Lords Sitting of 9 March 1981

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

ICI Scholarship Awards
Lord Boyd-Carpenter: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in the light of the decision of the High Court in the case of scholarships awarded by ICI to the children of two of their employees, they will direct the Inland Revenue to refund income tax in all cases in which this has been deducted on the basis of what has now been established to be an erroneous view of the law.
The Minister of State, Treasury (Lord Cockfield): My Lords, I am informed that the Inland Revenue have lodged notice of appeal against the decision of the High Court in this case. Before the court proceedings began the Inland Revenue agreed that no steps would be taken to recover tax from any ICI employees on whom assessments had been made. But, if in any case tax has been paid, the question of any repayment would need to await upon the final outcome of the proceedings.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply and, in particular, for contradicting the statement in The Times that no appeal was contemplated. Does my noble friend understand that, because of the sub judice rule, I have to resist the temptation to have a go at him on it?
Lord Cockfield: My Lords, I entirely appreciate what my noble friend says, and I agree with him that the merits of this case should await the decision of the higher courts.

UN Broadcasting Facilities
2.38 p.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their view of the proposal of the United Nations General Assembly Committee on Information that the United Nations Secretariat should conduct the necessary financial, technical and legal studies to enable it "to undertake international short-wave broadcasts over United Nations owned facilities and frequencies".
The Earl of Avon: My Lords, Resolution 35/201 adopted by consensus at the Thirty-Fifth Session of the United Nations General Assembly in December 1980 requested the Secretary-General to undertake the necessary studies for the consideration of the United Nations Committee on Information. Her Majesty's Government await the outcome of these studies.
Lord Brockway: My Lords, I thank the Minister for that Answer. When nearly every Government broadcasts over the world—America, the Soviet Union, Britain and many other nations; the British being the most objective of them all—is there not a case for the United Nations to have similar broadcasting facilities, in order to integrate an international view of these problems?
The Earl of Avon: My Lords, this is, of course, one of the matters which will now be looked at by the United Nations. I agree with the noble Lord that

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the United Kingdom does, indeed, lead in this field. However, I think we must await the outcome of this report before we can say any more.

Legislation: Delay in Publication
2.40 p.m.
The Earl of Kinnoull: 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 aware of the increasing delay in the publication of primary and secondary legislation, and what steps they will take to protect persons against the legal consequences of infringing rules of law whose nature they are unable to discover.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I am grateful to my noble friend for raising this matter, which I reply to in the absence of my noble friend the Lord President. It is regretted that there has been some increase in the time taken to print Public General Acts. The Government fully recognise the need to postpone commencement to allow for possible delays in publication, particularly where any new criminal offence is created. In the Government's view, Bills are too various in character to allow for any change in the general rule that Acts should enter into force on Royal Assent.
So far as regards secondary legislation, the Government are not aware of any increase in the time taken for publication. Noble Lords will, of course, recall that Section 3(2) of the Statutory Instruments Act 1946 provides that in proceedings for the contravention of a statutory instrument it is a defence to prove that at the time of the alleged contravention the instrument had not been issued by Her Majesty's Stationery Office or brought to the notice of the public in some other way.
The Earl of Kinnoull: My Lords, while I thank my noble and learned friend for that very full reply, particularly on a day when his department may not be at full strength, may I ask him whether the Government accept, in principle, one of the main recommendations of the Statute Law Society's report, which indicated that it should be a matter of course that after Royal Assent there should be a six weeks' delay before Acts of Parliament came into force, in view of the delays which have been experienced?
The Lord Chancellor: My Lords, I have read the Law Society's report, and also that of the Statute Law Society, which had a working party in, I think, 1979. I enjoyed reading them both. There is a great variety in the requirements for commencement in relation to individual Acts. In some cases—for instance, the Iran (Temporary Powers) Act 1980—very early commencement, if not immediate commencement, is an urgent necessity. Others involve periods much longer than six weeks to enable professional advisers
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to absorb the contents. Still others need different commencement dates for different purposes. I cannot resist, in the presence of the right reverend Prelate, reminding noble Lords that it has not yet been possible to bring into effect the Easter Act 1928.
Lord Airedale: My Lords, I wonder whether the attention of the noble and learned Lord the Lord Chancellor has been drawn to a recent Northern Ireland order—the Social Security (Contributions) (Northern Ireland) Order—where I believe there was a delay of 13 days between the making of the order and its publication, which would seem to me a glaring example of the kind of thing that the noble Earl is complaining about?
The Lord Chancellor: My Lords, I am grateful to the noble Lord, Lord Airedale, for giving me some advance warning of this very fast one. I gather the simple truth, although it runs into pages, is that it was thought right—this is rather an Irish answer—so as not to offend Northern Irish susceptibilities, to bring into force the Title and the interpretation clauses, but the operative clauses will not be in force till 6th April.

USA and Convention on Law of the Sea
2.43 p.m.
Lord Kennet: 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 action they intend to take, if possible in concert with other Commonwealth Governments, in view of the United States decision to block further progress on the convention, the fruit of seven years' work by the United Nations Conference on the Law of the Sea, which meets this week for its sixth, and intendly last, session.
The Earl of Avon: My Lords, the United Kingdom delegation to the Tenth Session of The Law of the Sea Conference will continue to work towards the conclusion of an acceptable convention as soon as possible and will consult with other delegations as appropriate on how this objective can best be met.
Lord Kennet: My Lords, in view of the fact that seven years' work has been put into the draft treaty by 140 nations and that it is not only deep sea mining which is at stake but everything which is done at sea; in view of the obvious damage to British interests if it does not come into effect; and in view of the fact that the Commonwealth groups consist of both developed and undeveloped nations and that the leadership of the undeveloped nations in this conference seems to have devolved upon Singapore, a Commonwealth country, would the Government go one step further and now give to the House, in public, a favourable "Aye" to the idea of a Commonwealth initiative, to be mounted in the first place by Canada, Britain and Singapore, to bring the new American Administration

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to its senses after what appears to be a beginner's blunder?
The Earl of Avon: My Lords, while thanking the noble Lord for his earlier remarks, I cannot go along at all with his final sentence. Since the recent press statement by the United States Government, Her Majesty's Government have not had time for formal consultations about the convention with other Commowealth Governments as a group, but the United Kingdom delegation will be sounding out other delegations at the conference, including those Commonwealth countries, for their views. I am sure that what the noble Lord said in his earlier remarks will be taken into account. Equally, may I remind him that the conference started only today?
Lord Ritchie-Calder: My Lords, is the Minister aware that the United States' action, which was unquestionably taken at the behest of the deep sea mining interests, has certainly postponed indefinitely, and probably destroyed, the possibility of setting up the International Seabed Authority, which authority was to administer the licensing and management of the seabed mineral reserves? Is the Minister also aware of the implications for the Deep Sea Mining ironically called (Temporary Provisions) Bill which your Lordships passed through this House, which purports to license the exploration and exploitation—
Several noble Lords: Reading!
Lord Ritchie-Calder:—of the quite unmeasurable wealth of the seabed and which admits that it has no terms of reference? The Bill states explicitly that it is not claiming these rights. It is simply an acknowledgment that anybody else has sovereignty.
Several noble Lords: Order!
Lord Ritchie-Calder: The question I want to put—
Several noble Lords: Hear, hear!
Lord Ritchie-Calder:—is this: will the Minister remind his right honourable colleague the Secretary of State for Industry, who is sponsoring the Bill, that in this process he is making himself an accessory before the fact in the biggest smash-and-grab in history since the 1855 Berlin Convention which carved up Africa?
The Earl of Avon: My Lords, I think that a great deal is being based upon the press statement which was made only on 3rd March last. The United States' statement does not mean that the United States will block all progress on the convention. We hope that negotiations on outstanding problems can continue.
Lord Brockway: My Lords, in his Answer the Minister said that the Government will seek "as soon as possible" the conclusion of an acceptable convention. Does that mean that the Government will not demand that the conclusion be reached at the forthcoming meeting? Do the Government understand the anger that there is among the third world countries because of this American proposal, and
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may not this anger prevent a settlement of the North-South dialogue at the Summit meeting in Mexico? Furthermore, in view of this controversial situation would the Government withdraw the Bill now being considered in another place which would give to the Secretary of State power to hand over to a consortium of multinational companies the right to
"exploit and explore the hard minerals of the sea bed "?
Would not this make the oceans of the world not a heritage of mankind but the monopoly of a few tycoons?
The Earl of Avon: My Lords, as I said in an earlier reply, this conference is meeting again today. At the moment we do not know how the countries are going to react and it would be unwise to prejudge that at the moment. Her Majesty's Government are firmly committed to the achievement of a comprehensive Law of the Sea Convention which fully safeguards our defence, economic and commercial interests. We hope to see early agreement on these negotiations.
Baroness Llewelyn-Davies of Hastoe: My Lords, is the noble Earl aware that his last answer has given some pleasure to this side of the House, because we on this side were rather disturbed by the levity displayed by the other side, even by the Front Bench, about the very serious matters which were being raised, involving the future prosperity of this country and of most other parts of the world?
The Earl of Avon: My Lords, I am grateful to the noble Baroness for her support. I hope there was no levity on my face. I was trying to listen.

Cable and Wireless
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Gowrie will, with the leave of the House, repeat a Statement which is to be made in another place on Cable and Wireless.

Gas Levy Bill
2.50 p.m.
The Minister of State, Department of Employment (The Earl of Gowrie): My Lords, I beg to move that this Bill be now read a second time. The House will recall that in May of last year the Secretary of State for Energy announced that the Government had decided in principle to impose a levy on the British Gas Corporation in respect of gas purchased from the United Kingdom continental shelf and sold to the corporation under contracts not subject to petroleum revenue tax. The Gas Levy Bill before your Lordships today is in a sense rooted in events that took place in the early part of the story of North Sea Gas. Natural gas was first discovered off the Norfolk coast in 1965, and within a year of this first discovery the decision had been taken to convert Britain to natural gas.

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The initial purchases of gas made by the Gas Council were from the Southern Basin fields, which are off East Anglia. The Gas Council's successor, the British Gas Corporation, has gone on to acquire gas from the Northern Basin fields. Almost all the gas that is now piped ashore is purchased by the BGC under long-term contracts negotiated before the leap in energy prices of 1973–1974. This means that the prices currently paid for gas under these contracts reflect the prices and escalation provisions regarded as commercially sensible in the era of cheap energy.
The average cost to the British Gas Corporation of all their gas purchases in the current year, that is 1980–81, will be about 8p per therm and this includes the cost of the relatively more expensive gas, including imports, from the Northern Basin. Eight pence a therm as the current average cost of gas may be compared with prices double that figure sought and achieved by producers for new supplies or re-negotiated contracts in recent international deals. Such prices, together with substantial escalation against subsequent oil price increases, evidently reflect the value placed upon gas supplies by the utilities that are now vigorously seeking to acquire them. It will therefore be clear that the gain to gas consumers in Britain which results from the British Gas Corporation's current access to cheap gas supplies is, of course, enormous. It would also be politically very tempting to leave this windfall with gas consumers but it would be quite wrong to do so.
Cheap gas under the old contracts is a rapidly declining asset. New supplies will cost anything up to 10 times the prices originally paid. If consumers are to make decisions on consumption and investment that are sensible for the nation as a whole gas prices must reflect the costs of supply on a continuing basis. That is what is meant by economic pricing and that is the consistent principle underlying the Government's policy. We may argue about the details about price levels at any particular time, or rates of change, but there is no avoiding the need to bring energy prices generally to levels which are consistent with matching supply and demand and which, in particular, reflect the costs of new supplies.
Rather over a year ago the Government set the BGC a financial target which reflected the decision to move steadily towards economic pricing, particularly in the domestic sector where prices are to be allowed to rise by 10 per cent. per year for three years, over and above the rate of inflation. The financial target was also consistent with the Corporation's own policy of selling gas to industrial customers at prices broadly related to those of the competing oil product.
Moving towards economic prices to consumers when gas costs remain constrained by long running contracts at prices which were agreed many years ago, must necessarily result in big windfall profits accruing to the British Gas Corporation. Last year BGC's pre-tax profits were £425 million. Within a year or two they would rise to over £1,000 million—unless Parliament approves this Bill—well in excess of the needs of their current capital investment programme. The intention of the levy proposed in this Bill is therefore to transfer this windfall gain from the Corporation
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to the Exchequer for the benefit of the nation as a whole. There is a close parallel in intention with our North Sea oil taxation regimes, which is designed to recover the windfall element from rising international oil prices, from the producers for the benefit of taxpayers generally.
Clause 1 of the Bill proposes a levy on the BGC's purchases of gas that are at present exempt from petroleum revenue tax. Petroleum revenue tax was introduced in the 1975 Oil Taxation Act, and Section 10 of that Act exempted from PRT gas sold to the Corporation under contracts made before the end of June 1975. As I indicated earlier, the rationale for this exemption was that the price and escalation provisions of those old contracts precluded any substantial windfall gain accruing to the producers. The windfall element resulting from rising energy prices has accrued instead to British Gas. It is therefore entirely appropriate that the levy be restricted to the Corporation's purchases of gas under contracts not subject to PRT.
Clause 2 specifies the proposed rates of levy for the first three years, namely 1980–81 to 1982–83, at 1 p, 3p and 5p per therm respectively. A rising rate of levy is consistent with moving towards economic prices in the domestic sector and with the continued rise in oil prices in real terms. The revenue from the levy is forecast to be about £1,300 million over the three-year period. Clause 2 also enables the Secretary of State, with the consent of the Treasury, to vary the rates of levy specified in the Bill and to set rates for later years, by order, subject to the Affirmative Resolution procedure in another place.
Let me now summarise the consequences of the proposed levy for the finances of the British Gas Corporation. Profits after the levy in the current year are forecast to be in the region of £300 million, with similar out-turns expected in the following years. The Corporation's financial target has recently been revised to a 3½, per cent. return on assets at current cost, to take acccount of the levy. Such a return would, in our view, be appropriate for an industry such as British Gas, taking into account the nature of the business and the returns made by industry generally, both in the past and at present.
Some concern has been expressed that the impact of the levy will hinder the Corporation's current major capital investment programme, aimed at improving gas supplies to industrial and to domestic customers. This is not the case. The Corporation's post-levy profits over the three-year period, together with provision for depreciation, should be enough to finance the investment programme currently under way. Let me stress that the levy is not a means of raising gas prices. The proposed levy will not affect what happens to gas prices since the rates of levy have been set to be consistent with the pricing policies which have already been announced.
In conclusion, the intention of the gas levy is to transfer the windfall gain that is accruing to the British Gas Corporation as a result of rising energy prices, to the Exchequer for the benefit of taxpayers generally. The windfall is substantially in excess of the Corporation's present requirements; it should not accrue to gas consumers alone, nor should it be held in reserve solely for the ultimate use of the industry. The proposed levy on PRT-exempt gas is a simple, efficient

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and appropriate means for transferring the windfall gain from the Corporation to the nation as a whole, without affecting gas prices or the investment programme of BGC. My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a—(The Earl of Gowrie.)
2.58 p.m.
Lord Strabolgi: My Lords, we are grateful to the noble Earl, Lord Gowrie, for explaining the provisions of this Bill. This of course is a Money Bill and all further stages should be formal. However, a Second Reading gives us, on this side of the House, an opportunity very briefly to urge the Government to do something to help the gas users, both the domestic users and the industrial gas users and particularly the energy-intensive industries.
Government policy for domestic gas has been to increase the price at the rate of 10 per cent. a year over and above the rate of inflation, as the noble Earl said. For industrial gas it is the corporation's policy, as the noble Earl said, to sell this gas at a price related to fuel oil. This of course has meant enormous profits to the British Gas Corporation and we do not quarrel with the purposes of the Bill. However, the increase in April of 15 per cent. will be the third in 12 months. There will be a further increase of 10 per cent. in October, making a 25 per cent. increase by the end of the year.
British industry is already paying far more for its energy supplies than its European competitors and this is falling particularly hard on the energy-intensive industries, such as the chemical, paper and board, glass and ceramic industries. These industries have been making representations to the Government for months now without any success. The NEDC report published last week has completely vindicated their case. This report has confirmed that for the large industrial users of gas British prices are 10 to 15 per cent. higher on average than those in other EEC countries. Our tax on heavy fuel oil here is £8 a tonne, compared to just over £3 a tonne in Germany and under 10p in France.
As The Times said last week:
"The Government has become a victim of its own over-rigid policies of insisting that electricity production covers its cost and gas is priced in relation to its alternatives. By always allowing pricing aimed at energy conservation and a reduction of the public sector borrowing requirement to dominate its thinking, it has put industry at a disadvantage in a way which a more flexible attitude could well have avoided".
The NEDC report concedes that for over 95 per cent. of British industrial customers electricity and gas prices are broadly in line with those on the Continent, and this, of course, has always been the line adopted by the Government. But the report makes clear what should surely already have been clear to the Government; in volume terms these customers account for only 15 per cent. of industrial gas consumption. The position is very different for the large users of gas, the gas-intensive industries, where they are paying between 10 and 20 per cent. more for supplies than on the Continent, with an average cost disadvantage of from 10 to 15 per cent.
The Government, apparently, as soon as they knew
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the NEDC report was on the way, began to bestir themselves and to take some action at last. I am glad to say they have now asked the commission to investigate the price differentials. If action had been taken earlier, it might have prevented the closure of Bowater's Merseyside newsprint mill, many lost orders and increasing unemployment. After all, the Government were warned by the CBI months ago. As long ago as last November the CBI in its evidence to the Select Committee on Energy in another place made clear that to an energy-intensive industry increases of this proportion, exacerbated by a high exchange rate, can be crippling. This is the evidence of the CBI. In the glass industry—and here I must declare an interest—energy costs currently account for nearly 22 per cent. of total glass manufacturing costs, which is surely an unacceptably large figure for a manufacturing industry to bear.
I hope that tomorrow's Budget will bring more understanding and better news for our hard-pressed energy users. They have, I submit, a strong case. There was an encouraging change of attitude on the part of the Government last month over the matter of pit closures and foreign coal imports. I hope this represents a change of direction, a change of heart perhaps, and the emergence of a new energy and financial policy that is less rigid, less hidebound and less destructive to British industry.
3.4 p.m.
The Earl of Lauderdale: My Lords, when I saw that the noble Lord, Lord Strabolgi, had put his name down to speak, I felt it would be fairly predictable what line he would take and perhaps one might have in mind an answer to one or two of the points he made. It was, of course, inevitable that he would focus, with his customary rhetoric, upon gas prices and the damage done to British industry. I was particularly fascinated by his suggestion that the Government have been fast asleep, or words to that effect, or at any rate dilatory in getting the NEDC to study the matter. I think he will know from evidence that we have both heard in the Select Committee to which we both belong that as a matter of fact the study by the NEDC was set up last autumn.
It is surely worth putting back in the record one or two facts which are now a matter of history. So far back as July 1979 the Price Commission, the love child of the party opposite, declared that domestic gas was at that stage under-priced to the extent of some 30 per cent. The same Price Commission, the same love child of the same parents, had said on more than one occasion that gas prices to the consumer should reflect the long-term replacement costs. Since 1979 the gas cost to BGC has risen by about 70 per cent. in money terms, and of course the northern gas is inevitably more costly than the southern gas because it comes from further away and from deeper waters. Some 30 per cent. of British gas now comes from the Frigg gasfield, most of which is in the Norwegian sector although it does straddle the median line.
The gas gathering pipeline now in prospect is going to cost something like £2 billion, and although happily the Government and the taxpayer are not directly

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involved in that, none the less the BGC will have to take account of the need to service and to redeem that capital, and tariffs in the future are bound to reflect that need. Before we pass from the gas gathering pipeline, may I ask my noble friend—he may or may not have received a message I sent recently saying that I would ask this question—whether he has any news about stories that are current that the banks, who are preparing to organise a consortium to fund the pipeline, have told the Government that they may be unable to do so unless the Government forces all available gas resources from that part of the North Sea into the pipeline? Defence strategy apart, I wonder whether my noble friend can assure us that he is satisfied, as not everybody is, that this is going to be the most economic way of gathering the gas.
Returning to the point about gas pricing at home, unless domestic under-pricing is ended demand will go on rising until the demand becomes unmanageable, and this inevitably at the expense of industry's premium needs. As to the industrial position, there has been, of course, much heat generated on this subject, and scarcely a day passes without my postbag, at any rate, having some propaganda statement on the subject to open up and read. But the fact is that comparisons with the situation in Europe are confused by the rise in the value of sterling, something like 20 per cent. up on the deutschmark and the franc, which makes comparisons difficult. Then, most European industrial suppliers guard as a deep secret the contracts that they have for supply, and it is indeed very difficult for anybody, NEDC or anybody else, to discover exactly what the main European industrial consumers are paying for the gas that they get.
The next thing is that, whereas industry here—or shall we say the market here?—has the prospect of absolutely secure supplies of gas, that is not so on the Continent. Some statistics published by the European Economic Community on gas prices—not, I admit, specifically industrial gas prices, but gas prices for consumers generally—are of some interest. The EEC has published a scale, based on 1970 at 100, giving current United Kingdom gas prices overall at 60; German and Italian at 12; Dutch at 135 and French at 150.
Finally, the complaint is commonly made—but it was not made by the noble Lord who has just sat down; he is far too intelligent to make such a stupid point, but it has been made by many others—that gas prices follow oil prices and in the United Kingdom oil prices follow those of OPEC, and should we not, it is argued, be basking in the enjoyment of cheap oil and gas of our own production? Of course, if our own oil prices were not related to those of OPEC then there would be an overwhelming demand for it and it would be resold at enormous profit to middlemen, who are hardly the darlings of the party opposite. The same would apply to gas. If gas did not follow oil prices more or less that, too, would encourage a gigantic waste of premium fuel in the private sector.
The argument overall that the British Gas Corporation should be left free to use its profits to subsidise the consumer reflects, I have to say, a socialist interventionist philosophy and is the economic counterpart
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of the political argument that all that is not compulsory is forbidden. I congratulate my noble friend on the way in which he has moved this modest Bill to serve good causes to an honourable end.
3.12 p.m.
Lord Beswick: My Lords, although my name is not down on the list of speakers I rise to invite the noble Earl to correct an impression which I am sure he inadvertently gave when he moved the Second Reading of the Bill. The impression he gave was that the profits of the British Gas Council are the result of some "windfall ", as they call it, as if they were, to use a phrase that is often used in another connection, "pennies from Heaven ". Those profits have not been achieved as a result of any climatic condition. They result from an enormous amount of hard work by the people in a public sector industry. I hope that the noble Earl will take the opportunity, when he replies to the debate, to correct that impression which, as I say, I am sure he inadvertently gave. I would only go on to say that there appears to be in some quarters the idea that the profits result from an over-pricing by the British Gas Council. Yet, as the noble Earl, Lord Lauderdale, said, there is an argument that they have, in fact, in previous years been under-pricing gas. If there were to be a proper investment programme in the future then an economical price would be needed.
I should have liked to hear the noble Earl, Lord Gowrie, tell us in what way the £1,300 million was going to be used in the future. Will it just go into the Treasury account as possibly part of the social service payments? Or are we to see a deliberate investment in energy programmes, or indeed—as I should like to see and as I have suggested here previously and so I shall not puruse the point now—are we to see a public sector investment board, with these sums of money going into that investment board? Instead of continually criticising other sections of British publicly-owned industry, like steel or BL when they have to invest, for being a drain on the taxpayer, we could see, if the operation were carried out properly, a balanced national investment policy which would not be a drain on the taxpayer but, in my belief, over a period of years would see a net return to him.
However, my main reason for rising to my feet is to suggest to the noble Earl that it would be appreciated in the British gas industry if he would take the opportunity to say that its success is in large part a result of the great efforts which have been made in running a high technology industry in a most efficient and competent way.
3.14 p.m.
Lord Leatherland: My Lords, I have nothing in the way of argument to add to the three highly intelligent speeches that we have had from noble Lords. I merely wish to ask two questions. In his opening speech the noble Lord the Minister used the expression "PRT ". I cannot find "PRT" mentioned anywhere in the Bill and I wonder whether he could tell us what it means. My other question concerns the final paragraph of the Bill where it says:
"therm ' means 0·105506 gigajoules".
What is a gigajoule?
3.15 p.m.
The Earl of Gowrie: My Lords, one of the great many disadvantages of standing at this Box is that every year one gets a little further from the O-levels that one did in these subjects. I am able to set the mind of the noble Lord, Lord Leatherland, at rest, in that I did, in fact, refer to petroleum revenue tax and only later truncated it rather unattractively to "PRT" in the interests of getting on with the business. Petroleum Revenue Tax was what I had in mind. As regards the definition of a therm, I would point out that a gigajoule is a metric unit of heat. I hope that that, at least, sheds some light on the issue.
I am grateful for the way in which the Bill has been received although I must say I admired the ingenuity of both the noble Lord, Lord Strabolgi, and my noble friend Lord Lauderdale—with the noble Lord, Lord Beswick, coming in on the rails, as it were—of perhaps turning it into a debate on economic pricing generally rather than a debate on the issue of the gas levy. I thought that that debate was quick and to the point and that both sides had something to be said for their arguments.
The noble Lord, Lord Strabolgi, mentioned price rises. Of course, the price rises that he actually itemised were for domestic prices, and industrial prices have been rising much more slowly. Indeed, my advice is that United Kingdom industrial prices were in line with those on the Continent until the middle of last year. However, the cost disadvantage of 10 to 15 per cent. opened up in the latter part of last year, owing mainly to the movement of the pound, and that, of course, was pointed out by my noble friend Lord Lauderdale most succinctly. Therefore I think that the CBI was over-stating its case. The benefit of the NEDC report is that it has provided a very balanced statement of the facts. I cannot, of course, anticipate what easing, if any, of the position is in the pipeline in order to try to help industry overcome this adverse balance in trade, in energy terms, which is principally a currency problem rather than an energy pricing problem.
My noble friend asked me whether the gas gathering pipeline would not be able to raise medium-term finance unless the Government required all the gas to go through the pipeline. As I am sure my noble friend appreciates, the concept of the gas levy is not in any way related to the financing of the gas gathering pipeline. Obviously he has raised an important question and the Gas Gathering Pipeline Organising Group has, I am able to tell him, asked the Bank of Scotland to hold detailed discussions on interim finance, and they will be reporting back shortly. The organising group aims to reach agreement on the structure and finance of the interim company as soon as possible after the end of this month. That will meet the financial requirements of the gas gathering line ahead of sufficient gas purchase contracts.
I am delighted to accede to Lord Beswick's request to pay a tribute to the efforts and endeavours of the British Gas Corporation. I do that most warmly, without any qualification. However, I do not withdraw the use that I made of the expression "windfall profit ", because the windfall involved was, of course, the very sharp rise internationally in the price of oil. That affects the price of gas, and it affects it particularly
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where the British Gas Corporation had, wholly properly, negotiated contracts based on a previous cheaper price of gas.
We, of course, believe that that windfall should be returned to the Exchequer for the benefit of the nation as a whole, as I said; but sufficient profits are, of course, left to the British Gas Corporation for it to continue with its excellent and, indeed, very expensive work of developing our national resources.
The last point I would make is on the suggestion of the noble Lord, Lord Beswick, that these monies be used specifically to help industry. When I look at what the Government have been doing to help industry, I can only say that they are being used to help industry. I am sure that the noble Lord's colleagues, or former colleagues, on nationalised boards would have to agree with that, whether they are Sir Michael Edwardes, Mr. MacGregor or, indeed, Sir Denis Rooke himself. However, the noble Lord, Lord Beswick, who was a distinguished member of previous Governments, knows perfectly well that we do not adopt a hypothecated taxation policy in this country and, indeed, I think that there would be very many dangers in doing so.
That said, I welcome the reception of this Bill—a Money Bill, as the noble Lord, Lord Strabolgi, reminded us.
On Question, Bill read 2a; Committee negatived.

House of Commons Members' Fund and Parliamentary Pensions Bill
3.22 p.m.
The Lord President of the Council (Lord Soames): My Lords, I beg to move that this Bill be now read a second time. May I first draw your Lordships' attention to a small omission in the printed copies of the Bill before your Lordships. On page 2, line 41, the words the fact "should be inserted after the words "but for ". Therefore, in fact, it should read "but for the fact".
This Bill flows from the fact that in years gone by there was no pension scheme for service in another place. Perhaps the best contribution that f can make in introducing the Bill is to outline the main points by way of background. The first intention of the Bill is to implement the recommendation made by the Review Body on Top Salaries a year ago about pre-1965 Members of Parliament; that is, about Members of Parliament who left the House before 1965. These, indeed, are those in another place whose service ended, in effect, before the parliamentary pension scheme was brought into operation. Their position was eloquently described by many noble Lords in the Second Reading debate in 1978 on the Parliamentary Pensions Bill. We were reminded that many of them—and indeed in this particular respect I can say many of us—sat for many years in another place in the days before allowances for secretarial services, postage, telephones, travelling and so on had even been thought about, let alone introduced. There are several who still contrive to give distinguished service as Members of your Lordships' House, but because they had no opportunity to contribute to a pension scheme, for the

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good reason that there was none to contribute to, they were deprived of any pension.
This situation has been of concern ever since the introduction of the parliamentary pension scheme more than 15 years ago. In proposing a parliamentary pension scheme the Lawrence Committee explicitly considered whether the scheme could cover Members who had already left another place. They considered that it could not, and the same principle of "no retrospection" in pensions matters continues to affect many thousands of would-be pensioners in the public services and elsewhere. However, I am sure that your Lordships will be glad, as I am, that following an invitation in 1978 by the then Prime Minister to take a fresh look at this matter, the Top Salaries Review Body in its Thirteenth Report proposed a solution, and it is that solution which is at the heart of this Bill.
From its creation in 1939 all Members of Parliament have contributed to the House of Commons Members' Fund, which is an old fund. It is a benevolent fund providing discretionary grants but on a stringent means-test, which means that only a few pre-1965 Members have benefited from it. I think that the contribution was about £12 a year from its inception until about 1959, when it became £24 a year, which it still is. That is for a Members' fund specifically as a benevolent fund.
The Review Body proposed that new grants should be payable to pre-1965 Members through this Members' Fund, but as of right. This proposal is the main feature of the Bill, and I hope that it will be welcomed by your Lordships. That is the background to Clauses 1 to 3 of the Bill. I shall make only one or two comments on the detailed conditions as to eligibility in Clause 1. I would suggest that the conditions have largely been framed to avoid creating further anomalies. For example, those who retired between 1965 and 1972 needed 10 years' service to qualify for a pension, which was paid only from age 65. The Bill has been framed so as not to treat pre-1965 Members differently from that group. Clause 1(6) relaxes this provision slightly by allowing the trustees in special circumstances to pay grants in cases of less than 10 years' service, but only if they are advised by the Government Actuary that such additional commitments can be borne by the fund. The trustees particularly asked to be given this additional degree of flexibility, and the Government are pleased to be able to respond to their wishes.
The last point that I would make on Clause 1 is that it will be no mean task to seek out and alert potential recipients to the new grants. But I understand that the fund's trustees and administrators are scouring through Who's Who and have plans in hand to bring this to the attention of any of those who are entitled to it but who do not in fact apply.
Clause 2 concerns the amounts to be paid. Initially, these are to be £1,000 a year to former Members and £500 to widows or widowers. In order to build up the fund to meet these commitments, the Government will be providing the fund with the sum of £2 million over 10 years. At this point I should perhaps assure your Lordships that these costings allow the grants, and are calculated to allow the grants, to be increased
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regularly. I suspect that there will probably be an annual review of the grants.
Subsection (1) provides the mechanism for these regular increases, and a final point in Clause 2 is that any additional discretionary payments made by the trustees to ex-Members should take account of the sums being received by them as of right. Subsection (3) makes this clear. In other words, the old payments paid by the Members' Fund to Members up to now, when considering the income of Members to whom it pays them, should take into account what they will now be getting as of right after this Bill is enacted.
Clause 3 is entirely technical. Under Section 4(4) of the House of Commons Members' Fund Act 1948, up to 10 per cent. of the Exchequer contribution to the Members' Fund may be earmarked for the "alleviation of special hardship ". Clause 3 allows the Treasury by order to prevent this from happening to any part of the new £200,000 a year which the Exchequer is paying towards the new grants, for otherwise it could put out the actuarial calculations.
Clauses 4 and 5 deal with a separate recommendation made by the TSRB. It will primarily affect Members of another place. But it will also benefit noble Lords who participate in the pension scheme as Ministers or other office holders. At present it is only possible to transfer pension rights earned outside Parliament into the parliamentary scheme within 12 months of first joining the parliamentary scheme. This unfortunately takes no account of the interruptions inherent in a political life, with which so many of us are all too familiar.
The review body proposed an extension of the time limit to five years, but even this would not deal with the problem completely. It would not meet the needs of all Members and it would leave the Parliamentary Pension Fund uncomfortably exposed. We are therefore proposing an arrangement which will offer participants in the scheme greater flexibility while it continues to safeguard the position of the pension fund. Thus, Clause 4 will allow transfers to be requested within 12 months of a person becoming a Minister, or Member of Parliament, either for the first time or after a break. It also provides a new option for all existing members of the scheme. I would commend this proposal also to your Lordships.
It is my hope that the measures in this Bill will be considered, in spite of their modesty, to be both practical and helpful. It is a subject which I know has mattered to a comparatively small number of people, but those who have rendered great service to the nation in years gone by. This has been a subject of worry for some years and a feeling of inequity, which to the best of our ability we are now seeking to put right. It is, as I see it, an all-party matter. Indeed, it was the previous Government which referred this in 1978 to the Top Salaries Review Board, and it falls to this Government to put it into operation. Though modest, I hope it will be both practical and helpful and may give us yet further cause to be grateful to my noble friend Lord Boyle of Handsworth, whose work chairing the review body on top salaries has been so eminently distinguished as in so many other fields to which he has given his life and his attention. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Soames.)
3.34 p.m.
Lord Peart: My Lords, this is a day when we can rejoice, even though some people may not accept all of what the noble Lord has said. I believe that the Government have done well on this. I, along with my noble friend Lady Llewelyn-Davies of Hastoe, participated in the work of the Boyle Committee. We gave evidence over a long period, and I am glad to think that a good response has been made. I should like to pay a tribute on behalf of all of us on this side to what the noble Lord, Lord Boyle, has done. Here we see the culmination of something we hoped would happen.
I know that there will be anomalies somewhere in some people's minds, but I believe that this is a first step in the best sense. I have carefully read this weekend all the speeches on the House of Commons Members' Fund and Parliamentary Pensions Bill. The Bill, as they say, has two main purposes. I think that the House will agree that the most important is to provide honourable Members who left the House before 16th October 1964 with grants from the Members' Fund. That was emphasised by the noble Lord. These former honourable Members had no opportunity to contribute to a pension scheme or to benefit from one. Many of them are getting on in years and some of them now find themselves in difficult circumstances.
This is a state of affairs which has been a source of anxiety on both sides of the House. Indeed, it was highlighted by the noble Lord's right honourable friend in another place, the Leader of the House of Commons, the Chancellor of the Duchy of Lancaster. There is all-party agreement on this. We have always felt a bit diffident when discussing matters which affect ourselves. I never thought of that, though, when I was Leader of the House in another place. I always believed that it was important that Members of Parliament should have adequate salaries and adequate pensions. I am glad that that issue now is such. Here we are really discussing the amounts. Although I think we should not spend too much time on this, the Government have indicated what it will cost. Clause 2 gives the annual payment under Clause 1, which will be £1,000 to a former Member, £500 to his widow or her widower. These amounts may be varied from time to time by resolution of the House.
I believe that there will be an increase in the maximum annual Exchequer contribution to the Members' Fund, which has been mentioned. In other words, here is something positive and something which is helpful. It may well be that some honourable Member may be able to criticise here and there. I personally welcome this Bill very much. I believe it will show again that we can gradually adapt our system to giving help to those who have given service in the parliamentary field over a long period of time. I wish the scheme well.
From carefully reading many of the speeches and the official reply in another place, I see that there is to be set up a special Select Committee to examine matters which arise from time to time. I do not know how this committee will act; whether it will also trespass a little on the Boyle Report, or the Boyle Committee. We shall watch carefully because this matter may go further to a discussion of linkage, et cetera, with pensions as things develop. However, on behalf of
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the Opposition I strongly welcome this Bill, and I hope it removes the grievances which have been there.

Cable and Wireless
3.38 p.m.
The Earl of Gowrie: My Lords, I think it might be for the convenience of the House if at this point I read out a short Statement which has been made in another place by my honourable friend the Minister of State for Industry, on Cable and Wireless. The Statement is as follows:
"On 2nd December, my right honourable friend the Secretary of State for Industry told the House that in the British Telecommunications Bill the Government had included a clause broadening its power to dispose of shares in Cable and Wireless.
"Since then we have been considering, in close consultation with the company, whether and how shares might be sold. Before reaching a final conclusion we consulted, through the Foreign and Commonwealth Office, all the Governments of the 30 or so countries in which Cable and Wireless operates telecommunications services under a Government concession. No objections have been raised to the Government's proposals.
"The Government have now decided to make a public offer for sale of just less than 50 per cent. of its shares, subject to obtaining the necessary powers in the British Telecommunications Bill. We and the company are agreed that when shares are offered for sale special arrangements will be made for employees to acquire shares.
"Cable and Wireless already enjoys a large degree of commercial freedom. The Government intend to refrain from using their rights as a shareholder to intervene in the company's commercial decisions. Cable and Wireless will be freed from the close relationship which exists between the Government and public corporations which must on occasion constrain the company from being wholly responsive to market forces. The part ownership formula we have decided on will follow broadly the precedent set in the case of British Petroleum, leaving the Government with a major shareholding capable of safeguarding overseas Government's interests as necessary.
"The chairman and court of directors of Cable and Wireless are in agreement with this line of action. Cable and Wireless has had a long record of achievement both in private hands and since 1946 as a public sector company. The proposed sale of shares will create a partnership between the public and private sectors. This new arrangement will provide the commercial flexibility and access to the financial markets necessary to exploit the growth and opportunities in the rapidly expanding telecommunications sector".
My Lords, that concludes the Statement.
Lord Ponsonby of Shulbrede: My Lords, I thank the noble Earl for repeating that Statement, which does not cause us any surprise. I was glad to hear the Statement indicate that the Government wish to retain control of Cable and Wireless and will market something

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under 50 per cent. of the shares. What gives us great concern, however, is this continual disposal of public assets. Recently we discussed the flotation of British Aerospace, which was floated at 150p per share and immediately after the flotation the shares achieved a premium of some 29p over the issue price, and currently they are standing at some 25p over issue price, producing a profit of about 15 per cent. for individual speculators who subscribed to the shares. I say that deliberately because we know that a great number of individuals subscribed to the shares and later sold them so that some of the institutions could achieve fairly large holdings of the shares.
What concerned us when we were going through the Aerospace Bill, and no doubt will concern us very much when we go through the Telecommunications Bill, is that when the Government come to float public assets off, they fix the price of the flotation in such a way that the country achieves a full price for the flotation so that we are not faced with an instance such as we have just faced, where national assets are being given away. When the Government come to examine this eventually, I therefore hope that they will ensure that the price fixed for the flotation is right so that they cannot be accused, as they can be accused in regard to British Aerospace, of being over-anxious to achieve a good flotation to the national detriment.
Lord Rochester: My Lords, we on these Benches join in thanking the noble Earl, Lord Gowrie, for having repeated that Statement. Except in the case of certain basic utilities, of which this is not one, we see no reason why the state should have a specially large interest and we are therefore happy to accept the principle involved in the Statement. We have noted that the directors of Cable and Wireless are in agreement with this line of action and we hope the partnership between the public and private sectors to which the Statement says the proposed sale of shares will give rise will create an element of stability in this field so that there will not be any need for further legislation. The part we most welcome in the Statement is that concerning the special arrangements to be made for employees to acquire shares. Although the terms under which they will acquire the shares are, understandably, not spelt out in the Statement, may I ask if it is intended that those terms will he more favourable than those applicable in the Stock Market generally?
The Earl of Gowrie: My Lords, I am grateful for the way in which my Statement was received by the noble Lord, Lord Rochester, and I am glad that the Liberal Benches and ourselves are in broad agreement on the issue of principle. Obviously I cannot be as grateful for the way in which it was received by the official Opposition Front Bench and there is a substantial divide of opinion between us. We have never seen why British companies operating in the private sector in this country should not be able to operate public assets very efficiently.
I am delighted, and not apologetic at all, at the success of the subscription and over-subscription in the case of British Aerospace. I recommend to all your Lordships, who are after all members of the
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general public as well as Members of this House, that you quickly dive into your pockets and purchase some of these admirable shares, and I am sure that any of your Lordships who did not do so in the case of British Aerospace are now regretting it.
That substantive difference aside, I welcome the general reception the Statement has had. I do not know the answer to the question asked by the noble Lord, Lord Rochester, as to the precise terms under which these shares are to be offered to employees. I will research that and inform him.
Lord Boyd-Carpenter: My Lords, under the new arrangement how will the appointment of the chairman and members of the board be handled?
The Earl of Gowrie: My Lords, the Government are remaining a majority shareholder in this company and as a result there will be no change in the arrangements. The present chairman of Cable and Wireless is this afternoon appearing at a press conference with my honourable friend the Minister of State for Industry endorsing this move.
Lord Orr-Ewing: My Lords, is my noble friend aware that many private sector pension funds were invested in British Aerospace and that if there has been a capital profit, that will be very welcome to the many pensioners who will benefit as a result? True, they will not be able to match the fully indexed pension in the public sector, but at least they will make some profit which will help them keep up with the public sector. We in this nation are carrying the largest public sector in the free world and we have a diminishing private sector which has to carry the burden of that public sector. We therefore hope the Minister will carry on the good work of privatising—if I may use that horrible word—further areas of the public sector.
The Earl of Gowrie: My Lords, I can tell my noble friend that we are determined to carry on in this way whenever conditions enable us to do so, and I welcome the support he has given us. It is of course a major delusion to think that the great corporate capital institutions of this country are somehow inimical to the interests of this country; they are thoroughly engaged in those interests and that is why there is nothing sinister and nothing other than of benefit to be found in their purchasing some of our nationalised assets.
Lord Shinwell: My Lords, may I ask the Minister to state what is the basic principle which guides the Government in coming to a decision about the disposal of assets which have been operated for some years on the principle of public ownership? Is there any distinction, or is there no distinction at all, or can it be that there is, for example, some political distinction, if I may put it that way? Do the Government consider the political implications of their decision to dispose of some public ownership assets?
What occurs to me is the question: what is the difference between Cable and Wireless and the nationalised coal mining industry? Why hesitate? If the Government want to go forward, having given the matter meticulous consideration, why not proceed,

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irrespective of public opinion or the opinion that is expressed, or is likely to be expressed in the future, by some of my colleagues on this side of your Lordships' House? What is it that guides the Government? Is there not a case for transferring the coal mining industry to private ownership? Would any noble Lord on the other side of the House, from either the Front Bench or the Back Bench, or any noble Lord on the Cross-Benches rise and ask, why do not the Government take over the coal mining industry, run it efficiently, and set aside any objection which those employed in the industry express? I may be asking a few questions about this; there is a mystery about it all.
If one has a principle and one holds it sincerely, earnestly, fervently, emphatically—I could use many other words; there are many that I have not yet used, but I merely want to know—why leave unaffected the national coal mining industry, with which I had something to do several years ago? Is there some political reason? I merely wondered.
The Earl of Gowrie: My Lords, if the noble Lord, Lord Shinwell, will direct me to people eager to purchase from us the National Coal Board or the coal mining industry, I shall of course with my colleagues consider the request most carefully. I would remind the noble Lord that my honourable friend the present Parliamentary Secretary at the Department of Education, when in opposition, floated the idea of selling the coal industry to those who operated it, and that would seem to me to be an excellent point of general principle. We are of course guided as much by market demand for assets as we are by anything else. We are also guided by the criteria of the degree of commercial freedom that is beneficial to companies in order to expand, and to do so without making calls on the public purse.
Lord Blyton: My Lords, is the noble Earl aware that we all know that Tory philosophy is to take away the profitable parts of national assets and leave those parts that are in the doldrums to be carried by the nation? Is he also aware that one of his own Back-Benchers said that private enterprise is carrying the burden? Can he tell me why gas prices are increased by nearly 20 per cent., so that from a protected profit of £600 million, £200 million can go back to the Treasury?
The Earl of Gowrie: My Lords, that is a somewhat political point, but it was not the Tory Party that nationalised all these assets in the first place. We fought long and bitterly against their nationalisation, and we regret that it ever took place.
Lord Underhill: My Lords, will the noble Earl agree that the statement he made in reply to my noble friend Lord Shinwell will be read with very great interest in relation to the justification for disposing of shares in what everybody recognises is an efficient and profitable concern? In the light of the decision that the Government will retain a majority shareholding, will the noble Earl speak to his right honourable friend the Minister of Transport and suggest that the same thing might be done in regard to the sale of British Rail subsidiaries?
The Earl of Gowrie: My Lords, I should be very
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happy to do that. Obviously when thinking about selling anything, one must consider whether there is a buyer. What I should like to get into the noble Lord's head is the point that there is nothing unpatriotic, nothing that involves special interest, or nothing that is in some way malevolent in selling national assets to national corporations.

House of Commons Members' Fund and Parliamentary Pensions Bill
Second Reading debate resumed.
3.55 p.m.
Lord Boothby: My Lords, to return to the Bill that we were discussing earlier, I would say that, having campaigned for it fairly vigorously for several years, I wish to thank my noble friend the Lord President of the Council for getting it through at last. It really is a case of "at last" because it has been far too long delayed, and to my certain knowledge a great many people who served in Parliament for well over 10 years before 1964 have died in considerable poverty. That should not have been allowed to happen.
I served in the House of Commons for 34 unbroken years and I consider that on the whole, on balance, at the age of 81 I am entitled to a modest pension. I do not think that that is asking too much. If I may add a word of comfort for the noble Lord the Leader of the House, I would say that the Bill will not cost very much because nearly all of us whom it affects are dead, and very soon we shall be all dead. Then it will cost nothing at all. So no one can ever accuse the noble Lord of reckless extravagance. Having said that, I wish once more to thank the noble Lord and to say that the Bill will bring great relief to the half dozen people who still survive.
3.57 p.m.
Lord Shinwell: My Lords, some of my spare time is utilised in reading the debates of another place, and so I am fairly familiar with the arguments that are adduced, this way or that way, on the subject of parliamentary pensions. Being familiar with the subject, I shall express myself quite definitely, without any equivocation and without attempting to persuade. I welcome the legislation. That statement seems to have astonished the noble Lord the Leader of the House. I am quite certain that he was expecting me to "go off the deep end "on the subject. If that was so, he was mistaken. The fact is that I regard parliamentary pensions as essential and as an inevitable consequence of endeavouring to inject some substance into the principle of parliamentary democracy, because there can be no democracy unless there is fairness and a measure of equality. I could develop that theme, but I shall leave it for a philosophical audience. By that observation I do not mean any offence to noble Lords who are present; but there are certain philosophical aspects of the matter.
Let me make it clear, beyond peradventure, that I claim no interest in this matter. I failed to express an interest because I do not have one. My concern is the situation of some of my colleagues who were in

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another place when I, too, was one of the residents. Indeed, my presence this afternoon, and my intervention, is not because of any particular desire I have to participate in the debate but because one of my most distinguished colleagues—I say that quite sincerely and earnestly—is not present, although I expected him to be present because he approached me recently and made reference to this legislation. He expressed the view—I am quite sure that he meant what he said—that it was a shameful thing that, having served for at least 19 or 20 years in another place, he was then (I hope the word will not be misunderstood) pitchforked into your Lordships' House and finds himself without any pension; whereas quite a number of new boys or newcomers (what do they call them? "Come-what-lately boys ", I think, is the expression I have seen in the press somewhere) are going to get good pensions—and I am very glad they are.
Indeed, I understand—perhaps the noble Lord the Leader of the House will correct me if I am wrong—they are to have those pensions indexed to a notional salary, not an actual salary received at present but one they are likely to receive in the future. I understand the pensions are to be index linked in that way. The noble Lord will correct me if I am wrong, but I was reading about it and I understood that that was the position. There may be some reason for that, but I would prefer that it should not be done. I prefer that they should get a pension based on their existing salary, but I understand that in future they will have it appropriately indexed.
But, at any rate, I am in favour of parliamentary pensions, and I can say that with complete readiness and, indeed, sincerity because I know what it means to be without one, and I also know what it means to be granted a pension on the basis of 10 years' service at a time when I had 40 years' service. Now, of course, I have more than that, including some service—I should not say "service ", but attendance in your Lordships' House. But I am concerned about my distinguished colleague. He is not only distinguished in the ordinary sense of the term but he is a Knight of the Garter. I refer to my noble friend Lord "Harvey" Rhodes. When I said to him, "You can apply to the Members' Fund ", as indeed my other noble friend did—whether he liked it or not, he had no other recourse—he said, "What—to be a pauper?" He was right to say that.
Now I do not suppose he requires a pension. I understand he is a person who is rather comfortable financially, and if that is the case he probably does not; but it is the principle. In my own particular case I do not require it—of course I do not; everybody knows that I am a very wealthy person, and so I do not make any song or dance about it—but I must say that it is also a matter of principle with me to have my pension based on 10 years' service. I could not understand that. I understand there are anomalies in pension schemes, and there is obviously one there.
Why cannot my noble friend Lord Boothby, having rendered distinguished service in another place and in the country as a whole, and indeed in international affairs, be entitled to such a pension? Of course, he should have been in the Cabinet, or several Cabinets—and I mean what I say. He had the capabilities, and he should have been pensioned in an appropriate
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fashion and not been asked to consider some miserable pittance, which has a certain association with charity, it seems to me. That was not the right thing to do with an eminent politician like my noble friend Lord Boothby.
I do not suppose that anything I say is going to have the least effect on the noble Lord the Leader of the House. I think that the Government have made up their mind. Lord Boyle has done his job—and, by the way, I regret to hear that he is not very well. He certainly did his very best in the circumstances, and perhaps I ought to say what he said to me on several occasions. He actually apologised for the nature of the scheme, although I was not complaining at all, and neither do I now. But I do consider that when we ask people to undertake service on behalf of the nation, whether as Members of another place or whether as Members of your Lordships' House, whether on the Front Bench or on the Back-Benches, and whichever category they might find themselves in, the subject of pensions cannot be ignored; and if it is good for Front Benchers it is good enough for Back-Benchers, even though there is some slight difference.
So I leave it at that. I welcome the Bill, and I welcome the intention of the Government. I only wish that the anomalies could have been brushed aside, so that nobody would feel any resentment, any sense of bitterness, about the treatment to which they have been subjected. I am saying that not on my own behalf—of course not, not in the least—but on behalf of some of my distinguished colleagues.
Before I sit down perhaps I can say this. I noted what the noble Lord the Leader of the House said. He said that only a few people are affected. That makes it all the more reason why they should not be disaffected in the way they have been. With that I leave it, and I hope that in the future those who serve the nation will receive the treatment which is associated with the service they have rendered.
4.7 p.m.
Lord Beswick: My Lords, it would be churlish not to express appreciation of the fact that someone has had the courage or sense of fair play to take this successful initiative in the matter of former Commons Members' pensions. I am not clear who really took that initiative, but, for my part, I would salute him or her. It is now some 14 or 15 years since I held the position now held by my noble friend Lady Llewelyn-Davies and I led a delegation to the Government of the day on behalf of my colleagues—and I included myself.
One excuse for my rising now is that I recall with quite exquisite clarity how it was explained to me by the civil servants who attended the Ministers on that occasion that to grant pensions retrospectively had never been done before and that a precedent could not be established. I am afraid one thinks immediately that the "never-has-been-done-before" argument did not seem to weigh very heavily with those same Treasury officials when the index-linking formula came up for consideration. It was also pointed out, very gently, very courteously but very firmly, that the pre-1964 Members had not contributed anything towards their pension. But it might also have been said, as the noble Lord the Leader of the House remarked, that the pre-

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1964 Members concerned, certainly for the greater part of their service, had not received any proper salary, either.
My Lords, I confess that I was sad when the Members of the Commons voted themselves the ten-year credit for the pre-1964 service without insisting that the same provision should apply to their former colleagues.
Lord Shinwell: It did.
Lord Beswick: Then they did not insist successfully, my Lords, is all I would say. But now that some amends are being made, one would hope that the provisions should apply equally to those who served in the earlier and much less-well-paid days and to those who now serve in another place. The first question I would therefore put to the noble Lord is this. What is the value per annum of the ten-year credit to those who retired from the House after 1964, and how does that figure compare with the amount now being voted to the pre-1964 Members?
My second question was to have been how the individuals concerned in this provision would be identified. I understand from the noble Lord the Leader of the House that research is now to be made and that there are former Members up and down the country, or their widows, who will be traced and informed. I should be grateful if the noble Lord would confirm that they will be so traced and informed. Incidentally, something has been said about the numbers involved, and as a sum of money has been decided I wonder if the noble Lord can tell us whether there is anyestimate of the numbers of former Members or their widows who will be affected by this provision. It will be interesting for some of us to know how many of our former colleagues still survive. Thirdly, may I ask from what date the pensions will be paid? Finally, I wonder whether we can get an understanding that those who have received payments from the Members' Fund on what has been called a means test basis will not find that that amount will be reduced by the amount of the pension now being considered.
4.11 p.m.
Lord Strauss: My Lords, I think that everyone in this House will support this Bill because its purpose is to remove a very real grievance which has been in existence for a long time. I have been well aware of it because for many years I was chairman of both the pensions fund and the Members' Fund; and Members frequently made representations to me and to my committee, and I to Lord Boyle and to the Leader of the House at the time, that this grievance should be remedied as soon as possible. Nothing has happened until now. I am delighted that it is happening now. One of the reasons why it has not happened before (and there are many reasons) is that the argument has been put forward that people who did not contribute a penny to any of these funds should not get any benefit from them at the expense of those who have contributed. The other argument was that anyone who does not have a reasonable income can apply to the Members' Fund. Many Members have said, quite understandably, that they do not want to do this. I do not think it was recognised—and I say this on behalf of my
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committee—that they acted very generously and that where an ex-Member who had nothing but the old age pension applied to the Members' Committee he would get £1,000 a year extra from that committee, which is the amount now being proposed under the Bill as that to which Members should be entitled. But the whole point is that ex-Members dislike having to apply to the Members' Committee, to disclose all their income and to subject themselves to the views of others and then only get money almost on a charitable basis. I think it is a good thing that that grievance has now been removed.
This grievance is only one of many. If I may, I will give the background of the general meanness over many years with which all Governments have considered both pensions and salaries of Members of Parliament. I have not suffered myself for, fortunately, I have outside resources; but I have seen my colleagues in the House of Commons suffer considerably. Many of them were never able to take lunch or dinner in the dining-room of the House of Commons; it was too expensive. They had to have a snack in the tea room. Day after day, that was all that they ever had in the way of food while serving in London when their home was in some other part of the country. On several occasions I remember being quite shocked when, late at night, I would offer to take some of my colleagues back to their "digs" in London during the Session. I took them, several times, I remember, to some place in Bloomsbury where they entered some obviously miserable and queasy lodging house where they had to live while they were doing their work in Parliament. I think it was deeply shocking.
They did that, not because they wanted to but because they had to, because the amount of salary they got was wholly inadequate. I am talking now of the times before the more generous salaries which have now been agreed to. Their conflict was that if they lived decently and reasonably in London in a way which would enable them to carry out their Parliamentary duties properly, they would have deprived their wives and families of the money they ought to have had to keep themselves. That was a very common problem facing Labour MPs and maybe others. It should never have happened. MPs who discharge the important duties which fall on them should not be put to that strain. They should receive such pay as will enable them to live, not in a wealthy way but without fear and constraint and without the need to scratch and scrape; they should be able to live a decent life.
Nearly all Governments have refused, or have been very reluctant, to raise both pensions and salaries. I must say a word about why this has been so; for I follow these matters closely. The answer is simply that the Governments have been fearful of the outcry voiced by the popular press and that if they raised salaries and raised pensions they would be unpopular and would lose votes; and they have not dared to stand up to the press lords or to the editors. I blame the press. It has been utterly disgraceful sometimes, when a case has been made by some committee or responsible body for an increase in salaries and pensions, that the press, because they like to write popular stuff, and there is nothing more popular than denigrating

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MPs, would come out with headlines such as: "MPs vote themselves higher salaries. They do not care about widows' pensions or old age pensions but they give priority to themselves in higher pensions and higher salaries ". Over and over again the Government have given way to that clamour. I was a member of a Select Committee of all parties in the 1950s which went into the question of Members' salaries. We proposed—I cannot remember the exact figure; I think it was £1,750—a figure which we thought was so ridiculously low (not adequate, but low), that the Government could not reject it. But when it came to the House the Government rejected it on the grounds that they did not consider it appropriate that MPs should vote themselves more money at that time. It is always "at that time". Every time is the wrong time; and so it has continued.
Fortunately that has changed. Governments have been more reasonable. On salaries, when one takes into account all the allowances which Members now get (travel and other allowances; £4,000 a year for secretarial allowances and £4,000 a year for research allowances) I, myself, do not think that the present salary of MPs, in view of national affairs and all the troubles, is unreasonably low. And pensions, except for certain difficulties, are I think defensible. I must add that this outcry which has stopped Members getting decent salaries and pensions has not always been from the popular press. I remember an occasion when we put forward a case for a very reasonable increase in salaries and The Times came out with similar accusations against the committee and demanded that the Government should not pay these outrageous increases to Members of Parliament while widows and old age pensioners did not get them.
Mr. Speaker, we are told that under the proposals now before us there is going to be a payment of £200,000 for 10 years into the Members' Fund in order to enable the pre-1965 Members to draw pensions without any procedure of means tests or anything of that sort. That is grand. But we should remember that the amount of money suggested, which is £1,000 a year, is not so much. It is the amount of money which in the past we, the Members' Fund, gave to quite a few ex-Members who needed it and who did not have many outside resources. We are not doing anything terrific. It is removing a grievance but it is not a gesture of very great generosity.
One word about two proposals which have been put forward frequently and advocated in the other House and outside. The first is that the accrual rate should be a fortieth instead of a sixtieth. I do not support that and I did not at the time because I take account of the fact that, although newspapers try to create hostile public opinion, public opinion must nevertheless be taken into account. I think that if Parliament voted itself pensions substantially higher than those of other public services—the one exception being judges—there would be real and justifiable anger or opposition to that from the public. Therefore I do not support that.
I welcome, however, the proposal that Members themselves may be entitled in the future to contribute to the Members' Fund and thereby increase their pensions when they retire. However, I give a warning
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to your Lordships: I think that in principle it is very desirable but I doubt whether it is as attractive as it sounds. When I was chairman of the Members' Fund Committee and the Pensions Fund Committee I remember working it out and we found that the amount they would have to contribute, calculated on an actuarial basis, was so substantial that it was doubtful whether it would be worth while. It is right that the matter should be gone into further and maybe some solution will be found.
The whole question of salaries is going to be looked at by an independent committee which the Government are going to set up. I do not know why it is not the Boyle Committee, which has been working on these matters for years and knows as much about them as anybody else. However, the proposal is that the Members' salaries should be linked with some designated group of salary earners. 1 do not think that is right. I think that is the wrong approach. There is no similar group of salary earners, nothing similar to Members of Parliament.
The linkage idea is good and I support the idea, if it is practicable, which has been advanced by certain Members of the other place (who are very knowledgeable about these matters) who have said that a sensible move is to link the salaries of Members of Parliament with the average remuneration of the public as a whole. That is very easy. Government departments know how salaries go up every year and it would be perfectly justifiable to say—and it would take it out of controversy in the House of Commons or the House of Lords—that as the general remuneration of services rendered by the population as a whole rose by 5 per cent., 10 per cent. or 1 per cent., or whatever it was, Members of Parliament should get that increased remuneration automatically. That would be a far better solution. I do not know whether it is practicable; but I think it should be considered. Meanwhile, all I can say—as have other speakers—is that I am glad that the Bill has come before us. It is long overdue and I certainly give it my very warm blessing.
4.24 p.m.
Lord Drumalbyn: My Lords, I wonder whether I may intervene for a few moments. It would be unfortunate if it were thought that no Member from this side of the House had contributed to this Bill on Second Reading. I am also happy to follow the noble Lord, Lord Strauss. I think that he was already a Minister in another place at the time I arrived at the House of Commons in 1945. He has an enormous amount of experience. I am sure that he has been waiting a very long time to make the excellent speech that he has just made, to which the House listened with great approbation.
I feel that I should say a few words. I must say at once that I have a contingent interest in this Bill, having entered the House of Commons in 1945 and left it in 1963. I am sure that there are many of my noble friends on this side of the House who are in support of this Bill no less than I am. I hope that I shall have their support in what I have to say.
I should like to comment in passing on something that the noble Lord, Lord Strauss, said. We on this side recognise the great hardships suffered by many Members of Parliament through not having access to a

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pension after 1965 simply because so many of them came in and served immediately after the war, at the time when there was a great flood of Labour Members, and their careers were disrupted. Probably they are as badly in need of a pension as anybody; however, the same applies to some Members on this side of the House, as the noble Lord, Lord Strauss, said.
One point I should like to raise in particular is that, as the noble Lord, Lord Shinwell, recognised, there is a real principle involved. The noble Lord, Lord Beswick, too, said—and I think he is absolutely right—that it has taken a long time to overcome another principle; that there should be no retrospective payments to those who have not earned entitlement to a pension. However, the principle that those who have served should in the end benefit in some way or another is an important one which really cannot be controverted.
This Bill was introduced in another place and it is a great credit to them that it was almost unanimously supported there. All of us who served in another place before 1965 and ceased to serve before that year and who still survive, as the noble Lord, Lord Boothby, so rightly said, would I am sure wish to express our gratitude to the Members of another place for the magnanimity that they have shown in this matter.
It is all very well to say that the line had to be drawn somewhere and it was drawn and that is that. All the same, it is very important that recognition should be given to those who served in the past and that is what, at the instance of, first, the party opposite, then the noble Lord, Lord Boyle, and then the present Government, the House of Commons has agreed to. I should like to reinforce a point that was put by the noble Lord, Lord Beswick. He asked whether those who are already in receipt of a discretionary pension under the House of Commons Members' Fund will continue to receive that discretionary pension in addition to the statutory pension which they will receive as of right. Considering the way in which the value of money has been falling and—alas !—is likely to continue to fall, that is highly desirable. I hope that my noble friend will be able to assure us that that will be so.
4.29 p.m.
Lord Taylor of Mansfield: My Lords, I do not want to be more than a few moments, but, as one who was a Member in another place for quite a long time, and knowing a little about the Members' Fund, I want to express my appreciation of this Bill today, although it does not affect me. I can speak with complete impartiality because I happened to leave after October 1964. Some were lucky and some were not. Looking at the Members' Fund from its inception, I think it was the child of Mr. Stanley Baldwin and the statute said that all Members of the House of Commons must pay a monthly contribution. But it did not say that it would be compulsory, whatever the position and circumstances of the individual concerned, and that benefits should be paid.
I can think of many Members who have gone through the other place and contributed for many years. I can think of one now who came into the other place in 1935 and contributed from the inception of the Members' Fund in 1938. He left the House not so long before October 1964 and that man has never had one penny benefit from the scheme. What I like
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about this Bill—I have some reservations about one aspect of it, which is the size of the benefit to be paid—is that it rights a wrong of many years' standing. It is because of that that I welcome it this afternoon.
4.32 p.m.
Lord Soames: My Lords, I personally, and the Government as a whole, will be grateful to the House for the general degree of support which has been given to this Bill from all quarters. Few enough noble Lords have spoken to enable me to reply, I hope, to each individual point that has been made. If I may start with the Leader of the Opposition, I am grateful for the general welcome that he personally gave to the Bill. It is something which exercised his mind a good deal when he was Leader in another place. He knew of the hardships suffered by some and of the inequity, which is an important aspect of this matter and which we are trying, at least to some extent, to put right by this Bill.
As regards the noble Lord, Lord Boothby, I am probably right in saying that, if his services in both Houses are added together, he has been a Member of Parliament for longer than anyone else since I do not know when. One would have to go back a long time to find someone who had spent more years here—except for "Manny"—I mean the noble Lord, Lord Shinwell. Anyway, the noble Lord, Lord Boothby, thinks he is pretty well up the list, and I suspect that is right. He has campaigned for a long time over this—not for himself—but, goodness knows!, he has done a lot in the media generally and has campaigned from his own resources. Also he has been deeply aware of others who were in the House with him. I think probably it was more a lack of equity rather than anything else which was the motivating force in this campaign which he has been conducting for so long. He said he appreciated that at least something had been done, although perhaps thinking it might have been more, to meet the problem. The noble Lord, Lord Shinwell, said that he had been pitchforked into this House—
Lord Shimvell: No, my Lords, the noble Lord is wrong. I referred to a distinguished colleague of mine who is unable to be here this afternoon, and he said that he had been pitchforked: he used that term.
Lord Soames: My Lords, I am sorry to have misunderstood. I was going to say, if it had been the noble Lord, Lord Shinwell, who had been pitchforked into this House: "Some pitch, some fork"! But of course the noble Lord is not affected by this Bill: he was referring to a noble friend of his whom he says was in poor circumstances but did not like to apply. Now, if he falls within the rules, he will need to apply but he will receive what is due to him as of right. All he has to do is to let it be known that he would like to have it.
The noble Lord, Lord Shinwell, also spoke about pensions in another place, and another place decided that pensions should be related not to pay but rather to what pay Members might have got if the full TSRB recommendations had been implemented. The answer is that it is to the pay and not to the TSRB recommendations to which pensions are now tied and. to the

31
pleasure of the Government, this was decided by the House as being a wise decision during a debate in another place last month.
The noble Lord referred to the fact—I think this lay behind the thinking of many noble Lords—that £1,000 a year was not enough. I must just mention the point that we are lucky that there is a Members' Fund because this is the only way in which we have been able to find a way round this difficulty that this is not a pension. It is a grant and the Government are putting money into the Members' Fund in order to be able to finance this grant. I think we should remember that, as I say, this is a grant which is being made to those who were Members of the other place and who retired before 1964 without contributing anything towards a pension scheme, because there was no pension scheme to contribute to.
Had there not been a Member's Fund it might have been extremely difficult for any Government to have found a way round it, and although £1,000 may not seem a tremendous lot these days the fact is that the total commitment by Government is £2 million. I know that there is a question before the House which is being examined by a Select Committee—and Ilshall come later to this—as to whether it should not be linked in some way to a basket of incomes such as for the Civil Service, for instance. I have looked up the position of a civil servant who retired after 10 years' service in 1964 on a salary of £1,750 a year, which is what a Member of Parliament was receiving then. It seems incredible, looking back on it, but that is what we all got. Today that civil servant's pension would be £1,079. That would have been a fairly senior civil servant in those days and so the discrepancy is not all that great.
The noble Lord, Lord Beswick, asked for a comparison of pensions and incidentally he asked how many there were. We believe there are 80 former Members and 160 widows or widowers: that is the approximate order of the numbers we are talking about. As to the comparison of pensions, for a pre-1964 Member, 10 years' credit would be worth a figure of the order of £1,700 or £2,000 a year.
Regarding the date from which the pension will be paid, the answer is: when this Bill is enacted; and so the sooner we can get it through this House the better. It went through another place in one hour, and here I would echo the remarks made by my noble friend Lord Drumalbyn as to how effectively the other place expedited the passage of this Bill. So the pensions will be paid as from the date when this Bill receives the Royal Assent.
The noble Lord, Lord Strauss, is someone who knows a great deal about this subject. He has done so much for Members and ex-Members of the other place. He was chairman of the Members' Fund for a long time and he brought his knowledge of financial matters and his general wisdom to bear. It was interesting to hear his account of how hesitantly and how slowly Government after Government faced up to the necessity of paying Members of Parliament properly and providing a pension for them. What he said is, of course, true. He went on to say that he did not see that trouble existing today and, if I heard him aright, he felt that, with all the tax-free allowances that were
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payable, the pay and conditions of service of a Member of Parliament had at last been put to rights.
He asked about the linkage, and whether in future the pay of Members of Parliament was to be linked to a kind of basket of salaries. That is to be looked at by a Select Committee and we shall see what they come up with. I have no doubt that they will give to what the noble Lord said the consideration which is due, in view of all his experience. The noble Lord said that £1,000 a year was as much as the Members' Fund gave, during his chairmanship of it, to those who were in dire need. Yes, certainly, but of course this is a different matter. This is now as of right. But this does not mean that we cannot continue with the good work of the other aspects of the Members' Fund.
That brings me to what my noble friend Lord Drumalbyn said. He asked whether the £1,000 could be paid on top of anything which an ex-Member may at present be receiving from the Members' Fund. This will be a matter for the Members' Fund to decide, subject to the fact of what is written into this Bill, which is that the £200,000 a year, which will be provided by the Government over a 10-year period, should not be used for that purpose. That has been actuarially worked out and is to be kept for payments to the pensioners themselves, to the ex-Members and their widows, and that money should not be touched. But that is not to say that the Members' Fund cannot make up their own mind, as they have done in the past, without any fear or favour and without anybody else knowing what it is that they do with the other monies that come into their possession. But this—
Lord Robbins: My Lords, may I ask the noble Lord a question? Is the actuarial amount, which is payable over the next 10 years, based upon a certain rate of inflation or not?
Lord Soames: My Lords, it is considered to be sufficient for the Members' Fund to be able to make regular increases in the light of inflation. That is how I would put it, and I hope that I have got it about right. That was the intention—
Lord Beswick: My Lords, the noble Lord says that the amount has been worked out actuarially. Is that actuarial calculation based on the figures which the noble Lord was kind enough to give me of those who have survived, because, presumably, those who have survived are the total number and are not simply those who have not applied to the discretionary fund.
Lord Soames: No, my Lords. It is the total number. But there is also discretion left to the Members' Fund—this had to be taken into account—and if they feel that they have sufficient money left over having paid as of right all those with 10 years' service, and other people applying who have had, perhaps, marginally less than 10 years' service, then they will be enabled under this Bill to pay the same amount of money to those ex-honourable Members.
My noble friend Lord Drumalbyn was kind enough to say—although it always makes things difficult—that he understood about there being no retrospection. There are always difficulties in pensions when there is no retrospection. All of us who have been in public

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life for a long time remember hard cases coming up again and again, because of no retrospection. But Government after Government have decided that they have to stick to this, because if they made every increase retrospective there would not be any money left for any other increases. This has been the view time and time again, and this is not a blame to put upon the Treasury, because every successive government have reached the same conclusion. As to the question about what extra has been provided, I think that I have answered that. Finally, there was the noble Lord, Lord Blyton, who, as he said, served on longer than 1964, but knows of many who will be glad to have this. I know how sensitive he is about his colleagues who are perhaps—
Lord Taylor of Mansfield: My Lords, I am sure that the noble Lord will not mind my correcting him. I am not Lord Blyton.
Lord Soames: I am so sorry, my Lords. The noble Lord, Lord Taylor, also served on longer, but I apologise to him. But I am grateful to him for the welcome that he gave to this Bill. As I said, he and I sat opposite each other for a long time and this debate took one back a bit, because everybody who participated in it has, in fact, been a Member of another place. So I quite understand the slip of the tongue of one noble Lord, who referred in his speech to Mr. Speaker.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

Industry Bill
4.48 p.m.
Report received.
Clause 6 [Powers to promote careers in industry etc.]
Lord Hinton of Bankside Lord Hinton of Bankside moved Amendment No. 1:
Page 4, line 22, leave out ("and") and insert ("or").
The noble Lord said: My Lords, I should like to thank the noble Earl, Lord Gowrie, for the very long and careful letter which he wrote to me, seeking to remove the fears which I expressed in the last debate. Unfortunately, although it was sent by the most rapid means, it ultimately reached me through the post of this morning and I have had the opportunity only of indicating to the noble Earl that, carefully as he has tried, he has not removed all of my doubts.
Clause 6 of the Industry Bill seeks to give to the Secretary of State financial powers which would enable him to make grants or loans, the purposes of which—I am roughly quoting from the Bill—are to assist in the promotion of the practice of engineering, the improvement of links between industry and education and the encouragement of young people to become engineers. All of those are very laudable objectives. Unfortunately, the strings which are tied on to them are objectionable. The greater body of members of the engineering profession feel that their profession, like all other learned professions, should be self-governing. I understand that it is proposed that whatever board is set up by the Secretary of State as the
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outcome of the Finniston Commission, that board shall, for an initial period of three years and for no longer, be composed of men who have been appointed by the Secretary of State. Such an arrangement would I believe be aceptable to the engineering profession, but it seems to me that the principle of subsequent self-government is undermined by Clause 6(5). To show your Lordships what I have in mind, I shall quote from what I said in the Second Reading debate:
"The first board will, unquestionably, need financial pump-priming. It is hoped that it will ultimately be self-supporting, but initial pump-priming will, I am quite certain, be necessary. I believe that, in discussion of the Finniston Report, a figure as high as £10 million has been talked about [although] I should hope that the commitment would be considerably less than that. If that money is provided by way of a loan, and if, as seems likely, that loan, or part of it, is outstanding at the end of the initial three-year period, the Secretary of State could foreclose on that loan. The board would then have to raise money on the money market and it is improbable that it could do this [without] a Government guarantee. Under the terms of Clause 6(5), the Secretary of State could not provide that guarantee, unless the members of the board continued to be appointed by him. I do not for one moment suggest that the present Secretary of State intends to use the clause in that way, but if it gets on to the statute book it will be the law, it can be so used by his successors and he cannot commit his successors to any course of action. Such a position seems to me to be dangerous, particularly when one remembers, as the noble Earl has pointed out, that Ministers are under constant … pressure from the Treasury. That particular danger could be removed by substituting the word 'or' for the word 'and' in Clause 6(5)(a).".
My fears on this point still exist. I should like to assure your Lordships that they are based on 13 years as an unestablished civil servant and on 12 years in the nationalised industry and that they are not based on the current TV series, "Yes, Minister".
There could be another objection to the clause as it is at present drafted. The whole profession of engineering comprises technician engineers and engineering technicians as well as chartered engineers. One hopes that whatever board the Secretary of State sets up it will cover the interests of those technician grades because they are a vital and important part of the profession. Just as the chartered engineers will continue to need their Institutions, so will the technician engineers continue to need their Societies and Institutes. Those Societies and Institutes already exist but they are badly supported, I hope that it will be part of the duties of the Secretary of State's new board to help those unchartered technician bodies, but as the Bill is at present drafted the Secretary of State might encounter insurmountable difficulties in attempting to do this.
Finally, it is a constant complaint in the engineering profession and outside it that engineers do not have a high enough status. I constantly point out to my fellow engineers that it is they who must create their status, and I think they have done a great deal to achieve this. But professions can be encouraged or discouraged in achieving status. It seems to me that so restrictive a clause as that which now apppears in the Bill does not give the impression that the profession is one in which the Secretary of State has great faith. I believe that this is a strong reason for the change.
I do not particularly like Clause 6; I think it would have been better to have discussed the engineering profession independently of the finances of British Leyland and other authorities. But we discussed this last week. Today I restrict myself simply to moving

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that the word "or" should be substituted for the word "and" immediately after the word "Charter" in line 22 on page 4 of the Bill.
4.57 p.m.
Lord Howie of Troon: My Lords, I rise to support Lord Hinton's amendment. I do so for entirely different reasons from those which he has just outlined and to which he referred in earlier debates on the Bill. First, I should like to thank the noble Earl, Lord Gowrie, for sending me a copy of the letter to which the noble Lord, Lord Hinton, referred. The letter attempted to remove the fears which Lord Hinton had expressed, fears which, it must be well known to the House by now, are fairly widespread throughout the engineering profession.
I agree wih the Minister that these fears, if not unfounded are exaggerated. I believe that that part of Clause 6 to which Lord Hinton objects was adequately explained by the Minister in his letter. That explanation is sound, so far as it goes. The fears which underlie Lord Hinton's attitude towards this amendment are based on a notion which engineers hold, that politicians are moved almost entirely by megalomania and by very little else. It would be idle to deny that there is a small element of megalomania in the make-up of the politician, but I am perfectly sure that it does not extend to an unbridled desire to take over the engineering profession. I entirely acquit politicians of that desire, so I think that the fears expressed by Lord Hinton and other engineers, if not unfounded are exaggerated. He does, however, have a strong point when he refers to the technicians. Lord Hinton might also have included the technician engineers.
I would remind Lord Hinton and the other Members of your Lordships' House that that particular difficulty would have been overcome had the House accepted my very long amendment which I moved at great length during the Committee stage. I assure noble Lords that I shall not speak again at anything like that length.
My reason for supporting Lord Hinton on this occasion is entirely different from his. It is this. The clause as it stands limits the Government's guarantees to three years only. What if three years is not long enough? In his letter to the noble Lord, Lord Hinton, the noble Earl, Lord Gowrie, said
"We expect to be able to ensure that the council is capable of standing on its feet by the end of the three-year period".
That is fine so far as it goes, but what if the council is not standing on its feet at the end of the three years? What happens then? Presumably something will have to be done.
The matter could be dealt with quite simply by the change which the noble Lord, Lord Hinton, has just proposed. That amendment to change "and" to "or" would, if made, permit the guarantee to be continued. For that reason the amendment ought to be accepted or, alternatively, if there are wider reasons for not accepting it they should be made plain and the Government might then be able to deal with that specific question of extending the guarantee beyond three years should that turn out to be necessary by some sort of amendment at Third Reading.
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I am not dying to divide the House on this matter. I shall listen carefully to what the noble Earl has to say in his reply but I believe that this is a very serious point. I mentioned it at Second Reading and, although I am not anxious to divide the House, if the noble Lord, Lord Hinton, feels that he must divide the House I shall vote with him, although not for quite the same reasons.
Lord Ponsonby of Shulbrede: My Lords, I would not wish to go over all the arguments which we had at Committee stage on this particular clause but I think it is fairly obvious to your Lordships that there is considerable concern about Clause 6 as it now stands. It seems to me that the noble Lord, Lord Hinton of Bankside, has made out a very powerful case for an amendment to this clause in the particular form which he has indicated. It may be that some other form of amendment to this particular subsection is possible—for example, indicating whether all or only some of the members of the Council for the time being need be appointed by the Secretary of State. But in view of all the arguments which we have had about this particular clause I hope that the noble Earl will either be able to convince the House that the clause is correctly drafted as it stands at the present time or will be able to look at this particular point again. I shall certainly listen with great interest to what the noble Earl has to say.
Lord Rochester: My Lords, I find myself in somewhat the same position. At the Second Reading of the Bill I said that it was a "mixed bag" and therefore it was not surprising that it gave rise to mixed reactions. I have come to feel that the noble Lord, Lord Hinton of Bankside, is essentially right in suggesting that a clause which seeks to give power to the Secretary of State to assist bodies set up to promote engineering and to promote educational links with industry should not really have been tagged on to a Bill which has to do primarily with the National Enterprise Board and the Welsh and Scottish Development Agencies. Instead it might well have been better, as he suggested on an earlier occasion, to await the outcome of discussions between the Government and the various bodies concerned and then, based on the outcome of those discussions and any financial provisions to which they might give rise, we could have had a debate on the subject of our response to the Finniston Report rather than dealing with it in the way in which we are now obliged to do.
However, we have to deal with the situation as it is. At the Committee stage I moved an amendment designed to bridge the gap between those favouring a statutory body and those favouring a body set up by Royal Charter. That amendment was not acceptable to the Government. I do not want to go over the ground again and I have not sought to table a further amendment on that subject. It is plain that the new body is to be set up under a charter and that it is to be altogether independent of the Government. Given that situation, I have some sympathy with the views which have been put forward by the noble Lord, Lord Hinton of Bankside, the noble Lord, Lord Howie of Troon (though for different reasons) and the noble Lord, Lord Ponsonby of Shulbrede, and with their

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fears that subsection (5) of Clause 6 as now drafted may have certain failings in it. Therefore, like the noble Lord, Lord Ponsonby, I shall await with interest what the noble Earl has to say in reply.
5.8 p.m.
The Earl of Gowrie: My Lords, the noble Lord, Lord Ponsonby, made it clear that he would suspend judgment on the Government until he heard my arguments—arguments mainly directed, obviously, at the noble Lord, Lord Hinton, who has put the substantive case and has made his reservations clear to us, both at Committee stage and this afternoon. The noble Lord, Lord Howie of Troon, puts me—and I think the House—in a rather difficult position because he has said effectively that he does not altogether agree with the noble Lord, Lord Hinton, in his argument but that he thinks the amendment should be supported for other reasons. The principal reason why the noble Lord, Lord Howie of Troon, wishes to support the noble Lord, Lord Hinton, is that he is worried because the Government's funding or backing of this body is limited to three years. My Lords, it is not limited to three years and therefore the reason for that support from the noble Lord, Lord Howie of Troon, to the noble Lord, Lord Hinton of Bankside, should really not be valid.
In the remarks that I wish to address to the substantive anxieties of the noble Lord, Lord Hinton, may I take it that I am also talking to the second amendment, tabled by the noble Lord, Lord Howie of Troon, or does the noble Lord wish to move that separately?
Lord Howie of Troon: My Lords, I should prefer to move it separately.
The Earl of Gowrie: My Lords, the noble Lord, Lord Hinton, has explained to us that the purpose of his amendment is to remedy what he sees as a potential problem in the drafting of Clause 6. He is concerned that it would be open to a future Secretary of State—and of course he has acquitted the present Secretary of State of any malevolent intentions, and I am grateful to him for that—to manipulate the provisions of the clause in order to enable him to continue to nominate the members of the proposed Engineering Council beyond the three years that we envisage. I think those were the "objectionable strings", as the noble Lord, Lord Hinton, put it—that were attached in this clause to the concept of the new body.
I had hoped that the noble Lord would have been persuaded by the assurance that I gave in Committee that those fears are wholly unfounded and I am glad to have this opportunity to repeat that without any qualification. The essential point is that it is the charter, not the Bill, which will provide for the nomination of the members of the council and the charter will make it quite clear that the Secretary of State's power of appointment is limited to three years, so that could not be less equivocal. Of course, therefore, we want to ensure, with the noble Lord, Lord Hinton, that this profession is to be self-governing and hence the charter makes it quite clear that the Secretary of State's powers of appointment are limited.
If your Lordships refer to the draft of the charter,
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the draft of 23rd January, copies of which have been deposited in the Libraries of both Houses, you will see that once it has been issued the charter can only be amended after a resolution has been passed by a meeting of the council itself with a three-quarters majority of the members present. Again, as I emphasised both at Second Reading and in Committee, there is nothing in Clause 6 of the Bill which would enable the Secretary of State to alter this charter in any way whatsoever. There is, therefore, no need—and I repeat my earlier assurances to the noble Lord and to the House—to amend Clause 6 in order to clarify or limit its scope.
May I now turn specifically to the amendment in the name of the noble Lord, Lord Hinton, because, in addition to this assurance and the objection I am making, its effect would be rather different from the ones he intends. The purpose of subsection (5) of the clause is simply to identify the proposed Engineering Council as the body in relation to which the Secretary of State may under subsection (4) guarantee certain obligations. Had these subsections (4) and (5) merely specified that the body had to be established by Royal Charter and concerned with promoting the practice of engineering, it would have been open to the Secretary of State to guarantee the obligations of a number of other chartered engineering bodies, including the CEI and its 16 corporation members. That, too, would be the effect of the amendment which the noble Lord has proposed, to substitute "or" for "and" in line 22 of page 4 of the Bill. I am sure the House will agree that this would be undesirable. The effect, however, of including, as we have, the additional provision that the members are, for the time being, appointed by the Secretary of State is to identify precisely the Engineering Council, since no other body would fulfil all the necessary conditions. The noble Lord, Lord Howie of Troon, has, therefore, effectively spoken in favour of the provision. From the explanation I have given, I am sure he will agree that the construction he has placed on it is also unfounded. I have said that the provisions of Clause 6 give the Secretary of State no powers of nomination and that this rests entirely on the Charter. Once the initial three years specified in it have expired the Secretary of State's power to issue guarantees will also lapse.
Finally, let me come to the other substantive point about which the noble Lord, Lord Hinton, was concerned. He was concerned that it might be open to a future Secretary of State to attempt to influence the council by foreclosing on a Government loan and then guaranteeing its private sector borrowing in return for retaining the right to appoint the membership. This would seem to me to be an extraordinarily tortuous way of going about an end which this future Secretary of State, should he wish to achieve such an end, could presumably take powers to achieve in the ordinary way because Parliament is sovereign. But, where this Administration is concerned, our policy, as I am sure the House recognises, is to keep Government involvement in this, and indeed in other bodies, to a minimum. We do not intend to leave the council in a position where it could be subject to the kind of crude pressure which the noble Lord has acquitted us of but has suggested some future Secretary of State might exercise.
As I have explained, we expect the council to become

39
rapidly self-financing, and for that reason and as part of our policy of not interfering in its affairs, we hope it will be possible to limit the Government's contribution to guaranteeing its private sector loans during the initial three-year period. But we have also made it clear that we are prepared to stand financially behind the body if this proves necessary; we have accordingly sought the power in Clause 6 to provide it with grants and loans, and those grants and loans would not have the kind of strings the noble Lord has dangled before our eyes attached to them. So one way or another we do expect to be able to ensure that the council is capable of standing on its own feet by the end of the three-year period, and we are confident that this would in practice remove the danger of the kind of interference about which the noble Lord is so anxious. When we add that particular intention, and the flexibility behind that intention, to the unequivocating way in which we have devolved the powers of nomination to the body under the charter, I do honestly think that it is clear that the noble Lord's anxieties are misplaced. However, because of his great experience we have taken them very seriously. We have been through the Bill with a toothcomb since he raised them. We have now been through it twice. I honestly believe that his anxieties are unfounded, and, in the light of what I have said, I hope he will feel free to withdraw his amendment.
Lord Howie of Troon: My Lords, before the noble Earl concludes, may I, with the leave of the House, put this to him? The Minister said I was wrong in my understanding of the provision. My understanding is this, that in order to qualify for the Government guarantee the new council has to satisfy two conditions and it has to satisfy both of them. One is that it is a Royal Charter, and we are all clear about that. The other is that its members are, for the time being, appointed by the Secretary of State. But we do know from other things which the Minister has said, and from his speech just now, that the period of appointment by the Secretary of State is limited to three years. That must mean to me that the period of the guarantee is also limited to three years. I see the noble Earl shakes his head. That must relate to the words he used "one way or another". If he could explain what in this connection "one way or another" means, perhaps he could satisfy me.
The Earl of Gowrie: My Lords, if I may address the House, by leave, for a second time, I may need to backtrack on my use of the phrase, "one way or another"; it was a rather sloppy phrase and no doubt I should not have used it. The point here is that the Secretary of State has powers to make guarantees and he is not limited in time when he does so; but he is limited in time as to the period in which he may make nominations of the members. The point of the charter is that the charter will in fact make the nominations in the future. So I do not see that there is any difficulty between these two positions.
On Question, amendment negatived.
5.19 p.m.
Lord Howie of Troon Lord Howie of Troon moved Amendment No. 2:
Leave out Clause 6.
The noble Lord said: My Lords, this is an amendment which was put down at Committee stage by Lord Hinton, and he was supported then by my noble friend Lord Ponsonby and, I think, Lord McCarthy. I have put it down for three reasons. First, I agree with those who have said during the course of this Bill through both Houses that it was quite wrong that the new Engineering Council should be dealt with in a clause tacked on to the end of a Bill which was really intended to deal with entirely different matters. It is interesting to note that the debate on the Bill in this House has concentrated entirely on Clause 6 and has left the other matters completely out of consideration, as though it were, as it ought to have been, a separate Bill.
My second reason for putting down the amendment again was that in the confusion of procedure at the end of the Committee stage I thought the noble Lord, Lord Hinton, had missed his chance of dividing the Committee, which he seemed to have intended. I understand that he does not wish to proceed on that course any longer, so my offer of a second chance is no longer necessary. However, more important, my third reason is to give the Government an opportunity to tell the House what stage the discussions on the setting up of the new Engineering Council have reached.
In Committee, I asked for assurances on matters which were important to the engineering institutions. I believe that I got those assurances and that the institutions ought to be satisfied with the assurances which were given then. Now, on this occasion of the Report stage, I want some assurances for myself. I disagree with the proposition which has been put forward in earlier stages of our discussions that this Bill is only about financial measures. It is, of course, about financial measures, but it is also about the matters to which those financial measures refer. I put those in an amendment which I moved in Committee and I should have liked to do so again, but that would perhaps have been unseemly.
Nevertheless, the nature of the body to which the Government guarantees refer is central to this entire debate. I think that the House ought to be told what the proposed Engineering Council now looks like. We know what it might have looked like from the draft charter which the Minister put in the Library some while ago. We also know that that charter has not been agreed or accepted and that the situation has moved on from there. We know what it might have been and we should like to know now what it actually is so that we know what we are offering these guarantees for.
The Engineering Employers' Federation were willing back in February to accept the draft as it then was—that is, the one which is now in the Library—but the institutions were not willing to do so. As the Finniston Committee said in its report—and I think we are all agreed here—in implementing the recommendations of Finniston (and that is what the Engineering Council is all about) the employers are actually more important than the institutions. Important as the institutions must be, it is through the employers that these recommendations will come to life. I think that their views should be very strongly taken into account. Are the employers still in favour of the January draft or have

41
the employers followed the institutions in objecting to certain parts of it?
There is one other thing that has happened since our last debate which I think is quite germane to this entire matter, and that is that the steering committee which organised the conference last October on the educational parts of the Finniston Report has published its report of that conference. The conference report wants an Engineering Council set up right away, but it says one or two things about the powers of that council which certainly ought to be ventilated and discussed before we guarantee funds to that body. For instance, the report of the conference still wants the Engineering Council to set up a registration body. But, as far as I can make out from the report, the registration suggested by the steering committee would be much more flabby than that proposed by the Finniston Committee. The registration proposed now seems to be little more than a list of names—a type of telephone book. I do not think that there is any point in pursuing a register of that type. The kind of register proposed by the Finniston Committee would make sense: the kind of register now proposed by the steering committee in its report of the conference seems to me to make very much less sense.
What I am really saying is that if the Government continue to dilute, as I believe they have been doing, the recommendations of the Finniston Committee, there is very little point in it going on. The Government have to make up their mind whether to dilute these proposals to the extent at which they become pointless, or to dig in their toes and get an agreement between the various bodies involved—and they include not only the engineering institutions, but the employers, the trade unions and professional engineers themselves, whether members of the institutions or not. I believe that we are in grave danger of providing guarantees and funds for an Engineering Council which might not be worth having. If that is the case, we do not need Clause 6. I beg to move.
Lord Rochester: My Lords, I have already supported the first reason given by the noble Lord, Lord Howie of Troon, as to why this clause should not be included in the Bill and I shall therefore say no more about that. However, I wish for the record—although more briefly than either on Second Reading or in Committee—to say why it is that for another reason I am unhappy about this clause. That reason is as follows. Although I welcome very much the provision that is being made to give financial aid to bodies concerned with the promotion of links between industry and education—albeit not in this clause but in some other more preferable way—I am very unhappy that at just this time the Government have made it plain that they are to reduce both the staff and the expenditure involved in these activities. When I said that in Committee the noble Earl very properly reminded me that we were just half as rich per capita in this country as they are in Western Germany, where very much more is done by way of financing activities of this kind. I nevertheless said that it seemed to me extremely shortsighted that at just this time the Government should choose to economise in that direction. I continue to feel the same and I felt obliged to say as much at this stage.
The Earl of Gowrie: My Lords, we debated the purpose of Clause 6 at some length in Committee and, of course, we have touched on important aspects of the clause in the debate that we have just had on the noble Lord, Lord Hinton of Bankside's amendment. I made the point in Committee that the clause contains provisions to enable the Secretary of State to support other areas of activity in addition to the proposed Finniston body. If the clause were left out, as the amendment of the noble Lord, Lord Howie of Troon, proposes, we would have to look very carefully at the future of the industry education activities which successive Governments have financed for a number of years and which, I believe, have the support of all parties in your Lordships' House and elsewhere. I am sure that the House will recognise that it would be a highly questionable procedure to continue to finance this expenditure under the Appropriation Act when specific statutory cover had been sought by us and denied.
In moving his amendment, the noble Lord, Lord Hinton, explained that his intention was to persuade the Government to reconsider their position on Finniston and to bring forward a new Bill to establish a statutory body. As I have explained to your Lordships, we decided against a statutory body after extensive consultations which revealed a clear majority in favour of the Government's proposals to establish a chartered body. Our consultations also demonstrated that there would be widespread opposition to a statutory body because of the risk that this would involve excessive Government involvement in the regulation of the profession.
Finally, I think that it is worth recalling that the Finniston Report itself did not recommend any statutory powers for its proposed engineering authority. The noble Lord, Lord Howie, has also argued that the Government have no option but to establish a statutory body because of the approach adopted by the leaders of the engineering profession. But I think—and I certainly hope—that the noble Lord has exaggerated the extent of the outstanding differences between the Government and the professions and their bodies. We have not yet reached final agreement with all the interests concerned, but we remain confident that it will soon be possible for my right honourable friend to reach agreement on the charter, which will then be recommended for the approval of Her Majesty.
We take the view, as we have done at every stage, that it is, however, important to ensure that the body is given the best possible start rather than to rush it through. So the Government are seeking a consensus. We are not trying in any way to dilute this work; we are trying to reach agreement. We are still continuing our discussions on the Royal Charter with the profession, with employers and with educationists. We are still hoping to reach a consensus and we are confident of doing so. With those assurances, I hope that the noble Lord will not press his amendment.
Lord Hinton of Bankside: My Lords, before the noble Earl sits down, may I emphatically point out that at no stage have I either suggested or implied the formation of a statutory body? The fact that I suggested that the whole matter might have been dealt with as a separate issue in debate does not imply—or I had not intended it to imply—a statutory body, because I think

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it is implicit in what the noble Earl has said that under the terms of the present legislation he is envisaging a charter body, as indeed am I.
The Earl of Gowrie: My Lords, if I may have the leave of the House to intervene once more, I am most grateful to the noble Lord for his intervention. I wholly acquit him of any misrepresentation on that score. The fault was entirely mine and I am glad that on this issue the noble Lord, whose experience and whose whole career in this field we all so much respect, and I are at one.
Lord Howie of Troon: My Lords, the noble Earl, Lord Gowrie, drew attention to what is undeniably the weakness of my amendment—namely, that, by removing the Government's power in relation to the proposed Engineering Council, it removes powers which relate to a number of other even more desirable bodies. That is sometimes a weakness, but it is a weakness which amply illustrates the fact that the Engineering Council should not have been dealt with in this way. It should not have been lumped in beside other bodies or other items in a general industrial Bill. But it has been, and I quite realise that were we to proceed to leave out Clause 6, we should do damage in areas where we do not wish damage to be done. For that reason, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Town and Country Planning (Fees for Applications and Deemed Applications) Regulations 1981
5.34 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin) rose to move, That the draft regulations laid before the House on 17th February be approved.
The noble Lord said: My Lords, I beg to move that the draft Town and Country Planning (Fees for Applications and Deemed Applications) Regulations 1981 be approved. I should like to speak also to the draft Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Regulations 1981. The regulations have been considered by the Joint Committee on Statutory Instruments, which has made no comment. The regulations introduce fees for planning applications under the enabling powers in Section 87 of the Local Government Planning and Land Act 1980.
Let me begin by explaining our intention in introducing these regulations. Local authorities spend about £63 million a year in England and Wales on the administration of development control. Our aim is to reduce the net total of public expenditure by about £38 million in England and £2 million in Scotland by recovering that amount from fees to applicants. I would not argue with the view that development control represents a service to the community at large and not to the developer. But given that we have a planning system—and no one disputes that there should be such a system—the applicant stands to gain materially from acquiring a planning permission.
The costs of planning must be paid for in one way or another, and in the debate on the enabling power the House agreed with our view that it was fair for a proportion of that cost to be met by the applicant. The principle is settled and we are not taking a decision on that today. These regulations seek to put that principle into practice in a way which will be as fair as possible to all the many different varieties of application and applicant. The fees that we propose will apply to applications for planning permission, applications for outline planning permission—that is, "in principle" approval of a proposed development—and applications for the approval of "reserved matters" —that is, the detailed matters which the local planning authority can reserve for later decision in granting an outline planning permission.
In addition, fees will be payable on applications for consents to display advertisements, the deemed applications for planning permission which arise from enforcement appeals and the deemed applications arising from established use certificate appeals to the Secretary of State.
When the enabling powers were before Parliament we set out detailed proposals in a consultation paper, and we consulted very widely on the suggested scheme of fees set out in that paper. We received nearly 400 responses, which were supplemented by extensive debates in this House and in another place on the enabling section of the Act. Our consultation paper set out a suggested scale of fees together with a statement of our aims. These are: fees that do not deter any development; a uniform scale throughout England Wales and Scotland; a scale that is not difficult or expensive to administer; and a scale that relates the fee broadly to the scale of the development.
The regulations which we have put before the House set out to achieve those aims. In order to do so we have made a number of changes to our original proposals. The changes are a direct response to the comments we received and to the views expressed in this House and in another place.
First, your Lordships will be aware that the regulations do not include fees for planning appeals. We yielded to the arguments put forward by noble Lords on this point and accepted an amendment to the enabling powers to remove that provision in the course of consideration in this House.
Some of your Lordships may also recall that at the Report stage of the Bill I undertook that we would not seek to introduce fees for various types of application. In response to that the noble Lords, Lord Mishcon and Lord Ponsonby of Shulbrede, and the noble Baroness, Lady David, were able to withdraw their proposed amendment. My undertaking is reflected in these regulations. We are not charging for applications for determinations under Section 53 of the Town and Country Planning Act 1971 to determine whether planning permission is required; applications relating to listed building consents and to tree preservation orders; applications to demolish unlisted buildings in a conservation area; applications for approval to siting and design of agricultural buildings, under the Landscape Areas Special Development Order 1950; and applications for development which would be permitted by the GDO were it not for an Article 4 direction removing those rights. My undertaking to

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the noble Baroness, Lady David, is reflected in regultion 4, which exempts alterations and improvement to a disabled person's house to improve access, safety, health or comfort.
We have also responded to representations on behalf of a number of amateur sporting organisations, who were concerned that the cost of a fee for developing a sports field would be a strain on their resources. Paragraph 3 of Schedule 1 provides for a low flat fee of £40 for applications by non-profit-making organisations for playing fields. More generally, we looked at the whole scale from the point of view of ensuring that the fees were not excessive for any type of applicant.
In particular, this House expressed concern about the effect of the fees on the owner-occupier. In response to that concern, we have cut the fee proposed for householder applications from £30 to £20. These applications are usually for house extensions too big to benefit from the permitted development rights in the General Development Order. With the General Development (Amendment) Order 1981, which was laid on 27th February, we are extending these permitted development rights still further, so that, although there will be suitable safeguards, some 50,000 householder applications annually, and perhaps more, will become permitted development, and will thus not be subject to fees. The applications that remain will often be for substantial building works costing thousands of pounds.
I could not accept the argument that we should exempt the owner occupier altogether. Over half the total annual number of applications are householder applications. To exempt them altogether would heap an unfair share of the burden on the business sector. I hope your Lordships will agree with me that £20 is a reasonable fee for a house owner to pay. We have also had in mind that too high a "bottom step" on the scale of fees could deter some of the smaller works done in the commercial and industrial sectors. So we have provided that applications for building works not creating more than 40 square metres of floorspace should attract a fee of only £20. That applies also to developments that do not create floor-space, such as shopfronts.
We have also been concerned to protect the interests of the small businessman in setting fees for advertisement applications. We had set a low fee of £10 for applications concerned with signs on business premises intended to advertise the business. We have now added to that category the advance signs, away from the premises, directing the public to the business, on which so many small businesses, particularly in rural areas, depend. We have also sought to ensure that for larger developments, too, the fees were not unfair or discouraging to applicants. This reflects the fact that the fees are an offset to the cost of processing the application, and not a tax on the development. And the cost of processing does not rise indefinitely with the size of the development proposed.
First, we have put a top limit on every scale of fee. The maximum fee for an outline application is £1,000 (compared with our original proposal of £20,000). Detailed applications for buildings are subject to a maximum fee of £2,000 (compared with no maximum at all in our original proposals). Similarly, we have put a maximum of £3,000 on applications for the winning and working of minerals, and £200 on applica
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tions for other operations (compared with our original proposals of £20,000). The particularly low maximum for "other operations" illustrates the wide variety of development of this kind, some of which, as my noble friend Lord Gisborough pointed out at Report stage, may be of low value, despite occupying a large area of land. This will no doubt benefit some fairly major schemes: but that is a small price to pay to avoid discouraging a low value development in that same category.
My Lords, I should now like to turn briefly to the provisions covering "deemed applications" arising from enforcement appeals and established use certificate appeals. Our proposals for fees for planning applications raised some fears amongst noble Lords that developers might avoid fees—and planning control—altogether by carrying out unauthorised development. We have minimised that risk by keeping the level of fees at a very small proportion of the value of the development. But we have also closed the loophole—and, if I may, I will remind the House that noble Lords welcomed this when we amended the enabling legislation—by providing for a fee, on the same scale as for applications, in the case of the deemed planning applications which accompany enforcement appeals. The fee is paid when the appeal is made. If the appeal is upheld on legal grounds, we have provided for the fee to be refunded. We have also provided for refunds when appeals are withdrawn at an early stage. But where the Secretary of State does not uphold the appeal on legal grounds, and proceeds to consider whether planning permission ought to be granted, the fee is retained.
My Lords, may I conclude by saying that I do not expect any regulations which ask people to pay for something for which they have not paid before to be a popular measure. But there is no such thing as a "free service"—and to the extent that the applicant assumes a share of the costs of planning control, the taxpayer and ratepayer will be relieved of the cost. This House endorsed that principle in approving the enabling powers. In framing these regulations to put the principle into effect, we have been much influenced, as I hope I have demonstrated, by the views of noble Lords, and made many changes to accommodate the views of the various interests concerned. I appreciate that in matters such as this we cannot foresee all eventualities in the regulations, and I can assure the House that we shall keep the scheme under close review in its first year of operations. If changes prove to be necessary in the light of experience, we shall bring forward amending proposals. But I believe the regulations before the House are a fair and workable set of proposals. I beg to move.
Moved, That the draft regulations laid before the House on 17th February be approved.—(Lord Bellwin.)
5.47 p.m.
Baroness Birk: My Lords, as the Minister no doubt remembers, we on these Benches resisted the proposals when the enabling legislation was introduced. He will also no doubt remember that we were joined by many of his noble friends. The community, as I think he has pointed out, is the primary beneficiary of planning control. In the Commons, when this matter came

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forward last week the Minister there said, on 3rd March at column 225:
"I am well aware of the argument that development control represents a service to the public and not to the developer. But once a system of planning controls is established, there is a good deal of benefit to be obtained from gaining a planning permission".
The effect on the quality of the overall environment seems to me to be of outstanding importance when we are talking of planning permissions, and it is the service to the public and not to the developer that is the important thing.
The mechanism to deal with this problem is to have a betterment tax, just as we have the development tax on developed land which mops up the productivity created by development, and not by the use of charges for administrative work. This really has nothing to do with the financial benefits which accrue as a consequence of the artificial scarcity of land and buildings as a consequence of any planning permission.
The effect, I fear, of the planning fees and regulations that we are discussing today is that, in spite of what the Minister has just said on this point, we believe on this side of the House that it will encourage some people to avoid planning permission altogether. This is happening all the time now without planning fees, and it takes a considerable amount of time to catch up with them, and many in fact are not caught up with before the time has expired. This amount of unauthorised development, and its whole effect, can put the planning clock backwards when in many ways we have been ahead of so many other countries both in Europe and also in America.
Secondly, there are the substantial administrative costs. More unnecessary bureaucracy and more staff will be needed. It will bring planning into disrepute, and people will be even less happy if they have to pay and then do not get permission. It will introduce a sour note into the whole of the planning procedure. Because people will want to make sure of permission there will inevitably be many more informal consultations with local authorities, and these will take up the time of the planning staff.
Naturally we are pleased about the exemptions that have been incorporated, about which the Minister spoke, and I must at this point thank him for the clear and concise exposition he gave of the regulations. We are particularly pleased about those which resulted from amendments moved by noble Lords on these Benches. The scheme may be workable but it will be at a very high financial and social cost. There are many aspects of the regulations which deeply concern me and I should be grateful if, when he replies, the Minister would answer some of the questions I have for him.
First, the proposals set out in the draft Statutory Instrument will not in practice be easy to implement. The basic scale in Part II of Schedule I is relatively straightforward although there will be many cases in practice where people will come to planning offices with their applications not knowing what the appropriate fee is and expecting planning officers to do detailed measurements to determine the appropriate fee. In the main body of the order there is a whole series of omissions and qualifications which in themselves may be reasonable but which will require local
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authorities to employ qualified planning rather than administrative staff.
If more time is to be spent as a result of charging fees and more staff are not to be employed, decisions on planning applications and work on appeals will take longer. I recall clearly during my time as a Minister at the Department of the Environment how we were trying hard to reduce the delays in giving planning permissions. This has always been a tremendous problem and I fear that these provisions will move it the other way, so to speak. Indeed, in the 6th March issue of the periodical Planning it was stated:
"From 1st April, local authorities will find it more difficult to determine planning applications within eight weeks. That is the conclusion from a straw poll of planning authorities on the implications of the introduction of planning charges and new amendments to the general development order".
Having spoken to various planning departments and officers, the writer of the article takes issue with the department over the effect that the GDO amendments will have, the effect of the savings and the whole question of staff. Will the Minister explain how local authorities will cope with an increased demand when the reduction in the workload, as a result of the relaxation of the general development orders, will be relatively marginal?
Since the consultation paper last year, certain significant changes have been made to the level of fees, as the Minister pointed out. The most important is that maximum figures have been introduced in some categories and drastically reduced in others. I know the Government believe they underestimated the income they would receive, so that these concessions can be afforded without reducing the overall yield. However, these modifications are all to the benefit of major developers. With the exception of the reduction in the fee for householders, which was advocated among others by the AMA, it will be major developments of over 50 houses, or more than 15 hectares in the case, for instance, of mineral workings, which will benefit. The consequence of these reductions, which apply both at the top and bottom of the system, will be that small businesses and small developments will pay a disproportionately larger fee in relation to the scale and value of the development proposed. For example, a large building organisation could put in an outline application for an estate of, say, 200 dwellings valued at at least £6 million and pay at the most £1,000. A small builder could put in an outline application for 12 dwellings on a 2·5 hectare site and have to pay the same fee. If there are to be fees, these maximum figures seem far too low.
As major planning applications can involve local authorities in much work and expense, may I ask the Minister to explain why the Government have adopted the specific maximum charges set out in the schedule, and may we be told how these quite extraordinary changes came about? Why, for example, has the original £20,000 suddenly been reduced to £1,000? If the Government found they were getting in as much money as they expected, if not more, from their projected plan, why not bring down the overall rate rather than reduce the ceiling? In other words, my questions are aimed at saying that, although in principle we strongly disagree with what is being done, if the Government insist on doing it they should at least do it

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logically and indicate the process of thought that motivates the whole scheme.
Thirdly, one specific omission from the regulations is the charging for applications for the disposal of waste. These applications are often substantial and highly contentious, but they will be charged under a miscellaneous category with a maximum fee of £200. It is understandable that the Government do not wish to introduce too many categories, but such applications are important areas for county councils and, given the amount of work involved, the fees proposed seem wholly inappropriate. Again, both the Association of County Councils and the Association of Metropolitan Authorities have expressed concern on the point. I should like to know why, if the Government insist on charging fees, they have not chosen to ignore waste disposal; and, as I understand it, the matter is not even mentioned in the circular.
Fourthly, applications for the change of use of land or buildings can cover very substantial areas or sizeable buildings and a flat-rate £40 fee does not reflect this diversity. It has been advocated that there should be a scale of fees and I should like to know why the Government have not chosen to operate a scale of fees for change of use.
Fifthly, the Government announced in this House during the passage of the Local Government Act that they would not be proceeding with charging for appeals, which I applaud. However, there are charges for applications which are deemed to have been made following enforcement action by local authorities. It seems odd that the Secretary of State, rather than the local authorities, should collect the fees which are levied, despite the fact that the local authorities will have done a substantial amount of work in carrying out enforcement action. In other words, if anybody is going to get the "dough" for this, it should be the local authority rather than the Secretary of State.
Even odder still is the fact that the fees levied will be the standard fee for such a development had an application been made in the first place. Again, the AMA has advocated that a penal rate should be levied and has suggested that it might be three times the normal rate that would have been charged. If no penalty is involved, there may be an added incentive to avoid planning controls and planning fees because the consequences of being found out are insubstantial. Again, therefore, I ask the Minister—if the Government are hellbent on these fees—why on earth there are no penalties for attempting to evade them. In other words, the good boys will cop out and the bad ones will not be penalised at all.
The Government have publicly and frequently proclaimed that they wish to speed up the procedures for deciding planning applications, and I agree with that absolutely. I fail to see how that can be squared, however, with the proposals set out in Schedule 1(2), which provides that someone submitting two applications for the same site at more or less the same time and relating to the same development or reserved matters will be charged at only 25 per cent. of the normal rate for the second application. Two applications mean two sets of files and two sets of administrative procedures. This, however, is a relatively trivial point compared with the underlying logic of the provision. I know it has long been
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advocated by the Housebuilders' Federation that their members should put in two applications. Once the eight week period for determination has been reached, they suggest that one of those applications should be taken to appeal while the other continues to be the subject of negotiation with the local authority. The latest planning statistics released by the DOE indicate that 39 per cent. of applications take eight weeks or more to be determined, which represents a total of 49,920 applications, close on 50,000 applications.
Were all those to be taken to appeal, even though many of them might have been determined anyway within a relatively short period, then the appeals machinery could become clogged up. I am not suggesting that that approach would always be followed by applicants, for whom even an additional 25 per cent. may be a major disincentive. However, it seems to me that by putting the provision in a statutory instrument, the Government are in fact inciting people to abuse the planning system by submitting unnecessary appeals which would require a substantial amount of work on the part of local authorities and the DOE. That is work which would prove abortive in most cases when a decision is given by the local authority and the appeal therefore withdrawn. I should like to know how the Government can justify that abuse of the planning appeals system when they are really trying to cut down the delay.
Local authorities have experienced very many problems in implementing the system of fees for building regulations applications and inspections. It is true that local authorities feel that that is less likely to be the case with the planning fees regulations, which are more tightly drafted, but there are many aspects of these regulations, in particular the matter of their yield for individual authorities, which will have to be considered. There are also many aspects of the regulations that are written in language which is not sufficiently precise and where experience will be necessary in order to determine whether changes are needed.
I am sure that the Minister saw a letter in today's Times, the signatories of which were representatives of the Royal Town Planning Institute, the National Council for Voluntary Organisations, the Confederation of British Industry, the Royal Institute of British Architects, the Law Society, the House Builders' Federation, the National Federation of Building Employers, and the National Farmers' Union. I am sure that many noble Lords will have read the letter, and I do not propose to weary the House by reading the whole of it. But the signatories say that,
"The scheme is unlikely to be cost-effective and will have only marginal relevance to local government finance. The assessment and collection of fees will make additional demands on staff at a time when the Secretary of State is encouraging local authorities to make more productive use of manpower, will divert professional resources from their role of facilitating development, and will add to the time taken to process applications".
That seems to me a very damning condemnation of what the Government are doing.
It is unfortunate that we cannot in any way amend the order. That was the point of the complaint that we raised when we were given so little information in discussing the primary legislation on planning fees in the Local Government Act. The Government failed to

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produce their detailed proposals on planning fees at that time. I understand that local authorities are relying on the income from the fees because the overall rate support grant has already been reduced by £38 million to cover them. Were they not to receive this income, they would be in an even more difficult position than that in which they have already been placed by the Government.
It would be inappropriate to divide the House on the regulations because they have been agreed in another place, despite strong criticism from both sides. However, I have attempted briefly to subject the regulations to some form of critical scrutiny, and I hope that the position will be monitored as the regulations are reviewed.
There is one more point about which I forgot to ask the Minister. If an application is not accompanied by a fee, or if the accompanying fee is not correct, or if a cheque bounces, the local authority should be able to return the application indicating that it will be considered when the correct fee is attached. However, I understand that at the moment that is not possible and that local authorities will simply have to sit on the application until the right fee is submitted. It seems to me that whichever way one looks at the matter, even from the viewpoint of those people who support the regulations and the principle behind them, some very serious monitoring must be undertaken, in regard to the regulations. I hope that the Minister will be able to assure us that a very careful review will be undertaken regarding the progress and the working of the regulations. I hope, too, that after the regulations have run for some time—perhaps a year—we shall have an opportunity to look at them again and see whether or not many of the fears that a number of us have about how the regulations will work out have proved to be justified.
6.5 p.m.
Lord Greenwood of Rossendale: My Lords, I should like to join my noble friend in thanking the Minister for the extent to which he has sought to implement the undertakings that he gave during the passing of the Act. This evening I feel very much like the signatories to the letter in The Times to which my noble friend referred. I have a number of misgivings about the regulations, but as my noble friend has said—and as the signatories to the letter clearly did not understand—we have no power to amend them, and it would be quite wrong for us to seek to reject something which had the approval of the House of Commons. However all of us must be grateful for the repeated assurances that there will be a constant review of the way that the regulations work, and I am strengthened in the philosophical attitude that I hope I am adopting by the fact that I believe that five years from now the regulations will not still be with us.
There is one point that I should like to put to the noble Lord. It concerns the references that the Under-Secretary of State made in another place when the regulations were discussed on 3rd March. At that time he gave the impression that the Association of Metropolitan Authorities had actually approved the regulations. My understanding—and this is perhaps not a very wide difference between us—is that, although
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the association had accepted the principles of the regulations, it had not in fact approved the detailed regulations which are before your Lordships' House tonight. I know only too well how easy it is at the Dispatch Box not always to use exactly the words appropriate to the situation, and I am not for one moment suggesting that Mr. Shaw misled another place. But it would be helpful tonight if the noble Lord, Lord Bellwin, could put this point right and perhaps correct any wrong impression that his colleague may have created.
Baroness Elliot of Harwood: My Lords, I should like to thank the noble Lord for his speech and for the alterations that he has managed to make in the regulations that we are discussing. I speak from the standpoint of having been in local government for 29 years and having for a long time served on a planning authority. I know that in addressing my questions to the noble Lord, Lord Bellwin, I am speaking to someone who has had the same kind of experience as I have had in local government. I agree with much of what the noble Baroness, Lady Birk, said. She put the criticisms very fairly, and they come from the kind of authorities that have been in touch with me.
I think the noble Lord underestimates the cost of administering the scheme. It is an extremely complicated matter. Part II of the regulations, relating to the scale of fees and the way in which they are to be assessed, is very complicated indeed. The local authority will have to add to its staff in order to be able to monitor the scheme. I think that the operating of the scheme will mean many additional problems for planning departments. There are so many different aspects referred to in Part II of the regulations relating to the scale of fees that it will be necessary for officials to inspect all the planning applications, and that will add considerably to the cost, as will the complications of the scheme.
Schedule 2 refers to advertisements on the spot and in such cases there will be a fee of, I think, £10. Another point in Schedule 2 relates to instances where advertisements are not within sight of the building or shop concerned; for example, in country districts. The premises could be quite some distance away and that would mean that a planning official would have to make a journey to see whether or not an advertisement was correct, and could be approved. Again, that is going to add to the difficulties by way of staff—at least according to my reading of it. I do not quite understand why there must be two kinds of fee and why we bring in advertising where you cannot see the site. In a country district it might be quite a long way away; it might be several miles away from the original building, shop or industrial centre which is being advertised.
Then it says in paragraph 3 that all other advertisements are going to cost £40. What does this mean? What other kinds of advertisements are going to cost £40? I should also like to add that all that I have said up to now has related to urban areas and to complaints that I had only last weekend, when I went back home and was bombarded on the telephone by present members of the local authority which is rural and of which I was a member for so many years. They are

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all extremely worried about this order and think it will not be helpful but will be costly. My noble friend says it is going to bring in a lot of money. It is also going to mean a lot of money being paid out, and I cannot help thinking that that is a mistake.
Then, on the subject of the National Farmers' Union and the agricultural situation, it is known to everybody —it has been publicised in every newspaper, not only the farming papers—that agriculture in this country at the present moment is in very low water, and that any development which might increase the efficiency of our agricultural industry is going to be subject to additional charges. I think that instead of helping the agricultural industry and other small industries it will have the reverse effect, because they are going to have to pay the fees, and, although they do not sound very big, if you add up all that is put into this schedule that I have in my hand here, it amounts to quite a large sum of money which people are going to have to pay. My experience in the past is that it is difficult enough to get people to apply for planning permission under existing circumstances, and we all know that an awful lot of people get away with doing things without getting planning permission. Sometimes they get caught and are fined or are made to return the site to what it was before they did the work, but that is a difficult thing to do.
I am afraid I think that these regulations are going to lead to more difficulties, more evasion and more cost. I realise—everybody has said so, and I know that it is so—that we in this House cannot amend these regulations, but I would beg the Minister to realise that this is a very unpopular measure. Although he cannot alter it and although he has done his best to make it less disagreeable, it is in fact very unpopular indeed, and I would hope that, as the noble Baroness has said, we might look at this again in a year's time, or at some time, because I have a horrid feeling that it is not going to work out as the Government believe it will. I think it is not going to help anybody, and that it will be far more costly than the Government think.
6.14 p.m.
Lord Bellwin: My Lords, I shall try to cover some of the points made by my noble friend Lady Elliot and the noble Baroness, Lady Birk, but perhaps they will allow me to begin with a reference (because it is the shortest point made that requires comment) to the noble Lord, Lord Greenwood. Yes, I entirely take his point. I would only say that if my honourable friend in another place did misunderstand the AMA's position then I am very grateful to the noble Lord, Lord Greenwood, for setting the record straight. As he says, it is certainly a possibility. Of course, I am grateful for the support of the AMA for at least the principle of the fees, and their approval is indeed another matter. So far as I am concerned I think I am pretty clear as to exactly where they stand in the matter, but it is good that we should get the record straight and I gladly thank the noble Lord for that.
My Lords, if the noble Baroness, Lady Birk, will allow me (in reverse order, as I think they say these days) to respond to my noble friend Lady Elliot, she said that the scheme would add greatly to local authority staff, and, indeed, so, I think, did the noble Baroness,
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Lady Birk. So, instead of going over the point twice, perhaps I may say that I do not believe that that is necessarily so at all. I will tell your Lordships why I cannot accept that the scheme will cause a substantial increase. Of course its administration will require a certain amount of staff time, and we have made an allowance of £2 million for that in estimating the yield from fees; but the scheme is not unduly complex, nor will local authorities be required to pore over each application in detail to check the fees. In most cases all that will be required is a quick check; and it should be remembered that more than half of all the applications, for example, will be paying a flat rate fee of £20.
I accept that the introduction of the scheme will make some demands on staff time while local authorities and applicants familiarise themselves with the new procedure. But we are introducing fees in the context of other measures which will in fact save staff. The GDO amendments alone will reduce the number of applications, as I said in my introductory remarks. No one knows by exactly how many it will be, but some 50,000, possibly more, I am assured, is a reasonable assumption to make. The Local Government, Planning and Land Act will cut out considerably the duplication of the work between the counties and the districts—and I speak with much experience of what that means. I think that, all in all, it is perhaps swings and roundabouts to some extent, but in practice, as to the concern about what it will mean by way of additional staff, in the context of all planning staff it will not be anything like the problem that my noble friend and, indeed, the noble Baroness, Lady Birk, fear.
My noble friend was very anxious on the subject of charges and agriculture—
Baroness Birk: My Lords, I am sorry to interrupt the noble Lord, but I was waiting until he had finally left the point about more staff. If there are not going to be more staff, the point I raised on that was: how then is he going to avoid increased delays? Because I think they are alternatives. As the noble Baroness, Lady Elliot, also said, there is obviously going to be more work, so if there is not going to be more staff would the noble Lord not agree that the chances of more extensive delays must be there?
Lord Bellwin: No, I do not agree, my Lords, and, if the noble Baroness will allow me, when I come to her points I shall try to develop the reasons why. As to the charge on agriculture, which is a very important matter of concern to many, I know, I would say that most agricultural developments will in fact be exempt from charges by virtue of the GDO permission. Those developments for which a planning application is necessary will usually, first, be very large, over 465 square metres, in which case the charge will be marginal to the cost of what must be a very expensive and sub-stantial development; or, secondly, will give rise to difficult planning issues—for example, those relating to intensive livestock units—or, thirdly, will be unconnected with farming activities on the land. In all these circumstances it seems reasonable to make a charge; but I undertake to consider any difficulties which may arise in practice, and to take them into account in any review of this scheme.

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As to the other points that my noble friend made, she said that the proposals were unpopular. I cannot remember in my limited experience listening to any scheme where quite so many changes have been made based upon the representations that we have received and the very careful thought that we have given to them in a genuine attempt to meet the concerns that have been expressed. The £20 figure, as against £30, I think is significant because that is anticipated to take in half of all the approximately half a million applications that come in in a year. No one likes any charge where there was none before, but time will tell.
I come to the points made by the noble Baroness, Lady Birk. I have brought with me the proceedings of your Lordships' House in 1977 when she argued so eloquently for the GDO to be extended. I read it with much interest and would only say to her that everything that she then said about it applies today. We have brought in certain safeguards which I think have made it much more acceptable. Unless she wishes, I shall not quote verbatim what she said; but one of the basic arguments was that the GDO would take out of planning the need for people to make applications. It really would make a considerable difference and would make good sense.
When the noble Baroness says that this order will encourage people to avoid planning permission, the first factor I would use against her is the extension of the GDO. The second is that, for the reason I have given, I do not believe that the £20 is going to cause any great dramas. Fears were expressed when we were discussing the whole enabling provision as part of the primary legislation about the ceiling we would propose. I know that at least one of my noble friends who then argued very strongly against the proposals now feels, while still not in favour, much more relaxed about it because of the ceilings that we have imposed.
Baroness Birk: My Lords, so that there is no misunderstanding, the noble Lord is quite right. I argued in favour and I remember it well. I am still in favour, and I have said so, of the extension of the GDO. I said that I thanked the Minister for that and also for the points he had taken on board from the amendments moved by my colleagues. But, I was not arguing for planning fees at the same time. What we are talking about today is the planning fees.
Lord Bellwin: My Lords, we will await the planning fees; but the fact is that when the noble Baroness talks about these proposals encouraging people to avoid planning permission I am fully entitled to quote the fact that the extension of the GDO is a fundamental part of a total package and that what we are proposing is the whole of the planning scheme. It was so argued in the Act, as I am sure she well remembers.
The noble Baroness referred to the charges for deemed applications. I would say that these are accepted in principle on all sides. It is logical that the Secretary of State should retain the fee because it is his department (and the Welsh Office, for Wales) which bears the major share of determining the deemed applications. Surely it is logical for the deemed application fee to be the same as the planning fee because the same development is involved. A fee at
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a penal rate would be unacceptable because it would be bound to deter the making of an appeal, which is the only way of challenging an enforcement notice.
The noble Baroness asked why waste disposal was not charged more. Well, waste disposal may cover a considerable area yet be a development of low value. Without a top limit there is a risk of deterring people from going through the proper planning procedure. Furthermore, a separate category would add to complexity. We shall monitor the working of the fees in operation and, if additional categories prove to be desirable, we shall be prepared to introduce them should the benefits outweigh the cost of the extra complexities. The noble Baroness asked why the maxima were reduced. We chose to reduce the maxima first of all because we were impressed by the arguments that were put to us and, secondly, because we believe that the bigger the fee the greater is the risk of injustice and of deterring development. Many of my noble friends spoke at some length on that aspect and we took careful note of what they said. I feel sure that I have not covered all the points that the noble Baroness raised. If she would like me to go on doing so, I would have another shot at it; but I am not sure that that would be in the interests of making progress in this House.
The general tenor of the reception from the noble Baroness, from my noble friend Lady Elliot, and from the noble Lord, Lord Greenwood, seems to be one not so much of approval as of, "We want to see how it works ". I have given the assurance that we intend to monitor and, if necessary, in 12 months' time we shall review how the scheme has worked. In the context of what we are trying to do overall through this whole speeding up of planning and getting at least something back towards the £63 million that it all cost, I think that this is a fair set of regulations to achieve it. I acknowledge that time alone will tell; but, yes, let us look at it again. I hope that I have covered at least the main points which noble Lords have raised.
On Question, Motion agreed to.

Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Regulations 1981
Lord Bellwin: My Lords, on behalf of my noble friend Lord Mansfield, I beg to move that the draft regulations laid before the House on 2nd March be approved.
Moved, That the draft regulations laid before the House on 2nd March be approved.—(Lord Bellwin.)
On Question, Motion agreed to.

Matrimonial Homes and Property Bill [H.L.]
6.28 p.m.
Lord Simon of Glaisdale: My Lords, I beg to move the Second Reading of this Bill. It falls into two parts. The first Part amends the Matrimonial Homes Act 1967—and that is Clauses 1 to 6 and all three schedules. It springs from a recommendation of the Law Commission.

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Part II seeks to improve the machinery of the divorce court in dealing with matrimonial property after a divorce and stems from a more recent paper of the Law Commission.
The first point goes back a very long way. The main principles were stated in a Law Commission paper when my noble and learned friend Lord Scarman was chairman in 1972. There were then very wide and very detailed consultations, and in 1978 the Law Commission produced a third report on matrimonial property to which they exhibited three Bills with detailed commentaries on each. The first dealt with co-ownership of the matrimonial home; the second with rights of occupation—and that is substantially the first Part of this Bill—and the third with the contents, the chattels. Your Lordships debated that paper in the summer of 1979 and my noble and learned friend on the Woolsack then indicated that he himself hoped on behalf of the Government to introduce a Bill dealing with rights of occupation. I think that Bill had very general approbation; so, for that matter, did that on co-ownership, although my noble and learned friend felt that he ought to put the case against it, acting as advocatus diaboli. The third Bill had more doubt expressed about it.
The present Bill, dealing with rights of occupation, was squeezed out in the Session when my noble and learned friend wished to deal with it. When it did not appear in the gracious Speech at the beginning of this Session, I asked the Minister in the debate on the Address whether it was included among the other measures which would be laid before the Houses. It appeared that it had been squeezed out yet again, although the noble Lord, Lord Belstead (speaking on that occasion for the Government), said that the Government would favour its adoption by a private Member of your Lordships' House. He suggested that such a Bill should be combined with the one dealing with the adjustment of property after divorce—in other words, what is now Part II of this Bill. I was very glad to undertake that.
The problem that was dealt with in 1967 applies equally to a husband or wife, or the other way round. However, for convenience, I shall take the position of a deserted wife because that is the more common one. If a wife were deserted by her husband and he was the legal owner of the property, the dwelling-house, he could sell it over her head and a bona-fide purchaser for value would be able to obtain an order for possession depriving the wife and children of the matrimonial home. The courts endeavoured to deal with that—principally my noble and learned friend the Master of the Rolls (whom your Lordships will be so glad to see here this evening). But judicial lawmaking has its limitations and it was obvious that it became necessary to deal with the matter by legislation.
The late Lady Summerskill, with the help of the Government—I think my noble and learned friend Lord Gardiner was then Lord Chancellor—introduced the 1967 Act. That enabled the wife to stand in the shoes of her husband. If she were in occupation and he was the legal owner, she could register a land charge, a Class F land charge, which would then give notice to a purchaser that she had an interest in the property, standing, as I said, in the shoes of her husband. Not surprisingly, after 12 or 13 years some
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minor technical defects have been found in that measure. Part I of this Bill seeks to remedy them.
I said that the 1967 Act enabled the wife to stand in the shoes of her husband. What it did not do was to cover the case where the husband was not the legal owner but the beneficial owner. There were trustees and he was entitled to possession as a beneficiary. The Act did not enable the wife to stand in the shoes of the trustees, who were thus enabled, if they wished, to sell the house over her head to a bona-fide purchaser for value. Clause 1 of this Bill seeks to deal with that situation, in effect enabling the wife to stand in the shoes of trustees where the husband is the beneficial and not the legal owner.
I am dealing with the principles behind the clauses because this is, I fear, a highly technical Bill and because the Law Commission had a lucid and detailed commentary in their 1978 paper on each of the clauses. I hope that course will be convenient to your Lordships.
The second case was if the husband had mortgaged the property and stopped paying the mortgage payments. A mortgagee in those circumstances is normally entitled to gain possession. The 1967 Act recognised that problem and enabled the wife, standing in the shoes of her husband again, to offer to pay off arrears of mortgage payments and to offer to continue to pay the mortgage payments as they fell due. But what it did not do was to provide machinery whereby the wife was notified when the mortgagee took proceedings for possession. Clause 2 provides for that case, again enabling the wife to stand in the husband's shoes.
Clause 3 is a declaratory clause. It gives statutory expression to the views of the Law Commission on one of their other papers relating to polygamous marriages—that the 1967 Act covered polygamous marriages, as indeed it obviously should. Your Lordships implemented that report in the Polygamous Marriages Act so that all that is necessary to do in this Bill is to make the declaratory provision in Clause 3 to put the matter beyond doubt. Clause 4 is concerned with the mechanics of registering a Class F land charge in respect of the registered land. I shall not trouble your Lordships with the technicalities of it. It should enable the procedure to be carried out both more effectively and cheaply.
Clause 5 makes a few corrections to the Act of 1967 in order to take account of subsequent legislation. It does the same for the Domestic Violence and Matrimonial Proceedings Act 1976. I think probably that it was an oversight that that was not dealt with in 1976. Clause 6, together with the second schedule, revises the power of the divorce court under Section 7 of the 1967 Act to order the transfer of a tenancy from one spouse (who will generally be the husband) to the other (who will generally be the wife). This is a very important power where the husband is a statutory tenant or is under a protected tenancy—that is to say, a tenancy that is still contractual but has the potentiality of becoming a statutory tenancy with all the security of the Rent Restrictions Act. It not only improves the machinery but it extends the power to make the transfer under that section to a case of a judicial separation as well as after a divorce or a decree of nullity. It also enlarges the time within which an application can be made, so as to bring it into line as

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to both the extension of time and the limitation by rules of court to what applies to the divorce court's powers in relation to property. That is Part I of the Bill.
Part II springs from a more recent Law Commission paper just over a year ago. The divorce court has very wide powers after a divorce to make transfers and various changes in property rights and possessory powers. I need not expatiate on that because these powers were explained very clearly only a short time ago by my noble and learned friend Lord Denning in a case called Hanlon v. The Law Society and by Lord Justice Donaldson in that case, both of them taking exactly the same view. Those views were endorsed in your Lordships' House when that decision was appealed.
But what the divorce court cannot do, at any rate directly, is to order a sale of the matrimonial home. That may often be necessary in order to do justice between the spouses financially. The court can, and does, do it indirectly through a summons being taken out at the same time under the Married Women's Property Act or by making an order for a lump sum payment which necessarily in practice involves the sale of the matrimonial home. But the Law Commission, after investigation and consultation, decided it would be much more expeditious, much less costly and altogether more simple if the divorce court were given powers of sale under Section 24 of the Matrimonial Causes Act 1973. My Lords, I fear this is not a very exciting Bill but I commend it to your Lordships as a useful Bill, and I hope that your Lordships will give it a Second Reading. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Simon of Glaisdale.)
6.44 p.m.
Lord Scarman: My Lords, I rise to support the Second Reading of this Bill and I should like, at the very outset of the few words I have to address to the House, to congratulate my noble and learned friend Lord Simon on his initiative in taking up the burden, which might otherwise have been borne by Her Majesty's Government, of promoting this Bill. I should like also to congratulate him, and indeed to thank him for the admirable clarity with which he has introduced this Bill. I detected a note of apology towards the end. He seemed to think that the Bill might not be of riveting fascination to the House. But how wrong he is. This Bill, certainly when expounded by my noble and learned friend, is, or ought to be, of riveting fascination to the House,
It is an amending Bill. It contains no new principle. It seeks by its various amendments only to strengthen the existing law, which protects the various rights of the spouse without property in the matrimonial property of the family. Part I is concerned with the matrimonial home. Part II is concerned with property of whatever sort which can be fairly described as "family property ".
The parent Act of Part I of this Bill was, as my noble and learned friend has told the House, the Matrimonial Homes Act 1967. We should all be exceedingly grateful to Lady Summerskill, to whose energy, initiative
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and indeed legal intelligence we owe this Bill. I was at that time chairman of the Law Commission and, as such, I willingly accept the responsibility for those errors and flaws in the drafting which have made it necessary to bring this Bill before the House. Those flaws were the flaws of the technicians. The principle of that Act—now of course strengthened and carried a little further by this Act—was conceived, declared and fulfilled by the energy, intelligence and imagination of Lady Summerskill and, as chairman of the Law Commission at that time, I welcome this opportunity of paying that personal tribute to her memory.
My noble and learned friend has explained the provisions of the Bill and I wish only to concentrate the House's attention on one or two of the strengthenings of the law which this Bill, if enacted, will affect. I direct attention, if I may, to Clause 2. This deals with the right of the spouse who has statutory rights of occupation when faced with an action brought against her husband by the mortgagee because for some reason or another he has failed to comply with the obligations under the mortgage. There is a very valuable section in our law—Section 36 of the Administration of Justice Act 1970—which gives a mortgagor of a matrimonial home certain rights when faced with an action for possession brought against him by his mortgagee. It does it by imposing a wide-ranging discretion on the court to temper the wind to the penniless lamb and to delay eviction or an eviction order.
One of the technical weaknesses of the parent Act was that the wife, with her statutory rights of occupation, might have no notice of the proceedings brought by the mortgagee which, if successful on his part, would lead to her eviction just as surely as it would lead to eviction by a judgment against her husband. Clause 2 ensures that a mortgagee, seeking a remedy in respect of mortgaged premises which are a dwelling-house, has to give notice to the wife. There are detailed provisions to that effect with which at this stage I will not weary the House. But it is a useful indication of how valuable this Bill will be in strengthening the parent Act.
Some of your Lordships may have observed with a certain amount of disquiet, under the heading Arrangement of Clauses, Clause 3—Polygamous marriages. This is not an ingenious attempt sub almost total silentio to introduce polygamous marriages into our society. They are already there. They have been there for some time. They are already recognised, both actual and potential. All that this Bill would do as my noble and learned friend has said, is to ensure that partners to marriages which are polygamous because of the country in which those marriages were originally celebrated, will have the same rights as those who have married in this country. I do not think your Lordships need fear any danger of several ladies of the harem squabbling over a house in Purley. So much for Part I—rights of occupation.
Part II would remedy an omission from the legislation—again, Law Commission legislation of immense importance—which is now consolidated in the Matrimonial Causes Act 1973. Plainly, there should be a power of sale in respect of matrimonial property when the assets of the broken-down family are being distributed, and that is all that Part II does. So much

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for the substance of this extremely useful amending measure.
There is one further virtue in this Bill which I should like to mention. It is an amending Bill and it is so drafted that, if it be passed into law, all its effective provisions by means of textual amendment will take their appropriate place in the statute law already dealing with the subject. When that happens, the shell of this Act, as it then will be, will disappear, will be sloughed off, and its effective provisions will be slotted into the existing statute law dealing with this subject. That makes a somewhat unattractive Bill when examined at this stage, but so far as the general public is concerned it makes for a very much more easily understood and more accessible body of law for those interested. Both for that technical drafting reason, as well as for the reasons of substance, I hope that the House will give this Bill a Second Reading.
6.53 p.m.
Lord Gardiner: My Lords, I rise very briefly to support the Second Reading of this Bill. For about the first seven years of the life of the Law Commission their reports, with draft Bills attached, were accepted and implemented within about 12 to 18 months of being published. We have now for several reasons, I think, fallen into arrears. There are now some 10 to 12, I believe, which have not been so implemented because they have not been put before Parliament. This has not, I know, been due in any way to the fault of the noble and learned Lord the Lord Chancellor, who has always been a very good friend of the Law Commission, or of his predecessor. It has been due, partly, to difficulties of parliamentary time; this Government, like Labour Governments, too, always try to crowd too much legislation into one Session. It has been partly also due, I think, to the fact that there are some Government departments which do not now act as they were wont to do.
As your Lordships know, when the Law Commission undertake the examination of a subject they get out a working paper consisting of Part I—that is what the law in this field now is; Part II—these seem to be the defects; and Part III—these are very provisional conclusions as to the alterations which ought to be made. There then, for months, takes place a long stage of consultation with everybody interested in the Bill or likely to be affected by it. It is only after all that has been done that they finally produce their report with the draft Bill attached. There is in some Government departments a habit growing up, I am afraid, of making no reply at all when they are sent the working paper, offering no comments, and then, for the first time, when the report is published, starting to raise difficulties or objections.
But whatever the reasons, we are falling rather behind, and therefore we owe a special debt to any noble Lord who is prepared to undertake the very onerous task of introducing a Bill as a Private Member's Bill. In this field, there is no Member of your Lordships' House with greater experience or more knowledge than the noble and learned Lord, Lord Simon of Glaisdale. Therefore I want to express my thanks to him for having undertaken that task and to wish the Bill God-speed.
6.56 p.m.
Lord Boston of Faversham: My Lords, like my noble and learned friend Lord Gardiner, I rise very briefly tonight to speak on the Second Reading of this Bill—briefly, because of the extent of the business which is before your Lordships tonight. We are again indebted to the noble and learned Lord, Lord Simon of Glaisdale, for this further initiative in family law, and I should like to join the noble and learned Lord, Lord Scarman, in commending the precision with which the noble and learned Lord, Lord Simon, has explained this otherwise complex measure.
On at least three occasions in the past two years he has brought before your Lordships matters in this sphere which have been through the Law Commission. There was the debate on 18th July 1979 on the whole of the Law Commission's Report No. 86, of which this Bill formed a part, on family property, matrimonial homes, co-ownership and occupation rights and household goods. There was the Bill which he introduced last Session on co-ownership, when we had that excellent Second Reading debate on 12th February last year—and, if I may say so, I very much hope that there will be an early opportunity for the noble and learned Lord to reintroduce that Bill here—and now we have this Bill on occupation rights and orders for the sale of property. We are, indeed, fortunate—and I do not think that this is something which we should just pass over and take for granted—that he has taken upon himself the sizeable task of championing these excellent Law Commission proposals. We are also fortunate in benefiting from his vast, unrivalled knowledge and experience in this whole sphere of family law.
Part I of this Bill covers what was probably the least controversial proposal in the Law Commission's Report No. 86 on family property, in what was called Book 2 of that report, dealing with occupation rights. In our earlier debate in July 1979, these proposals which we are discussing tonight received universal acclaim, and the noble and learned Lord the Lord Chancellor looked forward to the Bill's enactment. Part II of the Bill also contains useful reforms on orders for sale, as we have heard.
Both Parts of the Bill put forward reforms which have been called largely technical, but I do not think that that should be allowed to disguise the fact—and here I join with other noble Lords who have spoken tonight—that these proposals would also amount to significant advances in family law, in the position of women, and in bringing fairness and justice as between husband and wife. I should also like to join in the tributes which have been paid to my late noble friend Lady Summerskill. I should like to give a very warm welcome to these proposals. I very much hope that your Lordships will give the Bill a Second Reading and that, if it does reach another place, it will receive speedy approval there, too.
7 p.m.
The Lord Chancellor: My Lords, the best service that I can perform for this Bill is to say relatively little about it. I think it is a valuable and important contribution to family law. Speaking for the Government, I should like to express our thanks to my noble and learned friend Lord Simon of Glaisdale for having undertaken the not inconsiderable burden of expounding

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its provisions and for undertaking the equally not inconsiderable burden of trying to pilot a Bill which is not insubstantial in length, going into 14 pages, through this House of Parliament. I hope he finds a suitable sponsor in another place.
Cur view is that this should become the law with as little discussion as possible. The noble and learned Lord, Lord Gardiner, who has experience of these things, spoke of the terrible troubles that unfortunate Lord Chancellors get into in trying to keep going the flow of law-reforming legislation in the spate of controversial discussion in which Governments habitually find themselves engaged; and also, if I may say so, as I said in rather more academic surroundings last week, because of the rather curiously compartmentalised processes through which legislation has to pass in order to get into the Government programme as part of sponsored legislation.
I have failed to get a place in the Government programme but I have Government approval for the policy. It is for that reason that I should like to thank my noble and learned friend Lord Simon of Glaisdale for having undertaken a task that I myself, with more means at my disposal, would gladly have undertaken. Also I think that the House should express gratitude to the noble and learned Lord, Lord Scarman, who was chairman of the Law Commission whose work we are in part carrying out.
The present report of the Law Commission reiterates to some extent the tale of woe adumbrated by the noble and learned Lord, Lord Gardiner. I can only say, and I hope the House will believe, that I shall do my best to further its purposes. I am sure that my noble and learned friend Lord Simon of Glaisdale was wise to choose this particular item. It puts into effect Book 2 of Law Commission Report No. 86 which, as I think the noble Lord, Lord Boston of Faversham, said, is the least controversial of the three and therefore the easiest to insert into a parliamentary programme. I do not think that it ought to cause any controversy. It also puts into effect the more technical amendments contained in Law Commission Report No. 99. These insert textual amendments into the matrimonial law which, when we come to look at the statute as it will be operated, will form a continuous whole. My noble and learned friend has done a very real public service, and I should like to thank him publicly for having undertaken this task. Had he not done so, I should not have been able, this Session, to make it a Government Bill. As it is, I hope that it will go through the House more or less as it stands. After all, the drafting has been done by an expert and there should be no controversy about it. And I hope that on this occasion the other place will take a respite from its labours and let the Bill go through more or less on the nod. I am very happy to give a welcome to the Bill.
Lord Simon of Glaisdale: My Lords, I think that little more remains for me to do than to thank your Lordships for the very friendly and generous reception which your Lordships have given to the Bill. I was very glad that my noble and learned friend Lord Scarman and the noble Lord, Lord Boston of Faversham, mentioned the late Lady Summerskill
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whom, on a measure like this, one should always bear in memory with affection and admiration. I think we should want also to bear in mind the late Mr. Justice Cooke who was chairman of the Law Commission at the time of the third report which drafted Part I of this Bill. In paying those tributes I ought to mention that in introducing the Bill to your Lordships I ought to have said how much help I had had from the department of my noble and learned friend on the Woolsack. I certainly could not have managed it without that help, and I am very grateful.
In speaking of the slotting in of this measure, I think my noble and learned friend Lord Scarman implied—if he did not, I should like to express it—the desirability of an early measure of consolidation. As drafted by the Law Commission, the Bill had a consolidation schedule which for a number of reasons has been dropped—I think desirably. However, I hope that my noble and learned friend on the Woolsack will think it proper now to refer this topic for consolidation. It ought to be a comparatively simple measure of consolidation.
As for my noble and learned friend Lord Gardiner, I venture to agree with him that we have a duty to implement the recommendation of the Law Commission. Considering the value of their work it is not an expensive institution, but we are wasting them unless we rapidly take up their recommendations, which have been made only after the most thorough investigation and consultation, as the noble and learned Lord described. Unless we take steps to implement their recommendations we are wasting them. Having said that, I finish as I began by thanking your Lordships for receiving the Bill in the way that your Lordships have.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

Interpretation of Legislation Bill [H.L.]
7.8 p.m.
Lord Scarman: My Lords, I beg to move the Second Reading of this Bill whose predecessor I introduced in February 1980. When I did so I described the Bill as it then was as a modest measure of law reform. The Bill which I am now introducing is also modest but it differs in a number of important respects from the Bill which was the subject of debate in your Lordships' House last session. In the course of an interesting debate, at the end of which I begged and obtained leave to withdraw that Bill, a number of objections were taken to certain specific provisions contained in it. Some of those objections were taken by noble and learned Lords sitting on the Cross-Benches. Those objections, or some of them, I have considered, and with them in mind have put forward this new and different Bill.
The object of the Bill is to give effect to recommendations made by the two Law Commissions of the United Kingdom and by the committee over which my noble friend Lord Renton presided, the Renton Committee on the Preparation of Legislation. This means that three bodies concerned in various ways with the reform of the law have put forward, and

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indeed can be said to have initiated, the recommendations which find legislative shape in this Bill. The two Law Commissions were united and reported in 1969. The Renton Committee reported in 1975. I emphasise that there is no provision in this Bill which goes beyond recommendations put forward and endorsed by those three law reform bodies. It is for that reason that I lay this Bill before the House with what I hope is not a misplaced measure of confidence. As my noble and learned friend Lord Gardiner said earlier this afternoon, it must need very powerful arguments to displace or frustrate law reform recommendations coming from the two Law Commissions and augmented by the very distinguished Renton Committee.
The Bill is a very short one. It contains two effective clauses: one dealing with aids to the interpretation of our statute law and the other dealing with certain additional principles which could well be introduced into the interpretation of our statute law. The Bill is concerned solely with those aids to interpretation which are listed in Clause 1 and with the principles which are set out in Clause 2. It may be that your Lordships will think that the principles set out in Clause 2 are of far greater importance than the various aids to interpretation contained in Clause 1.
I hope your Lordships will allow me just to say a word or two about the historic way in which, under our constitution, statute law falls to be interpreted. Parliament passes and enacts statute law; the judges interpret the law. It is no part of Parliament's duty to interpret the law; it is no part of the judge's duty, save incidentally, in the course of his judicial work, to make law and it is the primary duty upon Parliament to pass intelligible law. If Parliament falls into error in its legislative process, historically the judges can do nothing about it. There is an old Latin tag which really does apply to the legislative activity of Parliament. If Parliament (and I now break into Latin) quod voluit non dixit—that is to say, if Parliament says one thing but means another—it is not, under the historic principles of the common law, for the courts to correct it. That general principle must surely be acceptable in our society. We are to be governed not by Parliament's intentions but by Parliament's enactments.
There is nothing in the limited proposals contained in this Bill which in any way undermines that basic constitutional position. But like so many broad constitutional generalisations, it has to be applied and developed in the light of experience. Parliament of course, in passing laws, is concerned with language; judges, in interpreting laws, are concerned with language. Language, especially a highly civilised and refined language like English, is not capable of attaining perfect precision, certainty or exactitude. So subtle and various are human affairs that language itself has to be subtle and refined and has to be able to grasp concepts of the imagination which defy certain or precise formulation. That is the basic underlying problem in applying anything so simple to the interpretation of statute law as the general proposition—Parliament makes the law, judges merely interpret it. The problem of interpretation, as every judge who has ever had to interpret a statute knows, is to puzzle out
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from the language used what it was intended that the statutory provision should do.
To this basic problem—and whatever method of solving it is used, the problem is always there—of course different judges have adopted differing approaches. The limited purpose of this Bill is, first of all, to make certain that some aids to interpretation which could be helpful are by law available to the judges and, secondly, to provide the judges with a uniform basis of principle so that they can know upon what basis to approach the eternal and never to be wholly solved problem of statutory interpretation.
If your Lordships look at the report of the two Law Commissions published in 1969 your Lordships will find that the two Commissions, setting out of course in more detail than I have done the basic dilemma of statutory interpretation, say that they have, after consultation—and when the Law Commissions say "after consultation" they are referring in two words to what is a very long and careful process involving a whole lot of people and interests—come to the conclusion that a limited degree of statutory intervention is necessary in the field of statutory interpretation.
I think most of us who have had experience of the problem would say that the two Law Commissions have indeed made out their case. Certainly, if I may just for a moment speak as a working judge, I would find both clauses of this Bill of great assistance in dealing with the perplexities of statutory interpretation. The Law Commission in their report, with immense learning, go through a good deal of the case law covering the various matters that are themselves covered by the two effective clauses of this Bill. And it emerges from their examination that on each of the matters covered by the two clauses in this Bill you will find in the case books differences of judicial approach, differences of judicial emphasis and even sometimes differences among the judges on principle. The whole field is obscured, I would almost say overgrown, by judicial doubts and anxieties. It is to clear away that undergrowth of uncertainty which is hampering the judges in their attempt to construe statutes according to the intent of Parliament that the limited degree of intervention represented by this Bill is put forward for your Lordships' consideration.
I pass very shortly to the Bill itself. Clause 1 deals with aids to interpretation. Only four such classes of aid are included. In that respect it differs from the Bill I had the honour of presenting last year. The first set of aids to interpretation are to be found in the Act as printed by authority, and the Bill would provide that in ascertaining the meaning of the provisions in an Act all indications provided by the Act as printed by authority, including cross-headings, punctuation, side-notes and the Short Title of the Act, may be taken into consideration.
I would make one or two comments on that. Punctuation is a difficulty. The old Acts were never punctuated. Modern Acts are punctuated. Lord Reid in a famous case in 1960, the Inland Revenue Commissioners v. Hinchley, said of the problem of punctuation that even if punctuation in more modern Acts can be looked at, which is very doubtful, it cannot be done in older Acts. Clearly, clarification is needed there. The position of side-notes to a section in an Act is really quite ridiculous. It is not admissible to

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look at them. Yet the eye cannot miss them. As Lord Justice Sax said in one case, they are sometimes useful. A more absurdly inconsistent position for the law to be in than that I can barely imagine.
The second set of aids to interpretation can be summed up in international agreements, either referred to in the Act, or copies of which have been presented in one form or another to Parliament, and they are, of course, they must be, international agreements relevant to the Act. It is possible to say that in recent cases the courts have dealt with that problem. But a doubt persists. As recently as 1931—and in the history of the law that is not very long ago—in the case of Ellerman Lines v. Murray the House of Lords ruled that an international convention mentioned in the Long Title of the Act, mentioned in a preamble which the Act had, and some provisions of which were included in a schedule to the Act, nevertheless could not be looked at if by study of the statutory provision in question the natural meaning—whatever that means—of the section was clear.
Noble and learned Lords, notably my noble and learned friend Lord Diplock and my noble and learned friend Lord Wilberforce, have in their judicial career in this House done what they can to correct the ideas which are to be found lying beneath the Ellerman case, but by no means totally. It should be put clearly beyond doubt, and judges should know, that when there is an international instrument either to which this country is a party or which has been presented to Parliament and is relevant to an Act, it can be looked at in construing that Act.
Paragraph (c) is more important perhaps even than paragraph (b). Paragraph (c) would make available to a court any relevant Royal Commission report or law reform body report or such other report that was relevant to the enactment. It has been the law for centuries that such material may be examined by the courts in order to discover what in an old case was called the mischief that the statute was designed to remedy. But society and the law have developed beyond those simple days in which the universal law of the country was the common law and statute merely the exception to correct some anomaly or mischief inherent in the common law. Statutes are now often passed not to correct mischiefs in the common law but to create new rights and new duties and to deal with the complexities of modern society.
As the late Lord Dilhorne said judicially, it is quite absurd to say to a judge, "You may look at this sort of material, previous reports and so forth, to determine the mischief that the Act was passed to eliminate or eradicate, but you must not use what you read to influence your views as to what the Act means ". It is that sort of nonsense that we must really get out of the law. Today, quite apart from the position in the 16th or 17th centuries, it must be making a proper utilisation of our law reform bodies that their reports can be looked at when they are followed by a statute to determine the meaning of the statute, again only as an aid to interpretation. Parliament may by amendment have passed way beyond these reports. If so, it does not need a judge of extraordinary acumen to be able to see that and to deal with it. Judges are as experienced in matters of this kind forensically as
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members of your Lordships' House are in a legislative context.
Everyone of these aids to interpretation should, I submit, be available to the judges. None of them, of course, is a substitute for interpreting the Act. Indeed, one very learned commentator in the 48th volume of the Harvard Law Review, dealing with this problem of aids to interpretation some years ago, said:
"The mistake made by those who are opposed to making travaux preparatoires and other materials available as aids to interpretation is to think that those who wish to make them available are substituting them for the interpretation of the Act".
They are not; they are there available as aids to be used or not as the judge in his judgment thinks right. The Bill takes care of that position because it provides that the weight to be given to any of these aids shall be no more than is appropriate in the circumstances.
I should like to say a final word on aids. The Bill, of course, would exclude proceedings in the two Houses of Parliament. It would exclude Hansard from the consideration of the judges and the reasons for that are such that I do not think that I need go over them again. When this matter was last debated in your Lordships' House the noble Lord, Lord Mishcon, said of the aids to interpretation to be found in the earlier Bill that all this means much extra work for the profession, all this really is increasing the load upon professional men and judges. That is a lovely generalisation until we see all that is intended; merely that every matter that is printed with the Act can be looked at for what it is worth; that treaties and international agreements to which the Act is designed to give effect can be looked at; that law reform reports which the Act is or may be designed to give effect to may be looked at; and finally I should mention that where there is European Communities legislation which is being enacted one may look at that legislation in interpreting our Acts.
That material will be available in any event in the textbooks and in the legal periodicals. No one could now write a textbook on any branch of the statute law or indeed on any branch of Community law without drawing attention to the matters which are set out in Clause 1. There is no extra burden here, and I am sure that the interested public who are not lawyers will look at those matters in any event and so much the better that they should be looking at what it is legitimate also for the judges to look at.
I can be shorter on what is perhaps the more important part of the Bill—namely, Clause 2. The only argument that I have heard against including in this Bill the three principles there set out, all of them endorsed by the Law Commissions and the Renton Committee, is that they are unnecessary. The principles do bear repetition and they are as follows: that a construction which would promote the general legislative purpose underlying the statute is to be preferred to one which would not; that one which is consistent with the Government's international obligations should be preferred to one that is not; and that in the absence of any express indication the statute should not have retrospective effect. Those principles come into force, of course, only—and I quote from the Bill—
"where more than one construction of the provision in question is reasonably possible".

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The point of that qualification, although I think that it will rarely be invoked because of the imprecisions of language, is to preserve the basic constitutional position that if the language is clear Parliament cannot be heard to say to the judge that it meant something else—quod voluit non dixit.
Finally, the Bill would apply to the whole of the United Kingdom and, if your Lordships should be in favour of the Bill and it should pass into law, that would be right because it has the support of the law reform bodies of the whole of the Kingdom—the Law Commission for England and Wales looking after the law of Northern Ireland and the Scottish Law Commission looking after the law of Scotland. The very distinguished committee over which the noble Lord Lord Renton, presided, endorses the various proposals in the Bill.
This is a limited degree of intervention proposed in a field historically left to the judges—proposed by our two law reform bodies and by the Renton Committee and designed to assist the judges in their basic task of interpreting statutes so as to give effect to the underlying intentions of Parliament where that is reasonably possible. My Lords, I beg to move.
Moved, That the Bill be now read 2a—Lord Scarman.)
7.36 p.m.
Viscount Bledisloe: My Lords, I suspect that it is an awesome task for almost anyone to address your Lordships for the first time. It is certainly particularly so for a mere barrister to address your Lordships when almost every other speaker in this debate is a present or a past Lord Chancellor or Lord of Appeal in Ordinary, and perhaps even more so when the mover of the Bill is the noble and learned Lord, Lord Scarman, at whose feet I had the privilege to start my legal career. I hope, therefore, that the House will be even more indulgent than usual to me.
My excuse for intervening in the debate is that I am a working lawyer as opposed to a working judge, who will, if the Bill becomes law, have to take account of it in my daily practice. My remarks relate to those provisions of the Bill which require one to consider additional matters in construing statutes; that is to say, Clause I, apart from paragraph (a) and perhaps particularly paragraph (c), which requires one to consider the reports of Royal Commissions, committees and so forth. Plainly this Bill is designed to ensure that in some cases a court will achieve the right result which otherwise it might not have done. Plainly that is a benefit and a desirable result. But, as the noble and learned Lord, Lord Elwyn-Jones, said when this matter was previously before your Lordships, one has to strike a balance between that advantage and any disadvantages that there may be.
Notwithstanding what was said by the noble and learned Lord, Lord Scarman, for my part I cannot doubt that this Bill, if passed, will add to the length of cases, because as more material becomes relevant so the hearing becomes longer and will make it more complicated and more expensive to advise upon statutory matters. If one has to look at reports one must do so and charge for it. The material referred to in the Bill is not readily available even in the best organised of
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barristers' chambers, let alone in solicitors' offices or perhaps in the libraries of the lower tribunals in the land which, presumably, have to give effect to this Bill as much as your Lordships' House and places where the noble and learned Lord, Lord Scarman, sits.
I think that the expensiveness was recognised by the committee over which the noble Lord, Lord Renton, presided, and it is, I suggest, a rather important matter. It may be said that that is a mere matter of cost which should not be set against procuring justice; but I venture to suggest that cost itself can be very productive of injustice. One sees frequently many litigants—people with legal problems, people who do not qualify for legal aid but who none the less are not of unlimited means—who are daunted from receiving their true legal rights because of the cost of litigation and the cost of seeking advice. They may not enforce those rights at all or they may settle for too little. Anything which adds to the cost of litigation or the cost of obtaining legal advice is, of itself, productive of a real and frequent injustice—I do not know, but perhaps an injustice rather more frequent than the misinterpretation of statutes which the Bill seeks to put right.
One knows that there are frequent, eloquent pleas for shorter trials; albeit I think that the most recent one in this House related to criminal trials. But one of the main reasons for the added length of trials is that more and more material is admitted before the court. One of the villains of that is the photocopier. Another villain is that judges are ever more unwilling to rule out any evidence, written or oral, which is submitted. One knows more and more that if one objects to evidence, the judge will say, "Yes, I see that there is great force in what you say, but let us let it in in case it is of any use ". That occurs frequently, and it stems from the judge's desire not only to be fair but to be seen to be fair.
We may perhaps forget that it is unfair on the other party if the trial goes on longer and longer because more and more material is laid before the court. The loser may go away feeling that he has had a good run for his money, but the winner—who may, in fact, in the end be paying the bill—will go away knowing that it has cost him far too much to enforce his rights because far too much material was before the court.
In all these instances I would suggest that the balance has been tipped too far towards admitting everything which might produce perfect justice, rather than trying to strike a balance which would keep out some material and shorten trials. I would suggest that perhaps—not particularly in relation to this Bill but generally—those who are in a position to do so should be encouraging the judges to redress that balance rather than encourage the admission of yet further material.
There is one other point which was touched on by the late Lord Dilhorne in the previous debate. Apparently everybody has agreed that all references to Hansard should be excluded. Yet the persons who are to give effect to the Act—both the courts and the lawyers—are to consider any relevant report. Surely the Act may not be intended wholly to implement the report; or the mover of the Bill itself may have said that it is intended to implement the report in all but one or two recommendations. It may be amended

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during its progress through this House or another place, thus moving it further from the report. But the learned judge trying it, the barrister advising on it, and so on, cannot know that because they cannot look at Hansard to find out; and, indeed, if they could, their task would be painful and laborious in the extreme.
The Law Commission and the noble and learned Lord, Lord Scarman, recognise the problem, but they say that the court is not bound to assume that Parliament has wholly accepted the report. Of course, that is so where the Act says something in plain language which is contradictory to the report. But one has only to have recourse to these aids to construction where the Act itself is ambiguous. If the Act is unambiguous, one does not need them. Therefore, a judge may find himself construing an unambiguous statute with a report before him, leaning towards the report when, in fact, the expressed intention of Parliament was not to give effect to that. One does not quite see how that is solved by the Bill.
Therefore, plainly there are various substantial points to be made in favour of the Bill, but I suggest that it also has disadvantages which must be balanced. Certainly it is not for me—particularly on this occasion—to suggest on which side the balance falls.
7.45 p.m.
Lord Renton: My Lords, I know that your Lordships will wish to join me in congratulating the noble Viscount, Lord Bledisloe, on his most excellent maiden speech. I count myself specially fortunate that it falls to me to congratulate him, for, like my noble and learned friend the Lord Chancellor, I was a fellow bencher of his much esteemed father, for whom we had a great affection in Lincoln's Inn.
The very fact that as a practising barrister the noble Viscount chose the Second Reading of this Bill to make his maiden speech suggests to my mind that he has a fine sense of priority, because this is, indeed, although a difficult matter, one of the greatest importance to our profession. The noble Viscount discussed this subject in not only a lucid, but a fair-minded way and one which commanded our attention. I think that most of his criticism of the Bill, as he expressed it, was really a criticism of paragraph (c) of Clause 1(1). It did not seem to me that his quite trenchant criticism could be applied to other provisions of the Bill in the same way.
In view of what the noble and learned Lord, Lord Scarman, said, it will not surprise your Lordships to know that I warmly support the Bill, for its recommendations are consistent with what was proposed by the Committee on the Preparation of Legislation, apart from paragraph (c) of Clause 1(1). I must make it clear—as indeed did the noble Viscount—that the committee of which I was chairman did not recommend that reports of Royal Commissions and other travaux preparatoires should be brought before the court for purposes of interpretation. Indeed, we recommended that they should not be.
The noble and learned Lord, Lord Scarman, deserves our congratulations and thanks, not only for introducing this Bill tonight but also for not being discouraged by his having felt obliged a year ago to withdraw the somewhat more controversial Bill which he then intro
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duced. Although last year doubts were expressed about Clause 1, as then drafted, one finds on re-reading the debate on that occasion that none of those who spoke considered it wrong for judges to construe legislation in a way which would promote its general legislative purpose as provided, then as now, in Clause 2(a). The only doubt that arose on that occasion—and it may still persist in the minds of some of your Lordships—is whether it should be spelt out in the Bill, for it was made clear on that occasion, as has been made clear tonight by the noble and learned Lord, Lord Scarman, that the judges already (whether they are strict literalists, if one may so describe them, or of somewhat broader-mind, if I may say so) have regard to the general legislative purpose when they can discover it, which, alas!, is not very often. I shall return to that.
But I suggest that it would be right to spell it out that the judges should have regard to the general legislative purpose. Surely no harm could be done by doing so. Further than that, I suggest that it would have a positive advantage. It would remove once and for all the long conflict between the literal and the purposive methods of construction, and it would make it clear that if the actual words used lead to what Lord Blackburn, when describing "the Golden Rule", called:
"an inconsistency or absurdity or inconvenience so great that the intention could not have been to use the words in their ordinary meaning",
then it would be right to consider the general legislative purpose. It would make it clear that it would then be right to do so.
When in 1979 the Law Commissions—as the noble and learned Lord, Lord Scarman, has mentioned—published their recommendations on the interpretation of statutes, they referred to the "interaction" between interpretation and drafting. I prefer the stronger word "interdependence". I do consider, and ask your Lordships to bear in mind, that there is unavoidably an interdependence between interpretation and drafting. Much of the difficulties of interpretation, and the differences of judicial opinion between one method of interpretation and another, would have been avoided if draftsmen had been less reluctant to allow the intentions of Parliament to be expressed.
Of course, there are various ways in which the intentions of Parliament can be expressed. It used to be done by preambles, but our committee, of which I was chairman, considered that. We leaned against the revival of the preamble. It could be done, I suppose, by having very elaborate Long Titles. But we concluded that it would be best done by statements of purpose. We recognised that they could be misused by being mere manifestos, as Sir Anthony Stainton, then First Parliamentary Counsel, said in evidence.
Having heard a mass of important evidence from draftsmen and from those holding high judicial office, including no fewer than four of the noble and learned Lords whose names are on the list of speakers for this evening's debate, we concluded—and we set this out in paragraph 11.8, the only quotation I shall make, if your Lordships will bear with me—as follows:
"We agree that statements of purpose can be useful, both at the parliamentary stage and thereafter, for the better understanding of the legislative intention and for the resolution of doubts and ambiguities. A distinction should, however, be drawn between a statement of purpose which is designed to

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delimit and illuminate the legal effects of the Bill and a statement of purpose which is a mere manifesto".
We said that that should be firmly discouraged. So we recommended that
"statements of purpose should be used when they are the most convenient method of delimiting or otherwise clarifying the scope and effect of legislation".
I feel bound to point out, incidentally, that if Parliament's intentions were clearly stated in statutes, expressed in one way or another, there would then be no need for resort to travaux preparatoires.
Our statute law has, we must face it, become so detailed and complex, and so riddled with vain attempts to legislate for anything that might happen, that it is now too often too obscure for us to rely entirely upon literal interpretation. That stage has been passed. Judges, professional advisers, as the noble Viscount pointed out, and everybody affected by legislation are entitled to more guidance from Parliament than they now receive. That is why I welcome this Bill. I hope that my noble and learned friend the Lord Chancellor will feel able to give it a fair wind, and I trust that your Lordships will give it a Second Reading.
7.55 p.m.
Lord Wilberforce: My Lords, the hour is getting rather late, so I hope your Lordships will not think me discourteous if I cut short the compliments. I am not going to bring within that self-denying ordinance the very sincere congratulations that I wish to pay to the noble Viscount, Lord Bledisloe, for his excellent maiden speech. I should like to assure him most sincerely that for us tired hacks on the judicial Benches it is most refreshing and beneficial to hear the sane words of a practising barrister to keep our feet on the ground. I hope he will come down here very often indeed to perform the same task.
I wanted to say a few words in this debate because I joined in a previous one, not when the previous Bill was introduced but in 1966. There was a debate then on a report of the Law Commission. This subject was discussed. I looked up what I said then, and it was this:
"I suspect"—
that statutory interpretation—
"is what is nowadays popularly called a non-subject. I do not think that law reform can really grapple with it. It is a matter for educating the Judges and practitioners and hoping that the work is better done".—[Official Report, 16/11/1966, col. 1294.]
Much better were the words said by Lord Reid in that same debate. May I quote his words, which carry so much of the flavour of that great man?:
"Many books are written about statutory interpretation. I always advise young men, 'Don't read them', because the rules are extremely simple. One looks at the words of the Act and asks, 'What is their natural meaning?'.. what is all this about 'the spirit of the Act?' … I am waiting with avidity to see what these new ideas are, but I am not waiting with any optimism".—[Official Report, 16/11/1966, col. 1278.]
So Lord Reid, in 1966.
I see no reason to recant what I then said. I still think that the interpretation of legislation is just part of the process of being a good lawyer; a multi-faceted thing, calling for many varied talents; not a subject which can be confined in rules. But I think it quite consistent with that to say, as I want to say this evening,
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that this Bill, which does not profess to be a code or of universal prescription, can be quite useful. I am very happy to give it support on that basis.
It is useful for what it says and what it does not say. I shall not say much about what it says in Clause 1, because that has already been well explained, lucidly explained, by the noble and learned Lord, Lord Scarman. I should like to sound a note of sympathy with what was said by the noble Viscount. As the noble and learned Lord on the Woolsack knows only too well, I am rather a bore in this House about the costs of litigation, and anything that bears on that matter is to me extremely sympathetic. I think that what the noble Lord, Lord Renton, said is very wise, probably, that most of the gravamen of possible costs can be centred on paragraph (c). I hope very much that the noble and learned Lord, Lord Scarman, will consider that particular aspect of the matter when we come to the Committee stage.
The remarks I want to make briefly concern Clause 2(a) about the general legislative purpose. What I think about that clause is that it carries a great deal of persuasion because it is moderately expressed. It could have gone so much further. It could have referred to what Lord Reid said, "The spirit of the Act". We know that there are statutes in other countries—in Switzerland and in New Zealand—which go a great deal further than this clause and give much greater powers to judges to find the spirit of the Act. I think that the restraint which is shown in this paragraph is extremely salutary.
That brings me to a point on which I want to say a few words. It is often said that British courts compare unfavourably with continental courts in the way they interpret statutes. They are said to be more literalist, more narrow, less purposive, and some have even said that the House of Lords in its judicial capacity is guilty of the same defects. I was very happy indeed to hear that the noble and learned Lord, Lord Scarman, did not take that line at all in introducing the Bill, and I am happy to see there is nothing in the Bill which supports such an approach.
The fact is that that is a tired old myth; it is one sedulously propogated by people who do not to their homework and prefer to parrot a phrase rather like people who prose on about the over-valued pound. Asked for statistics or some examples, they give none but instead trot out a few tired old cases which have been long discredited by decisions of this House. One need only think of the actual numbers of cases involved. Pick up any volume of the Law Reports and one finds—I have checked it with a great number —about 25 in each volume of cases of statutory interpretation in each volume of the Law Reports in each year. Add to those the number of unreported cases, the number of cases decided in county courts, by magistrates and by tribunals and one has an enormous mass, thousands of cases which must be decided every year of statutory interpretation. It is all work extremely well done of which perhaps one each year is picked out and is said to be a narrow piece of interpretation. One cannot possibly generalise on the subject unless one puts a great deal more effort into it.
As regards foreign courts, one can look around and find in the courts of France or anywhere else decisions just as narrow as one finds here. In interpreting con-

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ventions, the record is by no means to our disadvantage. So with this House in its appellate capacity. So far from the case being that we are a reactionary body holding up the liberal tendencies of other courts or academics to improve the law, the opposite is the case. I feel absolutely confident in saying that there is no stronger advocate or practitioner of purposive construction and no more skilled operator in that field than my noble and learned friend and colleague Lord Diplock, and I quote one extra-judicial passage of his:
If the courts can identify the target of parliamentary legislation, their proper function is to see that it is hit, not merely to record that it has been missed".
Every volume of the House of Lords' Appellate Cases is full of decisions of that character. To give a few examples—so I am not hoist with my own petard and accused of making generalisations without support—termination of pregnancy by a registered medical practitioner includes termination by nurses, and one could not have anything more purposive than that. Mr. Fothergill had his luggage damaged on an international flight; it was held that the loss of his Marks & Spencer sandals and a shirt worth £16 constituted damage to his baggage, and one could not have anything much more international-minded than that. In the case of Operation Julie, the great inquiry regarding drugs, a purposive interpretation was applied to the question of forfeiting the ill-gotten gains. And in the case last year about talaq marriages, the House of Lords took into account the international convention bearing on marriages. Be it said—it is only fair that it should be said—that in every one of those decisions the liberal line was taken by the House of Lords against the opposite line taken by the lower court.
I do not want to make a party speech in favour of our own country or House, but I really believe that comparisons between one country and another or between one court and another are not helpful in this field. We are all engaged in the same job, the very difficult job of interpreting the mass of obscure legislation we have had put upon us, and I hope we may all, with fair but moderate self-criticism and learning from each other, join together in the great task of giving certainty of interpretation to the public and of satisfying the public of the wisdom of Parliament and the humanity of the judges. That is the job we should be doing and I welcome the Bill because it takes a small and modest step and makes a small and modest contribution to exactly that purpose.
Lord Gardiner: My Lords, I wish at the outset warmly to congratulate the noble Viscount, Lord Bledisloe, on his maiden speech. He was short, clear and to the point and we all look forward to hearing him again soon and often.
No-one so far has opposed the Second Reading of the Bill. I rise briefly to support it. I was of course a supporter of the original Bill, from which, no doubt wisely, certain clauses have now been withdrawn. I can make no secret of the fact that I am not an admirer of the way in which legislation is prepared in this country or of the way in which our Bills are drafted, but I am not going into that tonight. I cannot refrain, however, from saying that I regret very much that even so many of the very modest proposals made by the
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committee of the noble Lord, Lord Renton, to improve our lot in these regards have so far not been implemented. However I shall not say anything further, and for one reason, namely that when we discussed the previous Bill last year, the noble and learned Lord the Lord Chancellor made the most splendid speech with every word of which I agreed, and I hope very much that he will repeat it tonight.
8.7 p.m.
Lord Simon of Glaisdale: My Lords, I, too, rise in the hope that your Lordships will give the Bill a Second Reading and I wish to congratulate my noble and learned friend Lord Scarman on its introduction and his explanation. I also wish to be associated with the congratulations to the noble Viscount, Lord Bledisloe.
There are two leading principles in the British constitution, the sovereignty of Parliament and the rule of law, and the fact that we claim to live under the rule of law means that the task of the courts should be not only to interpret the law independently but also to ascertain the meaning of what has been said rather than what Parliament meant to say. What a legislature or executive means to say is relevant in a totalitarian régime but not in a régime which claims to live under the rule of law.
Having said that, if the draftsman and Parliament and the courts do their job properly, each of them, what parliament means to say should be identical with what the courts declare to be the meaning of the words used by Parliament. For the draftsman there is the guidance which has been given by the Renton Committee and, like the noble and learned Lord, Lord Gardiner, I regret that it has not been fully implemented, and particularly that the machinery of control by the Statute Law Committee has been stultified.
Even more, there was the recommendation of the Renton Committee accepting the recommendations of my noble and learned friends the Lord President and the Lord Justice Clerk that statutes should be, much more than they are at present, framed to propound general rules rather than trying to cover any foreseeable situation. The courts are perfectly accustomed in the sphere of the common law to handling general rules, and as the Renton Committee in accepting the recommendations of my noble and learned friends pointed out, the statute would be far more satisfactory if that were done.
The noble Lord, Lord Renton, drew attention last Session to a number of Bills which were in flagrant disregard of that recommendation. Mercifully, so far this Session there has been a considerable improvement, and I have no doubt that that has been due to the activities of the noble and learned Lord. That is the aspect concerning the draftsman.
There are two things that Parliament can do. Parliament can make its meaning absolutely clear. There was a very distressing instance in the Race Relations Act, where it was left entirely in doubt as to whether the Act was intended to reach working men's clubs. It was notorious that a number of working men's clubs practised racial discrimination, and indeed the point was specifically raised, certainly in this House,

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and I think in both Houses. Yet the matter was left so much in doubt that different conclusions were reached as to the meaning of the statute in that regard by the Court of Appeal and by your Lordships' House sitting judicially. I know that a decision either way was bound to attract some odium. Nevertheless, I venture to suggest that it was the duty of Parliament, being apprised of that problem, to make its meaning clear beyond any doubt at all.
The other thing that can be done—I put this forward with a little more hesitation—is, instead of the Report stage in the second House which considers the Bill, there should be a scrutiny of drafting stage. Very little happens on a Report stage in the second House, except perhaps to implement undertakings given in Committee, but that could be done if the other place adopted your Lordships' rule and allowed amendments on Third Reading. I put that suggestion forward with some hesitation, though with full confidence. My hesitation is because I urged that suggestion on the Renton Committee. The committee did not accept it, or at any rate it passed it over in silence.
As for the courts, in my respectful submisison to your Lordships this Bill gives very valuable guidance. I think that to a great extent it is declaratory. I think that the whole of Clause 2 is declaratory of the better practice of the courts. But since that is the better practice, I can see arising no harm at all, and possible good, from enacting it.
As for Clause 1, as my noble and learned friend Lord Scarman pointed out, there has been a difference of judicial opinion about whether one can regard punctuation, and that should certainly be resolved. As for cross-headings and side-notes, that is new law. I am quite prepared to see that, so long as we recognise that they should be amendable and therefore would give extra scope to obstruction. Perhaps that does not apply particularly to your Lordships' House. I cannot see that that proposal would in any way involve extra cost, because there is the statute with its cross-headings, its punctuation, and its side-notes.
I should have thought that paragraphs (b) and (d) are certainly existing law. As for paragraph (c), again I cannot see that it can add to costs. Courts are entitled, indeed in my view they are bound, to look at a Royal Commission report or, say, a Law Commission report in order to ascertain what is the defect that the Act was aimed to rectify. Your Lordships have just given a Second Reading to the Matrimonial Homes and Property Bill. That is a Bill which was set out in a Law Commission report. Unless we enact something on the lines of paragraph (c), the courts can look at everything up to the commentary on the Bill, but then the present law, by a majority in your Lordships' House, says that you can look no further. Again, what is proposed cannot possibly add to costs. One is looking that far; why not just read on?
Then again it is said that the Act might not implement the report, but that is perfectly easy to ascertain, is it not?, merely by comparing the report, which in any case is before the court, with the Act of Parliament, which is also before the court. Therefore, I very much hope that my noble and learned friend will not yield to any blandishments over paragraph (c), but will
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stick by it as it stands. For these reasons, I hope that your Lordships will give the Bill a Second Reading.
8.16 p.m.
Lord Elwyn-Jones: My Lords, first, I should like to congratulate the noble Viscount, Lord Bledisloe, on his admirable maiden speech, in which he combined clarity with precision and, I was glad to see, agreed with one or two of the observations that I had made on earlier occasions—which is always very flattering to hear. We look forward to hearing the noble Viscount very frequently.
When a noble and learned Lord of the distinction of the noble and learned Lord, Lord Scarman, who has been on the Bench for many years, expresses the view that should the Bill became law it would be useful to him judicially, that carries very great weight with me, in particular when the view is supported by the three other noble and learned Lords who have spoken, and it would be a bold man indeed who would gainsay them. However, as the noble Viscount, Lord Bledisloe, said, it is not all a one-way process. I certainly hope that the Bill as it now stands will receive a Second Reading, and in Committee we shall have to look at some of its provisions.
The noble and learned Lord, Lord Scarman, always displays flexibility and is free from dogma in these matters. I am very happy to see that the matters which troubled me most in the previous version of the Bill have been dropped, and I now find myself in substantial agreement with the content of the Bill. However, one or two noble Lords have expressed their reservations about the referability of reports of Royal Commissions, committees and other bodies, and, when we come to Committee, we shall have to consider that matter again.
I could not help recollecting what the lamented late Lord Dilhorne asked by way of questions on this matter, when he said:
"Is it to be assumed that Parliament has accepted all that the Royal Commission has said? Only then can it be assumed that the report of the Royal Commission or committee can be a reliable guide".
Those of your Lordships who were present on that occasion may well remember how Lord Dilhorne expressed the fear that judges might be tempted to decide not what it was that Parliament intended by the words that it used, but what in the light of the various documents (he said that with a little contempt, I remember) Parliament should have done. But that, as he rightly said, would be going beyond the judicial function. I think that the noble and learned Lord, Lord Scarman, used the word "nonsense" in relation to that point of view. If I may say so, he is lucky that the man who was the author of that view is not here, because I think that there would otherwise have been a fairly tough response. We shall have to look at that point; it raises a very serious problem indeed.
So far as the provisions in Clause 1(1)(b) are concerned, I do not know whether the scope of that paragraph is not a little wide, but that may be a matter we can look at in Committee. On Clause 2 of the Bill, as it is generally agreed that it is no more than a statement of present practices in construction, I certainly think it does no harm. In passing, may I say what a delight it was to hear the noble and learned Lord, Lord

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Wilberforce, speaking up in his judicial capacity for the Lords. It was splendid! I hope it will be duly reported, even in legal journals, but I doubt it. However, I must not engage in vanity on these occasions. I can say how pleased I was because, unhappily, I was not a member of the bodies which reached any of those excellent decisions. I do not wish to take further time as there is more business to come before the House, but on this occasion, at any rate, I myself am happy to give a fair wind to the Second Reading of this Bill.
8.21 p.m.
The Lord Chancellor: My Lords, the noble and learned Lord, Lord Gardiner, invited me to make the same speech as I did last year. Perhaps I may at this hour take it as read. I can assure the noble and learned Lord that I still think exactly what I thought last year, and if I were speaking entirely for myself I should repeat it again in some form or another—and I will say one or two things in the same sense now. But, of course, there always is a conflict of interest for Lord Chancellors. One has one's professional integrity to preserve, and therefore one must give a straightforward opinion on the thing, which reflects one's real opinion. One also has to reflect the opinion of the Government, which, if I may venture to say so in the presence of two predecessors, is not always identical with one's professional judgment in the matter. To begin with, I must say that the Government are neutral on this Bill, although I very much hope—and here I speak in both capacities—that this House will give it a Second Reading, at any rate.
My Lords, I should at this stage like to join in the congratulations to our maiden speaker, the noble Viscount, Lord Bledisloe. Some of us, as the noble Lord, Lord Renton, reminded us, knew his delightful father and loved him very dearly; and, speaking for myself, having been on and off a Member of this House for quite a long time, one of the times when I was on I heard a most remarkable speech, from about the same place as the noble Lord, Lord Renton, is now sitting, by his grandfather. So I have survived three generations. But I will pay the noble Viscount the compliment, if I may, which it is not usual to pay on these occasions, of trying to tie in some of his arguments with the debate itself. That is not always thought to be appropriate for a maiden speaker, but he spoke with such cogency and such clarity that I think it would be difficult to handle the subject, which he handled so well, without talking about some of the things he said.
Now there is one thing that he said with which I wholeheartedly agree, as did my noble and learned friend Lord Wilberforce, and that is the growing prolixity and therefore the growing expense which is clogging up the courts at the moment. I was looking the other day at the figures for the Crown Court, and on an average throughout the country cases are taking two hours longer per case than they did 10 years ago. This is a very serious thing. There does not quite follow from that the conclusion which the noble Viscount was very careful not to draw but which I think he had at the back of his mind, that this might be an argument against the Bill. I think a greater robustness on the part of the Bench at first instance, and a greater robustness, conciseness, incisiveness
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and decisiveness on the part of the profession in the conduct of cases, is very much to be desired indeed and the proper remedy for the growing length to which cases are taken, both at first instance and on appeal.
As to the other thing he said, the premise I wholly agree with but I feel some qualification about the conclusion. I absolutely agree with him that the introduction of inordinate masses of only marginally relevant material, whether by way of evidence, argument or the citation of precedent, is a growing and very tiresome menace at every level in our courts of law; but, there again, I think that English lawyers in particular must avoid the classic error into which I think the English law of evidence has fallen from the first of mixing up admissibility and relevance and weight. English law has been much too ready to reject on grounds of admissibility things which ought to be rejected on grounds of robustness, marginal value and weight. I think this has been a haunting fault of our lawyers for something more than 300 or 400 years. So I would qualify the noble Viscount's conclusion while accepting his premises.
My Lords, I shall not deal in detail at this hour with the content of the Bill, but I should like to say one or two things about its philosophy, because I agree with the philosophy of the Bill entirely. I think it was T. S. Elliot who said:
"The lawyer's motto is, 'The spirit killeth, the letter giveth life'".
I fear that that has become too much the case in our approach to the interpretation of statutes. As my noble and learned friend Lord Wilberforce pointed out, the main business, almost, of our Appellate Committee and of our appellate courts, and a great deal of the business of our county courts, magistrates' courts and courts of first instance in the High Court, is precisely finding out what statutes mean. Up to and including a certain period in the 19th century, I think it was broadly true that you could adopt a literalist interpretation of statutes and at any rate have a very good chance of being right. The literalists, therefore, won an almost complete victory over the mischievites or the purposive constructors.
I think that now the balance ought to be tilted a little the other way, because the immense complexity of modern statute law, which forms the staple diet of the courts and to which my noble friend Lord Renton referred in his speech, is such that one cannot, I believe, interpret a statute aright unless one can place it in the correct legislative context in which the statute was passed. That does not mean to say, any more than the noble and learned Lord, Lord Scarman, meant to say, that one ought to introduce recitations from Hansard into the courts (it would be over my dead body first!) but I think that the blue book, the reports of the Law Commission and of the law reform committees have a definite part to play. If I may say so to the noble Viscount, both in advising as a barrister and in interpreting as a judge I think they have a part to play which is almost indispensable. I think that they can tell you the state of the law probably better than any textbook.
Incidentally I was very glad to hear my noble and learned friend Lord Wilberforce refer to the words of Lord Reid. There is not a good book on the interpretation of statutes; I do not care what anybody

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says. There is not a good book on it and I am quite certain that in the interpretation of statute law both the adviser and the judge cannot afford to do without studying the legislative context into which the statute has been passed. That means reading what the law was before it was passed, which can almost always be found either in the Blue Book or in the Law Commission report, and also seeing what that report intended to suggest. Of course it is true that these reports must be used with the greatest of caution for the sort of reason which the late Lord Dilhorne pointed out in the last debate; namely, that it by no means follows that, because the Law Commission or the Blue Book authors recommended a particular remedy for the mischief, Parliament intended to carry out that remedy either in whole in some cases or in part in others. Therefore, it needs a very good deal of common sense in using external documentation of that kind.
However, to suggest in the latter part of the 20th century that judges ought not to know what is going on, and that it is all very indecent and that only the words of Parliament can be studied and their meaning speculated about, seems to me to be a thoroughly retrogressive move. I can think of at least one case in the House of Lords in the last 15 years, or perhaps in the last 10, in which if that had been more systematically carried out the House of Lords would have come to a different conclusion. I can say that with certainty because, having legislated under the noble and learned Lord, Lord Elwyn-Jones, to reverse their decision, it was no longer law in England; and I, sitting as Lord Chancellor in a Scottish appeal where remedial legislation had not been taken, found that I was a member of a unanimous panel which said that the previous decision was wrong in the light of the arguments we had heard, as we were entitled to, because the English precedent was not binding on Scottish courts, and for this purpose we were a Scots court. I can say with complete confidence that an over-literalist approach is no longer the law and no longer corresponds to the actual practice of the Court of Appeal the House of Lords, or the best practice of the High Court.
But as one of the noble and learned Lords who have taken part in this debate has pointed out, statute law interpretation must go on in the county courts and the magistrates' courts as well. This is where I think that this Bill is of the most use. I believe that it is, as my noble and learned friend Lord Simon of Glaisdale said, very largely declaratory of what is the best practice at the moment. Where it is needed, maybe in the magistrates' court in Slough or a county court in Wales, is where a judge does not have either the experience of interpretation or the ready material available to spell out the right principles of judicial construction to apply; and it is because I think that had it been written down in black and white that certain things are possible and that there is a difference between acceptability and weight and that certain things can be looked at, it would be of the greatest possible assistance in the inferior courts which have to do the same work in interpretation as the appellate courts at a higher level.
It would be possible to go on at great length but I am not going to do so because we have other business to perform. But I should like to endorse what my noble and learned friend Lord Wilberforce said. In conclusion,
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I would like to endorse it. It is the very greatest possible mistake to draw invidious comparisons between continental systems and our own. In theory, the continental systems are not bound by precedent but there is no greater adherent to precedent than the French judge. Theoretically, the French courts are bound to a purposive interpretation and they come to exactly the same conclusion as an English court would do; so that there is not the difference that people think there is.
Having said that, I should like to thank the noble and learned Lord, Lord Scarman, for persisting in his efforts. He ran into a great deal of flak last time, but this time he has had a better reception. I myself have welcomed it individually on both occasions, and so far as the Government are concerned they preserve a neutral attitude.
8.35 p.m.
Lord Scarman: My Lords, it is not the first time that I have sailed through stormy weather to find tranquil waters, but whenever one reaches tranquillity after the storm one has lost a little tackle on the journey, as my noble and learned friend Lord Elwyn-Jones reminded me. However, I learned from the storm. This debate, apart from the very great interest of the speeches which it has been my privilege to hear, is marked by two delights. One is a present delight in hearing the maiden speech of the noble Viscount, Lord Bledisloe. Of course, I know him as that dirty little boy, Christopher, available to devil and to make sure that I did not overlook all the points for and against my case of which I should be made aware. He has made his speech with great skill and eloquence and just a little bit of mischief; and I thoroughly enjoyed it. I think that I should be uttering the views of all of us if I say that we look forward to hearing the noble Viscount again and again.
The other delight is a delight in retrospect. The name of the late Lord Dilhorne has been mentioned more than once in this debate. That is most appropriate. He took a part in the previous debate and he developed, as one would imagine, a forceful speech against the Bill then presented to the House. As we left the House—and this was my stormy period; I am now in my tranquil period—he turned to me and said, "Leave out this and leave out that and have another go; and you will not do so badly". That was typical of the friendship, warmth and immense judgment in public affairs that marked the career of Lord Dilhorne. It was a great pleasure to hear so many of your Lordships mention him in the course of this debate.
There is really nothing for me to say in reply to this excellent debate. I emphasised at the beginning—and many noble and learned Lords have picked it up and emphasised it—the limited nature of this Bill. My noble and learned friend Lord Simon of Glaisdale emphasised, as I endeavoured also to emphasise in opening this debate, the constitutional position of the rule of law in this country. Parliament can make laws but cannot interpret them; judges interpret laws but do not take a legal initiative. It is upon the basis of those principles and institutions that the rule of law in this country is maintained. There is nothing in this Bill to undermine those principles; there is much to strengthen them, because the Bill is intended to improve the

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practice of the judges in a way in which they would wish it to be improved, by making clear what is available to them and making clear to them the principles they are to follow.
As the noble and learned Lord the Lord Chancellor said, it is important to bear in mind that statutes have to be interpreted and applied by courts in all parts of the country, many of them remote from a law library. It must be of great value if a short, limited statute like this, drafted, I would suggest, in perfectly clear terms, is available so that they know what they may look at, what weight they may give it, and have in front of them the principles to guide them through the complexities of modern statute law.
When we come to Committee I assure my noble friend Lord Simon of Glaisdale that I shall not easily yield to the blandishments of 1(1)(c); I shall be prepared to refer to the Renton Committee's admirable report in explaining the mysteries of 1(1)(d). I hope that these principles are clear and I invite the House to give this Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

Right of Residence: EEC Directives and ECC Report
8.40 p.m.
Lord McGregor of Durris Lord McGregor of Durris rose to ask Her Majesty's Government whether they will state their views on the draft EEC directives on right of residence and on the conclusions of the Ninth Report of the European Communities Committee (H.L. 55).
The noble Lord said: My Lords, in asking this Unstarred Question, may I first apologise to the noble Lord, Lord Belstead, for unduly extending his parliamentary day and thank him for undertaking the task of replying? The draft EEC directive on right of residence to which I wish to draw your Lordships' attention will have the effect of abolishing the restrictions on movement and residence which still apply to those not covered by the regulations and directives relating to the free movement of workers and their families. Consequently, it will affect chiefly students and people who have retired or are well enough off to have no need to work, and their families.
However, if the directive were implemented in this country, it would make little or no difference. In practice, the resulting changes would be no more than marginal because we already extend similar treatment to the nationals of other EEC members as a matter of administrative policy. In particular, we assist fully in the maintenance for students of what the noble Lord, Lord Wolfenden, recently described to your Lordships as academic free trade within the Community, and his statement about the importance of this trade was endorsed by the noble Baroness, Lady Young, on behalf of the Government.
Under the directive a member state may require an intending resident to provide proof of sufficient resources to provide for the family but cannot set the amount of such required resources above the minimum subsistence level defined under its national law. This
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would be hard to apply in the United Kingdom because the supplementary benefits scheme contains so many variable and discretionary payments to meet individual circumstances that a clear figure for minimum subsistence cannot easily be teased out of it. A notional amount of a minimum would have to be agreed for the United Kingdom.
Moreover, some fear other repercussions in this administrative area. Would an extension of the right of residence result either in a disproportionate increase in claimants or would some people exercise their right of residence in order to become claimants? Such questions cannot be answered with certainty. There are as yet no means of estimating how many intending residents would enter or what proportion of them would come with the intention of scrounging. In 1979 some 5 million people came into the United Kingdom from Community countries. Of these, 1,350-odd were refused entry, the majority because the immigration officers believed that they were coming to live on public funds. This figure, applicable to all entrants from the EEC, does not suggest that the slight extension of the right to residence proposed by the directive would release a flood of ill-intentioned claimants upon the Supplementary Benefits Commission.
Further, it is not easy to make generalisations about the advantages to scroungers of the different systems of social security within the Community. Under the directive, we might end up by benefiting as a net exporter of that commodity. Another difficulty is that the directive proposes that a residence permit should be granted in the first instance for five years. Your committee concurs with the Home Office in holding the opinion that that is too long. However, I do not think that administrative difficulties can be a serious objection to the directive if the principle which underlies it is approved. That principle, as the Committee expresses it in its Ninth Report, is that the proposal is a logical extention of the rights at present accorded to persons engaged in economic activity.
There is an argument against this view which holds that the directive cannot possibly be intra vires the Treaty of Rome because that treaty was framed only for economic man who toils and moves freely to seek toil but possesses none of the other characteristics of citizenship. This point was put to the chairman of the Legal Affairs Committee of the European Parliament when he was a witness before the Committee. He replied as follows:
"The preambles"—
of the treaty—
"talk of 'an ever-closer union between the European peoples' and of 'an action tending to eliminate barriers'. These barriers cannot, in my opinion, only refer to the homo economicus, … they have to concern persons as a whole. It would be, allow me to say, of a second-rate materialism to keep only to the economic part of the Treaties … we have to try and go beyond".
My Lords, the directive takes but a halting step beyond though it is not the less to be valued because it is limited in scope. I believe that it should be regarded not from an administrative point of view but as enlarging the concept of citizenship and widening the national areas over which shared rights are recognised and enjoyed.
I am encouraged by what I understand to be the attitude of the Government. Speaking in Hamburg

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in November 1980, the noble Lord the Secretary of State for Foreign and Commonwealth Affairs observed that Europe is everything which serves to bring our peoples together in their work and in their leisure. The more these links grow, the more substance there will be to the Community and to its activities. That is why the Ninth Report of your Lordships' Committee considers that this draft directive raises important questions of policy and principle and that is why I am confident that the noble Lord, Lord Belstead, will be able to approve the committee's opinion that the principle behind the proposal should be accepted.
8.49 p.m.
Lord Avebury: My Lords, in welcoming the opportunity to discuss the report of the committee, of which the noble Lord, Lord McGregor of Durris, was a distinguished Member, may I first of all return to a theme which I have touched on previously when Select Committee debates have been held in your Lordships' House: that is, the lack of any feedback later on from Brussels in terms of a reaction to what is said in your Lordships' House and what has been said already by the Committee which is reporting to us. I feel that if people have taken the trouble to work long hours on these committees and then come before the House and explain them, as the noble Lord, Lord McGregor, has done, some kind of public reaction from Brussels is the least that we could demand.
It was said to me only this evening by a noble Baroness who is on one of the other sub-committees that she had heard on numerous occasions that the work done by your Lordships is valued in Brussels; but that is not the same thing as having a positive reaction to the suggestions that are made. Even if they are not always accepted, one would like to know that they had been properly considered and that the discussions which proceed on the draft directives have been fully taken into consideration.
Obviously my Party warmly welcomes any extension of the European ideal, and in principle we are in favour of making the free movement of people apply to those who are not engaged in any form of economic activity, as this draft directive does. As the noble Lord has already explained, it applies to three categories: students, retired people and those of independent means, together with their families. We agree that although this objective may appear to go beyond the Treaty, the directive would not be found to be ultra vires if challenged in the European Court. I think enough evidence was taken to satisfy the Committee on that point.
I also recognise that if Britain does consent to this directive or to one which is based on the draft now before us, it would reduce the power of the United Kingdom Parliament to make laws regulating the right of residence in this country by nationals of member states. But that is already the case for EEC nationals wishing to enter in order to take up or to seek employment, to set up in business or to work as self-employed persons. In paragraph 61 of the immigration rules it is expressly provided that such persons are to be admitted without a work permit or without prior consent. Paragraph 62 requires us to admit also their spouses, their children under 21, other children and grandchildren, if still dependent,
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and their dependent parents and grandparents. These provisions are not discretionary but they allow us to comply with our existing Treaty obligations. Clearly, if this draft directive came into force it would simply be an extension of what we have already agreed.
As the committee remarked, the optimum arrangement would be to concede unrestricted rights of residence to all citizens of every member state. The proposals in the directive do not go as far as that, but they lay down guidelines which determine whether or not a person who is not gainfully employed should be able to reside in a member state of which he or she is not a citizen.
The two points of concern expressed by the committee were the definition of "members of the family", including the word "dependent", and the imposition of the arrangements for ensuring that we do not get thousands of indigent Germans coming here to benefit from our generous social security arrangements. We are in some difficulty if we adopt a wider definition of "members of the family" for this purpose than we do in our existing immigration rules. We already have the absurd situation, for example, that a Frenchwoman who marries an American or Pakistani may take up residence here with her husband if she is in work here or is seeking to work here, whereas an Englishwoman who is married to the brother of that American or Pakistani would not necessarily be entitled to live here with him. In fact, since the last immigration rules were enforced, that would occur only if she was either born here herself or her parents or grandparents were born here.
So already we have citizens of this country being put into an inferior situation vis-à-vis their spouses than citizens of other Common Market countries. It would be unfortunate if we were to introduce further anomalies in the wake of these proposals, as we shall do obviously if we are going to permit the spouses and children and parents of spouses to be included among "dependents". In any case, as has been pointed out, there is an ambiguity in the drafting which would have to be cleared up; so we could not accept the present document as the final version.
May I suggest that the easiest way out of the difficulty might be for the directive to allow each member state to define "members of the family" and "dependent" in accordance with its own law. I admit that that might lead to some minor loss of reciprocity, but that is already inevitable when we come on to interpreting the financial criteria in the directive. Article 4(2) says that member states may require would-be immigrants for purposes other than work to provide, as the noble Lord, Lord McGregor, has already explained, sufficient proof that their resources will satisfy their own needs and the needs of their accompanying family members. That, according to the Economic and Social Committee, has to be not just for the immediate future after they have come in but for the whole of the five years, although that is not made absolutely clear in the directive.
But these resources are not to be greater than the minimum subsistence level defined under the law of each member state, so that if each member state defines separate subsistence levels there could be differences of treatment as between one country and

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another. The difficulty is that we do not have such a concept in our law of a minimum subsistence level. We have the various levels of supplementary benefit, as the noble Lord, Lord McGregor, has explained; but the inference from the directive is that this subsistence level is a unit amount which is defined in some way in the law of each member state.
What might be a way round this problem, if I may suggest it through your Lordships to the draftsmen in Brussels, is to say that member states may not require the resources to be greater than an amount sufficient to render them ineligible for social assistance in whatever State they are intending to enter. That means that somebody coming to Great Britain would have to show that he or she had sufficient resources to make it unnecessary to apply for supplementary benefit. But in the other countries of the Common Market, where different systems are in force, some of them of a much more local character than we enjoy here, the requirements would have to be settled in the light of their internal legislation.
The discussion in your Lordships' Committee makes it clear that there is some anxiety that we might get droves of Italian scroungers descending on us to live off our lavish supplementary benefits. At the moment they may come here, saying they are intending to look for work, and they may have no resources at all when admitted. There have been allegations by some newspapers, notably the News of the World, that people are coming for this purpose. The News of the World carried a front-page article some time ago showing a group of Italians enjoying a large meal washed down by great flagons of chianti, and it was rather puzzling to me how they had managed to afford such a large number of bottles on the supplementary benefits they were supposed to be receiving. Following enquiries, I found out that the wine had been paid for by the editor of the News of the World. So I think there may be some exaggeration of the extent to which people are benefiting from our social security provisions.
According to an estimate which was given to the committee, in 1980 I think there were only 500 people in total who had received supplementary benefit for more than eight weeks. It was not clear exactly how that figure was obtained, except that the witness from the DHSS who gave evidence said that if an EEC national claimed benefit for any less time than that it would not have been separately recorded but simply included in the total of all claims. We require rather more information than we have at the moment about the extent to which overseas nationals are claiming supplementary benefits, and we need that information on a continuing basis, because I dare say that this is not the last discussion of the kind we are having now which will take place in your Lordships' House or in the House of Commons.
I suggest—although it is not the responsibility of the noble Lord, Lord Belstead—that perhaps the DHSS might look into the possibility of collecting some more regular statistics than are available at the moment. If free movement leads to more EEC nationals coming here and claiming benefit, then, presumably, more of our own citizens will be claiming them—as the noble Lord, Lord McGregor, has said—in France or Germany. But, according to the DHSS,
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it is harder to claim supplementary benefits in France or Germany, or, indeed, in practically every other country in the EEC, because some countries pay social benefits only to their own nationals, which, so far as I can see, appears to be contrary to the provisions of Article 7 of the Treaty. Others also impose a residence condition and most of the schemes have a discretionary element in them, unlike our supplementary benefits which have to be paid if a person satisfies the conditions.
I found it rather hard to believe, when I was looking at the note which the DHSS submitted to the committee, that our system is so very much better than anybody else's in Europe, as they would appear to have claimed. When the DHSS were first asked in oral evidence for a comparison, they had to admit that their knowledge of other countries was scanty; they could not give the levels of benefits or the residence requirements in other countries of the EEC, and I thought that the paper which they finally submitted was rather uninformative. It would be useful, if this matter is to be pursued, for detailed comparisons to be made; and perhaps this is something that the Commission might be asked to undertake for future reference.
For the time being, however, in spite of the enthusiasm for these proposals of the European Parliament, they were said by Home Office witnesses to be unpopular with most of the member states and thus they are unlikely to succeed. It is a pity that what was intrinsically a sound idea in principle has been rather botched in practice, and that may be one of the reasons why the proposals are disliked elsewhere. I hope that, while public opinion and the opinion of Governments is maturing, as it may do in time, the valuable suggestions of your Lordships' Committee will be pursued and, if I may say so, that those which I have ventured to put forward may be considered as well.
9.3 p.m.
Lord Wolfenden: My Lords, I feel bound to begin with an apology. I hope that I may have your Lordships' pardon if I have to leave before the end of this debate. I very much hope that that will not be the case, because I particularly want to hear what subsequent speakers have to say. But, if it comes to the real crunch choice between listening to those speakers on the one hand, and catching my last train home on the other, I know which course I shall adopt, if your Lordships will forgive me.
I have very little to add to the admirable exposition of this report by the noble Lord, Lord McGregor of Durris. As has been said already, he is an important and influential member of the sub-committee which was responsible for reporting to the Select Committee itself on this matter, and it will not be any surprise to your Lordships who have heard him this evening that that is so. I want only very briefly to underline two of the points which he has made.
The first is the desirability, as it seems to me, of removing the distinction which at present exists between "workers" and others; not just a distinction but, if I may say so, what seems to me to be discrimination in favour of whichever you choose to adopt. I think that that is an especially unfortunate distinction if, in fact, students are—as they are—included among the non-workers. Equally, that would be the case, I suspect,

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with most of your Lordships if you wished to take advantage of living in another country. I suspect that most of us would be categorised not as seeking employment, but as, in my crude word, non-workers. So there is that very real reason—that personal, close, intimate reason—why we should wish this discrimination to end.
My second point, equally briefly, is the desirability, as it seems to me, of knitting the European Community more closely together not just by economic considerations. Obviously, this is no place to begin a debate on our membership of the Community, but we are members of it, we are committed to it and, in so far as we are, then I should like to see it as successful and all-embracing and wide in its scope as it can be. It is not just a matter of economic considerations and the Common Market in the narrow sense. We are talking about a human community, a community of human beings of various nationalities, some of whom are students and some of whom are not; some of whom are called employed or seeking employment; some of whom are regarded as being of independent means. Whatever the immediate category, what we are really talking about is a vast number of human beings who very much want for the most part, I am sure, to enjoy what can properly be called the benefits of the existence of the Community and of their membership of it.
It is perfectly true, as has been pointed out already, that there are one or two practical and administrative problems to be solved before this directive could be acceptable. But I find it hard to believe that they are beyond the wit of those who will have to attempt to solve them, and I should have thought that it would be a pity if, certainly at this stage, we allowed simply administrative, practical or even minor financial obstacles to impede the progress of this directive. I personally welcome it and I presume to commend it to your Lordships and to the Government.
9.8 p.m.
Lord Scarman: My Lords, I also should like to congratulate the noble Lord, Lord McGregor of Durris, on the admirable way in which he has introduced this debate. I can only hope that when the noble Lord, Lord Belstead, replies both he and those of us who are on the Select Committee will hear words supporting and approving this report. Indeed, I hope that the points made by the noble Lord, Lord McGregor of Durris, and by the noble Lord, Lord Wolfenden, will be carefully considered by the Government.
I should like to say just one word in answer to some of the observations made in the course of his speech by the noble Lord, Lord Avebury. He suggested that more attention should be paid in Brussels by the European Commission and others to the reports of the committee of your Lordships' House dealing with proposals for legislation emanating from the European Communities. Let me at once allay, I hope, some of his fears. I had occasion with the noble and learned Lord, Lord Fraser of Tullybelton, to visit Brussels about 10 days ago on the business of your Lordships' House, so far as that business is conducted by the Select Committee on the European Communities. We were largely concerned with legal questions but it was perfectly plain to both of us from what two Commissioners, Viscount Davignon and Herr Narjes,
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said that our reports and the debates in your Lordships' House arising from those reports are most carefully considered.
We were given one specific example which I hope will encourage the House as well as allay the anxieties of the noble Lord, Lord Avebury. Viscount Davignon had in front of him during our discussion the report on product liability. He had read in Hansard the debate in your Lordships' House on that report. As I understood what he said, he had already accepted the point that was made during the course of that debate about the way in which his officials, or the draft directive were proposing to deal with the problem of limitation of liability.
I am quite satisfied that our reports and the debates in your Lordships' House have their effect in Brussels. It is notable that during recent months representatives of the Commission and of the European Parliament have come over to London to assist not only the committee but its sub-committees in their deliberations upon draft proposals emanating from the European Communities. Sparsely attended though this debate may be, what is said tonight and what is said in this report will, I know, be most carefully considered and have real influence in Brussels.
Lord Avebury: My Lords, it was not so much that I had any doubt that people in Brussels read the committee's reports and what was said in your Lordships' House, as the lack of any formal mechanism by which your Lordships could be made aware of the consideration that had been given to these proceedings to which I was referring. Indeed, the experience of the noble and learned Lord, Lord Scarman, was in a way fortuitous. It was a happy accident that he was able to hear at first hand that Viscount Davignon had read the proceedings of the committee in question, but those members of the committee who were not in Brussels with him could have known about it only because the noble and learned Lord, Lord Scarman, reported back to them. I am asking for a rather more formal system by which your Lordships could be made aware of the consideration which Brussels had given to these proceedings.
Lord Scarman: My Lords, as a lawyer accustomed to formal mechanisms, I prefer almost any other mechanism to a formal one. But I take the noble Lord's point.
I have only a very few observations to make; the ground has been so admirably covered by the noble Lord, Lord McGregor of Durris, and by the noble Lord, Lord Wolfenden. My points are largely legal and I mention them only with the invitation that the Government give them some consideration. There are two classes of legal points arising on this draft directive. One is a point on the law of the European Communities, which is really for the Commission and for the institutions of the Communities to consider—and ultimately, of course, for the European Court of Justice to consider. It is the problem to which the noble Lord, Lord McGregor of Durris, referred—the problem of vires. Is this directive intra vires the treaties? That question must be open to a measure of doubt, although I happen to have no hesitation in advising—if I may advise your Lordships—that the

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European Court of Justice will almost certainly hold that the directive is intra vires if it should ever be challenged, and of course if it receives the unanimous support of the member states it is extremely unlikely that it will be challenged.
Nevertheless, there is a difficulty and that difficulty arises from the very excellence of the draft directive. When the chairman of the Legal Affairs Committee of the European Parliament came to give evidence to the Select Committee on the subject of this directive, he said that the directive, although of course limited in scope and applying really only to retired persons, persons of independent means and their families, and students, nevertheless heralded a new trend—an attempt to bring Europe closer to the people.
He went on to say that there was a note of freshness in the directive. It does not regard citizens and member states as merely economic agents. It treated them as people. It does, but by so doing it runs itself into a measure of difficulty which I am confident that the European Court of Justice—if it ever has to—will solve. The measure is there. It is a difficulty which is present, at any rate to the Legal Affairs Committee of the European Parliament, because the chairman, in giving evidence, said that there must be a rock hard basis in law for the directive so that it could stand up to legal challenge. The rock hard basis will be there if the court of justice adopts what we lawyers call a purposive approach to the interpretation of the preamble and the opening words of the treaty. I say no more about that. I have no fears and I am quite sure that if Her Majesty's Government are satisfied that this directive is to be encouraged they will not be deterred by those arguments, either.
I now pass to the legal problems in our national law. Here I would respectfully suggest that Her Majesty's Government should press for a greater, closer definition of certain matters to which your Lordships have already referred in the course of this debate. I shall mention only two. There is the definition of a dependant or member of the family. I cannot help thinking, notwithstanding the explanations given to the committee by the chairman of the Legal Affairs Committee of the European Parliament, that the definition is (at any rate by British standards) somewhat loose, if not woolly.
The European Parliament have proposed as an amendment which I think, though I am not sure, has been accepted by the Commission, that the definition of a dependant should be,
"any person whom the holder of a right of residence has an obligation to support or who is in practice dependent on the holder".
When the Select Committee first heard that definition, certain members, including myself, were somewhat apprehensive. The chairman of the Legal Affairs Committee of the European Parliament, giving his evidence, said that "obligation" meant legal obligation", and "who in practice [is] dependent upon the holder of the right of residence" meant "who is living under the same roof as the person entitled to the right of residence". If those two meanings are implicit in that definition, so be it, but I would suggest to Her Majesty's Government that they should
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press for something a little more explicit so that doubts may be removed.
The other point of genuine difficulty is the one to which all your Lordships who have so far participated in this debate have referred and which was developed (quite rightly) at some length by the noble Lord, Lord Avebury. That is the right given by the draft directive to member states to insist upon minimum sufficient resources from those persons seeking to take advantage of the draft directive and move from their own home state into another member state.
The difficulties are real. This is a late hour and it is not the appropriate moment to explore them. They are not simply difficulties of definition; they are difficulties of policy and they do need some attention. I would invite Her Majesty's Government to insist on getting some sort of formula which would ensure that the draft directive contains an indication as to the minimum amount of resources deemed sufficient which is suitable to the needs of the United Kingdom. I do not think, from what I have heard said in the Commission or in evidence to the Select Committee, that there will be any lack of goodwill in the Common Market in seeking to resolve that difficulty. It is a genuine difficulty through nobody's fault. I do hope that we shall hear something really encouraging and helpful from the noble Lord, Lord Belstead, when he answers this Unstarred Question.
9.21 p.m.
Lord Boston of Faversham: My Lords, my noble friend Lord McGregor of Durris has performed a most valuable service in raising this matter today, and in thanking him I should like to thank also all of the members of the committee for all their hard work. This is an important subject, and, like my noble friend, I shall be most interested to hear the views of the Minister, the noble Lord, Lord Belstead. I must confess that on reading the report I did feel somewhat apprehensive about aspects of the draft directive. I have been somewhat reassured by both what my noble friend himself has said and by what has been said by other noble Lords, including the noble and learned Lord, Lord Scarman, in his speech. But the reservations expressed by the Home Office in their memoranda are not insignificant ones, and some of the matters to which they draw attention, matters to which noble Lords have referred in the course of this debate tonight, not least on, for example, identity cards, are likely to arouse a certain amount of controversy.
My Lords, I do not intend in these few brief remarks to spell out the disadvantages that appear—these have been frankly explored by noble Lords who have spoken in support of the draft directive itself—but I would just add this: that those points also have to be seen against the background outlined in the report itself, and especially its reference in Paragraph 11 to the fact that the directive, if made, would
"involve a surrender by the United Kingdom Parliament of its future power to make laws relating to the right of residence in this country of nationals of the Member States, since … the Community would pre-empt that legislative field".
I think it is important that that point should be mentioned in the course of a debate like this. It was clearly one of the principal factors which was most obviously in the minds of the sub-committee and the

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Select Committee in recommending that this draft directive ought to be drawn to the attention of your Lordships.
So I feel that we should need to be reassured by the Government on the points the Home Office itself has raised. It is probably fair to say, especially in the light of the views expressed tonight, that those are largely administrative or technical worries and need not affect the principle involved in the directive itself. My Lords, all this simply helps to underline our sense of gratitude both to my noble friend and to the committee for bringing this important matter to the attention of your Lordships.
9.24 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, I am grateful to the noble Lord, Lord McGregor of Durris, for this opportunity to set out the Government's views on this draft directive, and in particular on the conclusions reached in the Ninth Report of the European Communities Committee of your Lordships' House. I should first say that the general attitude of the Government to the objectives of this draft directive is influenced by the fact that, under our system of immigration control, the privileges that the directive seeks to give are, as the noble Lord, Lord McGregor of Durris, recognised in his speech, for the most part already accorded in practice to those people whom the directive would cover. These would mostly be retired people, persons of independent means and students.
Of course, Community nationals are not normally subject to strict immigration controls chiefly because, under existing Community law, nationals of member states may move freely between those states to seek or to take up employment. That being so, one of the principal purposes of the immigration control—namely, the control of unauthorised employment leading possibly to settlement—is removed. Any of your Lordships who have seen the procedures at Heathrow Airport, for instance, will, I am sure, agree that the examination of passengers from Community countries is very brief and is indeed very much of the same speed as the procedures for citizens of the United Kingdom. The reason for that is simply that there is no point in questioning a student or other visitor closely to discover whether he has an intention to work, because the person would be perfectly entitled to do so anyway.
I have not heard it suggested that the present practice of United Kingdom immigration control excludes those such as retired people, persons of independent means and students from Community countries entitled to free movement of labour who want to come here either temporarily or even permanently. I would think, from the debate, that this is common ground between all sides of your Lordships' House and I would just say that our practice is to admit such people with a minimum of formality.
While one must therefore argue that, so far as United Kingdom practice is concerned, the objectives underlying this draft directive represent no significant change of policy, and indeed they can hardly be presented as a dramatic development in the history of the Community, it can also be said that if we claim already to be doing what the directive is all about
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then we should be able to support it. I should like to say quite clearly to your Lordships that the Government do indeed maintain that the principle behind the proposal carries no major policy implications for the United Kingdom, and such misgivings as we have are to some extent based on the view that, unless great care and attention is devoted to the drafting stage of such instruments, they can subsequently be interpreted in a way which the originators had never intended or foreseen.
I was grateful to the noble Lord, Lord Boston of Faversham, for saying that the reservations which were expressed by the Home Office—and many of them were indeed repeated in the report of the committee of your Lordships' House—are not insignificant. We are therefore concerned to ensure that in its final form the proposal of the directive does not inhibit a member state's freedom to deal with individual cases to an unwelcome degree.
In this regard there are three areas to which I think Parliament needs to pay particular attention. In the first place we must be sure that there is adequate provision for us to keep out those who are generally undesirable, such as serious criminals or terrorists; secondly, we must be satisfied that the final instrument is not open to exploitation by non-Community nationals whose aim may be to circumvent our normal immigration controls; and finally, there must be adequate provisions to prevent the abuse of public funds.
I should like to say a few words about public funds. I agree with the noble Lord, Lord McGregor, that it would be wrong to exaggerate the scale of abuse or to give the impression that Community nationals are waiting to come here to live on social security benefits. There are, however, cases which are very properly a matter of public concern. It is right and necessary that benefits for workers, students or retired people should not be exploitable by those who move from one country to another with the object of living off the taxpayer in whichever country will provide for them most easily. Nor indeed would it be in the interests of the Community and the ideals of the Community for Community instruments, drafted with the best of intentions, to be open to exploitation in this kind of way.
In the noble Lord's speech and in the speech of the noble Lord, Lord Avebury, there was the suggestion that any hesitation on the part of the United Kingdom would be ill-advised because in the two-way movement which the draft directive would encourage we should be as likely to benefit as much as, or perhaps even more than, other countries. That may be so, but I must point out that the number of European Community nationals coming here to work has not, as I understand it, lessened over the last three or four years during which this country has been in a deepening recession.
However, the point at issue is that a directive, which could after all form the basis of a case right up to the European Court, must surely be drafted as accurately as possible and not lead to unforeseen consequences. With that in mind, may I briefly mention some of the details of the proposal as it is at present drafted which could be a source of some difficulty?
Article 1 of the draft directive specifies those people who would benefit from its provisions, and its definition of family members is very wide indeed. It

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would appear, at least from the present English text, that the directive would extend to relatives in the ascending and descending lines without limits; to relatives who are not themselves Community nationals, and, it would appear, to those who do not even live with the person who would be exercising the free movement rights. The noble and learned Lord, Lord Scarman, spoke about the interpretation which the chairman of the Legal Affairs Committee of the European Parliament placed upon the words "obligation" and "dependent" in Article 1 of the draft directive. I was most interested to hear the remarks of the noble and learned Lord about this. All I would say is that the Government would like to see—and I am reinforced in my feeling about this, having heard the speech of the noble and learned Lord—these matters clarified in the directive, as I believe that at the moment they have not been clarified as regards this country.
This definition goes beyond what is contained in existing provisions for the families of workers and is particularly open to exploitation in so far as it concerns non-Community nationals. As at present drafted, for example, a man from a country outside the Community could gain settlement in the United Kingdom simply by marrying a girl from a Community country who happened to be here for a few months to learn English. Before we embark on any disagreement about a point of that kind at this late hour, may I just say that that may or may not be held to be desirable by your Lordships, but I do not think it should be governed by a European Community directive. In addition, as regards Article 1, that part of the draft referring to dependants even though they may be Community nationals, is, as the committee of your Lordships' House recognised, vaguely worded.
Lord Avebury: My Lords, a non-Community national can acquire a permanent right of residence now, can he not, if he marries a woman from one of the other member states who comes here for the purposes of work? If he accompanies her and remains here for the five years that is provided under our law for that woman to acquire a permanent right of abode, he also acquires it. So the extension to non-Community nationals of this right of spouses would be a logical feature of the proposal, would it not?
Lord Belstead: My Lords, it might be a logical one so far as the noble Lord is concerned, but what I am saying is that in addition to it being, I think, quite wrong that it should be put into effect by a directive, which would be a European Community directive and not a directive which is supposed to apply to the rest of the world, the effect of the directive would be to make the effect of what the noble Lord calls a logical extension very much wider indeed.
Another issue of concern to us, and I think to other member states as well, is the provision contained in Article 4 of the draft, which says quite properly that member states may require those who would benefit from the directive to provide them with proof of sufficient resources to maintain themselves and their dependants. Practically all your Lordships have referred to the difficulty created by the fact that the article goes on to lay down that such resources may not
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be required to exceed the minimum subsistence level defined under the law of member states.
In our law there is no generally applicable minimum subsistence level. Under the supplementary benefit scheme the level varies from one person to another depending on many different factors. The Government share the view which was expressed in the committee's report that there may not be an adequate solution to establishing a minimum subsistence level. The noble Lord, Lord Avebury, put forward a solution to this problem. I would simply say to the noble Lord that any alternative concept will require very careful thought if it is to be workable within our system.
As the committee recognises, this difficulty is made more intractable by the provision in Article 5 of the draft directive, which lays down that a residence permit must be valid for five years with no discretion to issue one for a lesser period. This would effectively remove the possibility of reviewing a person's ability to support himself and his family. The noble Lord, Lord McGregor, said that administrative convenience should not stand in the way of the principle of the directive. I sympathise with that. Indeed, I sympathise with the noble Lord, Lord Wolfenden, who gave the view that administrative convenience is never a good argument for standing in the way of something which is desirable in principle.
I would just remind your Lordships that the committee of your Lordships' House held that a right to review is essential. I think your Lordships came to that view because the directive as drafted could lead to people persistently living here at the taxpayers' expense for almost a full five-year period. I must say that we regard this provision as being unreasonably rigid.
Lord McGregor of Durris: My Lords, if I may say so, I said that the committee concurred with the Home Office's view that the five-year period was too long, and the committee certainly did not—and I do not think that I did in what I said—make a fetish of overriding administrative convenience.
Lord Belstead: My Lords, I must apologise to the noble Lord that I was perhaps making it sound as though I departed from what the noble Lord, Lord McGregor, was saying instead of calling his words into aid, which was not very good tactics on my part. I am glad that the noble Lord therefore would agree with me that there should be, as I understand what the noble Lord is saying, a discretion for member states to vary the period of validity of the residence permit according to circumstances. These are just some of the areas of concern which the Government would hope to see clarified before the draft directive could be finally adopted. I believe that some of them are shared by other member states, while a few countries may see more fundamental objections.
The Government will certainly give close consideration to the points which the noble and learned Lord, Lord Scarman, made. May I mention just one of his points. I think I have referred to the others in my speech. The noble and learned Lord raised the question of the vires of the directive. While this issue is known to be a source of concern for some who believe it to be ultra vires, there are arguments both ways. The noble and learned Lord put the other argument this

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evening. The Government will therefore participate in continuing discussions on the text of the proposal.
It is in harmony with what I have just said that I conclude by adding that the Committee's Ninth Report is a helpful and welcome document for which the Government are grateful. We are particularly grateful that in its careful exposition of the issues involved, your Lordships' committee gave due recognition to those points on which changes are felt to be required and agree that efforts should continue to be made to see whether those matters can be satisfactorily resolved.

Greater London Council (General Powers) (No. 2) Bill
Examiners' Certificate that no further Standing Order is applicable; ordered to lie on the Table.