret that the wording of the Private Notice Question which I have asked is incorrect. The correct wording is as follows:
"To ask Her Majesty's Government whether following the rejection of his appeal against the death sentence by Mr. Zulfikar Ali Bhutto, they will recall Her Majesty's Ambassador in Islamabad for urgent consultations."
Lord GORONWY-ROBERTS: The Answer of my right honourable friend is as follows:
"The task of the Ambassador is to remain in Islamabad to represent at this crucial stage the views of Her Majesty's Government. Now that the Supreme Court decision has been made, and there is a provision for Presidential clemency, the Ambassador has today delivered a personal message from my right honourable friend the Prime Minister to President Zia. The Government hope he will find a way to temper justice with mercy."
My Lords, that is the Answer which has just been made in the other place by my right honourable friend.
Baroness ELLES: My Lords, I should like to thank the Minister for that reply to my Private Notice Question. While we do not wish to interfere in any way with the internal affairs of another country, nor, indeed, with the processes of their traditional system, yet we would ask the Government, as good friends of Pakistan, to convey to the Government of Pakistan our anxiety, which I believe is shared by all sides of your Lordships' House, that in considering this very sensitive case they should bear in mind the wider political implications of carrying out this death sentence. May I also ask whether the Government could make some intervention as to the conditions in which Mr. Bhutto is being kept in prison. There have been considerable Press reports as to these condtions. This may be something which at the same time the Government might be able to touch on in their message to the President of Pakistan.
Lord GLADWYN: My Lords, we on these Benches feel that presumably there would be general agreement with the proposition that, while we should not seek to interfere in any way with the judicial proceedings of another and, indeed, a friendly country, it would seem to be in the long-term interests of Pakistan herself that clemency should be exercised now in respect of any crimes that Mr. Bhutto may be judged to have committed.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, as one who does not hold Mr. Bhutto's views at all, may I ask the Government whether I may be permitted to associate myself with these pleas. The quality of mercy is not one of which any man need be ashamed. Perhaps the Government will ask the Ambassador to remember that there is much about clemency in the Koran which General Zia might care to consider.
Lord HOME of the HIRSEL: My Lords, may I associate myself with my noble friends and with the Minister. I am very glad that a message is being sent to the Pakistan Government. I think that we in this country and in this House can claim to be friends of Pakistan. We should like the leaders of Pakistan to know of our concern for the reputation of Pakistan should this sentence be carried out.
Lord GORONWY-ROBERTS: My Lords, on behalf of my right honourable friend and the Government, it only remains for me to say that I fully share the views and the tone in which those views were expressed by the noble Baroness and the three noble Lords who have intervened in this brief exchange. I particularly value the sensitivity with which the noble Baroness put the points which she made, a sensitivity to which everybody else who spoke contributed. We have no wish to interfere with the internal processes, justiciary or otherwise, of an independent country, one with whom we have a very firm friendship. I am sure that what has been said, and the way in which it has been said, in this House this afternoon will be so understood by the Pakistan Government and by the people of Pakistan, of all shades of opinion. I shall draw to his notice the point which the noble Baroness raised about perhaps adding to the message which my right honourable friend has sent. The noble Baroness and everybody else will wish that that message, which I imagine is now on its way to Pakistan, should not in any way be impaired as to its essential sensitivity and also its prospects of success.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, the other Statement has been cleared in the other place. I do not know whether the Opposition Benches are ready to take it now?
Lord HAILSHAM of SAINT MARY LEBONE: My Lords, I think we had better have it.

WATER INDUSTRY PAY
3.45 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Stedman): My Lords, with the leave of the House, I shall repeat a Statement now being made in another place by my right honourable friend the Secretary of State for the Environment on pay in the water industry:
"I wish to make a Statement about pay negotiations for manual workers in the water industry.

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"The House may recall that on 19th January the water industry employers made a revised offer for manual workers representing an increase in earnings of 13·9 per cent. of which a substantial element—6·9 per cent.—related to a new productivity agreement. After lengthy negotiations the trade union side of the National Joint Industrial Council agreed to recommend acceptance to their relevant decision-making bodies. That offer was not in the event accepted by union members and negotiations resumed on 2nd February.
"In the early hours of this morning I learned that after long dicsussions the National Joint Industrial Council had not found it possible to reach a pay settlement for the manual workers. The offer—representing an increase in earnings of 15·9 per cent—made by the employers was not acceptable to the union negotiators as a basis for a pay agreement. This offer is worth an increase in average weekly earnings of £9.81 a week immediately rising to £12.70 from 1st April 1979. This is a major setback and disappointment with potentially very serious implications for industrial relations and for the British economy. I have therefore thought it right to request those concerned to reflect further and to consider whether in the national interest negotiations should be resumed. The House will not wish me to say anything further at this stage."
My Lords, that is the end of the Statement.
Lord SANDYS: My Lords, the House will indeed be grateful to the noble Barones for having repeated the Statement made by her right honourable friend in another place. From this side of the House, I too, will be circumspect in my remarks. That the talks of the National Joint Industrial Council should have been terminated at a very late hour last night after no less than 13 hours of discussion is a source of great dissatisfaction. We have, however, heard about one matter which is not specifically mentioned in the Statement but which has been reported in the Press; namely, that a further offer has been made. As I say, this is not specifically referred to in the Statement. I do not know whether the noble Baroness
610
would like to comment on that matter, or whether she can say that the Press statement was inaccurate.
Lord ROCHESTER: My Lords, we on these Benches would like to join in thanking the noble Baroness for having repeated this Statement. We share the view just expressed that the situation in the water industry is indeed serious. We support the Government in their view that those concerned should reflect further on the situation. We, too, have no desire to say anything which would in any way make further discussions more difficult. However, I think that I should add on behalf of my noble friends that if the Government, as seems to be the case, do not find it possible—as on all sides of the House they were advised to do last week—to consult with the Opposition Parties regarding these disputes in the public services generally, will they themselves now take responsibility by giving a firm and a clear lead to the negotiating bodies, advising them that they should not settle with the unions at the expense of either taxpayers or ratepayers, beyond certain specific limits? At the same time are the Government now prepared, in defence of the community at large, to state categorically that in the last resort they will take such action as will ensure that water supplies are maintained?
Baroness STEDMAN: My Lords, I am grateful to noble Lords for the responsible way in which they have received the Statement at this rather delicate stage of the negotiations. There have been certain Press comments this morning which I have discussed with the chairman of the National Water Council, and the offer made by the employers was just under 16 per cent., as I have reported to the House. It would seem that there may be some misunderstanding on this matter because I understand that in the course of negotiations one tries various permutations and combinations, finding how they work out; but the firm offer was for just under 16 per cent. and that is where the employers have stuck at the moment.
With regard to the Government intervening, it is of course a matter for the National Water Council, as the employers, and the appropriate trade unions representing the employees. The chairman of

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the National Water Council has kept in very close touch with my right honourable friend the Secretary of State throughout the whole of the negotiations on the manual workers' pay. The Secretary of State has informed him from time to time of the Government's views and where we think it would be appropriate to stick in the light of what is right and proper in the present circumstances. Like all other public authorities, the Water Authority is expected to act in the public interest in the same way as the other nationalised industries; and indeed they do and are doing at the moment. Therefore they had to know the Government's views on the specific pay proposals, which they were told, and the Government were prepared to accept the offer up to 16 per cent.
Lord NUGENT of GUILDFORD: My Lords, is the noble Baroness aware that the views expressed by the Secretary of State will command the general support of all sides of this House, I am sure, and indeed of the whole country? Is she further aware that the traditions of the water industry are those of constant service to the whole public, and will she ensure that both sides, employers and trade union leaders, are made aware of the expectation of the public that this great water industry will continue to serve the public with one of the basic needs of life, as they have always done? And will she make sure that not only the national leaders on the trade union side—who I know are doing their best—but also the local leaders on the trade union side will exert their influence to reflect the views of the majority of the workers in the water industry, who would wish to keep at work and would wish to continue to serve the public in the way they have always done?
Baroness STEDMAN: My Lords, I am sure the noble Lord is right in the sentiments he has expressed. We find it impossible to believe that the men, if asked, would turn down what is really a generous offer in the present circumstances. We also accept that if the offer is accepted there may still be some difficulties in some parts, where there may be some unofficial action for a short period. The Government will accept their responsi-
612
bility; they will maintain as good a service as possible. But we hope that the men themselves will realise what a good offer has been made to them and will ensure that their union leaders accept the offer on their behalf.
Lord WOLVERTON: My Lords, I should like to ask the noble Baroness one question which I think is very important. Does the Water Authority include sewerage workers, because they are vital also? The subject of sewerage is rather divided: the main sewage plants I think come under the Water Authority but I believe I am right in saying that the collection of sewage comes under the boroughs and districts. Would the award be the same for the sewerage workers as for the water workers?
Baroness STEDMAN: My Lords, the award is for the manual workers in all sections of the water industry. In some sense action by the sewerage workers would pose a rather greater health hazard to us, perhaps, in the immediate future than action by the ordinary water supply workers; but we hope that they too will be influenced by the size of the award that has been offered and that they will accept it.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, I do not want to embarrass the noble Baroness, but will she convey to her colleagues the view, certainly on these Benches and perhaps more widely, that the country will expect the Government to have contingency plans of the most important kind and that they are incurring a very heavy responsibility in the present circumstances by keeping us—the Opposition and the Liberal Benches—almost completely in the dark except for these public statements?
Baroness STEDMAN: My Lords, while negotiations are going on it is very difficult to keep consulting with all Parties and all organisations. We have done our best from the Department to make these statements available as and when there is some movement in the position, and we shall continue to do so. I hope that the next Statement we may make may be one of acceptance of the offer and that we shall be back to normal in the water industry. Certainly if the worst arises

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the Government will have contingency plans; we have a duty and a responsibility to maintain the water and the sewerage services and that we shall do.
Viscount MASSEREENE and FER-RARD: My Lords, if through unofficial action—or perhaps official action—water was cut off to some of our big cities, would that not be a criminal act? If one endangers life, and that certainly would endanger life, surely it would merit action under criminal law, would it not?
Baroness STEDMAN: My Lords, I think we should have to wait until some sort of action took place before making a decision on that.
Viscount TRENCHARD: My Lords, has the noble Baroness by any chance got any information on how much of the 15·9 per cent. offer was productivity and whether the productivity element is intended to be totally self-financing? Has she also got the rough earnings of the workers concerned, related to the number of hours worked?
Baroness STEDMAN: My Lords, the productivity element of the award is 6·9 per cent. and my understanding is that it is self-financing, which means that there is something like 9 per cent. left in the ordinary pay increase, which is the figure that we have in mind in so far as settlement for the other local government manual workers is concerned when their claim comes up. I am not able to give the noble Viscount figures of the actual earnings for the hours of work in the water industry. I will get them and will let him have them. What I can say is that this increase at the moment would be worth £9·81 a week immediately and when the consolidation takes place on 1st April, they would get another £12.70 a week, which I think is a fairly generous award in the present circumstances.
Earl FERRERS: My Lords, did the noble Baroness say £9 and then another £12?
Baroness STEDMAN: My Lords, I believe that I said £9.81 a week now, rising to £12.70 on 1st April.

LAND REGISTRATION (SCOTLAND) BILL [H.L.]
3.59 p.m.
Consideration on Report resumed.
The LORD CHANCELLOR: My Lords, we were dealing with Amendment No. 22.
Lord CAMPBELL of CROY: My Lords, I was about to wind up the short debate on Amendments 22 and 23 which I had moved, when the Private Notice Question and the Statement intervened. In his reply the noble and learned Lord, Lord McCluskey, has confirmed that there is still disagreement between the experts on conveyancing, about whether it is necessary to have Amendments like Nos. 22 and 23 in the Bill. He also told us that there was to be a further meeting on Thursday—that is in two days' time—and of course I should not wish to press this Amendment in the light of the further discussions that are taking place, particularly as, on having second thoughts and looking again at other parts of this Bill, the Government have been good enough to make a number of changes in response to suggestions made at earlier stages of the Bill.
I would just remind your Lordships that the intention of the Amendments is to remove any possible doubt as to the relevant part of Clause 9 being subject to the law of prescription. The noble and learned Lord, Lord Fraser of Tullybelton, has today expressed his own view that he is not completely happy with the Bill unamended in its present form, I hope that agreement one way or another will be reached among the experts before the Third Reading of the Bill. At the Third Reading there will be an opportunity for the Government or the Opposition to follow up the results of the discussions. So at the moment I simply reserve that position, and I beg leave to withdraw Amendment No. 22.
Amendment, by leave, withdrawn.
[Amendment No. 23 not moved.]
Clause 10 [Positive prescription in respect of registered interests in land.]
4.2 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 24:
Page 8, line 34, leave out paragraph (b).
The noble Lord said: My Lords, I beg to move Amendment No. 24. Clause 10, which we are now considering, seeks to insert words into Section 1 of a 1973 Act, the Prescription and Limitation (Scotland) Act, and the Law Society of Scotland have suggested that the wording which is proposed in paragraph (b), which my Amendment would seek to delete, is unsound in the face of an attempted fraud by forgery. I have therefore tabled this as a probing Amendment to draw attention to a possible weakness in the present form of paragraph (b). It appears possible that if registration followed a forgery, the forger could obtain a title that could not be challenged, through prescriptive possession on that registration. This is clearly not intended in the Bill. It is something that has been observed as a possible weakness and therefore I felt I must draw the attention of the Government to it. I beg to move.
Lord McCLUSKEY: My Lords, I should explain that paragraph (a), which the Amendment does not seek to touch, provides, as an alternative to the recording of a deed in the Register of Sasines as a foundation for positive prescription, the registration of an interest in the Land Register. Paragraph (b), which the Amendment seeks to delete is, intended to make it clear that the reference in sub section (1) of the Act of 1973 to a deed which was invalid ex facie or was forged refers only to a deed recorded in the Register of Sasines. Deletion of paragraph (b) makes this less clear. It does not apply the reference to a deed which induced registration in the Land Register and it is not appropriate that it should do so.
But we recognise the Law Society's fear in relation to fraud and forgery. We do not think that the Bill as presently drafted would have the effect that they fear it may have, but, on the other hand, this is a matter which I discussed last week with the Law Society Committee and again it is one where we ought to be able to come to agreement. I think the House will appreciate that we have made a lot of progress towards reaching agreement,
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and this is one of the outstanding points which has not yet been resolved. I hope we can resolve this matter between us on Thursday, so that those who assist the noble Lord, Lord Campbell of Croy, and those who assist me can reach agreement, and we can then express our agreement in a short Amendment at Third Reading. We think it may be desirable to make an Amendment at Third Reading to clarify the position. I should like to reserve my position on that matter until the discussions take place.
Lord CAMPBELL of CROY: My Lords, my intention had not been to take the whole of paragraph (b) out, as I think I indicated in my opening remarks, but to draw attention to a possible weakness in the drafting of the paragraph. The only way of doing this at Report stage was to put down an Amendment of this kind. The noble and learned Lord, Lord McCluskey, has taken the point. I am glad to know that he proposes that he or his officials should discuss this matter further with those who are worried about it outside the House. I am also glad that he leaves the situation open for amendment at Third Reading. Accordingly, I beg leave to withdraw Amendment No. 24.
Amendment, by leave, withdrawn.
Clause 11 [Transitional provisions for Part I].
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 25:
Page 9, line 4, leave out ("in that area").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 25. This Amendment is similar in purpose to an Amendment moved by the noble Lord, Lord Campbell of Croy, at Committee stage, and that Amendment was accepted by the Committee. That Amendment affected what is now Clause 11(1) and dealt with land completely outwith an operational area. Subsection (2) deals with the same point as subsection (1) when the land is partly within an operational area. It is a consequential Amendment to bring subsection (2) into line with subsection (1). I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 26:
Page 9, line 7, leave out from ("which") to end of line 8 and insert ("the provisions of this Act relating to registration have come into operation.").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 26. This was discussed at Committee stage. It is simply a drafting improvement.
On Question, Amendment agreed to.
Clause 12 [Indemnity in respect of loss.]
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 27:
Page 9, line 19, after ("any") insert ("land or charge certificate or").
The noble and learned Lord said: My Lords, Amendment No. 27 is associated with Amendment No. 28. I beg to move Amendment No. 27. Both of these are drafting Amendments. The word "information", I hope the noble Lord, Lord Campbell of Croy, will accept, is somewhat lacking in specification and not entirely appropriate to cover land or charge certificates issued by the Keeper. The word "manner" is less restrictive than the word "form", in the same clause, on the methods of issuing information which may be open to the Keeper under the rules. At this stage I beg to move Amendment No. 27.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 28:
Page 9, line 20, leave out ("form") and insert ("manner").
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 29:
Page 10, line 12, leave out ("disclosed under section 4(4)") and insert ("entered in the title sheet of an interest in that land under section 6(1)(a)").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 29. This is consequential on Amendments Nos. 10 and 12. I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 30:
Page 11, line 3, leave out ("particular") and insert ("information").
The noble and learned Lord said: My Lords, Amendment No. 30 relates to a discussion we had at Committee stage when the noble Lord, Lord Campbell of Croy, moved what was then Amendment No. 39. This proposed the replacement of the word "particular" with the word "information". We thought we might be able to do, better and we believe we now have done so, and Amendment No. 30. incorporates that improvement. I beg to move.
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble and learned Lord for removing the word "particular", which did have disadvantages, and for considering the alternatives, some of which we suggested from this side of your Lordships' House in Committee. The Government consider that "information" is the best of the available words, and I would commend it to the House.
On Question. Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 31:
Page 11, line 12, at end insert ("or to the description of the land in respect of which the feuduty, ground annual or rent is payable").
The noble and learned Lord said: My Lords, this Amendment is closely associated with Amendment No. 30. Although we believe that the word "information" is an improvement on the word being deleted, it is not now considered sufficiently precise to carry the whole meaning intended. This is that the Keeper should be liable for indemnity in respect of loss where such loss arises from an incorrect description of the land in respect of which the feuduty, ground annual or rent is payable. It has seemed best to spell this out by way of further amendment, and this is the purpose of Amendment No. 31. I beg to move.
On Question, Amendment agreed to.
Clause 15 [Simplification of deeds relating to registered interests]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 32:
Page 12, line 40, leave out ("is") and insert ("has been").
The noble and learned Lord said: My Lords, this Amendment is to the same

619
effect as two previous Amendments spoken to by myself and the noble Lord, Lord Campbell of Croy. I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 33:
Page 13, line 2, leave out ("Schedule D") and insert ("Schedules D and J").
The noble and learned Lord said: My Lords, Amendment No. 33 is intended simply to correct an error from the previous print and to make appropriate reference to Schedule I to the Conveyancing (Scotland) Act 1924. I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 34:
Page 13, line 16, at end insert—
("(3) It shall not be necessary—

(a) in connection with any deed granted by the uninfeft proprietor of a registered interest in land, to expede a notice of title;

(b) in any deed relating to a registered interest in land, being a deed referred to in section 3 of the Conveyancing (Scotland) Act 1924 or section 12 of the Conveyancing and Feudal Reform (Scotland) Act 1970 (dispositions etc. by persons uninfeft), to deduce title in accordance with the said section 3 or, as the case may be, the said section 12,

if evidence of sufficient midcouples or links between the uninfeft proprietor and the person last infeft are produced to the Keeper on registration in respect of that interest in land.").
The noble and learned Lord said: My Lords this is a point which was brought to our attention by the President of the Law Society, Mr. Andrews, and we are grateful to him for it. The Government are persuaded that the point is sound and accordingly it is incorporated in Amendment No. 34.
We are concerned here with an uninfeft proprietor. An uninfeft proprietor is one who has not completed his own title by linking it back through midcouples and links in title to the last infeft proprietor—that is to say, to the last title recorded in the Register of Sasines. Accordingly, provided the Keeper is satisfied that an uninfeft applicant has a good title to the interest that he is seeking to register in the Land Register, it is considered that the
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applicant should not be required to follow the procedure which has obtained hitherto as regards an uninfeft proprietor who seeks to record a title in the Register of Sasines. So he is not required to expede a notice of title or to deduce title in accordance with that section. He is not required to do that under the system of land registration. Accordingly, that is what the Amendment now seeks to achieve. I beg to move.
Lord CAMPBELL of CROY: My Lords, the House will have observed that the immediately following Amendment standing in my name—Amendment No. 35 is an alternative and would add words of a similar type in the same place in the Bill. I would only say that the drafting of my Amendment No. 35 has had the benefit of the expertise of the Law Society who raised this point originally, and that is the way in which the Society would have preferred to have made this point in the Bill. From what the noble and learned Lord said, it sounds as though the Government, who have had a chance to consider both the drafts, prefer Amendment No. 34, However, if for some reason the noble and learned Lord or his advisers have not had an opportunity of considering the alternatives, it might be possible to leave this matter over to a later stage. However, perhaps the noble and learned Lord is happy to make a selection now having looked at both Amendments carefully. Perhaps I could give way to him?
Lord McCLUSKEY: My Lords, I think that there are two points contained in Amendment No. 35 and one is the matter with which I have already been dealing—the matter of deduction of title. I think that we are satisfied that our Amendment is the correct one.
The other point is in relation to an obligation or a right of relief. We accept that special provision should be made for assignations of obligations and rights of relief so we accept that the second point contained is one to which we ought to respond. As I have said on previous occasions in connection with the drafting, we would prefer to look at the drafting afresh ourselves, but we would expect to come back on Third Reading with an Amendment which would incorporate the second point. I hope then that we shall have met both points.
Lord CAMPBELL of CROY: My Lords, I am grateful for that intervention by the noble and learned Lord which has enabled him during this Report stage to answer the point that I raised. It amounts to his preferring Amendment No. 34, but accepting that there is also a point of principle in Amendment No. 35 which may develop into an Amendment on Third Reading. Therefore, in the light of that I do not propose to move Amendment No. 35 when we reach it.
On Question, Amendment agreed to.
[Amendment No. 35 not moved.]
Clause 16 [Omission of certain clauses in deeds]:
4.14 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 36:
Page 13, line 30, at end insert—
("(b) import an assignation to the grantee by the grantor of").
The noble Lord said: My Lords, I beg to move Amendment No. 36 and I suggest that we also discuss Amendment No. 37 as the two Amendments are related. I am advised that all deeds coming within the ambit of Clause 16 should import an assignation. As the Bill is at present drafted it appears that deeds under Paragraph (a)(iii) only will impose an obligation on the grantor to assign his right. Therefore, Amendment No. 36 which I am now moving, and Amendment No. 37, seek to widen the clause to the extent required.
Lord McCLUSKEY: My Lords, the Government accept that Amendments Nos. 36 and 37 do more accurately describe what is required; namely, an importation of assignation rather than the imposition on the grantor of an obligation to assign. Therefore, we are happy to accept these two Amendments.
Lord CAMPBELL of CROY: My Lords, I thank the noble and learned Lord for accepting them.
On Question, Amendment agreed to.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 37:
Page 13, line 31, leave out ("(iii) to assign").
On Question, Amendment agreed to.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 38:
Page 14, line 19, at end insert ("and, in the case of a grant of land in feu, of all feuduties payable by the grantor to his superiors from and after the date of entry.").
The noble Lord said: My Lords, I beg to move Amendment No. 38. The purpose of Clause 16, as I understand it, is to shorten the form of existing deeds. I am advised that in a grant of feu the standard obligation of relief clause includes relief from all over-feuduties. I am sorry to use a technical term but that is what it is called, over-feuduties. Unless an Amendment of this type is accepted subsection (3)(b) will, I am told, not be used in feu grants because an obligation of relief clause will have to be inserted. Therefore, the intention of Amendment No. 38 is to simplify and carry out the purpose of the clause.
Lord McCLUSKEY: My Lords, I hope that the noble Lord, Lord Campbell of Croy, will forgive me for saying that, however unclear his explanation may appear to be, it could not possibly have been more clearly put and that derives I think from the difficulty of the subject matter. The Government are happy to recommend the acceptance of this Amendment to the House for the reasons which the noble Lord has advanced.
On Question, Amendment agreed to.
Clause 17 [Deeds of declaration of conditions]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendments No. 39 and 40:
Page 14, line 22, at end insert ("(a)")
Page 14, line 23, leave out ("in accordance with this Act") and issert ("(b) on the obligation being registered,")
The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 39 and 40 en bloc. Amendment No. 39 is simply a paving Amendment for Amendment No. 40, and the purpose of Amendment No. 40 is to clarify the meaning of the words:
"in accordance with this Act".
To discover this from the clause as presently drafted, it is necessary to refer to Clause 28(2) (which construes a reference to the recording of a deed in the Register of Sasines as a reference to

623
registration) as read with Clause 2(1) (which describes those interests which are registrable). The Amendment shortcuts that process by setting out what had to be deduced from the words deleted by the Amendment. Accordingly, Amendment No. 39 is a simplifying Amendment which is associated with Amendment No. 40. I beg to move.
On Question, Amendments agreed to.
Clause 18 [Variations and discharges of land obligations]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendments No. 41 and 42:
Page 14, line 31, after ("any") insert ("(a)")
Page 14, line 33, after ("discharged") insert ("(b) registered variation or discharge of a land obligation").
The noble and learned Lord said: My Lords, I beg to move Amendments No. 41 find 42 en bloc. These Amendments are similar in principle to the Government Amendments to Clause 17. The purpose of the second Amendment is to set out the implications of the clause for the purpose of the Land Register. As in Clause 17, it is necessary to refer to Clause 28(2), as read with Clause 2(1). The Amendment renders that unnecessary. I beg to move.
On Question, Amendments agreed to.
Clause 19 [Agreement as to common boundary]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendments Nos. 43 and 44:
Page 15, line 6, at end insert ("and on all other persons having an interest in the land or, as the case may be, the lands.").
Page 15, line 13, at end insert ("and on all other persons having an interest in the land or, as the case may be, the lands.").
The noble and learned Lord said: My Lords, in moving Amendment No. 43 I am happy to acknowledge the assistance that we have received from both the Law Society and from the noble Lord, Lord Campbell of Croy. These Amendments ensure that an agreement in terms of the clause shall be binding not only on the singular successors of adjoining pro prietors, but on anyone else having an interest in the lands concerned. Typically this would be the holder of a standard security over the lands concerned. I beg to move Amendments Nos. 43 and 44 en bloc.
Lord CAMPBELL of CROY: My Lords, I rise simply to thank the noble and learned Lord for again having taken a point that was raised during the Committee stage.
On Question, Amendments agreed to.
Clause 20 [Tenants-at-will.]
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 45:
Page 16, line 22, at end insert—
("(7) A heritable creditor whose security is over the tenancy land or land which includes the tenancy land, on there being tendered to him the amount mentioned in paragraph (i) of subsection (3) above (as read with subsection (4) above) and his reasonable expenses, shall discharge or, as the case may be, restrict the security so as to disburden the tenancy land.").
The noble and learned Lord said: My Lords, Clause 20 (6) imposes an obligation on the landlord to convey his interest in the tenancy land to his tenant-at-will free of all heritable securities. There is, however, no corresponding obligation on a heritable creditor to discharge or restrict his security so as to disburden the tenancy land. Amendment No. 45 makes good that omission. I beg to move Amendment No. 45.
On Question, Amendment agreed to.
4.20 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 46:
Page 16, line 22, at end insert—
("(8) In subsections (5) and (6) above, references to the conveying of the landlord's interest in tenancy land shall be construed in accordance with section 21(10) of this Act.")
The noble and learned Lord said: My Lords, in moving Amendment No. 46, I should refer at the same time to Amendment No. 49. The purpose of Amendment No. 46 is to apply to subsections (5) and (6) the definition of "conveyance" to be contained in new Clause 21(10). If the House approves, that is carried into the Bill by Amendment No. 49. Amendment No. 49 ensures that any reference to a "conveyance" in Clauses 20 and 21 shall be held to cover, first of all, a feudal title, secondly, a non-feudal title—that is to say a straightforward disposition—and, thirdly, an assignation of a lease, as appropriate. At this stage I beg to move Amendment No. 46.
On Question, Amendment agreed to.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 47;
Page 16, line 22, at end insert—
("(7) In this section and in section 21 of, and Schedule 1 to this Act, "tenant-at-will" means a person:—

(a) who not being—

(i) a tenant under a lease

(ii) a kindly tenant; or

(iii) a tenant or occupier by virtue of any enactment

is by custom and usage the occupier (actual or constructive) of land not exceeding one decare in area used principally for residential purposes or purposes ancillary thereto on which there is a building or buildings erected by him or his predecessors or acquired for value by him or them

(b) who is under an obligation to pay a ground rent to the owner of the land in respect of the said land but not in respect of any buildings erected thereon; and

(c) whose right of occupancy of the land is without ish;

(8) In any case falling within subsection ( ) above where

(a) there is no dwellinghouse on the tenancy land but there is another building or buildings; and

(b) in all other respects the provisions contained in paragraphs (a) to (c) are complied with

the tenant-at-will will be able to avail himself of the provisions of this and the immediately following section, subject to the proviso that the landlord shall be entitled to receive compensation in terms of subsection (3)(a) of this section only.
(9) Any dispute arising under subsections (7) or (8) above shall be referred to the Lands Tribunal for Scotland who may make such order as they deem appropriate.").
The noble Lord said: My Lords, I beg to move Amendment No. 47. This is a rather different kind of Amendment because it is an attempt—and I think the first one in legislation—to define a "tenant-at-will". During the previous discussions in your Lordships' House the Government made clear that no one had yet apparently been able to produce a satisfactory definition of a "tenant-at will" or a "tenancy-at-will". They more or less issued a challenge—at least that is how I saw it—to anyone to do so if he could.
During the three weeks' interval since the Committee stage, there have been meetings and consultations with solicitors, particularly in the North East of Scotland where most of the tenancies-at-will are to be found. That is to say, there have been
626
discussions with the solicitors who have been concerned with conveyancing with this very special kind of tenancy. As a result, this definition has been formulated I felt that it should at least see the light of day and therefore tabled it. It is a determined attempt to achieve what I understand the Government were hoping might be possible; namely, a definition which could go into the Bill.
I am also advised that the solicitors concerned would themselves see merit in having a definition of a "tenant-at-will" in the Bill, if it is possible to obtain a satisfactory one. I recognise that the Government may now need time to consider the terms of this Amendment so I would ask them to regard it as a first draft. If it has merit and if a refined version proves to be acceptable, then it could be put forward at the later stage of Third Reading or, of course, at some stage in another place where the Bill still has to pass.
I should point out that the Amendment on the Marshalled List contains an unusual word as regards legislation, though it is not uncommon in leases in Scotland—namely, the word "ish". That is a technical word, but I thought that I had better point it out in case any noble Lords thought it was a misprint. The general meaning is the opposite of "entry"; that is to say, "departure", "giving up" or "going out". I should also mention that the word "decare", which appears in the Amendment, means one-tenth of a hectare.
Finally, I want to explain the reference in subsection (8) which is now blank. It is intended to be the immediately preceding subsection, so that would be subsection (7). I believe that all who have been concerned in trying to define this extremely difficult subject will at least congratulate those who have been able to put forward this draft and suggest that it be considered. However, I recognise that so far this has proved to be an extremely difficult matter. Even though the noble and learned Lord may not have had time fully to consider this Amendment with his advisers, I hope that none the less he will continue to pursue this definition.
Lord McCLUSKEY: My Lords, I the entertained by the thought that when am

627
Law Society of Scotland first commented upon this particular Bill it issued a statement about it in which it said, among other things, that the Bill was framed in language that people might find difficult to understand. Therefore I am rather pleased to see that when it comes forward with a definition which it has prepared itself after due consultations, all one requires to know—if one can follow the rest of it—in order to understand it is what a "kindly" tenant is, what a "decare" is and what an "ish" is. So maybe the Society will learn a little humility from the attempt, however successful, when it comes to criticise the drafting of others.
Having got that off my chest, I would simply say that we recognise that this definition contains much useful material and we believe that it takes us quite a long way towards solving the problem which we had hitherto rather avoided, on the principle that one would always be able to recognise a tenant-at-will when one saw one. However, that does not seem to satisfy those who practise in the North East where there are tenants-at-will. I am happy to say that this is a matter which we would expect to resolve at the Thursday meeting. On that understanding, it may be that having publicised this definition and ventilated the matter, the noble Lord, Lord Campbell of Croy will not press the Amendment at this stage.
Lord FRASER of TULLYBELTON: My Lords, I simply want to say that it is very desirable to have an attempt to legislate on this matter. In the course of my practice, so far as I can remember I have never come across a tenant-at-will in any form, either on the Bench or in the practice. To my way of thinking kindly tenants are rather commoner and do not present any particular difficulty. The tenant-at-will does, and this is a useful attempt at a definition.
Lord KINROSS: My Lords, I too, have never had any practice which concerned a tenancy-at-will but then I do not practice in the North East of Scotland where this kind of thing prevails. Will the noble and learned Lord, Lord McCluskey, give an assurance that in the Bill there will be a definition of a "tenant-at-will"? If there is not such a definition,
628
I believe that we shall reach a state of chaos. It will not be good enough to have a document issued as guidelines because, as we know, guidelines can be varied and fall between extreme limits, as the guidelines in recent wage negotiations have done. Therefore, in order to understand this part of the Bill it is essential that there should be some definition of a "tenant-at-will".
Lord McCLUSKEY: My Lords, with leave, if I may respond to that particular question, I cannot give an assurance that there will be a definition. I believe that we may well come to agreement as to a definition, but it is better to have no definition than to have a bad one in the Bill. In a previous Bill where the term was used, no definition was given. That Bill gave certain housing improvement grant rights to tenants-at-will and that has actually worked, despite the fact that there was no definition. So it has worked upon the principle that those who were tenants-at-will were seen to be so when they preclaimed themselves to be. However, I hope to reach a definition and, if we do, it will appear at Third Reading.
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble and learned Lord, Lord McCluskey, for under taking to consider this further. I am sure that the solicitors who have been involved with tenants-at-will will also be grateful when they hear that the Governmentare continuing to consider this elusive definition and will try to find a suitable and satisfactory one.
As he indicated, the noble and learned Lord has certainly had his opportunity to respond to the Law Society of Scotland about its original criticism of the Bill in saying that in its attempts to formulate definitions it has produced some rather unusual words. I would point out that although a tenant-at-will is a fairly rare person, as those qualified in law in Scotland who have spoken in this debate have indicated, the word "ish" is not very rare because it appears in leases of different kinds in Scotland. It is a Scots legal term, but an unusual one, and that is why I thought I ought to draw attention to it in the Amendment. In the light of the noble and learned Lord's undertaking to continue to consider this matter, and knowing that further discussions will

629
be taking place with those who will have to deal with the Bill when it is enacted later, where tenancies-at-will are concerned, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 21 [Provisions supplementary to Section 20.]
4.31 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 48:
Page 18, line 6, leave out ("this section") and insert ("section 20 of this Act").
The noble and learned Lord said: My Lords, this is simply a drafting Amendment to rectify an incorrect reference to "this section". It is to be changed to "Section 20". I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 49:
Page 18, line 6, at end insert—
("(10) In this section and in section 20(5) and (6) of this Act, references to the conveying of the landlord's interest in the tenancy land shall be construed as references to a grant by him of a feu of that land or a transfer by him of it, and, in this section, "conveyance" shall be construed accordingly.").
The noble and learned Lord said: My Lords, I have already addressed the House on this Amendment. I beg to move.
Lord CAMPBELL of CROY: My Lords, I would just say that this appears to be an alternative. It is a starred Amendment so it has only appeared today, but it appears to be an alternative to Amendment No. 50 standing in my name. Therefore, this would be the appropriate moment for me to say that I think the Government Amendment meets the same point, and if the Government would prefer it I would accept this rather than my Amendment No. 50.
Lord McCLUSKEY: My Lords, I am grateful for what the noble Lord has said. I think his judgment in that is correct.
On Question, Amendment agreed to.
[Amendment No. 50 not moved.]
4.32 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 51:
After Clause 21, insert the following new clause:
Provisions supplementary to section 20: heritable creditors.
(".—(1) The provisions of this section shall have effect where a heritable security over tenancy land or over land which includes tenancy land falls to be discharged or restricted under section 20(7) of this Act.
(2) The heritable creditor shall be entitled for his interest to apply, and to be a party to an application, under section 21(1) of this Act.
(3) The Lands Tribunal for Scotland, if they are satisfied that the heritable creditor is unknown or cannot be found, may, on the application of the tenant-at-will or his landlord or both, make an order fixing the amount required to discharge or restrict the heritable security so as to disburden the tenancy land.
(4) If the heritable creditor—

(a) fails to disburden the tenancy land in accordance with section 20(7) of this Act, or

(b) is unknown or cannot be found, the tenant-at-will or the landlord or both may apply to the sheriff for an order dispensing with the execution by the heritable creditor of the deed of discharge or restriction in favour of the landlord and directing the sheriff clerk to execute the deed instead of the heritable creditor and on making such an order the sheriff may require the landlord to consign in court any amount or expenses which the landlord requires to pay for the purposes of section 20(3)(i), (4) and (5) of this Act to the heritable creditor or, as the case may be, any amount specified in an order under subsection (3) above.

(5) Where, in pursuance of an order made by the sheriff under this section, a deed of discharge or restriction is executed by the sheriff clerk on behalf of the heritable creditor, such deed shall have the like force and effect as if it had been executed by such heritable creditor.
(6) The sheriff may, on the application of any party, order the investment, payment or distribution of any amount consigned in court under subsection (4) above, and in so doing the sheriff shall have regard to the respective interest of any parties appearing to have a claim on such amount.
(7) Nothing in section 5 of the Sheriff Courts (Scotland) Act 1907 shall entitle any party to an application to the sheriff under this section to require it to be remitted to the Court of Session on the grounds that it relates to a question of heritable right or title.
(8) A heritable creditor shall have power to execute a valid deed of discharge or restriction in pursuance of this section notwithstanding that he may be under any such disability as is mentioned in section 7 of the Lands Clauses Consolidation (Scotland) Act 1845.").
The noble and learned Lord said: My Lords, this is rather a long Amendment,

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but it is consequential on the new Clause 20(7) which obliges a heritable creditor to discharge or restrict his security over tenancy land when the tenant-at-will acquires it. We gave consideration to a translation provision which would be shorter in order to make appropriate references to the application of Clauses 20 and 21 to heritable creditors, but it was considered preferable after that attempt to spell these out in a separate clause for reasons of clarity. It will be recognised that the new clause simply adapts as necessary the appropriate provisions of Clauses 20 and 21. I beg to move.
On Question, Amendment agreed to.
Clause 22 [Fees]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 52:
Page 18, line 19, leave out ("necessary") and insert ("reasonably sufficient").
The noble and learned Lord said: My Lords, the Amendment seeks to insert words which appear in Section 25 of the Land Registers (Scotland) Act which is being replaced by Clause 22. The word "necessary" which is at present in the Bill would impose an impossible rigidity on the fixing of fees. It would or might rule out a level of fees which created even a small surplus over the expenses of the Department. The proposed Amendment introduces a necessary element of flexibility. I beg to move.
On Question, Amendment agreed to.
Clause 24 [Appeals]:
Lord McCLUSKEY Lord McCLUSKEY had given Notice of his intention to move Amendment No. 53:
Page 18, line 30, after ("any") insert ("alternative".
The noble and learned Lord said: My Lords, I should indicate that I do not intend to move this Amendment. It was intended in fact to avoid doubt. The purpose of Clause 24(2) is to preserve an appellant's existing right of recourse to the courts, notwithstanding that Clause 24(1) nominates the Lands Tribunal as the forum for appeals arising from anything done or omitted to be done by the Keeper under the Bill. It is not,
632
however, intended that an appeal can be taken to a court of first instance if the same matter has already been dealt with by the Lands Tribunal.
The Amendment was intended, as it were, to cut off recourse to the ordinary courts if the appellant had chosen to go to the Lands Tribunal and the Lands Tribunal had dealt with the matter. But looking at it particularly carefully today we were not satisfied that it works, so I propose, with leave, not to press this Amendment at this stage but to come back with, I hope, a small Amendment at Third Reading. If no noble Lord wishes to speak I shall not move this Amendment.
[Amendment No. 53 not moved.]
Clause 26 [Rules]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 54:
Page 19, line 9, at end insert—
("( ) prescribing the form of deeds relating to registered interests in land;")
The noble and learned Lord said: My Lords, this is simply for the avoidance of doubt. It is not certain that the important category of deeds described in the Amendment is covered in the existing paragraphs of Clause 26, which contain matters regarding which the Secretary of State may make rules. I beg to move.
On Question, Amendment agreed to.
Clause 27 [Interpretation etc.]:
4.36 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 55:
Page 19, line 27, leave out from ("any") to end of line 28 and insert ("estate, interest, servitude or other heritable right in or over land, including a heritable security but excluding a lease which is not a long lease;")
The noble and learned Lord said: My Lords, I think that this is one of the last of the important matters that stand over, in effect, from the earlier discussions. Amendment No. 55 is designed in part to meet criticism from the Law Society of Scotland and from the noble Lord, Lord Campbell of Croy, that the present definition in the Bill of "interest in land" did not appear to cover heritable securities. The definition is therefore expanded to

633
include specific reference to "heritable security". In addition the definition excludes short leases from the "interest in land" for the purposes of the Bill. Such leases cannot at present be recorded in the Register of Sasines, and the position will be the same as regards the Land Register. It is helpful to have this made clear in the definition. I beg to move.
Lord CAMPBELL of CROY: My Lords, as the noble and learned Lord has said, this is one of the most important matters which has come up since the Bill was first introduced. We are therefore glad to see that the Government have accepted the advice that has been offered and have produced an Amendment for a definition on the lines suggested.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 56:
Page 19, line 30, at end insert—
(" "land" includes buildings and other structures and land covered with water;")
The noble and learned Lord said: My Lords, this Amendment seeks to introduce a definition of "land" for the first time in the Bill. The Bill is in the main concerned with interests in land but there are also references to land as a physical entity—for example, in Clause 19(1). The new definition of "interests in land" makes this additional definition necessary. I beg to move.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 57:
Page 19, line 31, after ("lease") insert ("(a)")
The noble and learned Lord said: My Lords, Amendment No. 57 is in the happy position of standing in the names of both the noble Lord, Lord Campbell of Croy, and myself. Amendment No. 57 is associated with later Amendments Nos. 58 and 59. Amendment No. 58 was proposed by the Government in response to a point raised by the noble Lord, Lord Campbell of Croy, at Committee stage. He asked whether a 10-year lease with the option to renew for at least another 10 years, so adding up to 20 years, or more, would be covered by the definition in the Bill of a long lease.
This, when we looked at it, was not beyond doubt, although the intention certainly was that this type of lease should be so covered. Amendment No. 58 therefore was intended to ensure this. It was in fact modelled on the definition of a long lease in Section 8(4) of the Land Tenure Reform (Scotland) Act 1974. However, when this was studied by the Law Society Conveyancing Committee they brought to our attention at the meeting that I attended with them last week that the words "or the grantee" were in, and they argued against their being in. When one looks at Amendment No. 59 in the name of the noble Lord, Lord Campbell of Croy, one observes that these words are not included. We consider that that is preferable to the Amendment which stands in my name. No 58. Accordingly, when we come to that I will ask the House not to accept Amendment No. 58 but to prefer Amendment No. 59. In the meantime, I beg to move Amendment No. 57.
Lord CAMPBELL of CROY: My Lords, I agree with the noble and learned Lord that it would be convenient to discuss Amendments Nos. 58 and 59 at this moment because our common Amendment No. 57 is simply an introductory Amendment to one of these alternatives. The noble and learned Lord has recorded how the Government did respond—and I thank him for doing so—to the query about leases which would add up to 20 years or more; and he has also recorded the difference that has occurred between the drafting of the Government's Amendment and the variation preferred by the Law Society. I am glad that he finds as a convenient way of choosing between the alternatives to accept Amendment No. 59, and I agree this would be satisfactory. I hope it will close this subject at this stage rather than needing further amendment on Third Reading.
On Question, Amendment agreed to.
[Amendment No. 58 not moved.]
Lord CAMPBELL Lord CAMPBELL of CROY moved Amendment No. 59:
Page 19, line 31, at end insert ("or
(b) which is subject to any provision whereby any person holding the interest of the grantor is under a future obligation, if so requested by the grantee, to renew the lease

635
so that the total duration could (in terms of the lease, as renewed, and without any subsequent agreement, express or implied, between the persons holding the interests of the grantor and the grantee) extend for more than 7 years;").
The noble Lord said: My Lords, I beg to move this Amendment, it being the one preferred by the Government.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 60:
Page 20, line 9, leave out ("over the interest").
The noble and learned Lord said: My Lords, this is simply a drafting Amendment which removes words which are superfluous in view of the reference to "interest over it" in Clause 27(1).
On Question, Amendment agreed to.
Clause 28 [Amendment and repeal of enactments]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 61:
Page 20, line 33, leave out (", including sections 17 and 18 of this Act,").
The noble and learned Lord said: My Lords, this is purely consequential on the earlier Amendments, Nos. 39 and 42. I beg to move.
On Question, Amendment agreed to.
Schedule 1 [Form of notice to be given by a tenant-at-will who wishes to acquire his landlord's interest as such in the tenancy]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 62:
Page 22, line 8, leave out ("grant him a conveyance of") and insert ("make over to him").
The noble and learned Lord said: This is also consequential, my Lords, this time on the Amendments to Clauses 20 and 21, which clarified the use of the words "conveying" and "conveyance" in those provisions. Amendment No. 62 also has the merit that it puts into the form words which are simpler to understand, namely, "make over to him".
On Question, Amendment agreed to.
Schedule 2 [Amendment of enactments]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 63:
Page 23, line 2, after ("28") insert ("of the Conveyancing and Feudal Reform (Scotland) Act 1970").
The noble and learned Lord said: My Lords, this is purely a drafting Amendment to insert the title of the measure to which Section 28 applies.
On Question, Amendment agreed to.
Schedule 4 [Repeals]:
Lord McCLUSKEY Lord McCLUSKEY moved Amendments Nos. 64 and 65:
Page 25, line 15, at end insert—

("1693 c. 22.

The Real Rights Act 1693.

The words "and priority".").

Page 25, line 17, at end insert—

("1868 c. 64.

The Land Registers (Scotland) Act 1868.

In section 6, the words "stamp the words "by post" ", the words "and thereafter" and the words "transmitted by post" where secondly occurring.

1868 v. 101.

The Titles to Land Consolidation (Scotland) Act 1868.

In section 142, the words "transmitted by post in terms of the Land Writs Registration (Scotland) Act "1868".").

The noble and learned Lord said: My Lords, the parts of the Acts repealed be these Amendments all contain provisions as to the ranking of titles to land which are at variance with Clause 7 which deals with the ranking of titles. I think I need say no more in relation to either.
The Earl of SELKIRK: My Lords, as we leave the Report stage, perhaps the noble and learned Lord would be good enough to give us some idea of how the operational areas will be brought into play. Where will the registration start and, roughly speaking, at what speed does he think it might proceed? It would be of interest to know that. I would not expect him to answer that today; perhaps he will give us the information on Third

637
Reading. I would add that it is particularly agreeable to find a Bill which has almost entirely been agreed and extensively amended, and we are grateful to the noble and learned Lord for that.
Lord McCLUSKEY: I shall certainly be happy to deal with that matter, my Lords. I think it has already been given some publicity, but it would be convenient at least to give a short description of what the intentions are in relation to bringing the measure into operation in the different areas of Scotland over the next decade or more.
Lord CAMPBELL of CROY: My Lords, as we part with the last two Amendments, I wish to add to what my noble friend Lord Selkirk said about the thanks that are due to the noble and learned Lord, Lord McCluskey, the Solicitor-General for Scotland, for the great attention he has clearly given to the Bill in the last three weeks and for being able to agree so many of the points at this stage.
On Question, Amendments agreed to.

PRICE COMMISSION (AMENDMENT) BILL
4.45 p.m.
Lord JACQUES: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Jacques.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Baroness Wootton of Abinger in the Chair.]
Clause 1 [Amendment of Price Commission Act 1977]:
Baroness SEEAR Baroness SEEAR moved Amendment No. 1:
Page 1, line 7, after ("earning") insert ("(a)").
The noble Baroness said: With permission, I will at the same time discuss Amendment No. 9. No. 1 is purely a paving Amendment designed to insert "a" in order that in Amendment No. 9 we can proceed to insert the new para-
638
graph (b), the purpose of which is to safe. guard enterprises which would otherwise be left without any safeguard in a situation in which the costs of raw materials had risen very greatly—as such costs at the present time are likely to rise very greatly—and which, with the removal of the 80 per cent. safeguard which has hitherto been available to them, would mean they would have no safeguard except in the judgment of the Price Commission. During the time the investigation was going on and, for that matter, afterwards—because it applies to both the investigation period and the post-investigation period—the price increases which they would have to sustain would not in any way be safeguarded because the safeguard clauses have now been removed. We want, particularly at this time when raw material prices are rising for reasons over which manufacturers have no control whatever, to make sure that this safeguard is maintained.
There may be some difficulties over the way in which the Amendment is drafted, but we argue that it is so vitally important that some safeguards should be given—particularly for this item, this over which it is crystal clear there will be great difficulties which manufacturers cannot possibly meet—and that there should be some assurance against a reduction of profits because of increases in raw material prices. I beg to move.
The Earl of GOWRIE: We on these Benches are glad to support the noble Baroness, Lady Seear, in her Amendment. Indeed, the Committee will be aware of Amendment No. 4 which stands in the names of my noble friend Lord Lyell and myself, so we are effectively debating No. 1, the paving Amendment, and Amendments Nos. 4 and 9, the substantive Amendments. I would only add to what the noble for protection at a time of rapidly shifting and escalating costs, which must be incontrovertible, that not only will the Amendment be welcome to many sectors of industry, particularly the food industry, but that in its intention, in its substantive points, it has all-Party support in another place. It was down in the House of Commons in the name of the Scottish National Party but was not discussed there simply because the previous draft of the Amendment was not acceptable to the Chair for technical reasons.

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I have no doubt that the noble Lord, Lord Jacques, will, as the noble Baroness, Lady Seear, suggested, give all sorts of reasons why this proposal is in some way technically defective, but the Government have paid draftsmen at their beck and call and should have no difficulty in getting it into shape. It would also seem reasonable from the Government's point of view even to accept the Amendment to save it going back to another place. We shall listen carefully to what Lord Jacques says, but I should have thought that, particularly at the present time, the case was incontrovertible.
Lord JACQUES: What I have to say in reply to the Amendments is a little involved, and important. Therefore, I shall read what I have to say, and I shall do so carefully and slowly. I can to some extent sympathise with the general feeling behind the Amendments. The cost of imported raw materials is to a great extent, though not entirely, outside the control of the purchaser. It therefore seems unfair that he should suffer as a result of increases in such costs. The Amendments are intended to give him some protection. I sympathise with that aim, but nevertheless I must oppose the Amendments. As I shall explain shortly, I believe that they are unnecessary, and that the concern behind them is unjustified. I also think that they reflect a fundamental misunderstanding of the nature of the safeguard provisions in the 1977 Act. Their acceptance would result in serious confusion.
Amendments Nos. 1 and 9, and the related Amendment, No. 4, make no sense in the context of a Bill dealing with the minimum level of profits which companies shall not be prevented from earning, and with the regulations governing such profit levels. If a company is to get a minimum level of profit, it would get that level of profit whatever its costs, since it would be able to pass on costs in the form of higher prices up to the point at which the minimum profit level was achieved. It therefore makes no logical sense to require, as the Amendments apparently seek to do, that minimum profit levels should be established to take account of one particular kind of increase in costs; namely,
"increases in costs incurred as a result of increases in prices of imported raw materials…"
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The Amendments could make sense only if increases in costs of imported raw materials were the only cost increases which a company had to face; and that is obvious nonsense. A company cannot be guaranteed a minimum level of profit merely by virtue of being able to recover costs of imported raw materials; other costs must be taken into account.
I can, however, see what the noble Baroness and the noble Earl are driving at. I think that they may wish to oblige the Price Commission to agree to an interim price increase for a company under investigation when that company can show that its costs have increased as a result of increases in prices of imported raw materials. In other words, the Price Commission would no longer have discretion in such a case, but would be statutorily obliged to issue a variation notice under Section 4(5) of the 1977 Act to permit price increases governing such increases in costs. But this would not be an amendment to Section 9 of the 1977 Act, with which the Bill is concerned, but to Sections 4(5) and 5(4) of the Act, with which, except consequentially, this Bill does not deal. There is no way in which sensible regulations could be drafted by virtue of these Amendments.
An Amendment requiring the Commission to allow interim price increases where costs of imported raw materials have increased is in any case unnecessary. In exercising its present discretionary powers, the Commission is obliged to have regard to Section 2 of the parent Act. Under Section 2(2)(a) the Commission may have regard to
"the need to recover costs incurred in efficiently supplying goods and services and in maintaining the value of the relevant businesses;"
Thus the Commission already has a statutory duty to look at the need to recover costs of imported raw materials. The company concerned should of course be efficient, and I assume that the noble Baroness and the noble Earl are not suggesting that inefficient firms should be entitled automatically to recover costs. If it could be shown that the Commission was in breach of its duty under Section 2, it would be open to challenge in the courts. Meanwhile, I can assure the Committee that the Amendments as they stand are confusing and make no sense. Even if one attributes to them the purpose which

641
I believe the noble Baroness and the noble Earl have in mind, they are quite unnecessary because they duplicate powers which the Price Commission already has.
Baroness SEEAR: I am afraid that it is not possible to accept the argument presented by the noble Minister. What he has really told us is that by the removal of the 80 per cent. guarantee, organisations are in fact left without any firm assurance that escalating costs are to be taken into account. As we said in the debate yesterday, there are of course general requirements under Section 2 of the 1977 Act for the Price Commission to take these matters into account, but these are all in the judgment of the Price Commission. The point which was made very clearly in the Second Reading debate is that, particularly at present when there are such rapid changes in costs which arise through no fault of the manufacturers, there should be no quantitative safeguard and that the only safeguard which the manufacturers are now to have rests on the judgment of the Price Commission. That is not satisfactory. What the noble Lord the Minister has really done is to make a case for not removing the initial 80 per cent. safeguard. That being so, I am afraid that we must divide the Committee.
Lord JACQUES: I believe that one point has been completely overlooked. I said that I appreciated what the mover of the Amendment had in mind, and I went further and said that this could be done but by an entirely different Amendment. I would ask that the matter be taken back and an entirely different Amendment be considered for the Report stage. An entirely different Amendment would not cause the serious confusion which would be caused by these Amendments.
Lord DENHAM: Will the noble Lord offer to the Committee to put the services of the Government draftsmen at our disposal to draw up such an Amendment which could be put down at the Report stage?
Lord JACQUES: I do not feel that the question is so much one of drafting as of getting the right place and the right kind of Amendment, and I am sure that, with the noble Lord, Lord Wigoder, available
642
to the Liberal Party, it would not be necessary for me to give the kind of assurance that has just been requested.
Baroness SEEAR: Lord Wigoder specialises in the subject of crime.
Lord BYERS: I wish to remind the noble Lord, Lord Jacques, that he started by saying that he had some sympathy with the intentions behind the Amendments and that they were intended to give some protection to efficient enterprises, which is true. May I put it to the noble Lord, as did the noble Lord, Lord Denham, that the best course for the Government would be either to come forward with their own proposition in order to achieve what we all want, or to allow us to defeat them so that they would be forced to the same end? That is what my noble friends Lady Seear and Lord Wigoder (with all his experience of crime), and I feel is the right thing to do.
Lord JACQUES: There are two elements in this matter. First, we say that the Amendments are unnecessary, that the Commission is obliged by virtue of Section 2 to take into account the matter referred to, and that if it fails to do so, it can be taken to court. That is our argument, but we are saying that, if it is wished to write the obligation into the Statute, it should be done not in this way but in another way. I do not think that there would be any great drafting difficulty; it is a question of making an Amendment to the right part of the parent Act.
Viscount SIMON: I have listened with care to what the noble Lord, Lord Jacques, said, and I thought that in his original explanation he said that the Commission had a statutory duty to take the matter into account, but later, when he read part of the section, he said that the Commission may take it into account. I do not think that the Commission has a statutory duty to take the matter into account. I feel that the noble Lord gave me my case with the closing words of his original intervention, when he said that the Amendments duplicate powers which the Commission already has, but it is not a duty which the Commission has under the Act.
Lord JACQUES: The Commission has a statutory duty to take into account

643
increases in cost of raw materials, but it may say that there are other ways in which this problem should be dealt with and there should be no increase. But it must take them into account. If it did not, it would not be carrying out its duties under the Act and could be challenged in the courts.
Lord LYELL: The noble Lord has made the case (I have the parent Act with me) but what worries me, having listened carefully to his opening statement, is the burden of proof that the company is so called "efficiently" importing its raw materials—and that, it seems to me, is the only cost involved where imported raw materials are concerned. The noble Lord quoted from the parent Act, Section 2(2)(a), which says:
"The matters aforesaid are—
a) the need to recover costs incurred in efficiently supplying goods …"
If a company has to go to law to decide whether or not it is "efficiently" supplying
the imported goods, then I think that the need for the Amendment is all the greater, because while going to law the cost of those imported goods is liable to fluctuate; and in this Amendment we are talking only of imported raw materials.
Lord JACQUES: Which simplifies it. You need not go to law: all you have to do is to convince the Commission.
Lord BYERS: I really think that the only way we can clear up the Government confusion which has arisen from the statement which the noble Lord was good enough to read to us—and it must have been a carefully considered statement, but, quite frankly, I did not understand it—is to divide. In that way we can get this matter clear at the next stage.
5.2 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 113; Not-Contents, 72.

CONTENTS

Ailesbury, M.

Exeter, M.

Northchurch, B.

Airedale, L.

Falkland, V.

Nugent of Guildford, L.

Alexander of Tunis, E.

Feversham, L.

Nunburnholme, L.

Allerton, L.

Foot, L.

O'Hagan, L.

Amherst, E.

Forester, L.

Rankeillour, L.

Amory, V.

Fortescue, E.

Robbins, L.

Ampthill, L.

Fraser of Kilmorack, L.

Rochester, L.

Auckland, L.

Gisborough, L.

Romney, E.

Avon, E.

Gladwyn, L.

St. Davids, V.

Avon, E

Gladwyn, L.

St. Davids, V.

Barrington, V.

Glenkinglas, L.

St. Just, L.

Belstead, L.

Gowrie, E.

Saint Oswald, L.

Bessborough, E.

Granville of Eye, L.

Sandys, L.

Bolton, L.

Greenway, L.

Savile, L.

Byers, L.

Grey, E.

Seear, B.

Caccia, L.

Gridley, L.

Selkirk, E.

Campbell of Croy, L.

Hailsham of Saint Marylebone, L.

Sharpies, B.

Cathcart, E.

Simon, V.

Chitnis, L.

Hampton, L.

Skelmersdale, L.

Clifford of Chudleigh, L.

Hankey, L.

Strathcarron. L.

Clitheroe, L.

Home of the Hirsel, L.

Strathclyde, L.

Cockfield, L.

Hornsey-Smith, B.

Strathcona and Mount Royale.L.

Cottesloe, L.

Ilchester, E.

Strathspey, L.

Craigton, L.

Inglewood, L.

Swaythling, L.

Crathorne, L.

Killearn, L.

Teviot, L.

Cullen of Ashbourne, L.

Kilmany, L.

Teynham, L.

De Freyne, L.

Kilmarnock, L.

Trefgarne, L.

De La Warr, E.

Lauderdale, E.

Trenchard, V.

Denham, L. [Teller.]

Long, V.

Tweedsmuir, L.

Dulverton, L.

Luke, L.

Ullswater, V.

Ebbisham, L.

Lyell, L.

Vernon, L.

Effingham, E.

Mancroft, L.

Vivian, L.

Ellenborough, L.

Marley, L.

Wade, L.

Elles, B.

Massereene and Ferrard, V.

Ward of North Tyneside, B.

Elliot of Harwood, B.

Merrivale, L.

Westbury, L.

Elton, L.

Mills, V.

Wigoder, L. [Teller.]

Emmet of Amberley, B.

Mowbray and Stourton, L.

Winchilsea and Nottingham, E.

Evans of Hungershall, L.

Newall, L.

Wolverton, L.

NOT-CONTENTS

Ardwick, L.

Gregson, L.

Paget of Northampton, L.

Aylestone, L.

Hale, L.

Pannell, L.

Bacon, B.

Hall, V.

Pargiter, L.

Balogh, L.

Hanworth, V.

Peart, L. (L. Privy Seal.)

Blease, L.

Henderson, L.

Phillips, B.

Boston of Faversham, L.

Houghton of Sowerby, L.

Plant, L.

Brimelow, L.

Jacques, L.

Ponsonby of Shulbrede, L.

Castle, L.

Kaldor, L.

Raglan, L.

Collison, L.

Kirkhill, L.

Ritchie-Calder, L.

Cooper of Stockton Heath, L.

Leatherland, L.

Segal, L.

Crook, L.

Lee of Newton, L.

Shinwell, L.

Crowther-Hunt, L.

Leonard, L.

Stedman, B.

Darling of Hillsborough, L.

Listowel, E.

Stewart of Alvechurch, B.

David, B.

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

Stone, L.

Davies of Leek, L.

Strabolgi, L. [Teller.]

Denington, B.

Lloyd of Hampstead, L.

Taylor of Blackburn, L.

Douglas of Barloch, L.

Longford, E.

Taylor of Mansfield, L.

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

Lovell-Davis, L.

Wallace of Coslany, L.

Fisher of Camden, L.

McCarthy, L.

Walston, L.

Gaitskell, B.

McCluskey, L.

Wells-Pestell, L.

Gardiner, L.

McGregor of Durris, L.

Whaddon, L.

Glenamara, L.

MacLeod of Fuinary, L.

Wilson of Radcliffe, L.

Gordon-Walker, L.

Murray of Gravesend, L.

Wootton of Abinger, B.

Goronwy-Roberts, L.

Oram, L.

Wynne-Jones L.

Greene of Harrow Weald, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

5.13 p.m.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of A binger): Unfortunately, the next two Amendments have been printed in the wrong order, so we now proceed to Amendment No. 3.
The Earl of GOWRIE The Earl of GOWRIE moved Amendment No. 3:
Page 1, line 10, after ("examinations") insert ("and section 4(5) of that Act ").
The noble Earl said: Lest the Committee thinks that this wrong order may be a sort of collusion of incompetence among the various Front Benches, may I say that this is the trouble with taking legislation as hurriedly as is happening at the present time. One of the most enjoyable moments I have had in your Lordships' House in the last few weeks was yesterday, when on Second Reading the noble Lord, Lord Jacques, told us that this legislation had nothing to do with the emergency. For legislation which is engaged in minor and capitalistically perfectionist details on monopoly and competition and the like, it is certainly occupying a very frenzied place in the Parliamentary timetable, and it is because of that frenzy that some of these nonsenses have taken place.
While the Bill as drafted seeks to abolish both the interim and the principal safeguards, this Amendment has the effect of retaining the requirement for there to be an interim safeguard. May I say to
646
the Committee that I should like to take with this Amendment, Amendments Nos. 11, 13, 15, 16, 17 and 18, all of which I take to be consequential upon this Amendment No. 3.
The reasons for retaining the interim safeguard are very clearly, I think, that safeguards are necessary because prices are frozen when a price investigation is announced. This is the effect of the repeal of the previous Bill. This we feel to be objectionable in two ways. First, we feel that it is unfair to prejudge the guilt of the company before any wrongdoing has been established by the Commission. A three-months' freeze is a penalty before the verdict is heard. Secondly, the whole purpose of the three-months' investigation of a price increase is to judge whether or not the increase is reasonable in the view of the Commission. The Commission has discretion to grant an interim award but the price freeze effectively forces the Commission to reach a judgment on the increase during the 28-day period prior to the investigation—when the same judgment is the whole purpose of the three-month inquiry. For businesses, the real fear of the prices freeze during the investigation is that cost increases can so quickly erode profits. There is a limit to the cost increases which a company can absorb and, when faced with sudden and large increases in raw material costs, little or nothing can be done but to pass on those costs. The interim safeguards guarantee

647
that there is a limit to which profits are eroded as the costs increase while the prices are frozen.
I cannot too often remind the Committee that, in fact, this Bill is about the repeal of safeguards on profitability which the Government themselves saw fit to put into the original Price Commission Bill. It will be said that the Commissioners' discretion to grant increases is a sufficient safeguard. I do not think that this can be completely relied upon. If it is argued that the Commission will normally allow reasonable interim awards, there can be little concern, surely, at statutorily requiring them to do so. I beg to move.
Lord JACQUES: The effect of these Amendments would be to negate a major part of the intention of the Bill; and this Bill, I might remind the Committee, has already been approved in principle by both Houses. The Amendments would restore the full effect of the safeguards during investigations by the Price Commission. Experience so far has been that the investigation safeguard is, in practice, the most important part of the safeguards. Acceptance of the Amendments will make a travesty of the Bill. Once an interim price increase has been allowed, whether under safeguards or otherwise, it cannot, as the parent Act stands, be reversed at the end of the investigation. The Amendments would not simply give firms protection during the investigation but, in practice, for a considerable time afterwards. Having given that explanation, I hope the noble Earl will feel that he can withdraw his Amendment.
The Earl of GOWRIE: The noble Lord has said that my Amendments, if accepted, would make a travesty of the Bill. I cannot accept that. The Bill is already a travesty and it would be impossible to "travestise" it any further. He also made the point, to which I am more sympathetic, that the principle had passed through the other place as well as through this House. In view of that and in view of the fact that the noble Lord will be aware that when we were dealing with previous Amendments (as led by the noble Baroness, Lady Seear) one of our arguments was that it would be right for the raw materials Amendment to be
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returned to the House of Commons—and if it is now his feeling that that is a fair thing to be done—I am happy to let the noble Lord off the hook on my present Amendment and beg leave to withdraw it.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES: We now go back to Amendment No. 2.
The Earl of GOWRIE The Earl of GOWRIE moved Amendment No. 2:
Page 1, line 10, after ("examinations)") insert ("and except as regards any notification given by the Commission in pursuance of subsection (1) of section 4 of that Act in respect of any increase of which notice has been given to the Commission in pursuance of an Order under section 5 of the 1973 Act where the said notice is given more then twelve months after the previous such notice".).
The noble Earl said: A very brief and temporary Lib-Con pact was put together to enable me to move this Amendment. There is no difference of opinion between the noble Baroness and myself upon it. The Government have emphasised that it is part of their prices policy that companies should seek to ensure the maximum practicable interval between price increases. While industry does not accept that such an arbitrary time period as 12 months is desirable or sensible, there is surely an argument for suggesting that those who keep to the spirit of the Government policy, which the Government feel is being reinforced by this Bill, should earn some additional protection from the effects of a Prioe Commission restriction. I beg to move.
Baroness SEEAR: We attach considerable importance to this Amendment. It does, as the noble Earl, Lord Gowrie, has said, encourage people to keep to what is the intention and the strong desire of the Government. We consider they should be given incentives so to do; and we consider it is of such importance that we shall push the Amendment to a Division.
The Earl of GOWRIE: The Liberal-Conservative pact did not originally include a Division, so I suppose the pact has now been disbanded. I must say that I think it would be a very good move if this Amendment went back to another place or was considered further on Report. At the same time, I am somewhat reluctant to take the eye of the Committee and

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both Houses off the Amendment I really mind about, which is the raw material Amendment. However, if my noble friends feel that they should follow the noble Baroness into the Division Lobby, it would be no part of my place to dissuade them.
Lord BYERS: Ought we not to hear from the Government before we make these decisions?
Lord JACQUES: I thought that it was better to hear the whole of the opposition before the Government replied. The Government support the objective of increasing the interval between price increases. There has indeed been a notable increase in intervals between price increases since the Price Commission Act came into operation. The fact that there is a 12-month interval between increases does not, however, in itself justify automatic special treatment under the legislation. The price increase may be unduly high or existing profit levels already more than adequate, despite the length of the interval. It is better to rely upon the discretion of the Commission which can allow for individual circumstances.
The Commission can already in the context of the criteria take into account the length of time between increases in deciding whether to mount an investigation. The Amendment covers only those who notify the price increases to the Commission in advance. If this line is to be followed at all, would it not be desirable to cover the smaller businesses which are not required to pre-notify?
Why are they being ignored? The Amendment is not entirely clear in its effect; it is not clear whether it relates to two increases in respect of the same product or whether there has to be a 12 months' gap in increases of any kind notified. The latter would be very harsh upon large companies which are notifying increases in different products all the time. I am advised that the Amendment, as it stands, would mean the latter and would inflict that hardship on the larger companies. I hope that with that explanation the noble Earl will feel that he had better withdraw the Amendment.
The Earl of GOWRIE: I am in the hands of the Committee. I am certainly sensible of what the noble Lord, Lord Jacques, has said. This is a matter which, speaking for myself, I would be happy to look at again on Report. For my part, I am happy to withdraw the Amendment, but it may be that other noble Lords do not with to withdraw.
The DEPUTY CHAIRMAN of COMMITTEES: Is it your Lordships pleasure that this Amendment be withdrawn?
Several noble Lords: No!
5.25 p.m.
On Question, Whether the said Amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 24; Not-Contents, 77.

CONTENTS

Airedale, L.

Foot, L.

Rochester, L.

Amherst, E.

Gladwyn, L.

St. Davids, V.

Auckland, L.

Grey, E.

Seear, B. [Teller.]

Banks, L.

Hampton, L.

Simon, V. [Teller.]

Barrington, V.

Kilmarnock, L.

Swaythling, L.

Byers, L.

Kimberley, E.

Wade, L.

Evans of Hungershall, L.

McNair, L.

Ward of North Tyneside, B.

Feversham, L.

Ogmore, L.

Wigoder, L.

NOT-CONTENTS

Ampthill, L.

Brockway, L.

David, B.

Aylestone, L.

Bruce of Donington, L.

Davies of Leek, L.

Bacon, B.

Castle, L.

Donington, B.

Balogh, L.

Collison, L.

Douglas of Barloch, L.

Bernstein, L.

Cooper of Stockton Heath, L.

Dowding, L.

Boston of Faversham, L.

Crook, L.

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

Brimelow, L.

Darling of Hillsborough, L.

Energlyn, L.

Fisher of Camden, L.

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

Raglan, L.

Gaitskell, B.

Rhodes, L.

Glenamara, L.

Lloyd of Hampstead, L.

Ritchie-Calder, L.

Gordon-Walker, L.

Longford, E.

Sefton of Garston, L.

Goronwy-Roberts, L.

Lovell-Davis, L.

Segal, L.

Gregson, L.

McCarthy, L.

Shinwell, L.

Hale, L.

McCluskey, L.

Stedman, B.

Hall, V.

McGregor of Durris, L.

Stewart of Alvechurch, B.

Henderson, L.

MacLeod of Fuinary, L.

Stone, L.

Ilchester, E.

Milford, L.

Strabolgi, L. [Teller.]

Jacques, L.

Murray of Gravesend, L.

Taylor of Blackburn, L.

Janner, L.

Northfield, L.

Taylor of Mansfield, L.

Kaldor, L.

Paget of Northampton, L.

Thomson of Monifieth, L.

Kilbracken, L.

Pannell, L.

Wallace of Coslany, L.

Kirkhill, L.

Pargiter, L.

Walston, L.

Leatherland, L.

Peart, L. (L. Privy Seal.)

Wells-Pestell, L.

Lee of Newton, L.

Pitt of Hampstead, L.

Whaddon, L.

Leonard, L.

Plant, L.

Wilson of Radcliffe, L.

Listowel, E.

Ponsonby of Shulbrede, L.

Wynne-Jones, L.

On Question, Motion agreed to.

5.35 p.m.
The Earl of GOWRIE The Earl of GOWRIE had given Notice of his intention to move Amendment No. 4:
Page 1, line 10, after ("examinations)") insert ("or of increases in the cost of imported raw materials incurred since the date of the last price increase.").
The noble Earl said: My only point in rising to my feet at this juncture is to establish that the Government accept that Amendments Nos. 4 and 9 are consequential on the vote we had on the first Amendment.
Lord JACQUES: Yes.
Lord WIGODER: They cannot both be consequential. Is it not right to say that Amendment No. 9 is consequential on Amendment No. 1, which the Committee carried, but that Amendment No. 4 should not be moved?
The Earl of GOWRIE: I am most grateful to the noble Lord. That is right. Amendment No. 4 is not moved.
[Amendment No. 5 not moved.]
Lord LYELL Lord LYELL moved Amendment No. 6:
Page 1, line 10, after ("examinations)") insert ("or, in the case of companies operating in assisted areas in order to earn profits to maintain those operations.").
The noble Lord said: This small Amendment is, I hope, in pursuit of a major Government incentive. It seems that Government investment incentives are, and always have been, designed to further the interests of firms in the assisted areas. If this Bill is in any way likely to harm companies, as we think it might,
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then all the more reason exists for taking very careful note of this Amendment, with its reference to "assisted areas".
A virtually identical Amendment was not considered in another place, on a mere technicality, but there the Government spokesman admitted, just as has the noble Lord, Lord Jacques, this afternoon, great sympathy with the objective of the Amendment. Thus we look to the Government in this Chamber to take note of our plea, and indeed of the plea of the minority Parties in another place. It cannot be reasonable or justifiable for the Price Commission to strike at prospective price increases and thus, we believe, put further difficulty in the paths of these companies, particularly in areas which may be in some difficulty for one reason or another—perhaps they may be "geographically disadvantaged", as the phrase goes, or perhaps in areas where employment is temporarily on the decrease. Certainly we believe that every single possible advantage should be given to the assisted areas, and for that reason I beg to move this Amendment.
Lord JACQUES: The Government regard this Amendment as undesirable, for three reasons. First, it is not necessary. By virtue of the Section 2(2)(c) (ii) of the parent Act, the Price Commission, in the exercise of their power to grant discretionary price increases, must have regard to the need for reasonable profits and
"to encourage the promotion of innovations and technical improvements and the expansion in the United Kingdom of the enterprises which consist of or include the relevant businesses;".
Although this passage does not refer directly to the assisted areas, the reference

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to industrial expansion would certainly include industrial expansion in the assisted areas.
The second reason is that it is not necessarily in the interests of the assisted areas that this Amendment should go on the Statute Book. Under Section 2(1) of the parent Act, the Commission is required to act in a manner:
"consistent with the making of adequate profits by efficient suppliers of goods and services;".
The maintenance of operations in the assisted areas is likely to be better served by efficient suppliers making adequate profits than by companies which are allowed to pass on costs to the consumer on an automatic basis and are therefore at a risk if becoming less competitive.
Thirdly, it would be very difficult to draft regulations which could be applied fairly. The safeguard regulations apply to individual prices and price increases. It would not always be easy to relate such individual prices and price increases to operations in the assisted areas. Should a company be allowed to increase its prices overall merely to cover a loss in one factory which happened to be in an assisted area, how could one ensure that the profits were used to maintain the operations in the assisted area rather than for some other purpose? It would be extremely difficult to devise regulations which were both fair in all cases and which could be administered by the Commission without the risk of frequent dispute. I hope, with that explanation, that the noble Lord will feel that he should withdraw the Amendment.
Earl DE LA WARR: The noble Lords keeps referring to Section 2: would he not agree that the duties of the Commission are almost totally qualified by the wording of Section 2(a) where they are required:
"to have regard to all matters which appear to the Commission in the particular circumstances to be relevant"?
The noble Lord has said more than once, and again just now, that the Commission must do this and must do that and it is all set out in subsection (2). But it is totally qualified, is it not, by the fact that they are allowed to make up their minds as to whether these matters are relevant.
Lord JACQUES: I replied to that question last evening, at the end of the Second Reading debate. My advice is that if the Commission has discretion, it must use it. It must use it reasonably, and if it does not do so then it can be challenged in the court.
Lord COCKFIELD: I suggest that an alternative view can be taken about that matter. It is perfectly true that if the Commission was perverse it could be taken to court, but it is highly unlikely that it could be challenged if its judgment was simply wrong. What we are saying, both on this Amendment and on earlier occasions, is that the Commission's judgment may well be wrong and, in view of the way in which the original Act is drafted, I doubt very much whether it would be possible to take it to court for that.
Lord JACQUES: This is not a matter which I am prepared to pursue at this stage.
Lord LYELL: The noble Lord, Lord Jacques, gave three reasons why I should withdraw the Amendment. His third reason was that, very often, aid to assisted areas does not work fairly. I totally agree with him that the investment incentives given to assisted areas do not work fairly to companies and enterprises which are on the borders of assisted areas. But since we have legislation and Government incentives to help those areas, then I should have thought there was every reason for giving such companies and enterprises all the help that is available.
I was a little lost by what the noble Lord, Lord Jacques, said about the parent Act. I have the parent Act with me and I was flying through it while he was speaking. He referred me to the top of page 4, Section 2(2)(c)(ii) and the expansion of businesses. But the wording is,
"…the expansion …of the enterprises which consist of or include the relevant businesses ".
I do not think that "relevant businesses", or anything in this sub-paragraph, relates to the problem that we have raised.
The noble Lord, Lord Jacques, says that the Commission will have discretion, but, as was suggested by my noble friend Lord Cockfield, there is no way of knowing

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how the Commission will use that discretion. If it used its discretion in what was felt to be an arbitrary or unfair way, there would seem to be very little remedy for an aggrieved company, especially in the circumstances in which the parent Act and this Bill will be operating. I am not entirely happy with the reply of the noble Lord, Lord Jacques, but I do not wish to push this Amendment at this time. However, we may want to return to it at a later stage. Having said that, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Lord LYELL Lord LYELL moved Amendment No. 7:
Page 1, line 10, after ("examinations)") insert ("or in the case of companies earning a return on the book value of assets employed in the business of less than 15 per cent., in order to earn profits equivalent to that amount.").
The noble Lord said: Once again, it falls to me to move this short Amendment. It appears that Clause 1(2) removes any requirement for a floor level safeguard when a company wishes or is forced to raise its prices, and, indeed, discretion is left entirely in the hands of the Commission. This Amendment seeks merely to provide a minimum base below which a company's profitability should not be driven, and we believe that this floor level is adequately harsh.
The Government have constantly referred in another place, as well as here yesterday, to this Bill's having no harmful effects on companies or on industry generally. But the degree of profitability is not easily forecast or, indeed, monitored, which is the word that is currently used so often. For this reason, the Amendment seeks to suggest a real minimum below which the return on the investments of a company will not fall. The level suggested in the Amendment is very low, and far too low to provide reasonable funds for any reinvestment. So I hope that the Government may see their way to accept this Amendment. I beg to move.
Lord JACQUES: It cannot be accepted that there should be any fixed standard level of profitability, even a minimum standard, for the whole of industry. This is contrary to the whole spirit of the Bill. Companies' financial needs vary widely, especially in the short-term, and so does
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the scope for increased efficiency. By guaranteeing companies an average level of profitability which could not be reduced at any time following an investigation, the Amendment would seriously restrict the Commission's scope for action; indeed, far more than at present. By referring specifically to the return on the book value of assets the Amendment ties the safeguards to an accounting system which is known to be unreliable. Furthermore, even if the accounting profession adopted a new standard which took into account inflation, there would be an unreliable standard, as is well known in the profession. In view of the unreliability of the standard which the Amendment proposes, I hope the noble Lord will feel that he ought to withdraw the Amendment.
Lord LYELL: The noble Lord, Lord Jacques, has been involved, as I have, in the profession of accountancy. He will know, as my noble friend Lord Boyd-Carpenter pointed out, that the Price Commission is run at the middle and lower levels by hordes of young accountants, as my noble friend described them. Those young accountants are doing all the work, and it is they who have to ferret out these figures. Those young accountants are in no way unreliable. If the noble Lord, Lord Jacques, is suggesting that inflation accounting is unreliable for the purposes of the Bill, then he should consider many aspects of yesterday's debate because the entire procedure is monitored and checked by young persons in the accountancy profession, about which the noble Lord has had such harsh things to say.
I agree with the noble Lord that the figure of 15 per cent. which we have just offered as a target may appear to be unreliable on a nationwide basis. We believe, however, that there should be some base level below which companies should not be forced to accept a profitability level. It was for that reason that we put down this Amendment. I do not believe that the noble Lord, Lord Jacques, can say that inflation accounting, or conventional accounting and the rate of return upon the book value of one's investments is entirely unreliable, because that is going to turn the whole operation of the Bill on its head.
The noble Lord, Lord Jacques, mentioned that this Amendment is contrary to the spirit of the Bill. The Bill works only

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pace the professional accountant and the young accountants who are seconded from firms. It was not necessarily a very good answer that the noble Lord gave. Once again, I think that we should do better to return to this matter at another stage. Therefore, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.51 p.m.
The Earl of GOWRIE The Earl of GOWRIE moved Amendment No. 8:
Page 1, line 10, after ("examinations)") insert ("or in the case of companies which are investing, profits sufficient to provide enough funds to ensure that cash flow is in balance over the coming 12 month period, so as to ensure that there is no damage to current investment plans and hence the prospects for jobs and higher output".).
The noble Earl said: If I may make a point in respect of the last Amendment, I think that the burden of my noble friend's speech is this: if the noble Lord, Lord Jacques, were running a small business, would he like young accountants like the noble Lord, Lord Lyell, to come in and tell him how to run it? Turning to Amendment No. 8, I propose to read out the Amendment in full because, more than a speaking note, I think that it says exactly what we are trying to do. In Clause 1, at page 1, line 10, after "examinations" we seek to insert:
"or in the case of companies which are investing, profits sufficient to provide enough funds to ensure that cash flow is in balance over the coming 12 month period, so as to ensure that there is no damage to current investment plans and hence the prospects for jobs and higher output ".
On Second Reading we debated—and I was certainly far from being the only person who felt that this Bill was cosmetic—the political context of the Bill. That is not our business this afternoon. Nevertheless, I think that the noble Lord must be aware that there has been a great chorus of anxiety from businesses that a Bill, which is not entirely innocent of political intent, political timing and the rest, might get in the way of real problems and real challenges over running businesses during a period of inflation. Of course, cash flow difficulties, with wildly varying interest rates and the like, are very substantial. We feel that companies will be discouraged from investing if they are not sure that they will be able to maintain cash flow. Even a large company might
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postpone a necessary employment-generating piece of investment.
Clause 1(2) of the Bill, as the Committee knows, removes the protection of the safeguard from those companies which have committed themselves to investment expenditure and which are reliant upon a price increase to secure adequate funds. It might be—and we shall come to the point of timing on a later Amendment—that provisions relating to investment, which assume a later price rise, have already been made and that the Price Commission could freeze such companies' price rises and totally alter their investment plans. I beg to move.
Lord JACQUES: The Amendment requires safeguards to provide for all companies which are investing. This would apply, one hopes, to most industrial companies. Safeguards would therefore have merely the same scope as at present. Moreover, safeguards for these companies would have to be such as to enable them to finance their investment plans out of retained profits, if they choose to do so. This is a very sweeping provision and goes far beyond the purpose of the existing safeguards. Of course the Government recognise the importance of providing funds for investment. This is allowed for already in the Section 2 criteria of the parent Act. The Commission must therefore take investment needs into account, and they have dealt with this point very carefully in their investigations so far. It cannot, however, be assumed automatically that the whole amount of investment should be financed out of retained profits and hence ultimately by the consumer. It may be desirable for at least part of the investment to be funded by raising capital on the market. This Amendment goes much further than the parent Act. In view of that explanation, I hope that the noble Earl will withdraw his Amendment.
The Earl of GOWRIE: I see in this argument some very curious and, if I might say so—not to the noble Lord but to those who have drafted the Bill—inexperienced economics. If I understand him aright, it does not seem to me to be a matter for the Price Commission to decide whether something should be done out of retained profits, or for a directive from the Price Commission to go out instructing companies to raise capital on

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the market. This is an absurdity, it seems to me. However, I shall study what the noble Lord has said, and if we can get this Amendment into better shape I will return to it at a later stage. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.57 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 9:
Page 1, line 10, after ("examinations)") insert—
("or
(b) in consequence of any increases in costs incurred as a result of increases in prices of imported raw materials purchased or used by such persons; ").
The noble Baroness said: Amendment No. 9 is, I think noble Lords will agree, consequential upon Amendment No. 1 which has already been agreed to. Therefore, I beg to move.
Baroness SEEAR Baroness SEEAR moved Amendment No. 10:
Page 1, line 10, after ("examinations)") insert—
("or
(c) in consequence of any increases in costs incurred by such persons as a result of Government action; ").
The noble Baroness said: Amendment No. 10 is of the same order and in some regards is complementary to Amendment No. 9 which has just been agreed to. As noble Lords know, Amendment No. 9 deals only with increases in the price of imported goods, but there are other extremely threatening increases in prices which manufacturers are going to have to face over the next 12 months.
Where those increases in prices are clearly the result of Government action, it is surely reasonable that safeguards should be incorporated in the manufacturer's right to price increases. In particular, and as an example of the kind of thing we are speaking about, if it is allowed that the wages of local authority employees have gone up considerably—and it has already been agreed, apparently, that they will go up by at least 10 per cent.—this is bound to mean a substantial increase in rates. This will fall very
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heavily on manufacturing industry, and a safeguard comparable to the safeguard for increases in imported prices is appropriate for increases in prices which manufacturers have to bear as a result, as this Amendment says, of Government action. I beg to move.
Lord JACQUES: The Bill does not remove the Commission's power to grant discretionary increases. In deciding whether to do so, the Commission are required to have regard to all matters relevant to restraining prices, so far as that is consistent with the making of adequate profits by efficient suppliers. Where Government action produces an unavoidable increase in costs which cannot be absorbed by greater efficiency, then the Commission will in effect be bound to allow the increase to be passed on to the extent necessary to allow an adequate profit. The Secretary of State would face great difficulty in making regulations which satisfy the requirements imposed by the Amendment. There would be no power to define what is meant by "costs incurred as a result of Government action". It would have to be left open so that the Commission or, following an investigation, the firm itself would have to consider what constituted such a cost. This would introduce an undesirable element of uncertainty into the Bill.
The Earl of GOWRIE: I wonder whether the noble Lord could clarify something which I think would help the Committee. The noble Baroness pointed out—very fairly I thought—that while this Amendment was in no sense consequential on the Amendment which we passed earlier, it was closely linked to it. As I understood him, in his reply the noble Lord said that if a price increase or raw material cost rose because of Government action or because of Government obligations, the Price Commission would be bound to allow this to be passed on. I am not clear where or how it says that the Price Commission would be bound to do so. I should be much happier about this if he could show us in what way the Commission is bound to allow the cost to be passed on.
Lord JACQUES: I think I had better quote the exact words which I used:
"Where Government action produces an unavoidable increase in costs which cannot be

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absorbed by greater efficiency the Commissior will in effect be bound to allow the increase".
The Earl of GOWRIE: That is fine; that comes out of the noble Lord's brief. But where does it come in relation to the Bill?
Lord JACQUES: The Commission is obliged under the criteria in Section 2 of the parent Act to allow costs in so far as they are consistent with the efficient management of the business.
Lord WIGODER: The noble Lord is referring to the words "It is the duty of the Commission to have regard to". He has gone (has he not?) very much further than that in his statement in the Committee today?
Lord JACQUES: Our interpretation of that is that if there was an increase of Government costs, unless the Commission could show that that could be absorbed by greater efficiency, in our opinion it would be obliged to allow the costs under Section 2.
Baroness SEEAR: I suspect that the difficulty in which the noble Lord finds himself is that he very much sympathises with this Amendment and that if rates are increased it is entirely appropriate that they should be allowed; but following the comment made by my noble friend Lord Wigoder I submit that although it is the intention of the noble Lord and the intention of the drafter of the noble Lord's brief, it is not in fact in the 1977 Act. That is all that matters, and it does not say that they are bound to; it only says that they are bound to have regard.
You can have regard to something and then, having looked at it, you can turn the other way and do something quite opposite.
There is nothing in this legislation to say that they are bound to take that increase in rates consequential upon Government action into account automatically. They only look at it and say, "It may be or it may be not". If the Minister wishes to make it in the sense that he said, that they should be required to do so, then he will accept our Amendment, because that is the only way to be sure that what the noble Lord said he wants to happen and he believes will happen will in fact happen.
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I submit that it will not happen on the basis of the 1977 Act.
The Earl of GOWRIE: Might there not be a way out of this difficulty? As the noble Baroness has pointed out to the Committee, the noble Lord, Lord Jacques, has given us a very clear statement of how he feels this should be interpreted. Might he not go back and see whether his clear statement of intent could not be institutionalised in some way and make his own suggestion on that?
Lord JACQUES: I am advised that if the Commission concludes that costs are unavoidable and cannot be absorbed by greater efficiency then it cannot refuse the increase. That confirms exactly what I said.
Lord BYERS: That seems again to be an opinion which has been expressed from that Despatch Box. What we are looking for is the authority in the Act which puts that obligation on the Commission. Would the noble Lord not take the point of view expressed by the noble Earl, Lord Gowric, and have another look at this matter? We have to go through the Report stage and Third reading; this is something which ought to be cleared up and we should like to know the authority.
Lord JACQUES: I think the authority is what we discussed earlier: it is that the Commission, having been given a discretion, must use it reasonably, and if it does not do so it can be challenged. I believe that is the authority.
Baroness SEEAR: I am very sorry, but I am afraid we cannot accept that as an adequate answer. The noble Lord has not told us where to find the legal basis; he has not given us the words from the Act. The Committee is asking the noble Lord to tell us where in the Act of 1977 the words "have regard to" appear. Given that there are no safeguards, we want it legally written in that the Commission has to do more than "have regard to". We want it written in that it is required to allow such increases to be included in the price increase.
If the noble Lord will take this matter back and look at it again, we shall be glad to withdraw the Amendment and to bring

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it in again at the Report stage. We do not ask him to commit himself either way at this stage. I am not anxious at this moment to press this Amendment to a Division, but if the noble Lord is not able to say that he will look at it again then I fear that I shall have to do so. I should prefer to withdraw the Amendment, to ask the noble Lord to look at it again and to bring it up at the Report stage.
Viscount TRENCHARD: Before the noble Lord replies, would he please remember the intervention earlier of my noble friend Lord Cockfield, who is not in his seat at the moment, with all his experience of Price Commission matters and all his background as an absolute expert in tax law and interpretation? He stated that he could not see, under this Act, how a company would have any action in law against the Commission for failing to regard one of the many criteria as being relevant.
Lord JACQUES: I would suggest that perhaps the best thing is to withdraw the Amendment and to table the same Amendment at Report stage, and then I shall either give the same answer or a different answer or I shall produce an Amendment which will achieve the same objective.
Lord BYERS: Could it be a better answer?
Baroness SEEAR: I thank the noble Lord very much, and in the light of that I shall be glad to withdraw the Amendment, but on the clear understanding that we shall reintroduce it at Report stage. We hope that by that time the noble Lord will have come forward with what I think his Party likes to call a "copper bottomed" answer to this problem. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.9 p.m.
The Earl of GOWRIE The Earl of GOWRIE had given Notice of his intention to move Amendment No. 11:
Page 1, line 12, leave out subsection (2).
The noble Earl said: This Amendment has been taken with Amendment No. 3.
Lord LYELL Lord LYELL moved Amendment No. 12:
Page 1, line 17, after ("effect") insert ("and subsection 4(5)(ii) shall be replaced with the following subsection: "in a case where, upon receipt of an application pursuant to subsection (5) above the Commission do not subsequently give a variation notice to the relevant person, they shall be required to provide that person with a notice setting out that fact and explaining, by reference to such matters specified in section 2 of the Act as it considers are relevant in the circumstances and in particular by reference to such of those matters mentioned in the original application of the relevant person to the Commission, their reasons for not giving a variation notice".")
The noble Lord said: This particular Amendment arises as a result of Clause 1(2) of the Bill. Clause 1(2) seems to us—and indeed it is intended to—to remove the interim profit safeguard, but we are told that the Commission still has the power under this Section 4(5)(ii) of the main parent Act to grant an interim increase at its own discretion; that is, at the discretion of the Commission. Our Amendment is designed to introduce one or two procedural safeguards on the use of this particular discretion. We might be treading on some of the same ground that the noble Lord, Lord Jacques, was covering in the last Amendment. It seems that if the Bill is passed the interim profit safeguards are going to be removed; the discretionary power of the Commission to grant any interim awards, again under Section 4(5)(ii) of the main, Parent Act, becomes in this case of crucial importance.
Companies which are faced with increases in particular raw material costs are wholly reliant on this discretionary power of the Commission. Raw material costs can increase suddenly and it is impossible for the company to absorb them by way of increased efficiency, to which the noble Lord, Lord Jacques, has drawn attention. I wonder whether in the course of his remarks the noble Lord could tell us how it is possible to improve efficiency so far as imported raw materials alone are concerned—nothing else, not the handling from the ports, not the handling in the particular works, but the actual cost of imported raw materials. I cannot see that there is a relevant and logical link between the argument of efficiency which was used by the noble Lord, Lord Jacques, and what we are concerned with here, the cost of raw materials.
The legislation, particularly the parent Act, provides very little guidance to the Commission on the use of their power of discretion. Indeed, Section 4(5) of the parent Act says that when the Commission have received a request for the variation notice they may—and I emphasise "may"—give to the relevant person a variation notice.
Lord JACQUES: May I ask the noble Lord which Amendment he is speaking to?
Lord LYELL: I am speaking to Amendment No. 12. I understood we had disposed of No. 11.
Lord JACQUES: I understood that we were considering No. 12 and I could not relate what the noble Lord was just saying to Amendment No. 12.
Lord LYELL: I was speaking to Amendment No. 12. I am sorry if the noble Lord thinks I have strayed. I think there is a little red book which has been used in recent history to quote relevance. If the noble Lord, Lord Jacques, has missed any of my remarks he may be able to pick them up, if not tonight then tomorrow. I was speaking about Section 4 of the parent Act which says that the Commission may give to the relevant person a variation notice. In performing this duty they must have regard to the matters in Section 2, and this is what the noble Lord, Lord Jacques, has referred to.
There are two very distinct concerns about the use of this power in this new situation which we are in this evening, referring to this Bill. First, the Commission may be more restrictive than is justified simply in pursuit of a short-term price delay. Secondly, because it seems there is no procedure for them to follow in the Bill, there will be no evidence that they have examined that particular increase and fully considered the merits of the case so far as is possible in the circumstances of the case and according to the time available.
This Amendment will not materially affect the obligation on the Commission, but we believe it will make them consider any arguments sufficiently to provide the basis for a written reply to the company's application. This appears to be a reason-
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able request, to ensure that the Commission are seen to respect and account for the use of their crucial discretionary power. We have heard a lot about the discretionary power this evening. We hope that the Commission can be seen to justify this power and to make reasonable use of it. I am sorry if I strayed off; I was speaking on Amendment No. 12. I beg to move this Amendment.
Lord JACQUES: The question was raised how you might become more efficient and absorb the increase in the cost of an imported raw material. There are several ways in which you could do that: you could use less; you could substitute a British material; you could have a different process of handling the material. There are many ways in which you could look at the whole question of being more efficient as a result of the price increase.
I want now to come to the Amendment which is before us. This Amendment would make it an obligation upon the Commission to give a reason for refusing an interim increase. The Government have given very careful consideration to this Amendment. The Commission are already required to give reasons for their recommendations when making their report. The question arises, why not at an earlier stage?—which the Amendment would require. The answer is that during the investigation the Commission will not by definition have all the facts at their disposal. In considering an application for an interim increase the Commission will necessarily be relying heavily on the arguments put forward by the person concerned. If those arguments stand up, then very probably an increase would be allowed. But the Commission will only have heard one side of the argument. It would be wrong in principle for them to have to give as the basis of their reasoned decision factors which they have perforce only considered in this way. The chances are that to require them to do so would work against the interests of those concerned.
Variation notices are a form of relief, and if a reasoned decision were required the Commission would be likely to insist on a far higher standard of proof so as not to prejudice the recommendations made in their report. Refusal to allow an interim increase will not, as the Bill

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stands, mean that the Commission have finally made up their mind, but merely that the case has not so far been made out. The applicant can always come back with further argument by making a fresh application. This Amendment would require the Commission to make up their mind at an early stage and so prevent proper consideration of the issues during the remainder of the investigation. We believe that this could act against the person seeking the interim increase rather than for him.
Earl DE LA WARR: I must say that I am amazed by the convoluted arguments of the noble Lord. If I may say so, this is a very simple Amendment, or at least I take it to be so—an Amendment which makes one tell the victim, as soon as one can, just why one disagrees with what, in effect, is his application. I believe that it is as simple as that, and I should have thought that the Government would have welcomed the Amendment particularly, and if only, because of the crying need for good public relations on behalf of the Price Commission which badly needs some good public relations.
As I see it, the Amendment will at least reduce the Star Chamber image which the Commission is rapidly acquiring, protected as it is from the need to use any criteria other than its own judgment. At least it enables the victims to take the earliest opportunity to complain and to challenge the Price Commission in terms of its own thinking and of their application. I believe that this Amendment is good, sound common sense.
Finally, although I do not wish to enter the realms of going to the courts, let me say that, if justice is indeed deing done, it always seems to me as well that it should be seen to be done. Therefore, I can see no reason at all why the Government should not accept the Amendment unless, if I may say with all respect to the noble Lord, they are being totally unreasonable and totally pigheaded. Their very refusal to consider anything seems to me to put their attitude in that light.
I ask the noble Lord to try to have some sympathy with this fairly simple view. Indeed, perhaps he could tell us that he has some sympathy with what I have said and that at a later stage he may be able to help us. I think that that would be
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for the good of everyone—for the good of the Government, for the good of the Commission, and for the good of the firm which really believes that it needs to raise its prices. I commend the thoughts behind this Amendment to the noble Lord for further and very careful consideration.
Viscount TRENCHARD: Are not the Government asking to have it both ways? In reply to previous Amendments the noble Lord has said that the Commission will use its discretion. He has even suggested that it has a duty to have regard to all the important factors—of which there are many—before it refuses a request to put up a price immediately. I am particularly concentrating on the delay for four months.
As regards Amendment No. 12, we say that if the Commission has considered the relevant matters, and has refused an interim application to put the price up immediately, at least it should state its reasons for refusing and state how it has used its discretion. However, the Minister says: no, it cannot possibly do that in the middle of an investigation—I take him to have in mind that it has so many matters to investigate in the three to four months; it cannot possibly say on what grounds it has refused to give interim permission for the price to go up; indeed, that cannot be done until the full report is made.
I suggest to the Government that they are asking to have it both ways. I suggest and hope that during the Report stage we shall find that they have found a way of confirming that there is a legal requirement in the Bill for the Commission to take account of those factors which have been mentioned in previous Amendments—most recently in Amendment No. 10. However, if in fact, as my noble friend Lord Cockfield and others have suggested, the Commission does not have such an obligation, and it can decide which factor is relevant, then—if it refuses an interim increase which a company considers desperately necessary and for lack of which it may well have to lay men off—if we are to rely on the Commission's discretion, the very least that can be done is that the Commission should declare how it has used its discretion and under which of the criteria it has decided to refuse this vitally important interim increase. I suggest to the Government that they cannot have it both ways.
Lord JACQUES: The situation is quite clear. The Government say that after an investigation the Commission must give its reasons for refusing, if it refuses. The Amendment says that the Commission must give a reason before it has had the opportunity to investigate. I suggest that that will, in the long run, operate against interim increases rather than for them. I suggest that it is unfair to expect the Commission to give reasons before it has commenced its investigation—afterwards yes, by all means. That is the difference between the Government and the Opposition.
Lord LYELL: In reply to the last comment of the noble Lord, Lord Jacques, I think that there is a little more than that which divides us. However, I am grateful for the support and very careful arguments that I have heard from my noble friend Lord Trenchard and, indeed, from the noble Earl, Lord De La Warr.
As for the reply of the noble Lord, Lord Jacques, after I had sat down, I am afraid that I lost him very rapidly after he passed a comment about referring to the other side of the argument. I wonder who else is concerned and on whose behalf the Price Commission is acting. Is it running around like a latter day St. George smiting down overweening companies, or what? I would suggest that certainly other people are concerned: the companies' employees, the companies' customers and the public at large, who presumably want to buy the companies' products or the company would not necessarily be in business.
However, the noble Lord, Lord Jacques, in his last remarks and reply to my noble friends believed that the Commission could not give reasons before it held its investigations. However, I wonder whether the Commission goes into every investigation in every sector and every different firm with complete wide-eyed innocence? I wonder whether the Commission needs to take, in many cases, such an inordinate time when presumably it is not embarking on an investigation of a particular sector or company, let us say, "cold"—in other words, the Commission does have some knowledge and experience and records on its files of similar investigations in similar sectors with firms doing the same sort of business. I wonder whether the Commission has some idea, from its researches, of what it is indeed looking for.
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If that is not the case, and the Commission says to a firm, "You may not raise your prices, but we shall look into each and every reason why", then I think that there is a great deal of justification for this particular Amendment.
The noble Lord has said that he believes the Amendment will act against interim increases. I am afraid that I did not follow that. Perhaps he could explain it to me briefly now or on another occasion. I am tempted to ask the noble Lord whether he can give me any further explanations, but I suspect that we might have pushed this matter far enough tonight. I certainly have said enough and probably my two noble friends have expressed their opinions fairly forcibly. I wonder whether it would be wise to allow the noble Lord, Lord Jacques, and the Government to read and to consider what we have said tonight. I tell him that we shall return to this particular Amendment, or something very similar to it, at a later stage because we believe that we have raised a number of points. I have been totally lost, but people more expert than I in this particular business or, indeed, in industry which is liable to be investigated by the Commission, are similarly confused. That said, I beg leave to withdraw the Amendment at this stage.
Amendment, by leave, withdrawn.
[Amendment No. 13 not moved.]
6.32 p.m.
The Earl of GOWRIE The Earl of GOWRIE moved Amendment No. 14:
Page 2, line 28, leave out ("17th January 1979") and insert ("the date that this Act receives the Royal Assent.").
The noble Earl said: My Lords, one of the many unpleasant things about this Bill is the element of retrospection which is contained in it. If that were not bad enough, the element of retrospection is also ambiguous. A Committee stage is fundamentally designed to try to improve a Bill, to elicit information from the Government about the exact intentions of a Bill, or to examine the ways in which a Bill might work out in legislative practice. However, that is extremely difficult in the case of this Bill because, as we argued on Second Reading, it is fundamentally—I will not use an emotive word; perhaps

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"political" is now emotive—a presentational or a cheer-leading Bill.
This morning I read a leading article in the Labour Weekly about the industrial crisis, the strikes and the like. The conclusions of the leader writer were as follows:
"What is needed is action to control the root causes of current unrest".
Certainly, we would agree with that. He continues:
"Principal among these remains inflation".
Certainly we would agree with that. He then went on to say:
"The Government must take tough action on prices, no interim rises, no profits safeguards and rigid investigation of all applications".
What we see in the Bill and what makes it so difficult to analyse and discuss coherently is a legislative attempt to meet such political or other demands.
Our view is very much that legislation is the wrong way in which to do it. I think this point is made with the confusion on the retrospective element in the Bill. Clause 1(7) clearly provides that a company which has made notification before 16th January and has qualified for an interim award may maintain that award regardless of the passing of the Bill. The status of notifications made between 16th January and the date on which the Bill may actually pass is however not made clear. In announcing this Bill, the Prime Minister suggested that there would be an element of retrospection about it. He said:
"The Bill will also provide that firms which pre-notify price increases after today"—
and he was speaking on 16th January—
"will not qualify for safeguards if the Price Commission decides to investigate those price increases".—[Official Report, Commons, 16/1/79; col. 1559.]
The primary purpose of our Amendment is to gain clarification from the Government of the intention of the subsection, which we find highly ambiguous. That is why in this case I make no apology for tabling an Amendment which has been treated in another place; because in commenting upon it during the Committee stage in the House of Commons, the Minister himself recognised that it was not properly drafted. That reference is to be found in the Official Report of the House
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of Commons of 31st January at col. 1604. As a matter of principle, it is essential that however much we object to its intention, the legislation is at least clear as to its effect. Therefore, the Amendment which we propose will make it quite clear that the Bill applies only to notifications made after the date that the Bill receives the Royal Assent. The virtue of that is that there can be no argument or doubt upon the date when this Bill receives Royal Assent. I beg to move.
Lord JACQUES: It is reasonable that firms which pre-notified price increases before the Government announced this proposal to introduce the new legislation should be entitled to the investigation safeguards, even after Royal Assent; because they may have taken the level of safeguards into account in preparing the notification. That is achieved by the existing subsection (7). However, it is not reasonable that firms which notify after the Government's announcement should have this privilege. Notifications made on or after 17th January in the light of the Government's announcement might be made at a higher price or an earlier date than otherwise would have been the case. In the interests of the counter-inflation policy, it is desirable that such increases should not be protected by safeguards.
The Earl of GOWRIE: My Lords, we have heard a number of remarkable statements there. Taking them in reverse order and referring back to the noble Lord's speech on Second Reading, I understood him to say that this Bill had very little to do with counter-inflation policy and that it was mainly to do with maintaining competition and the like. Leaving that aside, I submit that he is really saying that here was a Bill presented by a Government which provided firms with certain safeguards to their profitability. It was, therefore, likely that they would take such safeguards to their profitability into account in making applications for a price rise or in passing on a price rise to the customer, or whatever.
He then demonstrates that the Government are presenting a Bill which effectively takes these safeguards away. Far from being called "safeguards" any more, the safeguards are now called "privileges". He implies that privileges are being taken

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away from firms. Surely the point here is that it is perfectly reasonable for a firm to try to maintain its hold on the safeguards without the element of retrospection, because the safeguards were given to them by the Government in the first place. The Government must have believed that they were worthy or worthwhile. Even if the Bill were necessary as a result of the present situation, why is it necessary to backdate it?
Lord JACQUES: My Lords, put very briefly, the position is that those who gave their notifications before 17th January had no knowledge of the Government's intentions. Those who made them after that date but before Royal Assent could have had some knowledge and could have framed their notifications accordingly. Therefore, in the first case it is reasonable and in the second case it is not reasonable.
The Earl of GOWRIE: My Lords, in terms of the Amendment, that is a perfectly clear answer; but, like so much that goes on in Parliament, it is infinitely removed from the way in which real life and real firms order their affairs. However, I do not at this late hour intend to press the Amendment, but I give notice to the noble Lord that we may return to it at a later stage. I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 1, as amended, agreed to.
Remaining clauses agreed to.
The Schedule [Repeals]:
[Amendments Nos. 15 to 18 not moved.]
The Schedule agreed to.
House resumed: Bill reported, with the Amendment.

AVIATION SECURITY FUND (AMENDMENT) REGULATIONS 1979
6.41 p.m.
Baroness STEDMAN: My Lords, I beg to move that the Aviation Security Fund (Amendment) Regulations 1979, a draft of which was laid before this House
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on 14th December 1978, be approved. These regulations, to be made under Section 2 of the Civil Aviation Act 1978, amend the Aviation Security Fund Regulations 1978 and will come into operation on 1st April 1979.
The House will recall that Section 2 of that Act empowered the Secretary of State to make regulations requiring certain aerodrome authorities to pay contributions to an Aviation Security Fund, out of which he may reimburse the cost of security measures that fall to be made under the Protection of Aircraft Act 1973 and the Policing of Airports Act 1974. The first amendment changes the date in Regulation 2(l)(a)(ii) to 1st December 1978 being the latest practicable date prior to the Regulations being laid. The second amendment changes the date in Regulation 2(1)(b) from 1976 to 1977. Neither of these amendments alters the list of authorities of the 28 aerodromes required to make contributions to the Fund. The third amendment seeks to increase the levy in Regulation 2(1) from 80 pence to 85 pence. This increase in the levy follows consultations with representatives of the air transport industry and is based on the latest estimates of expenditure and passenger traffic growth. The latest estimate of aviation security expenditure for 1979–80 is just over £24 million, which represents an increase of 26 per cent. on the current year's forecast. This is partly due to inflation but also to an expansion of passenger searching facilities at major airports in anticipation of increased traffic growth. This expansion of facilities includes the introduction over the next two or three years of x-ray devices at the search points in major airports.
The fourth Amendment seeks to raise the weight limit in Regulation 2(2)(e) from 5,000 kilograms to 10,000 kilograms, and is intended to overcome a problem facing helicopter operators, particularly those servicing North Sea oil rigs. In this instance the security measures which are applicable to oil rig helicopters under the Protection of Aircraft Act 1973 are very small in relation to those measures required by the Department of Energy and the oil industry itself. Thus, such helicopter operators face substantial expenditure with regard to security and receive little or no reimbursement from the Aviation Security Fund in respect of

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measures recommended by the Department of Trade.
Representatives of the air transport industry have recommended, and the Secretary of State has agreed, that the weight limit of 5 tonnes for the exemption of passengers arriving in small aircraft in Regulation 2(2)(e) of the 1978 regulations should be raised to 10 tonnes. Finally, the fifth Amendment is necessary to remove the words
"the first period beginning on 1 April 1978"
from Regulation 3(1), which were put into the 1978 regulations to permit retrospection. I beg to move.
Moved, That the draft Regulations, laid before the House on 14th December 1978, be approved.—(Baroness Stedman.)
6.45 p.m.
Lord TREFGARNE: My Lords, the House will be grateful, as always, to the noble Baroness for explaining these short regulations so helpfully. As the noble Baroness may recall, although it was not her duty to steer the original Bill through Parliament, we had a somewhat nerve-wracking afternoon with the Committee stage of the Civil Aviation Bill last year. However, having now reluctantly conceded the principle defined in the Bill we could not, and would not, wish to oppose this order.
I think the provision to raise the weight limit of aircraft to be subjected to these charges from 5,000 kilograms to 10,000 kilograms described by the noble Baroness is welcome, and will help not only the North Sea oil helicopters, to which the noble Baroness referred, but also a number of operators of air-taxi type aeroplanes who might otherwise have found these regulations somewhat irksome.
There is one related matter to which I would refer. We all hope and expect—and these sentiments were certainly expressed forcibly during the passage of the original Bill—that these measures which are now deemed necessary (and I would not dispute that) are nonetheless of a temporary nature. It would be hoped that as the risk dimishes it will be possible gradually to lower the facilities that are used without perhaps relaxing our vigi-
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lance too much; but certainly it might not be necessary to continue indefinitely with the very expensive facilities now being created.
Having said that, I would go on to say that I therefore view with some trepidation the creation of this vast army of personnel to see to these tasks. The British Airports Authority now employ no fewer than 1,500 people at the airports for which they are responsible, purely and simply for security purposes. This amounts to something like one-third of their total workforce. This increase has been effected almost wholly in the last 12 months, or perhaps 18 months. The Authority took over responsibility from the airlines and from some of the other authorities for the tasks that were originally performed to a large extent by contractors; but now almost all of these personnel are employed by the British Airports Authority itself.
I wonder whether it really is clear to these new employees that the task may indeed be a temporary one. I wonder, therefore, whether it would be possible to run down this huge private army—and I can call it nothing else—as and when the time comes. I cannot say when that will be. It may not be this year or next year, or even the year after, but I would not hope that it would go on much longer than that.
There is one other point I want to make. As the noble Baroness said, the original regulations defined an aerodrome as one catering for more than 50,000 passengers per annum. A list of the airfields therefore affected was published at the time, I think as an Explanatory Memorandum. It was certainly not included in the 1978 regulations, and I do not think it was included in the Act itself. Does the list of airfields published at that time remain accurate? Can the noble Baroness tell me whether any additional airfields have now been added to the list, or indeed whether any have been deleted from the list?
We are anxious to ensure that the facilities provided and the impost therefore placed on airlines and passengers are no greater than they need be and are not continued for a moment longer than is necessary. If the noble Baroness will

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give me a reply, either now or in correspondence, that will perhaps set at rest some of my fears. Having said that, and having raised those two points, I hope the House will agree to the regulations.
6.50 p.m.
The Earl of KINNOULL: My Lords, I do not share my noble friend's hopefulness that this private army, as he called it, of 1,500 people will diminish over the next few years. I should have thought that when an airport is handling 26 million people a year, 1,500 people operating a 24-hour security service is not all that great a number. I should like to know whether cargo is also charged. Heathrow has a spectacular reputation for losses suffered in cargo thefts, and I hope the noble Baroness will comment on that aspect.
Secondly, the increase being from 80p to 85p, is this figure likely to increase again, bearing in mind the 15 to 16 per cent. increase in passenger put-through annually at the airport? It was a worry and a heavy burden to be carried when the Civil Aviation Act went through. Can she say whether the 85p will last for a certain period of time?
Lord TREFGARNE: Perhaps I might clarify one point, my Lords. My noble friend said I was complaining about the number of people. I am not complaining about the present number. I regret they are necessary and I agree they probably are necessary, but I hope the number will be reduced as and when the scale of the risk diminishes.
6.52 p.m.
Baroness STEDMAN: My Lords, I am grateful to the two noble Lords opposite for their remarks and for the way in which they have received these regulations. The noble Earl, Lord Kinnoull, raised the question of cargo. I understand no levy is charged so far as cargo is concerned, though some of the security staff have been diverted to help look after cargo. That may meet the point he raised.
We also hope this is a temporary measure; but as for the word "temporary", his guess is as good as mine as to how long "temporary" will be. Obviously it will last as long as the need is there for it. In the same way, so far as future increases are concerned, I cannot
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guarantee what will be the position in 12 months' time if these regulations have again to be put before the House. I cannot say whether there will need to be another increase then.
What I can say—and the noble Lord, Lord Trefgame, was kind enough to tell me he was concerned about the question of the security staff—is that the number of security staff paid out of the Aviation Security Fund over the whole field of security amounts to 24½ per cent. of BAA's staff, and I understand that those actually engaged on the searching side of security amounts to some 19 per cent. of the staff. That may seem a large number of people, and the noble Lord asked whether they were aware of the fact that we hope perhaps that at some future date there may not any longer be the need for their service.
We had complaints about conditions at Heathrow; in October we had problems at Terminal 3 which were caused by a temporary insufficiency of security staff, despite the numbers, and we could not carry out quickly and efficiently the searching of passengers or their baggage. That was because the BAA had been placed in the position of having to take over from the airlines, some three months earlier than they had planned, the searching responsibilities because the private security firm involved was no longer able to provide the adequate cover we wanted.
I understand that we are at present in discussion with the BAA about an increase in security staff to cope with the expected growth in traffic during the 1979 summer period. I think we would all agree that conditions at Terminal 2 are far from satisfactory, but the BAA is trying to ensure that inconvenience to passengers is kept to a minimum, and we are trying to improve the passengers' lot. While the security arrangements at the entrance to Terminal 2 are by no means ideally situated, there has been no reduction in their effectiveness and we are assured that this is a very effective security organisation in so far as we are able to provide one.
We have looked into complaints we have had about delays in passenger searching, and we have established without doubt that they are minimal compared with other reasons for delays. So far

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as the order is concerned, it must come before the House every year. It will be a question for the House to take a decision in the light of the circumstances existing in 12 months' time; but on this occasion I am happy to think we have the support of noble Lords opposite for this order.