HL Deb 18 June 1981 vol 421 cc776-95

Consideration on Report resumed.

Clause 66 [General classes of acts not infringing the postal privilege]:

4.25 p.m.

Lord Lloyd of Kilgerran moved Amendment No. 71:

Page 56, line 19, at end insert— (l) the sending, collection and conveyance of letters where the sender and addressee is outside the United Kingdom").

The noble Lord said: My Lords, I beg to move the amendment which stands in the name of my noble friend Lord Winstanley and my own name. The amendment is directed towards adding another class of acts to those listed in Clause 66 of the Bill which would not infringe the exclusive privilege to the Post Office with respect to the conveyance etc. of letters. The class of acts with which our amendment is concerned is: the sending, collection and conveyance of letters where the sender and addressee is outside the United Kingdom". There is now a growing practice whereby air couriers pick up letters abroad—perhaps in Germany, for example—to be delivered to another foreign country—for example, Nigeria. Often such letters cannot conveniently or urgently be carried from, as in the case of my illustration, Germany to Nigeria. A practice has grown up involving a central point for the air couriers in the United Kingdom where the letters are sorted. All that happens to the letters in this country is that they are sorted at the central point. There is no question of any delivery of the letters in this country, and therefore it is considered that it would be valuable to make clear in Clause 66 that such a class of acts does not infringe the exclusive privilege of the Post Office. I beg to move.

The Earl of Gowrie

My Lords, naturally I have listened with great care to the noble Lord, Lord Lloyd of Kilgerran, and I understand him to be saying that the amendment is necessary in order to give some security for the activities of the air courier companies which at present carry express letters both to and from the United Kingdom. However, I am not sure that the amendment is necessary and I certainly think that it would have undesirable consequences.

The House might be aware that when this clause was debated in Committee in another place an amendment was made, which now appears as Clause 66(1)(d). This subsection makes an exemption from the monopoly —the monopoly which is at the basis of the postal system—for the conveyance of a letter by a messenger sent for the purpose by the sender to an aircraft for onward conveyance by that particular aircraft out of the country. It therefore covers that part of the activities of air couriers which involve a messenger leaving the express letter with the aircraft for onward conveyance, rather than taking it all the way to the addressee.

When the amendment was debated in another place my honourable friend the Parliamentary Under-Secretary said that he was not prepared to agree to an amendment covering incoming foreign letters, since the conveyance and delivery of incoming foreign express letters by air couriers would in fact be covered by the general suspension for express mail—which is to be effected under Clause 68—and in any case, it would be very difficult to draft an exemption to cover incoming mail which would apply only to air couriers. The amendment poses an identical problem and would allow any person, not just air couriers legitimately engaged in that business, to convey and deliver both incoming and outgoing foreign letters. It would lead to a substantial loss of business for the Post Office, and would, I think, strike at the heart of the integrity of the basic network, which we seek to preserve, even as we seek to liberalise that which can operate in connection with it, or parallel to it.

The amendment could allow a private operator to contract with, for example, the United States postal service for the conveyance and delivery of all United States mail sent to addresses in the United Kingdom. My advice is that that would be possible. I am glad to see that both noble Lords on the Liberal Benches shake their heads. Obviously they do not wish that to happen; nevertheless my advice is that that could happen under the amendment.

It is certainly not the Government's intention that the primary Post Office monopoly should be eroded in that way. Indeed, under the suspension we have granted carriers will be required to charge £1 per item in order to prevent any large-scale erosion of the monopoly. I could not therefore accept the amendment for this reason alone, but there is also another consideration which I would ask the House to bear in mind. Some foreign postal administrations have already expressed considerable concern about the concession which we have already made in respect of air couriers, though I, for one, welcomed that concession—the concession which appears in Clause 66(1)(d)—and this concern which they have expressed would be hugely augmented were we to accept this amendment.

I therefore believe that the very considerable liberalisation which we have accepted under the concession agreed to in Clause 66(1)(d) goes far to meeting the air couriers' case—a legitimate case, and one we wish to encourage, as I have acknowledged. I do not really believe I can go further, and I hope that the noble Lord will not press me to do so.

Lord Winstanley

My Lords, I listened with great interest to the noble Earl's reply, although I did not have the benefit of hearing my noble friend move the amendment; but it seemed to me that the noble Earl had a difficulty for every solution. I am bound to say that on one or two aspects of what he had to say to your Lordships it seemed to me he had been wrongly advised. This deals only with letters in respect of which both the sender and the addressee are outside the United Kingdom. I think that is utterly clear in the amendment, and it seemed to me that what it was proposed to do by the amendment was in line with what is generally, I think, urged within the EEC as a whole. I was rather disappointed in the noble Earl's reply. I assure him that I will study it with very great care and seek further advice on it, but I thought it only right to let him know that I personally, at least, was disappointed with the kind of reply he gave us.

Lord Lloyd of Kilgerran

My Lords, like the noble Earl, Lord Gowrie, I welcomed, of course, the amendment to Clause 66(1)(d), dealing with certain aspects of the actions of air couriers; but, as my noble friend said, it seems to me that the advice given to the noble Earl fails to appreciate that the object of my amendment is only to enable the sending, collection and conveyance of letters where both the sender and the addressee are outside the United Kingdom. As my noble friend Lord Winstanley has said, we will study the noble Earl's reply and perhaps come back to it at another stage.

The Earl of Gowrie

My Lords, If I may have the leave of the House, I would say that I have received further advice and I acknowledge—and I apologise for this—that I overstated the case, in that the amendment before us deals only with mail passing in transit through the United Kingdom. I think, however, that my primary objection is not altered by that, though I acknowledge that the rhetorical emphasis, so to speak, that I gave is changed. But the integrity of the monopoly, which is my prime objection, added to the extent to which the Government have met the air couriers' case, which I also repeated and on which noble Lords and myself are in complete agreement, I think still remain valid. Perhaps the best thing would be for noble Lords to see what I have said on that in the light of my retraction of one part of my remarks, and then they can decide whether they wish to return to the matter.

Lord Lloyd of Kilgerran

My Lords, may I say, with the leave of the House, that I think the noble Earl the Minister has been very fair, and I am very grateful to him for the retraction he has made. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Gowrie moved Amendment No. 72: Page 56, line 26, leave out ("employed by one of the correspondents or by") and insert ("an employee of one of the correspondents or of").

The noble Earl said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Lord Lyell moved Amendments Nos. 73 to 75:

Page 56, line 30, leave out ("employed by the same person or by") and insert ("employees of the same person or of").

Page 57, leave out lines 20 and 21.

Page 57, line 38, at end insert— (""ship" includes any boat, vessel or hovercraft.").

The noble Lord said: My Lords, I hope it might be for the convenience of the House if we take Amendments Nos. 73, 74 and 75, standing in the name of my noble friend, together. These are consequential upon Amendment No. 67, which was agreed late in the evening at the previous stage. I hope it will be to your Lordships' convenience if I move Nos. 73, 74 and 75 together. I beg to move.

On Question, amendments agreed to.

Clause 67 [Saving for things done under a licence]:

4.37 p.m.

Lord Ponsonby of Shulbrede moved Amendment No. 75A: Page 57, line 40, leave out ("either unconditionally or subject to any conditions specified in the licence, and").

The noble Lord said: My Lords, during the Committee stage of this Bill I moved a series of what I described as modest amendments to this clause. They would have had the effect of introducing some basic safeguards; to assure the public that persons to whom licences are granted are fit and proper persons to hold them, and to ensure that licensees do not operate anonymously.

Despite the modesty and, I believe, the sound common sense of these objectives, the noble Lord, Lord Trefgarne, who replied to the amendments for the Government on that occasion, opposed them. However—and I was heartened by this—he acknowledged in his speech that some of the things I had suggested that it might be appropriate for licensees to so (such as, for example, putting their name and address on the communications which they handled) perhaps ought to be imposed in certain cases as a condition of the licence that is to be issued. Where I take issue with what the noble Lord said in that debate is that he did not regard the imposition of such a condition as this as a matter for primary legislation.

I have read the noble Lord's arguments very carefully. They are founded on the general hypothesis that conditions which are appropriate for one licence may not be altogether appropriate for another licence. I do not know what sort of licences or conditions the noble Lord may have had in mind when he made this generalisation. What I am certain of is that the particular condition I am seeking to introduce is not one of limited relevance but of general validity. I should like to take a little of your Lordships' time to explain.

At the moment, with very limited exceptions, the Post Office has the monopoly of carrying all letters. If I, as an addressee, find that a letter which has been delivered to me has taken rather longer to reach me than it ought to have taken, I know precisely to whom to complain about that. I complain to my local postmaster. But what will happen when the Bill becomes law? In the first place, we know that the Secretary of State plans to grant licences so that document exchanges may function legally, and charities may deliver Christmas cards. But we also have hints, in what the noble Lord, Lord Trefgarne, said in Committee, that "one day" there may be "more comprehensive" licensed services. That phrase has an ominous ring to my ears, but I am not going to pursue that particular point with your Lordships this afternoon.

In the second place, we know, because the noble Lord, Lord Trefgarne, told the Committee, that Government policy will be to grant licences to "classes of persons", not to particular persons. I explained when moving amendments to this clause in Committee the effect of granting licences to classes of persons. Once the licence is granted the Secretary of State will have no idea of who, within the class, is operating under it. There will be no central record of such operators and their activities. They will be able to operate anonymously.

Where all this leads me, my Lords, is to suggest to your Lordships that, given the existing Precedent whereby if the Post Office lets down a customer, that customer is in no doubt as to whom he can complain; and, given the inherent risk that under this Bill unknown numbers of operators, licensed under a general licence to a class of persons, could carry mail anonymously, it is only sensible to introduce into this clause a provision which will enable users of letter-carrying services, when licensed services are operating, to be able to identify from the items delivered those whose services have been used.

In layman's terms, the amendments standing in my name and in that of my noble friend, will require a licensee to ensure that each letter that he conveys or delivers bears an endorsement indicating either his own name and address or that of one of the other licensed people who handled the letter during the course of its transmission. Ideally, and probably most conveniently from the practical point of view in most circumstances, the endorsement should be made by the licensee who receives or collects the mail in the first place. However, I am not proposing to be as restrictive as that, and where a chain of different licensed carriers is involved I think it could be left to them to work out an arrangement that is operationally the best for them. I see no real need for, and should not want to impose a requirement that every licensee in the chain should endorse his identification on the item carried. Customers with a grievance could make inquiries of the licensed carrier whose name and address the letter bears. It would then be up to that carrier to pursue the matter raised by the customer with the other licensed operators whose services were used during the handling of the specific item.

The endorsement of the name and address of the licensee could be written, but I should expect it to be more convenient for it to be by a stamped impression or by means of an adhesive label; whichever method would be the most convenient for the licensee. This requirement will not impose any real burdens on licensees. The running of even a rudimentary postal service is going to involve a sortation stage at some point. That will be a suitable opportunity for stamping on the endorsements to be made. Or, I suppose, the sender could be encouraged to purchase and affix an adhesive label bearing the licensee's name and address. One could even envisage that many licensees, or at least the efficient ones, will be pleased to advertise their services in this way. Indeed, that could lead to their adhesive labels becoming collectors' items!

I hope it will not have escaped the attention of the noble Lord who is to reply that this series of amendments will impose absolutely no additional administrative work on the Secretary of State or his department. During Committee stage the noble Lord, Lord Trefgarne, criticised the amendments that I then moved because—and I use his words: their effects would be far from modest, in terms of the bureaucracy needed to administer them". I do not necessarily agree with the noble Lord's criticism; but I certainly cannot be accused of that charge now. I hope, in fact, that the noble Lord will be able to tell your Lordships' House that he is prepared to accept these amendments. If, however, he is not disposed to do so, I should be grateful if, in explaining to the House why not, he would deal with the following points.

First, could the noble Lord say why he does not consider that this particular condition should apply to all items carried under licence? Does he think that there could be circumstances where it is in the public interest that some mail carried under licence should be carried anonymously? Your Lordships may recollect that during the speech of the noble Lord, Lord Trefgarne, in Committee, he placed some emphasis on the theme of laissez-faire; that it can be left to "market forces" to sort out the good from the bad operator. I cannot see that that philosophy will stand up to any test if the licensed services can be run anonymously. Secondly, the noble Lord, Lord Trefgarne, made some play with the point that services to be provided by licensees will be contractual and that any customer who has a complaint against a private operator will be able to take up his complaints in the courts, should he so wish. The noble Lord referred to "any customer" but I suspect he meant the sender, because in the normal course it will have been the sender who has paid the licensee the necessary fee; and the contract will be between him and the contractor.

Now, my Lords, let us imagine the situation where the sender has learnt, presumably from the addressee, that a letter sent by means of a licensee has been inordinately delayed. Let us imagine further that the condition I am proposing as a general condition has not, in fact, been imposed in the licence under which this particular letter has been conveyed. Without straining credulity too far, let us assume that the licensee has not, of his own volition, put any endorsement on the letter to indicate that he has conveyed it. So, therefore, what we could easily have is an annoyed customer with a legitimate complaint, and the corpus delicti—the envelope containing the delayed item. But unfortunately, there will be no evidence on this envelope that it ever passed through the hands of the licensee. One wonders what the courts would make of that. What would be the legal remedy then?

My Lords, I could press this line of argument much further, but I shall give only one or two other examples of the sort of difficulties that could occur if licences are issued without the condition I am advocating. There could be the, hopefully rare, operator who does not deliver mail but just dumps it somewhere. Assuming that it is ever found, ought not that licensee to be readily traceable? And would not the inclusion of a general requirement that a licensee's identity should be endorsed on items carried be something of a deterrent against that sort of thing happening in the first place? Finally, let us look at the issue from the point of view of licensed operators. Would they be content, I wonder, if customers would allege that they had used a certain licensee's service and his service had failed to deliver the letter on time, if the letter bore no indication at all that it had been entrusted to a licensed service?

My Lords, I hope that the noble Lord will bear these examples in mind when he lets us have his views on the points I have just put to him. I suggest that, assuming he is still minded to oppose my amendments, he should have to convince your Lordships that the clause as drafted will adequately protect both potential customers and licensees. The advice I have is that it does not. I should have mentioned that, in moving this amendment, I speak as well to the subsequent six amendments. My Lords, I beg to move.

4.50 p.m.

Lord Lyell

My Lords, we have listened with great care to the arguments put forward by the noble Lord, Lord Ponsonby. The last two sentences of his speech filled me with relief because I had visions that he had a separate point with four queries on each of the six amendments. His explanation will have persuaded the House that all the amendments lie together and are an attempt to qualify somewhat Clause 67. As the noble Lord pointed out, my noble friend Lord Trefgarne discussed with him this particular matter at an earlier stage. The gist of what my noble friend said was that we did not consider the provision outlined by the noble Lord, Lord Ponsonby, should be necessarily contained in primary legislation.

Clause 67(l) empowers the Secretary of State to attach whatever conditions he thinks fit to any licence that he may grant, and this permission will allow the maximum flexibility to vary any condition to suit each licence. It is an important point to note that a licence can be issued only after consultation with the Post Office who, I am sure, will put forward their views very clearly on the kind of conditions which they consider ought to be included when any licence is granted.

We do not at present envisage including such a condition as has been outlined by the noble Lord, Lord Ponsonby, in the licences which we shall be granting under Clause 67; that is, to allow charities to deliver Christmas cards and to allow document exchanges to transfer mail between one another in bulk. I do not believe that this requirement will substantially improve the position of the consumer.

The noble Lord, Lord Ponsonby, raised the very important point that the consumer will not know to whom to address his complaint if his letter arrives late. But of course the recipient will know who the sender is. The sender will certainly know by whom he sent the letter. Thus it would appear to us that the sender who will be paying a fee to the licensed carrier, who would certainly have the major cause for complaint if letters arrive late or did not arrive at all than the addressee or the recipient.

We appreciate the spirit of the amendments and what the noble Lord is seeking to do. We also appreciate very much that the noble Lord, Lord Ponsonby, is making an attempt to protect the position of the consumer; but we do not believe these amendments are necessary or appropriate. I repeat what my noble friend Lord Trefgarne said at an earlier stage: even when private operators have been licensed to operate letter services, the final decision as to who should be entrusted with mail lies with the customer and he will of course always be able to choose the Post Office if he is not prepared or is unable to trust the alternatives.

I would add a note of reassurance; once licences issued by the Secretary of State are operating, if a demonstrable case is made out that there is a need for a condition such as the one being proposed by the noble Lord, then the Secretary of State would certainly consider varying the licence to include such a condition as would be appropriate. As a point of detail, I note that Amendment No. 75C inserts into this clause a requirement that all licences shall be in writing, while Clause 67(5) only requires licences issued to classes of persons to be in writing. I can assure the House that although the clause does not specifically say that licences issued to individuals must be in writing, that of course is the intention and it certainly will be our practice. I hope that my remarks have covered the points raised by the noble Lord. We believe that Clause 67, as drafted, will meet the needs of the consumer. We do not feel that further amendment is necessary in this case.

Lord Ponsonby of Shulbrede

My Lords, I am sorry that the noble Lord has not felt able to accept the spirit of these amendments. He is quite right that a person who receives a communication late can ask the sender to whom he entrusted it. But it is not always easy to get in touch with the sender who may not be on the telephone or who may have moved away. There are various problems one can think of in getting in touch with the sender in order to complain. I have some comfort from the noble Lord's reply when he indicated that these could be conditions which are imposed when the licences are granted. I confess that despite the arguments he used I fail to see how these minor suggestions would not be applicable in all cases. Nevertheless, it is not my intention to divide the House on this issue. I shall look once again very carefully at what the noble Lord has said to see whether there is any further progress which we might be able to make on this. It was my intention to move Amendment No. 75C and the noble Lord seemed to indicate that would be accepted if I did so. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 75B not moved.]

Lord Ponsonby of Shulbrede moved Amendment No. 75C: Page 58, line 6, after ("shall") insert ("be in writing and shall").

The noble Lord said: This is essentially a drafting amendment. As the noble Lord, Lord Lyell, mentioned, Clause 67(5) already provides, inter alia, that licences granted to persons of a class must be in writing. It does not, however, provide that requirement in respect of a licence granted to a particular person. This amendment, by inserting those words, ensures that that is done. The noble Lord, Lord Lyell, I think indicated that that was the intention. I beg to move.

Lord Lyell

My Lords, I said that Amendment No. 75C was inserting one or two conditions into the clause and the noble Lord especially mentioned Clause 67(5). I hope I gave the assurance that it is our intention that licences issued to individuals must be in writing. That certainly would be the practice of my right honourable friend when issuing licences. I am advised that Amendment No. 75C would be otiose and that it is not necessary in the Bill in that we shall be insisting upon this.

Lord Ponsonby of Shulbrede

My Lords, I find that a very odd argument because in fact included in Clause 67(5) are the words "in writing". They are there in the Bill and therefore I should have thought that for the sake of consistency, if it is the intention that licences in either case should be issued in writing, there is really no reason why the Government should not accept this very minor amendment.

Lord Lyell

My Lords, by leave, I would repeat that my instructions are that it is not necessary. I understand that Clause 67(5) was the relevant key clause and that it would refer back to Amendment No. 75C.

Lord Ponsonby of Shulbrede

My Lords, does the noble Lord not wish to add anything further to what he has said?

The Earl of Gowrie

Not really, my Lords.

Lord Ponsonby of Shulbrede

My Lords, I find the argument rather difficult to follow. I certainly would not press this amendment to a Division, but I shall smile if the Government themselves come back with their 72nd amendment on Third Reading, adding the words "in writing", I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 75D, 75E, 75F and 75G not moved.]

Clause 68 [Suspension of the postal privilege]:

5.2 p.m.

Lord Lyell moved Amendment No. 76: Page 58, line 37, at end insert ("; and in this subsection "letter" has the same meaning as in section 65").

The noble Lord said: My Lords, this amendment is consequential on Amendment No. 67 which we agreed at an earlier stage of the Bill. I beg to move.

On Question, amendment agreed to.

Lord Byers moved Amendment No. 77: Page 61, line 38, leave out ("and the approval of the Treasury").

The noble Lord said: My Lords, I beg to move Amendment No. 77. It may have been thought that we went over this ground in some detail on Amendments Nos. 47 to 51, but I make no apology for moving this amendment, though it is similar, because in our view it goes to the heart of Government financial policy and it follows logically on that final debate which we had last Monday. I raised this whole question of capital investment for nationalised industries on the Loyal Address last November. I also raised the same principle on the Second Reading of this Bill, and the discussion which took place on Monday on Amendments Nos. 47 to 51 enabled the noble Earl, Lord Gowrie, to reiterate the Government's policy on the raising of money by the private sector, and particularly nationalised industries such as British Telecom.

What he said then was vitally important to the whole debate on the nationalised industries in that he invited your Lordships to suggest alternatives to the Governments present policy. He said at col. 510 of last Monday's Hansard (15th June, 1981): I can console the noble Lord, and indeed the House, by saying that the Government will unconditionally welcome any valid means of raising extra finance for telecommunications investment outside public sector borrowing requirement constraints. The noble Earl stated the Government's case very fairly indeed when he said at col. 513 on the same day: …where a nationalised industry whose financing, whether current or capital, carries an implicit Government guarantee, one is in the territory of external financial limits, whether one likes it or not. Quite correct: I do not quarrel with that. What I do quarrel with is the idea that because an industry is nationalised there must be an implicit Government guarantee when it borrows money. I do not accept that at all. In my view, this is at the root of the wrongheaded thinking which is constraining much-needed investment and depriving the private sector of the orders it needs to give employment to its workers. Restrictions on capital investment in the public sector practically always result directly in reduced orders for the private sector. This, I think, is quite wrong thinking.

I contend that British Telecom should be allowed to try to find part of its capital investment requirement from the financial institutions in the private sector. In doing so, it must make it clear to the lenders that there is no Government guarantee, either implicit or explicit. That is not a difficult thing to do. One can put it in bold print at the top of the contract which is agreed and make it absolutely clear that there is no need to give an implicit or explicit guarantee because it is a nationalised industry. The acid test is whether the institutions will provide the cash and on what terms they will provide it, and the risks they will be taking will be reflected in the terms. But I must say that where you are dealing with an undertaking like British Telecom, which has a strong potential revenue, there should be very little difficulty in raising funds.

It could be that the financial institutions would not provide cash to British Telecom. I do not believe that, but at least there ought to be negotiations to see whether they will. I think the financial institutions will make no bones about the fact that if a contract is signed it is their risk and they accept it. It may well be that British Telecom will conclude that the terms required by the financial institutions are too stiff, in which case they will either re-negotiate or they will not accept them. But our contention is that British Telecom should not be prevented from trying to raise part of its capital funds in this way from the private sector. As I say, the test lies in the negotiations between British Telecom and the institutions and not with the Treasury, and it has nothing to do with the public sector borrowing requirement.

I am not going into the "overcrowding" theory which is put forward so often. That, I believe, has been totally exploded by a number of financial experts in the last month or so; but this process of negotiating with the financial institutions has the added advantage that British Telecom's capital investment will be subjected to the detailed scrutiny of expert financiers who are extremely unlikely to agree to the provision of cash for current purposes but who will be interested in financing an on-going capital investment on which there will be an adequate return to them. If this policy of negotiating investment finance free of guarantee can be substituted for the policy of external financial limits within the constraints of the PSBR, the result must be to provide orders and jobs in the private sector and to arrest the trend of increasing unemployment and factory closures. What is more, it will enable the private sector institutions to help some of our basic industries to get really up-to-date.

All that is required is to permit British Telecom to try its hand at raising money outside the PSBR and to shift the risk-taking from the Treasury to the financial institutions. If they will not accept the risk there is probably something wrong with the capital investment plan, but at least we claim that BT should be free to negotiate. That is the purpose of this amendment. I hope the Government will be prepared to accept this line of thinking, which I believe is basic to the recovery in the private sector. I beg to move.

The Earl of Gowrie

My Lords, I have to confess at the beginning that I had not anticipated going over this particular argument again at this stage because we dealt with it in considerable detail at Committee stage, and also it came up again a couple of days ago on the first day of the Report stage. But I altogether acquit the noble Lord, Lord Byers, of, as it were, bowling me a fast one, because I share with him the view—and I have expressed this from this Box, as well as elsewhere—that one of the central issues in current political and economic debate is the scale and funding of Government deficits. This is a major area of intractable difficulty for Governments of either political party and if we could get it right, and if we could get a breakthrough into new or more effective systems, it would be very much for the good of industry in the country. Therefore, I welcome the chance to go over one or two of the arguments again.

The other point about which I should like to reassure the noble Lord, Lord Byers, is that I do not fall into the trap of making too glib a distinction between public and private sectors. When talking about the public sector, I usually make a distinction between the public trading and the public service sectors. They are obviously considerably different. I well appreciate, as the whole Government do, the connection between private industries supplying large public corporations. Indeed, one of the reasons why the Government have, at a time of considerable pressure on their resources—as the previous Government experienced—released large sums of public money for, let us say, British Leyland, is the connection between that public corporation and many small, medium or, indeed, large-scale private sector organisations supplying the motor industry. So we do not, as it were, make a glib distinction between public and private.

But without wearying your Lordships with the same difficulties over again, perhaps I may engage in a brief fantasy. Let us imagine that a Liberal Government is formed, either in its own right or in alliance with some other group in the political system, and we all of us enjoy the good fortune to have the noble Lord, Lord Byers, as Chancellor. Let us also suppose that, as Chancellor, he suggests that the PSBR is as it were, cut in two, three or four, and that good and virtuous capital spending, where there is a likelihood of return, be put out to private tender without Government guarantee and, therefore, without showing up on the Government's books; not for the purposes of his Government's theology or doctrine, but for the very practical purpose of what the Government say when they go out into the national and international money markets, looking for monies to fund their deficits.

What the money markets or the capital institutions will say to the noble Lord in those circumstances is, "Fine! We accept that this portion of borrowing is for capital investment, but how are you going to guarantee to us that you will not guarantee the loss? For instance, this is a large public corporation. It is supplying a public service, it is supplying a public service in the form of a monopoly in the primary instrument use, and we do not imagine that you, or your electorate, will take it very well if, for some reason or other, the use of the network is withdrawn from one section or other of the community, because of an outstanding liability on British Telecom which they have not been able to meet on the monies that we have lent them. What are you going to do then"?

Knowing the experience and ingenuity of the noble Lord, Lord Byers, I do not doubt that he would, were he Chancellor, look with his officials, for ways of, as it were, ring fencing—to use that jargon—a particular bit of investment of British Telecom from the pay of British Telecom's employees, or from the network or services that British Telecom was, by statute, enjoined to provide. All I can tell him is that he would not find that ring fencing an easy job.

I should like to meet him, because I agree with him that some form of fencing ring, or creation of lines of demarcation between capital investment and current investment, is highly necessary and desirable. But, in the end, both these corporations and the Government that sponsors them have to look in the markets, whether they like it or not, for these monies. All the evidence we have is that the markets would not find it easy to lend money without an implicit guarantee, and that it would be difficult for the Government to divorce one sector of a large corporation's borrowing from another, or to prevent drift, as it were, with monies borrowed from one purpose floating into another purpose; let us say, increased pay in that sector.

But, having outlined the difficulties, we have not rested on our laurels about this. When my honourable friend the Minister of State for Information Technology granted an increase recently of £200 million—I am doing this from memory, but I think I am right in saying that—he created conditions, as, as it were, the corporation's banker, which ensured that that money should not drift into other requirements—for instance, pay—of the kind that I have mentioned. Therefore, I can say to the noble Lord, Lord Byers, that the Government themselves are very exercised by this as banker. They are trying to improve ring fencing or, if you like, demarcation within the corporations that they fund. This also occurs with British Steel, British Leyland and the rest. It may be that, as the Government struggle to find internal solutions, so some of these solutions will be exportable from the Government into the capital and financial markets.

I do not think it would be appropriate to undertake something of a revolution in the methods of funding nationalised industries and monopoly services, by means of an amendment at a late stage of a Bill in your Lordships' House. But I hope that the noble Lord will be persuaded by me that we are as exercised as he is about this issue. We welcome anybody to do work on it, we are trying to work on it ourselves and we must all hope that someone will soon come up with the answer.

Lord Byers

I should first like to say to the noble Earl that these ideas have been developing over the past few months, and I believe that it is a good idea that we should debate and discuss them. I believe that the noble Earl and I have a lot in common in thinking along these lines. But I think I am a little ahead of him, partly because I have had some experience of raising relatively large sums of money, many millions, in a team which did it for mining in different parts of the world. These were not nationalised industries, but the principle was absolutely clear. It was that we raised money from the financial institutions and we negotiated the terms in such a way that the risk was taken by those financial institutions at a price. I believe that this is the way that we are going to have to work with the nationalised industries.

I was associated with raising a large sum of money for exploiting the uranium deposits in Canada. There we had to give option warrants attached to the loan money, so that if it were a success the people who had lent the money could exercise those options and get into the equity capital of the uranium mines. Something along those lines might well work in the case of British Telecom. If a major contract were to be let for the improvement of the telecommunications industry, it might well be possible to put together a financial consortium which would insist on terms such as that. If it worked out properly, they could come into the equity of British Telecommunications or one of its subsidiaries. Something along those lines might work.

The reason why the Government have to provide cash for British Leyland and British Steel is because they cannot put forward a viable plan of capital investment which will give a good return at the moment. They might be able to do so later. If Michael Edwardes is very successful, it is possible that he could go to the market. I do not believe that it is impossible to have what has been called this ring fencing. I believe that this is a matter for negotiation round the table. When one asks for £200 million to be put up by a consortium from the private sector, they will look at it and will help the Government to put the ring fence round so that it does not trickle off into higher wages.

I believe that this is the way we ought to be proceeding. I agree with the noble Earl that of course we cannot do it by way of an amendment at this late stage in the Bill, and I shall withdraw the amendment. However, this is an avenue which we ought to look at very carefully both for British Telecommunications and for other nationalised industries. I do not believe that there will be any difficulty at all in raising cash for the Channel Tunnel, whether this is done by the Government, by the French railways or by anybody else. I believe that this is the way we ought to go. We have got to give to these nationalised industries the freedom to negotiate, where they can, as much of their own capital requirements as they can. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 75 [Power of the Secretary of State to make orders about pensions]:

5.21 p.m.

The Earl of Gowrie moved Amendment No. 77A: Page 65, line 28, after ("supplemental") insert ("or incidental").

The noble Earl said: My Lords, this amendment is consequential on Amendment No. 54. I beg to move.

On Question, amendment agreed to.

The Earl of Gowrie moved Amendment No. 77B: Page 65, line 29, after ("of") insert ("any statutory provision and").

The noble Earl said: My Lords, again this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Clause 77 [Interpretation and extent of Part II]:

The Earl of Gowrie moved Amendment No. 78: Page 66, leave out lines 32 to 38.

The noble Earl said: My Lords, this amendment is consequential on Amendment No. 67. I beg to move.

On Question, amendment agreed to.

Clause 79 [Extended application of the Telegraph Acts]:

[Amendment No. 79 not moved.]

Lord Lyell moved Amendment No. 80:

Page 67, line 40, at end insert— ("(2) For section 26 of the said Act of 1863 there shall be substituted the following section—

Determination of objections by arbitration.

26.—(1) As soon as may be after the receipt by British Telecommunications of such a notice of objection, party may require the objection to be referred to an arbitrator to be appointed, in default of agreement, by the President of the Chartered Institute of Arbitrators; and the reasonable expenses and remuneration of the arbitrator shall be paid by British Telecommunications. (2) In the application of this section and sections 27 to 29 and 33 of this Act to Scotland, any reference to an arbitrator shall be construed as a reference to an arbiter. (3) The Arbitration Act (Northern Ireland) 1937, except the provisions set out in Schedule 3 to that Act, shall apply in relation to any arbitration under this section or section 33 of this Act in Northern Ireland as if the arbitration were pursuant to an arbitration agreement and as if this Act were such an agreement, except in so far as that Act is inconsistent with this Act. (3) In consequence of subsection (2)—

  1. (a) in section 24 of the said Act of 1863 the words "and send" onwards shall be omitted;
  2. (b) in sections 27 to 29 of that Act for the words "Board of Trade", wherever occurring, there shall be substituted the word "arbitrator";
  3. (c) in section 33 of that Act for the words "the Board of Trade" there shall be substituted the words "an arbitrator to be appointed, in default of agreement, by the President of the Chartered Institute of Arbitrators; and the reasonable expenses and remuneration of the arbitrator shall be paid by British Telecommunications"; and
  4. (d) section 34 of that Act shall be omitted.
(4) Subsection (1) shall extend to the Isle of Man; and subsections (2) and (3) shall come into operation on the appointed day.").

The noble Lord said: My Lords, if it is convenient to the House, I should like to speak also to Amendments Nos. 83, 109 and 110. This group of amendments effects an overdue reform of the Telegraph Act 1863 which governs the carrying out of works done by British Telecom. One example is the placing of telegraph poles and wires. Sections 26 and 33 of the Telegraph Act 1863 provide for certain minor disputes about the siting of telegraph works to be determined by what is known as the "Board of Trade".

In the view of the Government, arbitration offers a simpler, speedier and much more efficient but equally fair alternative. The 1863 Act already provides in Section 34 for the Minister to appoint an arbitrator. The president of the Chartered Institute of Arbitrators is empowered to act to resolve any disagreement about the appointment of an arbitrator. The change in the Long Title is necessary to encompass these amendments which amend "rather than" extend the application of "the Telegraph Acts. I beg to move.

On Question, amendment agreed to.

Clause 81 [Tax provisions]:

Lord Lyell moved Amendment No. 8IA: Page 69, leave out lines 26 to 32.

The noble Lord said: My Lords, these amendments do two things. They remove the present subsection (4) of Clause 81 which is no longer needed since Clause 46 of the Finance Bill contains a similar provision applying to all statutory bodies and thus to British Telecom and the Post Office. The new subsection (8) inserted by Amendment No. 81B serves to clarify subsection (2) of Clause 81. It ensures that subsection (2) does not apply before British Telecom's first accounting year. Therefore it rules out any possibility of reopening any issues concerning the tax due from the Post Office for previous tax years—that is to say, before the creation of British Telecom. I beg to move.

On Question, amendment agreed to.

Lord Lyell moved Amendment No. 81B:

Page 70, line 16, at end insert— ("(8) Subsections (2) and (3) shall have effect in relation to accounting periods of the Corporation and of the Post Office ending on or after the appointed day.").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Clause 84 [General interpretation]:

The Earl of Gowrie moved Amendment No. 82:

Page 72, line 9, at end insert— (""pension" includes allowance and gratuity;").

The noble Earl said: My Lords, I spoke to this amendment with Amendment No. 59. I beg to move.

On Question, amendment agreed to.

Clause 88 [Repeals and savings]:

The Earl of Gowrie moved Amendment No. 83: Page 74, line 27, after ("extends") insert ("(other than an enactment contained in the Telegraph Act 1863)").

The noble Earl said: My Lords, I spoke to this amendment with Amendment No. 79. I beg to move.

On Question, amendment agreed to.

Schedule 2 [Provisions as to transfers of property, rights and liabilities]:

The Earl of Gowrie moved Amendment No. 83A: Page 78, line 26, after ("paragraph") insert ("and paragraph 1A").

The noble Earl said: My Lords, this is a technical amendment which should be considered with Amendments Nos. 87A, 95A, 95B and 95G. I beg to move.

On Question, amendment agreed to.

The Earl of Gowrie moved Amendments Nos. 84 to 87:

Page 78, line 31, leave out ("held or subsisting partly for the purposes of ") and insert ("comprised partly in").

Page 78, line 33, leave out ("for the purposes of") and insert ("in").

Page 79, line 10, leave out ("rights or liabilities held or subsisting") and insert ("right or liability comprised").

Page 79, line 12, leave out ("their") and insert ("its").

The noble Earl said: My Lords, with the leave of the House I should like to move Amendments Nos. 84, 85, 86 and 87 en bloc. They are all technical amendments. I beg to move.

On Question, amendments agreed to.

The Earl of Gowrie moved Amendment No. 87A: Page 79, line 28, at beginning insert ("1A").

On Question, amendment agreed to.

Lord Lyell moved Amendment No. 88: Page 80, line 8, leave out from ("determining") to second ("and") in line 10 and insert ("that matter").

The noble Lord said: My Lords, this is a technical amendment dealing with the transfer of property, rights and liabilities from the Post Office to British Telecom. I hope it is the wish of the House that I should move it formally.

On Question, amendment agreed to.

Lord Lyell moved Amendment No. 89: Page 80, line 14, leave out ("to, and by virtue of this Act") and insert ("by this Act to, and by virtue thereof").

The noble Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

The Earl of Gowrie moved Amendments Nos. 90 to 95:

Page 82, line 10, leave out ("(however worded and whether express and implied)") and insert ("(whether express or implied and, if express, however worded)").

Page 82, line 14, leave out from ("reference") to ("engaged") in line 15 and insert ("(whether express or implied and, if express, however worded) to a person employed by, or").

Page 82, line 16, after ("transferor") insert ("and holding a specified office or serving in a specified capacity").

Page 82, line 19, leave out from ("to") to ("and") in line 22 and insert ("a person employed by, or engaged in the business of, the transferee who corresponds as nearly as may be to the first-mentioned person; (cc) any reference in general terms (however worded) to persons employed by, persons engaged in the business of, or agents of, the transfer or were, as respects anything to be done on or after the transfer date, a reference to persons employed by, persons engaged in the business of, or agents of, the transferee;").

Page 82, line 42, leave out ("and (c)") and insert ("(c) and (cc)").

Page 82, line 43, leave out (" employees ") and insert ("persons employed by, persons engaged in the business of, or agents").

The noble Earl said: My Lords, with the leave of the House, I should like to move Amendments Nos. 90 to 95 en bloc. They are all technical amendments. I beg to move.

On Question, amendments agreed to.

5.30 p.m.

The Earl of Gowrie moved Amendment No. 95A: Page 83, line 23, leave out ("1(5)") and insert ("1 A(5)").

The noble Earl said: My Lords, we spoke to this amendment with Amendment No. 83A. I beg to move.

On Question, amendment agreed to.

The Earl of Gowrie moved Amendments Nos. 95B and 95G:

Page 83, line 24, leave out ("1(7)") and insert ("1A(7)").

Page 83, line 28, leave out from (" paragraph ") to (" to ") in line 29 and insert ("1A(5) or a direction under paragraph 1A(7)").

The noble Earl said: My Lords, Amendments 95B and 95G are both technical. I beg to move them en bloc.

On Question, amendments agreed to.

Schedule 3 [Consequential amendments]:

Lord Lyell moved Amendment No. 96: Page 88, line 25, after ("205") insert ("205A").

The noble Lord said: My Lords, this is a technical amendment which extends to British Telecom the benefits of statutory undertaker status for the purposes of the new Section 205A which was inserted in the Town and Country Planning (Scotland) Act 1972 by the Local Government (Miscellaneous Provisions) (Scotland) Act which has just received Royal Assent. I beg to move.

On Question, amendment agreed to.

Lord Lyell moved Amendment No. 97: Page 97, line 10, leave out ("As from the appointed day").

The noble Lord said: My Lords, this amendment is consequential upon Amendment No. 60, to which we spoke earlier. I beg to move.

On Question, amendment agreed to.

Lord Lyell moved Amendment No. 98:

Page 97, line 17, at end insert— ("(2A) As from the appointed day, section 37(1) of the 1969 Act (loans by the Secretary of State to the Post Office) shall have effect as if for the words "section 35(1) or (2) of this Act" there were substituted the words "section 72(1) or (2) of the British Telecommunications Act 1981".").

The noble Lord said: My Lords, this is a technical amendment dealing with the borrowing powers of the new Post Office. I beg to move.

On Question, amendment agreed to.

Lord Lyell moved Amendments Nos. 99 to 102:

Page 97, line 33, leave out ("As from the appointed day").

Page 97, line 34, leave out from ("effect") to first ("in") in line 35 and insert— ("(a) as from the appointed day, as if").

Page 97, line 39, after ("(b)") insert ("as if").

Page 97, line 40, after ("words") insert (""section 7(1)(d) or (f)" and, as from the appointed day, as if for the words so substituted there were substituted the words").

The noble Lord said: My Lords, these amendments are all consequential upon Amendment No. 60, which we dealt with earlier. I beg to move them en bloc.

On Question, amendments agreed to.

Lord Lyell moved Amendments Nos. 103 and 104:

Page 100, line 27, at end insert— ("(4A) Section 209(3) shall also have effect as if—

  1. (a) after the word "section" where it first occurs there were inserted the words "199 of this Act authorising the stopping up or diversion of any footpath or bridleway is made by a planning authority or an order under section";
  2. (b) in paragraph (a) after the words "which the" there were inserted the words "footpath or bridleway is stopped up or diverted or as the case may be the" and for the words "local authority" there were substituted the words "authority which made the order";
  3. (c) in paragraph (b), for the words from "to the" to "months" there were substituted the words "not later than the end of the said period of three months to the authority which made the order"; and
  4. (d) in each of paragraphs (d) and (e), for the words "local authority" there were substituted the words "authority which made the order.".")

line 29, at end insert ("and for the words from "under" to "local authority" there were substituted the words "to which subsection (3) of this section applies, the authority which made the order".").

The noble Lord said: My Lords, these are technical amendments reproducing in Scotland the effects of paragraph 53(5) which deals with England and Wales. I beg to move.

On Question, amendments agreed to.

Schedule 4 [General transitional provisions]:

The Earl of Gowrie moved Amendments Nos. 105 to 107:

Page 110, line 6, leave out ("statutory provision, agreement or other provision") and insert ("provision or agreement")

Page 110, line 15, leave out from ("by") to ("agents") in line 24 and insert ("persons engaged in the business of, or agents of, the Post Office were (or, if the context so requires, included) references to persons employed by, persons engaged in the business of, or")

Page 110, line 25, after ("references ( ") insert ("whether express or implied and, if express,").

The noble Earl said: My Lords, these are all technical amendments. I beg to move.

On Question, amendments agreed to.

Schedule 6 [Enactments repealed]:

The Earl of Gowrie moved Amendment No. 107A:

Page 130, line 10, at beginning insert—

("31 & 32 Vict. c. 110 The Telegraph Act 1868. Section 11.")

The noble Earl said: My Lords, this is a technical amendment. I beg to move.

On Question, amendment agreed to.

The Earl of Gowrie moved Amendment No. 107B: Page 130, line 13, column 3, at end insert ("Section 14.").

The noble Earl said: This amendment has already been spoken to, my Lords. I beg to move.

On Question, amendment agreed to.

Lord Lyell moved Amendment No. 108:

Page 130, line 48, column 3, leave out ("section 107") and insert—

("In section 86(1), in the definition of "local authority", the words "county borough".
Sections 106 and 107.").

The noble Lord said: My Lords, this also is a technical amendment. I beg to move.

On Question, amendment agreed to.

The Earl of Gowrie moved Amendment No. 109:

Page 131, line 34, at beginning insert—

("26 & 27 Vict.c.112. The Telegraph Act 1863. In section 24, the words from "and send" onwards.
Section 34.").

The noble Earl said: My Lords, this amendment was spoken to with Amendment No. 79. I beg to move.

On Question, amendment agreed to.

Lord Lyell moved Amendment No. 109A: Page 132, line 30, leave out ("paragraph") and insert ("paragraphs 78(1), 79, 86(1) and").

The noble Lord said: My Lords, this is a technical amendment dealing with public rights of way which are made under the New Towns Act and they have to be sent to the Post Office. I beg to move.

On Question, amendment agreed to.

In the Title:

Lord Lyell moved Amendment No. 110: Line 7, leave out ("extend the application of") and insert ("amend").

The noble Lord said: My Lords, this is the last amendment of the series, to which I spoke with Amendment No. 80 earlier. I beg to move.

On Question, amendment agreed to.