Lords Sitting of 19 May 1981

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

Lord Jenkins of Putney
Hugh Gater Jenkins, Esquire, having been created Baron Jenkins of Putney, of Wandsworth in Greater London, for life—Was, in his robes, introduced between the Lord Strabolgi and the Lord Brockway, and made the solemn Affirmation.
Lord John-Mackie
John John-Mackie, Esquire, having been created Baron John-Mackie, of Nazeing in the County of Essex, for life—Was, in his robes, introduced between the Lord Elwyn-Jones and the Lord Cledwyn of Penrhos, and made the solemn Affirmation.

Airline Tickets: Wholesaling
2.42 p.m.
Baroness Burton of Coventry: 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 propose to take any action on the availability of discounted airline tickets following the discussion held with organisations on the suggestion that wholesaling of these tickets should be considered.
The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne): My Lords, as I said in answer to a Question by the noble Baroness on 26th March, it is for the agents to discuss with the airlines matters relating to methods of sale of airline tickets. There is no action for the Government to take until such time as the airlines are persuaded to favour a system of wholesaling of unsold tickets, and there is an IATA recommendation to this effect for Governments to consider.
Baroness Burton of Coventry: My Lords, I have become so weary of this type of Answer. I wonder whether the Minister realises that stonewalling consistently is not only boring but an affront to the House when every piece of evidence is treated in that manner. May I ask Lord Trefgarne whether he is aware that in the current recession more and more airlines are using bucket shops for their surplus tickets and that among the most recent ones are reputable airlines such as KLM, Air France and Swissair? Finally, does the noble Lord recall that yesterday he told the House that it was not always wise to postpone decisions indefinitely? May I ask him whether he has now reached a decision to do nothing at all about this
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matter or whether they are still in an indefinite situation?
Lord Trefgarne: My Lords, I am sorry that the noble Baroness finds my Answers on this matter wearisome. I suppose I should be out of order if I were to say that I find the Questions much the same.
Several noble Lords: Yes.
Lord Trefgarne: As for the substance of the supplementary question asked by the noble Baroness, the problem, as she has described it, of the bucket shops is not precisely the Question on the Order Paper and is, indeed, rather a different matter. The question whether or not bucket shops should be authorised by the airlines to sell their tickets is a matter for the airlines, not for me.
Baroness Elliot of Harwood: My Lords, we have listened to these replies from Her Majesty's Government. Surely it is time for Her Majesty's Government to take a lead. Everybody knows what is happening. All the airlines are perfectly aware of what is going on. Why do not the Government say straight away either that this is illegal or that it is legal? If it is legal, then everybody will benefit from it.
Lord Trefgarne: My Lords, as I have explained to my noble friend on several occasions, and also to the noble Baroness, Lady Burton of Coventry, and to a number of people who have been to see me privately, including Members of the other place with various delegations, the question of legality in this context is a difficult one to solve. It is not immediately clear upon what basis the illegality could be founded, although I am certain that there is an illegality of some sort. The difficulty is to find evidence which will stand up in court. As for taking a lead, as my noble friend suggests I should do, we do indeed take the lead in the bilateral negotiations in which we are involved from time to time for securing a régime of lower air fares, which is certainly the long-term answer to the problem.
Lord Young of Dartington: My Lords, even if the Minister is unable to announce any action, would he at least be prepared to accept that all consumers would be behind Lady Burton in the kind of stance she has taken on so many occasions in this House? If the Minister accepts that, can he give us any assurance at all that at some point in the future, in response to what is a very general consumer opinion, the Government might awake from their torpor on this issue?
Lord Trefgarne: My Lords, those who produce that sort of line of reasoning are, with respect, oversimplifying the problem. As I have said many times before, the air fares which are charged by individual airlines are a matter in the first place for the airlines themselves and subsequently for approval in this country, first by the Civil Aviation Authority and then by the Government. It is not open to me unilaterally to abrogate the agreements which we have entered into with other Governments.
Lord Boyd-Carpenter: My Lords, while accepting what my noble friend has said as to the position of the Government, can he indicate that as a matter of policy the Government favour getting rid of most of the restrictive apparatus of IATA and allowing air fares to be fixed, like many other commodities, by the law of supply and demand?
Lord Trefgarne: My Lords, as my noble friend will know, IATA is an association of airlines and it is for the airlines themselves to decide how they want to order their affairs. If they think fit to join IATA, they have to follow the procedures which it lays down. My noble friend is quite right to suggest and, indeed, to invite me to assure both him and the House, that the Government do favour a régime of generally lower air fares. We should also favour the removal of some of the restrictions on the sale of air fares generally.
Lord Bruce of Donington: My Lords, the noble Lord has indicated to the House that he is in some legal difficulty and that he needs evidence. Can the noble Lord give to the House some indication of the type of evidence which he requires in order that his legal difficulties may be resolved?
Lord Trefgarne: My Lords, the sort of difficulties to which I have referred include, for example, the difficulty of ascertaining who has committed the offence of selling or using an air fare other than the one which is part of the authorised agreement. I can assure the noble Lord and the House that the difficulties are formidable.
Lord Renton: My Lords, is my noble friend aware that in at least one of these cases the jury failed, or refused, to convict, that it seems to be very difficult to establish guilt in such cases and that this situation is bringing the law into wide contempt and should be brought to an end as soon as may be?
Lord Trefgarne: My Lords, certainly I agree that the present situation is unsatisfactory but I am persuaded—indeed I am quite satisfied—that the right answer is to find a régime of lower air fares which can be sold without many of the awkward restrictions which apply at present.
Baroness Burton of Coventry: My Lords, I wonder whether the Minister is prepared to accept an unorthodox suggestion. Does he recall that when I asked him before about the wholesaling system he did not tell us that he had seen the organisations concerned until I asked him about that in a supplementary question? When he meets these organisations for the representations, would he allow those of us who are particularly interested in this from the point of view of consumer affairs, such as the noble Baroness, Lady Elliot of Harwood, the noble Lord, Lord Young of Dartington, or myself to sit in and see whether we can bring some common sense to bear on this matter?
Lord Trefgarne: My Lords, I am not short of advice on these matters and I am always pleased to receive
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the noble Baroness when she wants to come and see me. Of course some people who come to see me do not always see precisely eye to eye with the noble Baroness, Lady Burton, and may not necessarily wish her to be present at meetings which they have with me, but, in principle, of course I have no objection to receiving the noble Baroness whenever she wishes to see me.
Lord Morris: My Lords, in his previous answer my noble friend referred to illegalities of some sort. Can he be a little more precise about that?
Lord Trefgarne: My Lords, I fear I cannot. If I had had a better legal framework under which to operate on this matter, I think the problem would have been solved.

Maternity Allowance Payments
2.51 p.m.
Baroness Phillips: 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 will review the method of paying maternity allowance so that working mothers receive their full entitlement.
Lord Cullen of Ashbourne: My Lords, my right honourable friend is obliged to make payment in accordance with the legal entitlement determined by the independent statutory authorities. If the noble Baroness knows of any claimants who have been paid less than their legal entitlement their cases will be investigated.
Baroness Phillips: My Lords, while thanking the noble Lord for that reply, I should perhaps say that I have no personal interest to declare in this matter, but I wonder whether the noble Lord is aware that a working mother who ceases to work can receive maternity allowance for 11 weeks before the birth and 4 weeks after—or even a little longer—whereas if she continues to work she forfeits the money that she would have had before the birth. Since the money must be set aside for 18 weeks, would the Minister not agree that it would be more sensible and fair that all mothers should have the 18-week maternity allowance?
Lord Cullen of Ashbourne: My Lords, the noble Baroness probably knows that my right honourable friend sent out a consultation paper about this last October in order to try to tidy up what is rather a patchwork arrangement where there is a grant, an allowance and maternity pay. No consensus was reached on this, and we are now considering waiting until the new sick pay scheme comes into operation before reviewing the whole question of maternity benefits.
Lord Davies of Leek: My Lords when the noble Lord is reviewing these questions of social security

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allowances in many fields, please will he see that legislation is brought forward to help the people who are not learned in the law or in the ways and means of obtaining help, in order to help them to get what they are entitled to, particularly in view of the fact that there are millions of pounds of unclaimed social security owing to people who do not have the know-how?
Lord Cullen of Ashbourne: My Lords, it was with that idea in mind that a complete review of supplementary benefits was undertaken recently, and now I think the noble Lord will find that it is very much simpler, both for claimants and for those who are administering the scheme.
Baroness Phillips: My Lords, sensing that the noble Lord is sympathetic, may I express the hope that the review will come out with a fair scheme? Contributions have been made by all and it seems reasonable that all should collect.
Lord Cullen of Ashbourne: Yes, indeed, my Lords.
Lord Young of Dartington: My Lords, may I ask the noble Lord whether he is able to make a statement about when the Government will be able to say that they will upgrade the level of maternity grant in line with inflation, instead of keeping it at its ridiculously low level of £25, which as the noble Lord knows, was set as long ago as 1969?
Lord Cullen of Ashbourne: My Lords, this is the crux of the matter. Certainly the sum of £25 was fixed in 1969 and has never been altered. One of the options for a review of the system is to abolish both the maternity allowance and the maternity pay and hugely increase the maternity grant. There are several other options, but it is fairly complicated and I doubt whether the House would want me to go into it.

The House of Lords and the Constitution
2.55 p.m.
Lord Alport: 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 view of the Lord President of the Council's undertaking on 8th December 1980 that they would "give urgent consideration to the strategic purpose" of the Constitutional Referendum Bill, now before this House, any statement of past progress and future intentions can now be made.
The Lord President of the Council, Lord Soames: Yes, my Lords. Since the debate in your Lordships' House last December the Government have carefully considered the matter to which my noble friend refers. The Government are entirely committed to a Second Chamber as an essential part of the constitution. They have, however, decided not to come forward
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at this time with proposals to afford some form of statutory protection to the House of Lords without reference to the broader issues of the composition and powers of your Lordships' House. The Government are considering the many different proposals which have been put forward for reform.
Lord Alport: My Lords, may I ask my noble friend whether I should be right in interpreting his Answer as meaning that in fact there is unlikely to be any action in this field for a very considerable time? Since the programme of legislation ahead of us is now so great in this Session and it would be wrong therefore to ask your Lordships to give consideration to the further stages of the present Constitutional Referendum Bill in this Session, would the Government perhaps consider giving some support to a revised Bill, taking into account the criticisms made at Second Reading, and for it to be introduced at the beginning of the next Session so that some progress may be made on this matter while they are making up their minds about the future form and powers of the House of Lords?
Lord Soames: My Lords, my noble friend is really asking whether the Government would consider giving support to some measure of the character of the Bill which he introduced, giving us a valuable opportunity, as I think the whole House will agree, to debate this matter at the beginning of this Session. He is asking whether the Government would give support to a similar measure to be introduced next Session, again without consideration of the composition and powers of your Lordships' House. What I tried to say in my original Answer was that we think the two should be linked together and that it would be wrong to proceed with one without giving due and proper consideration to the important question of composition and powers at the same time.
Lord Paget of Northampton: My Lords, does not the noble Lord agree that so long as we have a sovereign Parliament both this and any other similar Bill is a necessary futility because it can be repealed by the next Parliament just as easily as it can be passed by this one?
Lord Soames: My Lords, I do not think it is quite as simple as that. As I have said, my noble friend did a service to the House in introducing this Bill. Many views were expressed in the debate on the Second Reading of the Bill, but since that debate the Government have weighed all the pros and cons and, in particular, what was said during the course of that debate and, although there seem to be advantages and disadvantages on both sides, we felt that what I have put to the House today was the right answer.
Lord Shinwell: My Lords, is the noble Lord the Leader of the House aware that the Labour Party has decided to abolish the House of Lords when it is returned after the next election, which is by no means unlikely, and therefore what is the use of a constitutional referendum?
Lord Soames: My Lords, there are many reasons why I think it unlikely that such an eventuality will

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come to pass. One of them is that I do not think the country would like to see single chamber government.
Viscount Gage: My Lords, is it not extremely unlikely that there would be any general agreement about comprehensive reform? Would not the Government be well advised to consider a modest measure of this sort, and by doing so might not the Queen be relieved of having to take some very difficult decisions?
Lord Soames: My Lords, all this was taken into account. There was a balance of arguments, but I do not think that Question Time is a proper time for a further debate on the advantages and disadvantages, such as took place on the Second Reading. All I can say is that the Government have considered every aspect of this question and have come down on the side of what I have suggested to the House.
Lord Orr-Ewing: My Lords, are there not constitutional dangers in the fact that this country has no written constitution? We have no Bill of Rights. It is certainly unlikely that in the short term we shall have any electoral reform. Does my noble friend recall that the Lord Chancellor delivered an exceptional Dimbleby TV lecture drawing attention to the danger of an elective dictatorship and wherein it was shown that a minority Government of extreme views could be a considerable danger to our whole constitution? Would he therefore remember that there are considerable dangers, that it may be later than the genuine democrats in both Houses think, and that it therefore is necessary to take some steps to protect our parliamentary system? So the suggestion he made in his first reply, that the Government are examining this matter, is welcome. Would he say that there is some sense of urgency about this examination?
Lord Soames: My Lords, we are indeed examining it, and we realise that this is a matter that cannot be allowed to trail too long.
Lord Lee of Newton: My Lords, would the noble Lord agree that by far the most sensible propositions yet put on this issue were those contained in the report of the Labour Party Peers, which I tried to outline some months ago? If a Bill such as that proposed was put forward, would the Government support it?
Lord Soames: My Lords, that is a hypothetical question.

Tate Gallery Extensions
3.2 p.m.
Lord Segal: 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 extensions to the Tate Gallery are planned on the site of the former Millbank Hospital, when they are likely to be completed, and what is their estimated cost.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, a new museum to house a large part of the Turner Bequest is to be built on part of the Millbank Hospital site. Work is expected to start at the beginning of 1982 and take two years to complete. The estimated cost of the building, which will be linked to the Tate Gallery, is £5½ million: funds have been donated by the Clore Foundation.
Lord Segal: My Lords, while thanking the Minister for that reply and paying tribute to the generosity and public spirit of the trustees of the Clore Foundation for their magnificent bequest, may I ask whether the noble Lord is aware that his reply will give great relief that this unique collection will at last be found a worthy permanant home? May I ask the noble Lord two supplementary questions? Is it proposed that there will be direct access to the extension from the existing Tate Gallery building, either underground or above ground? And will there be an opportunity for a wider examination to be made of the proposed plans for this building?
Lord Bellwin: My Lords, I am glad that the noble Lord is pleased at the Answer, and I am inclined to agree with him that this would be the feeling of most Members of your Lordships' House. With regard to the access point, perhaps it would be helpful if I were to say that two of the four ward blocks will shortly be demolished to make way for the new Turner Museum, and the remaining two will be used to provide much needed storage space for the Tate Gallery. Other buildings which will be retained as part of the overall redevelopment will be used as offices, including a new home for the National Art Collections Fund. Quite what the effect of that will be on the access I am not too sure.
Perhaps it would be helpful if I were to say—also covering the second point the noble Lord made—as regards an opportunity for there to be public comment on the proposed redevelopment, the Westminster City Council are presently considering a notice to propose development and they have invited representations. Drawings and a model are being displayed at City Hall and later they will also be displayed at the Tate Gallery. I would have thought that that was the time for people to have their say on this matter.
Lord Hutchinson of Lullington: My Lords, as chairman of the trustees of the Tate Gallery, may I ask the Minister whether he is aware that a very distinguished architect, Mr. James Stirling, has been engaged by the trustees to design this building, and that access to the building will indeed be from the Gallery itself and from the outside? May I ask the Minister, enlarging perhaps the sense of the Question, whether he is aware that the Tate Gallery now has become one of the greatest museums of modern art in the world, and that the rate of expansion of the Gallery must, therefore, exceed the rate of any other museum of fine arts in the country? In those circumstances, would the Minister urge the Government to give the development of the rest of the site urgent priority so that the public are able, as the Minister agrees they are entitled to be able, to see the works which we acquire, which we are at the moment quite unable to put on show?
Lord Bellwin: My Lords, I am very grateful to the noble Lord for his obviously very informed response to the point of access and the other matters. I do not think anyone would quarrel with any of the observations he has made. As to the point about the rest of the site which it is planned to redevelop, I would only say that there are plans, of which I am sure the noble Lord is aware, and it is hoped to provide for the future expansion of the Tate Gallery on this site, possibly, or should I say, hopefully, by means of further donations of private funds.
Lord Strabolgi: My Lords, arising out of what my noble friend Lord Hutchinson said, would the Government bear in mind that there are many important 19th century paintings, particularly Victorian paintings, in which there is an increasing interest which it is Impossible to accommodate in the present accommodation of the Tate Gallery? Will it be possible for this to be borne in mind in any extensions, either for Turner or for other works?
Lord Bellwin: My Lords, I unhesitatingly bow to the greater knowledge of the noble Lord on this subject. I will read with interest what he has said and assure him that we will consider it carefully.
Lord Davies of Leek: My Lords, is the noble Lord aware that my supplementary question is a complete non sequitur, but, if he would like to enjoy seeing future exhibitors at the Tate, there is a marvellous exhibition of children's paintings upstairs in this House at the present moment.
Lord Bellwin: My Lords, I hear what the noble Lord says.

Business
Lord Sandys: My Lords, it may be for the convenience of the House if I announce that dinner will be available this evening at the usual time. The House will adjourn at approximately seven o'clock for approximately one hour. During this adjournment the European Communities (Accession of the Republic of Zimbabwe) Order, the Sheriff Courts (Scotland) Order and the Committee stage of the Licensing (Amendment) Bill will be taken.

Transport Bill
Lord Bellwin: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an Instruction to the Committee of the Whole House to whom the Transport Bill has been committed that they consider the Bill in the following order:—

Clauses 1 to 4,

Schedule 1,

Clauses 5 to 7,

Schedule 2,

Clause 8,

Schedule 3,

Clauses 9 to 14,

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Schedule 4,

Clauses 15 to 17,

Schedule 5,

Clause 18,

Schedule 6,

Clause 19,

Schedule 7,

Clauses 20 to 25,

Schedule 8,

Clauses 26 to 28,

Schedule 9,

Clauses 29 and 30,

Schedule 10,

Clause 31,

Schedule 11,

Clauses 32 to 37,

Schedule 12.

—(Lord Bellwin.)

On Question, Motion agreed to.

Judicial Pensions Bill [H.L.]
3.8 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): I beg to move that the Commons amendments be now considered.
Moved, that the Commons amendments be now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill (70) as first printed for the Commons]
1 Schedule 2, page 32, line 10, leave out ("1st January 1957") and insert ("16th July 1956")
2 Schedule 2, page 32, line 16, leave out ("1st January 1957") and insert ("16th July 1956")
3 Schedule 2, page 34, line 17, leave out ("14(1 )(a)") and insert ("10(4)(a)").
The Lord Chancellor: My Lords, on Amendment No. 1, perhaps I can say, in moving that the House do now agree with the Commons in their said amendment, that as all the amendments are Government amendments, it is not surprising that I shall move the same Motion in regard to all of them. There are four amendments, of which three relate to Schedule 2, and if the House agrees, I will move the first three and then the last.
If the House will look at Schedule 2, the three amendments with regard to that schedule all correct errors to which I have to admit that an annotator to Messrs. Butterworths first drew our attention. The first two amendments correct a wrong date. Paragraph 9 of Schedule 2, to which the amendments relate, reproduces Section 25(4) of the Administration of Justice Act 1956. That section refers to the date on which that subsection came into force. But, by virtue of the Administration of Justice Act (Commencement) Order 1956, Section 25 came into force on 16th July 1956 and not on 1st January 1957.
The third of the Schedule 2 amendments corrects another drafting error because it refers to Section 14(1)(a) of the Administration of Justice Act 1973. There is no Section 14(1)(a) in the Administration of Justice Act 1973. The derivation table correctly shows

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that the right subsection is Section 10(4)(a) of the Administration of Justice Act 1973. I beg to move.
Moved, That this House doth agree with the Commons in the said amendments.—[The Lord Chancellor.]
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble and learned Lord for explaining these lucid amendments to us all, and to the annotator of Butterworths. We are happy to take help from any source in respect of these technical measures that come before the House.
Lord Renton: My Lords, I was merely going to say before the noble and learned Lord, Lord Elwyn-Jones, rose to his feet, how much both Houses of Parliament owe to those assiduous people who annotate our statutes for us.
Lord Foot: My Lords, while that may be all very well, is it not a little humiliating to this House that, whereas we have used as one of the excuses for our existence the fact that we are a revising Chamber, that lot has now fallen upon the other place?
The Lord Chancellor: My Lords, the other place must serve some useful purpose after all!
On Question, Motion agreed to.

COMMONS AMENDMENT
4 Schedule 3, page 37, line 44, after ("or") insert ("a pension").
The Lord Chancellor: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 4. For this again we are indebted to an outside source, but on this occasion no less than Sir Godfray Le Quesne, the chairman of the Monopolies Commission. It is simply a clarificatory amendment. Paragraph 7(3) of Schedule 3 to the Bill, to which the amendment is made, re-enacts paragraph 6 of Schedule 2 to the Pensions (Increase) Act 1971 as amended by Schedule 12 to the Fair Trading Act 1973. It is plain that paragraph 6 applied the Pensions (Increase) Act 1971 to the pensions of the chairmen and deputy chairmen of the Monopolies Commission, and accordingly the amendment reflects the existing law. Paragraph 7(3) of Schedule 3 simplifies the wording. I beg to move.
Moved, That this House doth agree with the Commons in the said amendment.—[The Lord Chancellor.]
Lord Elwyn-Jones: My Lords, the House will note the value of the circulation of Bills on this occasion yet again. It is very helpful indeed.
On Question, Motion agreed to.

British Telecommunications Bill
3.13 p.m.
The Minister of State, Department of Employment (The Earl of Gowrie): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(The Earl of Gowrie.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD ABERDARE in the Chair.]
Clause 33 [Power of the Secretary of State to make orders about pensions]:
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede moved Amendment No. 120:
Page 33, line 1, after ("may") insert ("with the consent of the Trustees of the Post Office Staff Superannuation Fund").
The noble Lord said: I beg to move Amendment No. 120 and I should like also to speak to Amendment No. 121. The purpose of these two amendments is to get an agreement from the Government that they will not split the Post Office Staff Superannuation Fund without the consent of the trustees of the fund. As the Government know, there is considerable concern among the employees of the Post Office about this particular matter. Indeed, that was acknowledged by Mr. Baker the Minister of State in the House of Commons on 1st April when he said at column 524:
"this is one of the issues that has caused the greatest anxiety and concern among postal and telephone workers … That is entirely understandable. Apart from one's own house, a pension is probably the most valuable asset, or the right to an asset, that will be acquired during one's lifetime".
Later during the Third Reading debate he went on to say:
"the pension entitlement cannot be removed or reduced by any action by me or any other Minister under the Bill. That is the basic assurance … that no pension entitlement can be removed or reduced by any order under the Bill''.
The Post Office Staff Superannuation Fund is one of the largest and most powerful financial institutions in the country giving security and protection to employees and former employees which no other pension fund can rival. The fund has assets of something over £3 billion. About 400,000 staff are employed by the Post Office and British Telecom and rather under half of those are in the Post Office section and rather over half in the Telecom section. There is no logical reason why if the Post Office divides into two corporations the fund must do the same. The criterion to be used for the judging of what is best for the future of the fund is surely the interests of its members. It is the nature of the fund and its purpose which distinguishes this issue from the others which will result from separation.
So far as the future of the fund is concerned, it is not primarily a question of the philosophy of separation or of the tidiness of organisation or of the management prerogative, although the interests of the two corporations are clearly matters to be taken into account. The major issue is surely the interests of the members of the fund.
Given the surrounding circumstances of the widespread changes which will arise from separation, the unions believe that the right course of action at present is to retain the fund as it exists and to make as little change as possible. That would clearly be a valuable contribution towards stability in a period when the separation of the telecommunications and the Post

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Office from each other is having a profoundly unsettling effect on the staff.
I think that one should say that there is no point in change for its own sake and that is how this proposal appears to the staff. The Government have already agreed to consult with interested parties about the splitting of the fund, but so far they have not given any assurance that they will act in accord with the spirit of that consultation. Therefore, in this amendment we are proposing a safeguard to ensure that they get the agreement of the trustees before they decide on any splitting of the fund. So far as the trustees are concerned, their view, I understand, is that they see absolutely no reason why there should be a division of the fund into two. They believe that the fund has been well organised and managed and that, I understand, is also the view of the members of the fund and their trade union representatives.
One should further consider the reasons why the trustees believe that it would be disadvantageous for the biggest pension fund in England to be split into two funds which would make them the third and fourth largest funds. I understand that the trustees believe that they would no longer be the automatic first port of call for anyone with a large proposition be it in property or in the placing of new shares or a sale for distress reasons of a large line of existing shares. Not only does this give the trustees the advantage of first refusal, but it also gives them the chance of being involved with other partners and of negotiating terms which are weighted towards them.
I understand that the trustees have also come up with the figure of £1 million as the extra cost per year that would be incurred by various charges in various ways if the management of the fund had to be split into two. I think that the noble Earl who is to reply should be very much aware that at the end of the day the Secretary of State will have to justify to the members of the fund why it is worthwhile spending an extra £1 million in expenses in order to split the fund. As I have said, the trustees cannot see the merit in incurring these additional costs for the splitting of the fund.
At the heart of this is the point that the members of the fund believe, in effect, that there will be better pensions for the employees of the Post Office and of British Telecom if, in fact, the fund remains as one. This is a fairly straightforward amendment and I hope that the Government will agree to accept the fact that, until after they have had their consultations, they should not take any action on this other than with the agreement of the trustees of the fund. I beg to move.
Lord Morris: The noble Lord, Lord Ponsonby, has just said that the members of the fund believe that the fund should not be split. What evidence does he have for saying that? Will the members of the fund be consulted?
Lord Ponsonby of Shulbrede: I have not personally consulted the members of the fund or, indeed, each and every one. But I am informed that the members of the fund believe, because of the views of the trustees, that if additional expenses were incurred, that would
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have the effect of reducing the amount of pensions available.
The other concern is that if we split the fund—and, of course, the fund has investments in property and other things—obviously we must take a view as to into which particular side of the fund particular assets go. We could well have a situation where one part of the fund grows faster than the other part of the fund. This would inevitably mean that those belonging to the part of the fund that was not growing as fast as the other part would feel aggrieved.
Lord Hawke: I think that some of the arguments put forward by the noble Lord are probably special pleading on behalf of the Post Office people rather than the telecommunications people. In the long run, if you consider the future of this industry, the telecommunications people will be on to a winner and the others will be on to a loser. It stands to reason that those who are on to a winner stand to receive better pensions than those who are on to a loser.
I do not think that the argument about the largest fund getting the pick of the propositions is very valid, because a large proposition can always be split between the two. There is no earthly reason why the two funds should not be run from the same office. There would be no need to have two entirely different offices, different staffs and things like that. Nowadays in financial matters it has been found that size is very often a handicap. People who have smaller amounts of assets and can change their assets more easily, are often in a very much better position than those with immense sums which they cannot change. For example, if a fund has £1 million of value in some important company and another fund has, perhaps, £50,000, the people with £50,000 can sell on the market tomorrow, but the £1 million might be much more difficult to place. There is no virtue in size.
I quite agree that it will be difficult to split the fund, particularly if it owns property. For all I know, it may own works of art and things of that sort, and I do not quite know how, for instance, you split up a Gauguin. However, I think that it must be done because, as I say, as time goes by telecommunications will be on to a winner and the others will be on to a loser.
Baroness Phillips: In reply to the noble Lord, Lord Hawke, surely there are many classic examples illustrating that the moment we divide things, they cost far more. We are all saddled with the redistribution of local government. Let me cite what has happened in my local government area. Whereas once we had two town clerks, we were told that one would be very much cheaper; in fact, we now have five, because we have administrative officers. We know exactly what will happen if we divide up the pension fund.
The Post Office had cheaper stamps, better service and certainly cheaper telephone communication when it was under the Government. One of the worst things that we ever did was to make it a separate corporation. If, once again, we are to split this up, not only will more manpower be involved, but it will certainly be a much more costly operation. I know what the Minister will say: that it was a Labour

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Government that did it. That still does not make it inviolate.
3.26 p.m.
The Earl of Gowrie: I think that the contribution of the noble Baroness, Lady Phillips, was extremely pertinent in relation to the corporation. But the fact is that we are debating the pension fund, which is run by a tightly-knit body of financially-motivated men, and is not an issue in this part of the debate. I find this a very interesting subject and I congratulate the noble Lord, Lord Ponsonby, on the pithy and coherent way in which he moved the amendment; indeed, I congratulate my noble friend Lord Hawke for talking, if I may respectfully say so, very sound financial sense, that size is not always a virtue.
It is true that the pension fund of the Post Office is probably the biggest single concentration of capital in this country, and this debate will be useful if only to underline what we, on this side, are so often saying, that it really is grotesque to continue to talk about the rival merits of socialism and capitalism as if, in the traditional sense, they still existed; as if concentrations of capital are now corporate and social, not necessarily in their direction but in their ownership.
The largest concentration of capital in the United Kingdom is, in fact, the pensions of all the relatively small employees of a very large state corporation. It is, indeed, a very big fund and I hope that, whatever happens to it structurally, the fund will use the liberalisation that this Bill offers to put a small portion of its £3 billion into new British information technology enterprises. That more than anything would get the show on the road. We must hope that the fund managers, who I passionately agree should be entirely free from any direction in this matter, will take the opportunities that they are being given.
Of course, the future of the fund is of great importance to all the employees of both the Post Office and British Telecom, as well as to the very many existing pensioners. Therefore, the Government have a great responsibility to get this right; we are very conscious of the concern, and we attach very great priority to achieving a solution which has the widest possible support. To that degree we are altogether in line with the sentiments expressed by the noble Lord, Lord Ponsonby.
My honourable friend the Minister of State for Industry and Information Technology has met the unions involved as well as the trustees, to allow them to put their views to him. The Post Office board has also submitted its recommendation, which, as the noble Lord, Lord Ponsonby of Shulbrede indicated, is to separate the existing fund and make it into two funds; one for the pension arrangements of each corporation. The Government have made it clear that no quick decision will be taken and that we do want to achieve the widest degree of consent. The present round of consultations will be completed soon and we shall then need time to reflect on the issues involved and to weigh up the advantages and disadvantages of the various solutions which have been proposed. I can again assure the noble Lord that no final decision will be taken without full consultation.
Whatever is decided, I do have to point out that it will not be possible to maintain the status quo absolutely.
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Some changes have to be made to the present trust, if only to allow employees of British Telecom to continue to be members of the fund at all and to allow British Telecom employees to be allowed to appoint trustees, and so on. In the same way, the Inland Revenue will necessarily require separate accounting from the previous arrangements of the two corporations and thus sharing out may also lead to changes in the deed. It is for this reason that the powers being taken by the Secretary of State in Clause 33 are needed.
While we would naturally wish to achieve the greatest degree of support for the eventual solution, it must be accepted that, inevitably, there may be some disagreement, if not on the major principles then on the detail of their implementation. There has to be some means of resolving any such disagreement, and in a big public sector corporation this must ultimately devolve on the accountable Secretary of State. I can sympathise with the intention behind the amendment and I am trying carefully to tailor my words in the direction of the noble Lords' sentiments—but I am afraid that the amendment as against the sentiments which the noble Lord has expressed would not deal with any position that might occur should there be a disagreement among the trustees. If that were to happen—and in the range of human life disagreement can always happen-then the effect of this amendment would be to prevent the Secretary of State from taking any action. He would be stymied in the possibilities open to him. I am sure the Committee would agree that it would be wrong to allow this to happen. It would also have the effect of giving the trustees of the Post Office fund effective control over Ministerial amendments to a British Telecom trust deed. I think the Committee would also agree that that might be undesirable.
The rights of invididuals are protected by the very major safeguard contained in Clause 33(3), which provides that no order can be made which removes or reduces anyone's existing pension entitlement; nothing decided here or in another place can interfere with that. In the light of this explanation, together with the commitment that I have made for very full consultations and the sympathy and consideration which I have shown towards the viewpoint which the noble Lord Lord Ponsonby of Shulbrede represented, I hope that the noble Lord will not press what in effect would be an amendment to stymie the Secretary of State.
Lord Morris: In response to my noble friend Lord Ponsonby of Shulbrede the noble Earl the Minister quite rightly replied that Her Majesty's Government have a considerable duty of care in regard to this matter and that in those circumstances no quick decision should be taken. May I just ask the noble Earl the Minister if he will do everything in his power to expedite agreement, because I believe that time is of the essence with regard to this matter and that delay will only hinder the implementation of the solutions which might be defined as being satisfactory to all concerned?
The Earl of Gowrie: I recognise that it is important to get this matter settled and I share the view that has been expressed by my noble friend. We must go carefully but we cannot use that as a pretext for delay.
Lord Ponsonby of Shulbrede: I thank the noble Earl the Minister for his sympathetic response to this amendment. I accept his point that there must be some solution to this particular problem, but when he referred to the problem of disagreement among the trustees I believe he really meant that there could be problems if there were a disagreement between the Secretary of State and the trustees, rather than it being a case of the trustees disagreeing among themselves. The noble Earl the Minister repeated the assurance which was given by the Minister of State in another place that no member of the fund would lose any entitlement or suffer any decrease in his pension as a result of a splitting of the fund. My concern is that if one effect of the splitting of the fund is that there will be additional costs placed upon the fund, then at some time or another that is bound to have some effect on those who are members of the fund. While accepting the noble Earl the Minister's major thesis, this other point still remains. However, I shall look very carefully at what the noble Earl the Minister has said in response to this amendment and shall possibly come back to it at Report stage.
Amendment, by leave, withdrawn.
[Amendment No. 121 not moved.]
Clause 33 agreed to.
Clauses 34 to 49 agreed to.
Clause 50 [Obligation of Secrecy]:
3.38 p.m.
Lord Young of Dartington Lord Young of Dartington moved Amendment No. 122:
Page 43, line 2, at end insert—
("(3) In the provision of data processing services and services connected therewith, the Corporation shall adhere to the terms of Resolution 74(29) of the Committee of Ministers of the Council of Europe.").
The noble Lord said: I should like to begin by making it clear that the resolution of the Committee of Ministers of the Council of Europe to which the amendment refers has, as the noble Earl the Minister will know, been superseded by the European convention for the protection of individuals with regard to automatic processing of personal data—which I can only think is a literal translation from the French.
I fully accept that it might have been better if my amendment had referred to that convention rather than to the previous resolution. I should like to say to the noble Earl the Minister that I should be perfectly well satisfied if the Government felt able to insert into the Bill at a later stage an amendment to the effect that, in the provision of data processing services, et cetera, the corporation shall adhere to the terms of the European convention which I have just mentioned.
I hope—not in vain I trust—that this will not be too difficult for the noble Earl the Minister to accept, because, as was mentioned earlier in the debate, the Government have already announced that they will adhere to this convention, and to recognise it in this Bill would be the first consequential step in giving legal effect to the convention. The convention certainly goes a lot further than Clause 50 to reinforce the obligation of secrecy, as I hope to make clear in a
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minute. However, it will not have effect until there is consequential legislation.
I must say a word about the nature of the problem, although the problem is well-known. Computers are more and more extensively used for the storage of information about citizens of this country, as of other advanced countries, and this information can be combined and recombined in all sorts of mysterious ways. Information about bank balances, creditworthiness, social security payments and benefits, our health records, businesses started and liquidated, our families and many other matters can be put together at ever reducing cost on a computer without the individual concerned knowing anything about it.
Just yesterday in this House a question was raised about the extent to which information about car owners which is stored on the Ministry of Transport's computer at Swansea is being freely transferred over the telephone line to the computer, at Newcastle, of the Department of Health and Social Security. This kind of talking to each other on the part of computers via the telephone system is clearly going to become more and more common.
The European Convention deals with the problem of privacy, given the trend of which I have just spoken, in a comprehensive way. The purpose of the convention, as is stated in it, is
"to secure in the territory of each party for every individual, whatever his nationality or residence, respect for his rights and fundamental freedoms and in particular his right to privacy with regard to automatic processing of personal data relating to him".
In broad terms the convention gives individuals the right, at reasonable cost, to find out what is stored about them both in public and private computers. It gives the individual citizen the right to examine the data and to correct it if it is inaccurate, and also to have the data taken out of the store if it concerns racial origin, political opinions or religious beliefs, or data about health or sexual matters unless this is specifically authorised by law.
It seems to me, as I hope it will seem to the noble Minister, that the European Convention is very much on the right track in giving this additional protection that the citizen does not at present have in law. The debate on this matter has had a sadly long history in Britain, which on data protection has lagged behind almost every advanced country in the world. There was such strong feeling about it in the early 1970s that the Labour Government of that time set up the Younger Committee, which reported in 1972. Nothing was done. After a change of Government the matter was looked at again, and Mr. Roy Jenkins, who was an outstanding liberal and reforming Home Secretary, who has since become better known as a member of the Gang of Four, appointed the Lindop Committee in July 1976.
That committee reported in 1978 on the ways in which the data protection authority, which it was given the function of examining, would work out in practice. If its recommendations were accepted it would finally clear up the difficult issue in law of who owns information about individuals and what rights the person has in respect of whom the information is stored. The Lindop Report, like the Younger Report before it, was warmly welcomed but, as happens with

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so many Government reports, the rest has been silence—largely so. One Government after another have unfortunately stonewalled. I only hope that we are not going to have another example of it from my noble friend opposite in a few minutes.
Despite growing pressure from the British computer industry and British business, so far nothing has happened. France, Germany, Sweden, Norway, Denmark, Luxembourg, Spain and Portugal are just some of the countries which have data protection laws on their various statute books. Unless we take similar action, computer operators outside this country will be prevented from passing information into the United Kingdom. We could, like Panama in another field, become a computer haven for shady operators and lose the respectable international trade in information and, as one of the directors of Lucas said the other day, prevent British firms from getting business involving the transfer of information by computer across borders.
Medical interests have been as keen as business interests on data protection which would preserve confidentiality of information about patients. Perhaps there is at last to be some movement because the Government have recognised the European Convention, and this is certainly a most welcome step. The Home Secretary has said that he has decided '"in principle", though only in principle, to introduce legislation on the subject. He did not exactly speak with firmness. On the question of when there was to be legislation, he said, "When opportunity offers", which goes back to very much the same form of words used by a previous Home Secretary as long ago as 1975.
We have the opportunity—I do not think that can be denied—to do something about it today if the Committee so wishes. It certainly cannot be claimed that we do not have the parliamentary time today to take at least a first step along the road indicated to us as desirable by the Lindop Report and the Younger Report before that. I have to say that I fear we shall not get truly liberal and comprehensive legislation on this matter until there is a change of Government, and I imagine that I look forward to that more eagerly than the noble Minister opposite. But one should always be ready for surprises, and I end by begging the noble Minister to surprise me today. I beg to move.
Lord Lloyd of Kilgerran: I should like to support the noble Lord, Lord Young of Dartington, in this amendment. As your Lordships have no doubt heard from other sources, industry in this country has been worried at the absence of data protection in the laws of the United Kingdom. Indeed, when the all-party group on information technology was set up over 18 months ago one of the first matters brought to the notice of this all-party group was the absence of these laws and how it was affecting seriously the business of this country.
As the noble Lord, Lord Young, has said, computer operators abroad are reluctant, so I am told, to pass communications through this country because of the absence of any protection of data processes. The Lindop Report has now been warmly welcomed but so far no efforts have been initiated, apart from Lord Young's amendment in this Bill. There may be some
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procedural difficulties about endorsing the terms of a Council of Europe convention in a Bill of this kind, but in my submission this Committee should take the opportunity of supporting this amendment of the noble Lord.
Lord Trefgarne: I am sure that we are all grateful to the noble Lord, Lord Young of Dartington, for raising this important subject on the rights of the individual in relation to data banks and for the measured way in which he moved his amendment. However, although I can understand the noble Lord's concern, and indeed the concern of the noble Lord, Lord Lloyd of Kilgerran, I do not believe that this amendment is the best way to deal with the problem.
First, I am advised that it is highly unusual for a statute to incorporate part of an extraneous document in this way, as it is preferable for statutes, so far as possible, to be self-contained. The noble Lord, Lord Lloyd of Kilgerran, foreshadowed that point. But that is not the only reason why I feel unable to accept the amendment. As the Committee may know, Resolution 74(29) has now been superseded by the Council of Europe convention on the protection of individuals with regard to the automatic processing of personal data. I am sure your Lordships will have welcomed the signature of that convention by the United Kingdom as recently as 14th May. As the noble Lord, Lord Young, said, the Home Secretary announced to Parliament on 19th March that the Government had decided in principle to introduce legislation, when a opportunity offers, designed to provide statutory protection for personal information handled automatically, and when enacted, the proposed legislation will enable the United Kingdom to ratify the convention. I believe that general legislation is the proper place to deal with this problem and that the course I have outlined is the best approach.
Meanwhile, this clause continues for BT the present statutory provision whereby the unauthorised disclosure—except as required by law—of information obtained in the course of the provision by the Post Office of data processing services is an offence. BT will therefore already be governed by one of the principles contained in the convention. But it would be premature and unfair to single out BT for further statutory duties which would involve it in extra costs but which would not have to be met by its competitors. I am sure my right honourable friend the Home Secretary will pay careful attention to what has been said today and will take it into account in the preparation of the legislation.
I do not think there is very much between the noble Lord, Lord Young, and the Government on this matter; we both agree that the provisions of the convention to which I have referred should, as soon as may be, be applied to British Telecom, as indeed to the rest of the appropriate bodies which will be covered by the convention. It is simply a question of how best to bring that into legislative shape. I hope the noble Lord will agree that the Government's approach is the right one and will not seek to press the amendment.
Lord Byers: I wish to take this opportunity to thank the noble Lord, Lord Young, for raising this matter.

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I was a member of the Younger Committee which spent nearly two years going into all aspects of privacy and I do not think we could have done a more thorough job. We have, however, for nearly 10 years, with the support of noble Lords like the noble and learned Lord, Lord Gardiner been pressing for action along the lines of the report. If the Government would give an assurance that the appropriate moment will come some time in the next Session of Parliament, many of us would feel a great deal happier because we are lagging too far behind other countries which have already adopted a form of protection for data processing. I have a feeling that we are storing up real trouble for ourselves if we keep putting off action as we have been doing over the last decade.
Lord Trefgarne: I fear I cannot give the assurance the noble Lord seeks. My right honourable friend announced his intention in this matter only last March and, as I say, the convention was signed just a week ago, so I doubt that it will be possible, although I should be happy to be proved wrong, to bring the legislation forward as soon as the noble Lord asks me to assure him we shall. However, I assure him that there will be no unnecessary delay.
Lord Morris: My noble friend said legislation would be forthcoming "as soon as may be". Is that another way of saying "as soon as possible"?
Lord Trefgarne: It depends what one means by "as soon as possible".
Lord Byers: I suggest to the Minister that this is about the right time, in this parliamentary Session, to put down a marker for the next parliamentary Session, and then, with any luck, we shall get the priority we have been demanding for so long.
Lord Trefgarne: I am afraid I am not in a position to foreshadow the contents of the next Queen's Speech.
Lord Young of Dartington: I thank the Minister for his remarks but naturally, like other noble Lords, I was sorry because there were no surprises in his answer. All noble Lords who have spoken share the same views, and of course some of us know a great deal more about the issue than others. I fear that the Minister's remarks, when he spoke about "as soon as may be", represented very little advance on what we heard earlier from the Home Secretary, when he used the phrase "as soon as possible". Although the Minister was not able to say anything more firm today, I hope he will convey to his colleagues the reasonable strength of feeling there is on this question and express the hope that there will be legislation next Session. That would be welcome by the British business community, by the medical profession and by all those concerned with civil liberties in this country. I greatly hope it will be possible for the Government to act on the matter, not just as soon as may be but with a particular timetable attached. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 50 agreed to.
3.57 p.m.
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 123:
After Clause 50, insert the following new clause:
("Interception of messages
.—(1) A person who—

(a) intentionally intercepts any message or other matter carried by means of a public telecommunication system (including any such system provided, under a licence, otherwise than by the Corporation);

(b) instigates any person engaged in the business of the Corporation to intercept such a message or other matter; or

(c) discloses the contents of any message or other matter intercepted under paragraph (a) or (b) above.

unless acting in obedience to a warrant issued pursuant to the following provisions of this section, shall be guilty of an offence and liable on conviction on indictment to a fine not exceeding £5,000 or to imprisonment for a term not exceeding three years or to both.
(2) Proceedings for an offence under subsection (1) above shall not be instituted in England or Wales except by or with the consent of the Attorney General, or in Northern Ireland except by or with the consent of the Attorney General for Northern Ireland.
(3) No person shall be guilty of an offence under subsection (1) above as respects any act done by him whilst engaged in the business of the Corporation.
(4) The Secretary of State may, on the application of a chief officer of police or the Commissioners of Customs and Excise, issue a warrant for the interception and disclosure of telecommunications if he is satisfied that—

(a) it would assist in the detection of a serious offence;

(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried; and

(c) there is good reason to think that the interception would result in a conviction for that offence.

In this subsection "serious offence" means—

(i) an offence for which a person not previously convicted could reasonably be expected to be sentenced to imprisonment for a term of three years; or

(ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence.

(5) The Secretary of State may, on the application of a chief officer of police or the Director-General of the Security Service issue a warrant for the interception and disclosure of telecommunications if he is satisfied that—

(a) it would assist in the detection of a major subversive, terrorist or espionage activity giving rise to external or internal danger to the defence of the Realm; and

(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried.

(6) An application for a warrant under this section shall be made in writing and shall specify—

(a) the person whose telecommunications it is sought to intercept and the telecommunications in question; and

(b) the facts and circumstances in support of the application, but the Secretary of State may allow any information required under paragraph (b) above to be provided orally and not in writing in respect of an application for a warrant under subsection (5) above.

(7) Except in a case of emergency, any warrant under this section shall be issued only under the hand of the Secretary of State; and, in any such case, shall be confirmed under his hand as soon as reasonably practicable after issue.
(8) In this section "intercept" includes the doing of any act designed to enable an interception to take place, and intercepts", "intercepted" and "interception" shall be construed accordingly.").
The noble and learned Lord said: This new clause relates to the important question of interception of communications taking place between private citizens

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either by the exercise by the state through the Home Secretary of a power to do so or by persons or bodies with no such power. It seeks to give statutory authority and form to the actions that are taken in this field by the Secretary of State and to prevent, so far as the law can, and to punish by suitable sanctions, unauthorised interceptions of communications on the publicly-operated systems.
A great deal of public concern has been widely expressed in the press and elsewhere that the unauthorised private tapping of telephones and the bugging of premises and phone lines are believed to be more extensive now than ever before. Micro-electronic technology has made the available devices smaller, cheaper and much easier to acquire and install, and the potential for abuse is now so great that we believe further action is needed to protect the privacy of the citizen.
On the first main purpose of the clause—namely, the problem of authorised intercepts on behalf of the Crown-the Committee will, I believe, find itself in agreement with a statement made by the noble and learned Lord, Lord Diplock, earlier this year in his report on the interception of communications in Great Britain:
"That the exercise by the State of any power to read or listen to communications taking place between private citizens involves an invasion of their privacy which has always been looked on by the public with suspicion and distaste".
That, I believe, applies equally to interceptions of communications through the telecommunications system, with which Amendment No. 123 deals, and to No. 145, which deals with interceptions of the contents of mail carried by the Post Office.
I think that there will also be common ground on the other side of the coin; namely, that properly authorised and carefully controlled telephone tapping and interception of mail are both necessary to combat crime and espionage. Serious crime, not only domestic crime, but in particular terrorist crime, planned and carried out across the frontiers of states by criminal gangs, is on the increase. The sinister and profitable traffic in drugs continues unabated, and in this dangerous nuclear age espionage unhappily shows no sign of diminution.
The Committee will note that we bear in mind the importance of those considerations in the amendment. We do not wish to deprive, nor seek to deprive, the police, the security service, or Customs and Excise, operating under warrants issued by the Secretary of State—and I emphasise the point about the warrants being issued by the Secretary of State—of a useful weapon in their efforts to protect the community from the dangers that I have mentioned. However, in a democracy invasions of the privacy of phone calls, and of letters passing through the post, must be authorised clearly by the law before they can be justified and sustained; and that is the first proposition that the clause seeks to establish, by giving what is done a statutory basis. The second purpose of the clause in general terms is that all unauthorised tapping outside the legal framework provided by the clause should be dealt with by, and should be liable to, strong penalty.
As to my first proposition, unhappily the state of the law in this country on telephone tapping is, to say the
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least, unsatisfactory. The origin of the power is obscure. There is no statutory or express legal authority for telephone tapping. While I am not suggesting that the tapping of the telephone by police is unlawful, unhappily it lacks full and express legal authority. This is a particularly serious defect in our law when we bear in mind that the Government of the United Kingdom have assumed an obligation under Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms to secure for everyone the right to respect for his private and family life, his home and, I stress, his correspondence.
This matter was considered by Vice-Chancellor Megarry, in the Chancery Division, in his judgment in the case of Malone v. the Commissioner of Police of the Metropolis, with which I am sure the noble and learned Lord is very familiar. The Vice-Chancellor expressed his view of the matter in this way:
"It is, I suppose, possible to contend that the de facto practice in this country sufficiently secures these rights and freedoms",—
under the convention—
"without legislation for the purpose being needed".
Then he added:
"It is also plainly possible"—
and note the contrast—
"to contend that, among other things, the existing safeguards against unbridled telephone tapping being merely administrative in nature and not by law, fall far short of making any rights and freedoms secure to anyone".
That is a view with which, with great respect, I find myself in full agreement, and it is against that defect that the proposed new clause is directed.
In a later passage the Vice-Chancellor made clear his view when he stated that in our law
"any adequate and effective safeugards against abuse are wanting".
He added:
"In this respect, the English law compares most unfavourably with West German law: this is not a subject on which it is possible to feel any pride in English law".
That is indeed a serious ststement to be made by a Vice-Chancellor. Later in the judgment he stated:
"I would only add that, even if it was not clear before, this case"—
the Malone case—
"seems to me to make it plain that telephone tapping is a subject which cries out for legislation".
The continuation of his judgment is highly relevant. He went on to say:
"However much the protection of the public against crime demands that in proper cases the police should have the assistance of telephone tapping, I would have thought that in any civilised system of law the claims of liberty and justice would require that telephone users should have effective and independent safeguards against possible abuses. The fact that a telephone user is suspected of crime increases rather than diminishes this requirement: suspicions, however reasonably held, may sometimes prove to be wholly unfounded. If there were effective and independent safeguards, these would not only exclude some cases of excessive zeal"—
as he put it—
"but also, by their mere existence, provide some degree of reassurance for those who are resentful of the police or believe themselves to be persecuted".
I apologise for taking up so much time on that quotation, but I believe that it goes to the heart of the matter,

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and I point out that it emanates from a judicial source of high authority.
The new clause is an attempt to respond in regard to what the Vice-Chancellor called,
"a subject which cries out for legislation".
The Vice-Chancellor added in his judgment that:
"…the difficulties in legislating on telephone tapping ought not to prove insuperable; and the requirements of the Convention should provide a spur to action, even if belated".
I wonder whether they will. I very much hope that the Government will respond to the judgment and to the amendment by accepting the clause as it is or with such amendment as they may think proper to introduce.
Other democratic countries have shown themselves quite capable of having a statutory basis for telephone tapping and for appropriate political and legal safeguards against abuse in these invasions of the privacy of the subject. No doubt it was the absence of an identifiable legal or statutory basis for the Home Secretary's powers that led the Royal Commission on Criminal Procedure recently to propose that the use of all surveillance devices, including those for the interception of letters and telephone communications, should be regulated by statute, and that is what the new clause tries to do.
With regard to the second purpose of the clause, would point out that ill subsection (1) it makes a clear and unequivocal statement of the illegality of unauthorised telephone tapping and it imposes an appropriately serious penalty on those who perpetrate it. The Committee will see that subsection (1) creates three criminal offences. It refers, first, to a person who,
"intentionally intercepts any message or other matter carried by means of a public telecommunication system (including any such system provided, under a licence, otherwise than by the Corporation)".
So that, first of all, deals with intentionally intercepting. The subsection refers, secondly, to a person who,
"instigates any person engaged in the business of the Corporation to intercept…".
That deals with instigation. Thirdly, the subsection refers to a person who
"discloses the contents of any message … unless acting in obedience to a warrant issued pursuant to the … provisions"
of the clause that refer to the powers of the Secretary of State to issue warrants for interception.
The subsection also provides, I believe for the first time in regard to this kind of intolerable misconduct, appropriate sanctions. The penalties proposed are, on indictment, a fine not exceeding £5,000 or imprisonment for a term not exceeding three years, or both. At the present time the penalties for unauthorised interceptions are quite trivial; they are farcical. Yet this is a time when the fact that unauthorised interceptions and bugging are on the increase is widely reported in the press and they are seriously feared to be taking place. As the report of the Post Office Engineering Union on tapping the telephone points out, private bugging and efforts at debugging are now big business. Equipment is easily available, and last year an American company, Communications Control Systems, actually opened a London shop selling a wide variety of specialised devices. The shop is called "Counter Spy", oddly enough, and is located in Park Street in Mayfair.
The use of these deices for the purposes of, for instance, industrial espionage is now thought to be considerable. They can be used for the purposes of the commission and furtherance of the crime of blackmail, quite apart, of course, from the deep offence and affront that tapping one's telephone causes to those who are made the victims of it, whether they be of high estate or low. This is why we now think it proper, for the first time, to attach real, effective penalties to deal with this mischief.
Subsection (2) provides that proceedings for an offence under this clause should be brought by the Attorney General. Clearly, telephone tapping is a serious offence in the field of a good deal of political sensitivity, and we think it is necessary that prosecutions should be brought by the Attorney General. This would provide consistency and would enable him to balance all the considerations of public interest that are involved, and, of course, the prospects as to whether a prosecution would be likely to succeed. So that is a valuable safeguard.
Subsection (3) of the clause exempts the staff of the British Telecommunications Corporation from the provisions of the clause. The staff are already liable to a series of specific offences contained in earlier statutes going back as far as the Telegraph Act 1873. Obviously, the staff of British Telecommunications, in the day-to-day course of their duties, may have to listen to telephone calls in order to help the customer in connecting his call, to check the quality of service or in ways of that kind. But outside such proper interceptions or activities, the staff would already fall foul of strict disciplinary procedures, which include provision for dismissal.
Subsections (4) and (5) of the clause are very important parts of it. They set out the criteria which the Secretary of State is now obliged to follow in issuing warrants for interception to the police, Customs and Excise and the security service respectively. I should like to emphasise that these criteria which are included in the clause are exactly the criteria which the Home Secretary states he currently operates and which are, indeed, set out in the White Paper, The Interception of Communications in Great Britain, which was issued in April of last year.
If your Lordships will be good enough to look at the subsection, it says:
"The Secretary of State may, on the application of a chief officer of police or the Commissioners of Customs and Excise, issue a warrant for the interception and disclosure of telecommunications if he is satisfied that—

(a) it would assist in the detection of a serious offence;

(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried"—

so it is very much a last resort power—
"and
(c) there is good reason to think that the interception would result in a conviction for that offence".
Then, in that subsection the words "serious offence" are defined, as they are defined in paragraph 4 of the Home Secretary's White Paper; namely,

"(i) an offence for which a person not previously convicted could reasonably be expected to be sentended to imprisonment for a term of three years; or

(ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence".

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I recollect that the noble Lord, Lord Hooson, commented critically upon that definition of "serious offence" in an earlier debate, but we have been so anxious to secure the full co-operation of the Home Office in giving approval to this new clause that we have jealously followed the very language which the Home Secretary has used and within which he regards himself as confined.
Then subsection (5) says:
"The Secretary of State may, on the application of a chief officer of police or the Director-General of the Security Service issue a warrant for the interception and disclosure of telecommunications if he is satisfied that—

(a) it would assist in the detection of a major subversive, terrorist or espionage activity giving rise to external or internal danger to the defence of the Realm; and

(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried.".

Those criteria are the Home Secretary's own criteria for applying these powers, and I submit they create reasonable and responsible limits within which these powers should be exercised.
Subsection (6) provides that applications for warrants will normally be in writing, but permits information to be provided orally. That reflects what is in fact existing practice, as indicated in the report of the noble and learned Lord, Lord Diplock, of March of this year, and is a useful provision to safeguard security.
Subsection (7) provides that except in a case of emergency a warrant shall be signed by the Secretary of State himself. In a case of emergency a fellow Secretary of State could presumably be made available to do so. This again reflects what is said to be—and as the Home Secretary says so, it presumably is—the practice operating at this present time, and it is so described in the Secretary of State's White Paper. Finally, subsection (8) simply concerns the scope of the term "intercept".
I have taken the Committee through the subsections of the clause. As will be seen, its overall intent, as I have said, is to give statutory force to the very procedures which the Home Secretary says already operate, and to the precise criteria which he says already apply. In my view, and in the view of my noble friends, the enactment of this clause would clarify and place beyond doubt—and there is a good deal of room for legal doubt about it now—the legal authority of the Home Secretary to issue warrants. It would also introduce new and stronger penalties against unauthorised tapping, and I believe that it would greatly strengthen the position of the United Kingdom in relation to its compliance with the European Convention on Human Rights and put it beyond doubt. I believe this clause, if implemented, would provide a welcome measure of reassurance to a very concerned public. I beg to move.
4.20 p.m.
The Earl of Gowrie: If I rise at this point it is not for any purpose of trying to discourage debate hut simply because I think it might be convenient for the Committee on this very important issue if I put the Governments' position quite clearly, if I am able to do so, at the beginning. The amendment is concerned with the integrity of the public telephone service, and that is a matter of great importance to all of us who use
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it. It affects not only the minority who are involved in crime, but the great majority of us who are not involved in crime. They, too, the majority, have an interest in interception both because they want criminals brought to book, on the one hand, and because, on the other, they also want to be assured that their own telephones will not be subject to arbitrary interception.
The postal and telephone services provide a universal means of communication for the whole nation and the telephone system in particular is the most convenient and quickest system of communications available. It also provides the ideal means, unfortunately, of communication for the criminal and the spy who wishes to communicate quickly with his associates. I do not think it can be disputed that it is as necessary today as ever it was for the agents of the Crown to exercise a proper, but a strictly controlled, surveillance in relation to these services. As the Birkett Report put it in 1957:
"the criminal and the wrongdoer should not be allowed to use services provided by the state for wrongful purposes quite unimpeded".
Since then, the growth of terrorism and drug smuggling have served only to strengthen the case. On this there is no disagreement between the Government and the supporters of this amendment and if a similar amendment on the interception of mail, because they, too, accept that interception is a weapon which should be available to the Crown.
What is at issue is not the need for interception as a weapon in the fight against crime, but rather the way in which the weapon is controlled to ensure that the power to intercept communications is exercised only in clearly justifiable cases and the use made of it limited to what is strictly necessary. A balance has to be struck between the needs of the community in the prevention and detection of crime and the rights of the individual whose privacy may be infringed. The question we have to debate today is whether, for that balance to be properly struck, the arrangements for the control of interception must be enshrined in legislation. The Government's case rests on two simple but vitally important propositions. The first proposition is that if interception is to be effective it must be carried out in secret. The second is that the judicial process is by its very nature an open process. It is the conflict between these two propositions which, in the Government's view, makes it impossible for interception to be regulated by an Act of Parliament, and thus made subject to litigation, without necessarily destroying its effectiveness.
Clearly a suspected bank robber, drug smuggler or spy should not know that his mail or telephone is being intercepted at the time. Otherwise he will modify his behaviour accordingly. But it is equally important that the information which forms the case for interception should be kept secret, both then and subsequently. It would clearly help the criminal to discover how much the police know about his activities—and who is telling them. And yet this is exactly what would happen if the criteria for interception were laid down in an Act of Parliament; for it is an essential feature of our constitutional system in this country that what is laid down in an Act of Parliament can be tested and enforced in the courts at the suit of any interested person. Cases in which an individual

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thought that his telephone was being improperly intercepted could be brought before the courts and the courts would be obliged to adjudicate.
To enable the court to determine the matter fairly, all the relevant information would have to be exposed in evidence. This would include all the information available to the Home Secretary, some of it of a most sensitive nature derived from those on whom the police and the security service depend; people in some cases whose very lives would be endangered if their part were known, or even suspected, by the dangerous men against whom interception is sometimes employed.
Before the Home Secretary signs a warrant—and this is a responsibility which the Home Secretary cannot delegate—he has to be satisfied that interception is justified in accordance with the criteria set out in the White Paper which the Government published a year ago. That means that the Home Secretary must be fully and frankly informed of the basis of suspicion against the individual concerned, including information which should on no account be revealed, and, least of all, revealed to that individual. And if the Home Secretary is to be frankly informed about such secret matters he must himself be in a position to keep the secrets entrusted to him. How then could he permit such information—which he would not reveal to the other place—to become a matter of evidence in a court of law?
And yet, if interception were regulated by statute, this is what must happen. For it is the very essence of the judicial process that the judge must determine the matter exclusively on the basis of the law and of the evidence adduced—the evidence adduced, that is, by the parties, publicly and in the presence of each other. It would no longer be possible to keep secret the sort of sensitive information, often given at great personal risk, to which I have referred. It is no answer to say that secret matters could be kept secret by claims of Crown privilege. If secrecy precludes the Home Secretary from saying whether there has been an interception or, if there has, from demonstrating to the court that the conditions laid down in the statute for the issue of a warrant were in fact met in a particular case, then the judgment of the court must go against him. From that, unfortunately, there is no escape.
But important safeguards already exist which avoid the unacceptable consequences of legislation. This Government have appointed one of our most respected judges, the noble and learned Lord, Lord Diplock, to scrutinise the existing arrangements and undertake a continuing, independent check that the procedures and safeguards set out in the White Paper on 1st April 1980 are, in fact, being observed. He has complete access to all the secret material which is submitted to the Home Secretary and he has complete freedom to look at any case he wants in whatever way he chooses. Individual cases are thus independently tested against the published criteria while still preserving the essential secrecy. The public are protected against unjustified interception and the informant against the revenge of his associates. No one, I believe, who has read Lord Diplock's first report can doubt the care and penetration with which he has carried out his task. He gave the system a clean bill of health; and his continuing checks on individual
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cases provide a valuable new safeguard against any departure from the published principles.
First, there is the position of the Post Office and, after the coming into force of this Bill, the British Telecommunications Corporation, which is independent of the Government. They need the confidence of their customers and would not put it at risk by allowing widespread and unjustified snooping on their customers' communications. In fact, they will undertake interception only where the law requires them to do so. Their employees would be committing a criminal offence if they undertook interception except in accordance with a warrant. Similarly, as regards the police it was plainly stated on oath in a recent court case—and again I am quoting—that:
"The Commissioner of Police of the Metropolis would not in any circumstances authorise, or be party to, the tapping of any telephone otherwise than in pursuance of a warrant of the Secretary of State".
The same applies to other chief officers of police. And for the individual police officer to undertake unauthorised interception would be a very serious disciplinary offence indeed.
These arrangements provide a strong safeguard against unauthorised tampering with Post Office equipment. If Post Office employees engage in unauthorised interception, they are breaking the law. While generalised allegations of unauthorised tapping have been made, my right honourable friend the Home Secretary made it clear in another place that if he were given specific evidence of unauthorised interception he would of course immediately take firm steps to deal with it.
It is sometimes argued that to introduce legislation into this area cannot be all that damaging because a number of other countries have done it, and the noble and learned Lord has rehearsed that argument along those lines this afternoon. With the greatest respect to him, this seems to us to be a misleading argument which does not pay sufficient regard to the different legal, constitutional and historical traditions of the countries concerned which make it, in our view, inappropriate to draw parallels. In the Federal Republic of Germany, for example—which is often quoted in this connection—there is a statutory provision which provides in terms that,
"there shall be no legal remedy before the courts in respect of the ordering and implementation of restrictive practices"—
which in this context means surveillance measures.
In exceptional cases the constitutional court would have a function; but the Committee will be well aware that in this country we have no constitution in the German sense and no constitutional court. It we were to follow the German model we should find ourselves with a statutory provision which was not within the cognisance of the courts of the land—those very courts whose constitutional function it is to interpret and enforce the statutes in individual cases. I cannot believe that the House would wish to adopt so extraordinary a provision.
In a number of countries the practice is for interception warrants in criminal cases to be issued by a magistrate or some other judicial officer, acting in an administrative rather than a judical capacity. In this country that would mean giving the responsibility to all magistrates or all judges—or at least to some class

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of judges—with a consequent loss of consistency, control and democratic responsibility. I believe it is far better that this responsibility should rest with a single Minister responsible to Parliament. However, from the information available the Government have formed the view that in those countries which provide for the regulation of interception by statute, usually including such provisions as retrospective notification, the effectiveness and value of interception has, when you get down to it, been reduced. The Government see no reason to follow that example.
May I now very briefly sum up the Government's case against these provisions. It is that interception to be effective must be secret. That in turn means keeping secret both the fact of interception and the information which led to it. If arrangements for interception were laid down by Act of Parliament it would be impossible, under our judicial system, to preserve the secrecy and yet, if challenged, to satisfy the court that the Act had been complied with. Secrecy and litigation cannot be reconciled. That is why we oppose these provisions. They are unworkable. In our view they are also unnecessary.
The public have a right to know that interception is properly controlled. But we believe that the present system of administrative controls and safeguards, which has stood the test of time—we are not in new territory here—provides the necessary assurance. The position of the Post Office, the key rôle of the Secretary of State's warrant, the procedural arrangements described in last year's White Paper, and behind them all the monitoring eye of the noble and learned Lord, Lord Diplock, are, I believe, sufficient to reassure the public that our arrangements are such as both to protect the public interest and to safeguard the rights of the private individual.
4.35 p.m
Lord Gardiner: I do not often trouble your Lordships in these days. We are discussing two things: telephone tapping and a proposed piece of law reform, and I have had some experience of both. I shall be interested to know whether there is any Member of your Lordships' House whose telephone has been tapped or threatened to be tapped more often than mine. A long time ago I went—partly at the request of the Bar Council and partly at the request of Christian Action—to observe the opening of the treason trial in Johannesburg. The first thing that leading counsel for the defence said was, "Whatever you do, do not use the telephone because it is tapped by the police".
I went, in the days of Salazar's Portugal, to the so-called treason trials in Portugal. One of the first things that the defence lawyers said was, "We at once tell you that any telephone call you make will be tapped". In the days of "the Colonels" I went to Athens to deliver a lecture on human rights. This was merely a definition of what human rights were and their history, and contained no criticism of the then Government. The manager of the hotel—not only kindly but I think bravely—told me that the police had already been round and seen all his telephonists, who were all to keep a complete record of any telephone conversation I had.
When I went with the Commonwealth Secretary to Rhodesia, I was of course aware from Sir Roy Welen-
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sky's memoirs that when Mr. Dingle Foot went to defend a black African in Rhodesia his private and confidential talk with him on the case had been tapped by the police. I asked Mr. Smith whether if we saw any of the African detainees we were to assume that the conversation would be tapped. He said that he did not know but he would find out from the police and let us know. He never did let us know. When we saw Mr. Nkomo and other Africans in detention, we did so in the middle of a very large field.
We stayed at Government House with Sir Humphrey Gibbs. He told us that the room that we were to use as a sitting-room was swept every morning for "bugs" but he could not guarantee it and that when we discussed things we should sit close together, not talk too loudly, and must have the radio on.
When I became Lord Chancellor I realised how essential it was for me to be able to have strictly private conversations with the Attorney General, who is the Lord Chancellor's alter ego in the other place. Particularly in my case, having had so little parliamentary experience, I was, as your Lordships know, immensely fortunate in having my noble and learned friend as Attorney General with his great parliamentary experience. Being a pacifist and having appeared for Sir Oswald Mosley and Mr. Harry Pollitt, I thought it more likely than not that MI5 were "bugging" the telephones in my office.
When I had to speak to the Attorney General in confidence I took him out on one or more occasion in the car because I knew the driver and I knew that she would never have allowed the car to be "bugged" without my knowledge. So I have had experiences in this field, and I am still not certain whether my telephone was "bugged" by MI5 or not but I think it probable.
I have also had some experience in law reform. I started trying to reform some of our laws in 1924—which is rather a long time ago—and was for 40 years working outside Parliament in various societies, during 16 of which successive Lord Chancellors appointed me to the Law Reform Committee.
I am delighted to see the noble and learned Lord the Lord Chancellor here and I should like to ask him two or three questions, if he feels inclined to reply to them, the answers to which I hope will be in the affirmative. They are all things I think I have heard him express in the past. The first is, does he agree that on the matter of law reform English people, including lawyers, are unduly conservative, with a small "c"? So often I have been told that some law which works perfectly well in other European countries could not possibly work rightly here, or that some law which works perfectly well in Commonwealth countries could not work rightly here; and then, when the law is enacted, it works as well here as anywhere else. I find it very difficult to understand why, most other European countries having such a law, we could not. It seems to me that the European Convention is perfectly clear because, apart from providing for a right of privacy concerning correspondence, which includes telephones, it then goes on to say:
"There shall be no interference by a public authority with the exercise of this right, except such as in accordance with the law and which is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection

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of health or morals or for the protection of the rights and freedoms of others".
That gives an enormous discretion to each country to make their own law. All it says is that there ought to be a law about it.
Secondly, I would ask whether he agrees that, as long as we are parties to an international treaty, although that treaty may form no part of our domestic law, it is out bounden duty to carry out its terms; and does it not follow from that that we ought, if we are to comply with the European Convention, to make a law in this field?
For those reasons, broadly speaking, I support this amendment which goes some way in that direction. There are also one or two questions I should like to ask and if the noble Earl the Minister cannot reply now perhaps he would be good enough to write to me about them. I do not think that any ordinary person minds—I certainly do not mind—200, 300 or 400 cases a year in which the Home Secretary authorises a senior police officer to tap somebody's telephone either to prevent crime or, when a crime has been committed, to find out who has committed it and so on. It is the other cases that I think people are worried about.
The first question I should like to ask is: Am I right in thinking that if one uses the words "Secretary of State" we are not just talking about the Home Secretary but about any Secretary of State, so that in practice now other Secretaries of State besides the Home Secretary have the power to issue such warrants and do in fact issue such warrants? Then, much has been said of the most valuable report of the noble and learned Lord, Lord Diplock. I should like to know whether or not MI6 was within his powers of reference. Next, I should like to know whether—I think the answer is probably in the negative—I am right in thinking that the organisation known as "Government Communication Headquarters" was outside the noble and learned Lord's terms of reference. Lastly, I should like to know whether I am right in thinking that telephone-tapping by American security forces in England was wholly and deliberately outside the noble and learned Lord's terms of reference. May I make it plain that I can well believe that in the world in which we live it is very desirable that the English and American security services should work together: that is a separate point. All I am submitting is that the time has come when this should be part of our law and legal system so that the public know who are the people who are entitled to give authority for telephones to be tapped.
I see no difficulty about the framing of such a law. This particular clause is adapted to this particular Bill, of course, but behind it all lies the serious question raised by the noble Lord, Lord Byers. It is 12 years since the Younger Committee's Report. It is not simply a question of telephone-tapping. They recommended, as your Lordships may remember, making illegal electronic devices for eavesdropping, and in a wider context than we can pursue in relation to this Rill, there lie behind it all questions of the new electronic devices. It is not just a question of putting your telephone out of order, which can be done by the Post Office, and then calling to put it in order and
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slipping in a "bug". There are many other devices. I think that the whole subject of electronic surveillance demands consideration in a wider field.
4.46 p.m.
Lord Rawlinson of Ewell: I would apologise to your Lordships for not being here at the start of this debate, and particularly to the noble and learned Lord who moved the amendment, but I am provoked to speak by what has just fallen from the lips of the noble and learned Lord, Lord Gardiner. He talked about his association with what he described as his "alter ego", the Attorney General, the noble and learned Lord, Lord Elwyn-Jones, and he talked about the remarkable story of having to get into a motorcar to be able to discuss with him private matters and apparently sensitive matters of Government.
I was the "alter ego" of my Lord Chancellor, the present Lord Chancellor. He is not, if I may say so, a person who usually speak sotto race and, as far as I recollect, any conference that we had either in his room—sometimes in rooms, sometimes in corridors, sometimes in a smoking room—or wherever it may be, was spoken at the top of his voice so that I could understand and learn exactly what he wanted. I find it absolutely extraordinary to believe that there were these two distinguished Law Officers of the Labour Government sneaking into a motorcar, getting under a rug, passing to each other what was going to happen about the emergency regulations and whether they were to be amended or whether the law of contract should be adapted or adopted. It seems to be a most extraordinary situation. Nevertheless—other Governments, other manners, other behaviour.
All I should like to say is that after the experience of nearly 20 years of government—I was a Law Officer even before the noble and learned Lord, Lord Elwyn-Jones—I have never found that this law as it is, as practised—because it is no law: practice rather—is in any way, shape or form a threat to the liberty of the individual. I beg your Lordships to retain and maintain the present practice and the present position. It is sensible, it is pragmatic, it has a safeguard in the form of one of the most distinguished judges and a Member of your Lordships' House, to supervise and to see that it is being properly carried out. It would be a bad day, I submit, if we tried to enact this into law. The practice works: let us keep it.
Lord Inglewood: I think it is a pity that this debate should be continued entirely by distinguished lawyers, because this is a subject which does have an interest for a great many people who have not held high judicial office and who have not known the inner workings of the system. Nobody in this Chamber could say that I am not on the side of law and order, considering the number of speeches I have made over the years, but I must say I am not entirely happy about the speech of the Minister. I did not find myself convinced that this was a subject which should be begun and ended as an administrative matter.
Furthermore, we must appreciate that there is widespread uncertainty and unhappiness in the country today about exactly how this power is used. I do not want to make a long speech but I do want just to make two points, and first to ask the Minister, when he

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replies, if he could say anything about the timing of these operations. Anyone who knows anything about the prevention of crime knows that speed is often the most important aspects. How long does it take, from the moment a chief officer of police or his junior gets the first idea that it may be a case where he has to ask the Secretary of State for a warrant to enable telephones to be tapped? If it is going to take any length of time, it may be too late and, therefore, half useless.
My second point is this. Once this information is obtained, who will control how it is used, compared with information from the central criminal records? It may be said that only certain people will have special authority to obtain information from those records. Once it is obtained we should be more certain as to how it is used. We are going to infringe the liberty of the subject by tapping telephones and here I must say that I did not find the noble and learned Lord, Lord Rawlinson, so convincing, when he said that this was no threat to the liberty of the individual. It seems to me that what we are now doing is admitting that it is a threat, and saying that, in special circumstances, it is something which we should accept. But what I want to know is: once this information is obtained, by these means, what checks are there on its use?
Lord Lloyd of Kilgerran: I am encouraged by the realistic and practical approach of the noble Lord, Lord Inglewood, in this interesting debate. As a lawyer who has practised only in the exotic field of intellectual property, and who has not had the advantage, so far as I am aware, of experiencing bugging in technological matters, I should like to congratulate the noble and learned Lord, Lord Elwyn-Jones, on moving this important amendment.
I do so on two main grounds. First, I congratulate him on his eloquent, careful and comprehensive manner in moving the amendment. But, more importantly, I congratulate him on taking the initiative in moving this important amendment as a lawyer of such distinction, and as a former Lord Chancellor. That fact, in itself, is of importance, particularly as the noble and learned Lord the Lord Chancellor has throughout been in his place on the Government Front Bench. This will, perhaps, do something to alleviate the disquiet and anxiety which prevails outside the House, and will show that, at least, your Lordships' Committee is taking very seriously and urgently this matter which is raising such disquiet.
Your Lordships will be well aware, as the noble and learned Lord, Lord Elwyn-Jones, pointed out, of the vast variety of gadgetry which is now available on the open market: first, for bugging, then for anti-bugging, for telephone tapping and for serious invasion of personal privacy as well as vast schemes for industrial espionage and piracy. But, of course, invasion of privacy is justified when one is dealing with bank robbers and terrorists, and in combating crime.
The noble and learned Lord, Lord Elwyn-Jones, has spoken at length about the Malone case, where the court pointed out that there were few legal safeguards against the invasion of privacy. There is the case of Dr. Klass v. Federal Republic of Germany, which appears to indicate that this country may be in serious breach of our international obligations in this field, particularly under Article 8 of the European Convention
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on Human Rights. The public at large know that an innocent person who has had his conversations recorded in the United Kingdom, then circulated and put in storage, appears to have no redress at the present time and cannot successfully sue for damages.
I, also, am unhappy about the answer given to us by the noble Earl, Lord Gowrie, on behalf of the Government. It does not seem to me, in view of the inadequacy of United Kingdom domestic remedies dealing with the violation of fundamental rights, that this is a matter which should merely be left in an administrative way. Privacy must be safeguarded and I support this amendment as a substantial move in the direction of law reform, as advocated by the noble and learned Lord, Lord Gardiner, which is the main content and the main theme of the amendment which is before your Lordships.
Lord Ritchie-Calder: I should have thought that the noble Lord, Lord Lloyd of Kilgerran, with all his knowledge, would know that he is probably not immune from this tapping. If he deals in intellectual property, then he is one of the people most likely to be exposed to industrial espionage. I assure my noble and learned friends Lord Gardiner and Lord Elwyn-Jones that they would no longer be able to go out in their car and talk to each other with immunity, because we now have telescopic bugs which pick up from a distance. We are in a most extraordinary situation where practically anybody at any time, unless we provide safeguards, will be able to bug anybody else.
I have had the distinction of being warned by people as distinguished as my noble and learned friend Lord Gardiner. I am one of your Lordships who has been pretty systematically bugged. I know, because I read the transcripts and when I read them I said: "What an extraordinary, sinister and devious character this fellow Ritchie-Calder must have been. I wish I had known him". The conversations were almost on the level of the kind of thing we have been hearing lately, about the non-existent tapping of Prince Charles.
But the point is that it is all there. It is positive, it is growing and we must take the necessary precautions to curtail it. Like everybody else, I see no reason why, on positive serious knowledge, the protectors against crime should not be allowed to take ample precautions about the necessary information. But this has now become world-wide traffic and it is growing. I can bring any bugs I like into this country. I hope that other people will not follow my non-existent example. But this is something which we really must deal with very emphatically indeed.
Lord Young of Dartington: I should like to support this amendment, having been persuaded to do so by the speeches made by my noble and learned friends Lord Elwyn-Jones and Lord Gardiner. It seems that the Government are seriously under-rating the extent of public anxiety on this very important subject and I hope that, even at this late hour, there may be some sign that there will be some reconsideration.
In supporting the amendment, I want to make only one point. I should like to stress again what my noble friend Lord Lloyd of Kilgerran said about technological factors and their importance. I think it is generally accepted that the cost of telephone tapping and mail

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interference has fallen drastically. What used to take hundreds of hours of human labour can now take the time of only a never-sleeping computer and, as computer intelligence—which is what it is often called—increases, costs will go down still further as computers are trained to recognise voices and other indicators of sensitive material. So that the time, the trouble and the cost of going through what used to be a very clumsy exercise in the past are all going to diminish.
As for the post, advances in technology already allow mail to be read unopened; and, of course, not just by public servants, by any means, as is the case with phone tapping as well. It seems to me that these technological developments underline the need—although I accept that they are only one of the reasons—for additional safeguards against phone and mail tapping, and I hope that this Committee will, for this reason as well as for others that have been given, support the amendment.
Lord Lloyd of Hampstead: I should like, very briefly, to add a word in support of this amendment. I confess that I have never been a person of sufficient importance for anybody to wish to tap my telephone. Nevertheless, I share the tremendous public concern that is felt over this matter, a concern which was reflected recently in the judgment of the Vice-Chancellor in a case which came before him in which he made it clear that he thought our law was most inefficient.
The one matter to which I should like to refer is that to which the noble and learned Lord, Lord Gardiner, has already referred; namely, the European Convention. It seems to me that the Government have overlooked the fact that it was laid down in the well-known Klass case, which was considered by the Court of Human Rights, that there needs to be some sort of appeal procedure on the part of an aggrieved citizen. The court there held, so far as I remember, that it was not necessary for this appeal to be to the ordinary courts of law. There could be some kind of special appeal procedure—say, to an independent tribunal.
The noble and learned Lord, Lord Elwyn-Jones, has suggested in his amendment that the appeal should be to the High Court and the Government have indicated that they see great objection to that procedure. What they have not indicated is that they would be prepared to contemplate some alternative by way of an independent tribunal.
It is perfectly true that we have the benefit of the services of that most distinguished judge, the noble and learned Lord, Lord Diplock, but his services are related, as I understand it, purely to the general operation of the security arrangements. He is not in a position, and it is not within his terms of reference, to consider individual appeals.
There therefore remains this very important lacuna in our law. In view of the fact that the Government are apparently not prepared to contemplate any kind of judicial or quasi-judicial regulation of this issue, which it seems is of burning importance to so many people, my view is that one has no alternative but to give one's warm support to the amendment so ably and lucidly advanced by the noble and learned Lord, Lord Elwyn-Jones.
Lord Mottistone: Before the debate ends, I wonder whether the noble and learned Lord who moved the amendment can explain why there appears to be no reference to Scotland in subsection (2). Are the Scots to be freed from this special provision for a special reason?
5.2 p.m.
Lord Elwyn-Jones: As the noble Lord's question is specifically addressed to a limited point, may I say that we have the presence, happily, of the noble and learned Lord the Lord Advocate. I understand that the provisions and arrangements in Scotland differ so fundamentally from those in the rest of Great Britain that it was not thought appropriate to bring Scotland within the purview of this proposed clause.
I am grateful to those noble Lords who have taken part in the debate. I am sorry that the noble and learned Lord, Lord Rawlinson of Ewell, was not here when I spoke, though perhaps he lost little. On the other hand, had he been here he would perhaps have had a better balance of the case for the clause than he has.
My noble friend Lord Gardiner indulged in fascinating reminiscence about personal experience of interception of telecommunications. Perhaps I may also be permitted a little anecdotage—speaking for myself, of course. I recollect an occasion when I had a brief in Libya on a case which contained certain political implications. As is often the custom when going abroad for cases of civil liberty, the moment I arrived there to appear for the defence, every possible difficulty in the way of visiting counsel was created. I was informed that the case had been adjourned for a week. I was a little worried about the situation which resulted, because I was due to appear for the defence in a murder trial at Cardiff Assizes, the date of which I was not sure about. So I sent a signal to my clerk in The Temple, Eric Cooper, asking him to let me know the date of the murder trial. I received a frantic call from our diplomatic representative in Tripoli the next morning. He said, "What on earth is going on? A cable to you has been intercepted, reading, 'Cable received; murder fixed for Wednesday' and signed by an obviously suspect person, Eric". Happily, however, our diplomatic representative was able to redeem the situation with a few well-chosen words.
If I may turn from the frivolous to the serious, I confess that I was very disappointed with the speech of the noble Earl, Lord Gowrie. What surprised me was that he omitted completely to deal with the provisions in the Bill which provide sanctions for unauthorised intercepts as though he is perfectly happy about what has been said in the Committee about the widely extensive range of unauthorised intercepts. (I shall come back in a moment to cases of intercepts on the authority of the warrant of the Secretary of State.) The noble Earl maintained a total silence about those intercepts. That is where we believe the main mischief lies. It lies in the field of what I might call private bugging, private intercepts, using all the devices which it is notorious are now used in all sorts of fields, like industrial espionage.
Can the Home Office really be content with a situation in which the most that is capable of happening to those who do this is that they can be penalised for

865
stealing the Post Office electricity which is involved when interfering with the Post Office's telephone communications? It is a nonsense. This interception which is undoubtedly causing grave concern to the public—my noble friends have indicated that—can now be carried out more or less with impunity. I do hope we shall receive an answer to that part of the story.
As to the other side; namely, the authorised intercepts by the Secretary of State, the gravamen of the Home Office case is that if you put his powers into statutory form, every time you enact a power by statute there is the possibility of civil proceedings being brought by those who are affected by the use of that power. In my submission, the Home Office should not be so frightened of judicial review as they appear to be.
The courts are not inexperienced in handling matters of the gravest importance to the security of the country. The noble and learned Lord, Lord Rawlinson, and I have appeared in many an official secrets case at the Old Bailey where there were confided to those who were allowed to attend the proceedings in camera matters of enormous importance to the security of the country. I have never known of any leakage from that process, either on the judicial side or on the side of advocacy or those concerned. Judges are perfectly capable of protecting the public interest in any proceedings for a declaration, or whatever it may be, either by the procedure of sitting in camera or by the aid of Crown privilege, if need be.
In my experience, the Home Office has always over-reacted to fears of what may happen if greater controls over executive power are introduced. I remember that when I appeared for the Crown, without success, in the leading case on Crown privilege, I was told, "This is a disaster. All the secrets of the State will now be opened. Terrible things are going to happen". Nothing of the kind has happened, despite my eloquent warnings to their Lordships in Appellate Committee that they would.
Then there was the Dorset yacht case, where the Home Office was deeply worried about the fact that when a borstal boy being treated in an open borstal escaped and got on a yacht where the yacht owner had foolishly left some liquor behind, there was consequential damage caused in subsequent collisions and the yacht company sought to make the Home Office responsible for failing properly to supervise the control of the absconder. Terrible fears were uttered from the Home Office that it would put an end to the licensing system, to probation, to licence on leave, to suspended sentences and that terrible things would happen. Nothing of the kind has happened. I think that authority, if I may say so with great respect-and I hope I am not speaking irresponsibly in this field—does get over-frightened about extensions of protections of the liberty of the subject on the one hand and, on the other hand, the duty of the Executive when things go wrong to face the consequences if the citizen is injured.
I do not want to take up much more time. Nothing that I have said in any way diminishes my admiration and the value of the work done by the noble and learned Lord, Lord Diplock, but of course that is in an extremely limited field. His terms of reference were to examine the working of the system whereby the Home Secretary
866
issues warrants for intercepts. He has examined that and I confess I was not surprised to learn that within that limited field there is apparently not a great deal to worry about. But it is in the unauthorised fields, where intercepts are made other than through that established machinery that most of the mischief lies. I am bound to say that in our view what the clause proposes, so far from diminishing the authority of the Home Secretary, would give it statutory shape and statutory form and statutory support, So far as concerns the other end of the scale of the threats to the privacy of the subject in this country, which in my view are now very great, this clause will provide further protection and at least will at last provide sanctions against the improper interceptor of our private affairs.
The Earl of Gowrie: I tried to make the Government's case as fully and carefully as I was able to do and I do not wish to detain the Committee by going over it again. I listened with great interest to the speech of the noble and learned Lord, Lord Gardiner, and indeed I could not help, as it were, mentally commissioning a painting for your Lordships' House about the rare deliberations between the noble and learned Lord, Lord Elwyn-Jones, and the noble and learned Lord, Lord Gardiner, when they were in high office, but I think the point he made was well answered by my noble friend Lord Rawlinson. He asked me some specific questions and, as he kindly suggested, I will write to him on those.
I must take exception on one point in the speech made by my noble friend Lord Inglewood. I do not think it is sufficient to try to write off the rather solemn provisions that I was outlining as being the desire of the Government to keep this an administrative matter. I made it clear in my speech, if he will be so kind as to read it tomorrow, that the warrant of the Home Secretary himself was needed in the vast bulk of these cases, and that it was a solemn affair and not, as it were, as his phrase rather suggested, on the whim of some minor official in a large department of state.
The noble and learned Lord, Lord Elwyn-Jones, towards the end of his speech appeared rather to concede that the Government might have a case where issues of state security might be concerned and where our system and the present system, and the system which obtained when the noble and learned Lord was in Government, operate in the need for authorisation by the Home Secretary. He said that what he was worried about and what the public were worried about was unauthorised interception and that I had not dealt sufficiently with that. Indeed, it is a fair charge, I think, that the bulk of my speech depended on a defence of the existing system where state security was concerned and where interception for the purposes of crime detection by the police was concerned.
On unauthorised interception, it is not true that these are minor offences or that we can all, as it were, "bug" our neighbours without let or hindrance. It is a serious offence for anyone wilfully and maliciously, or without authority, to open someone else's mail, or to use a radio receiver or transmitter for the purpose of intercepting a message. It is also an offence dishonestly to use or divert electricity. Although I agree that there is a slightly farcical element in the

867
concept of electrical theft, and although I also concede that that concept is based on a civilisation with a rather narrower view of the potential of electricity than obtains, nevertheless the fact remains that the diversion and dishonest use of electricity is a serious crime and is therefore covered under existing legislation. I believe that these provisions adequately cover the areas where unauthorised interception might occur in practice. I have consulted my right honourable friend the Home Secretary and I am advised that there is absolutely no reliable evidence of unauthorised interception, whether of mail or telecommunications, but I will bear the point very much in mind.
Lastly, I want to bring the attention of the Committee back to the fact that our system has to strike a balance between the desire of the public not to be snooped upon and the equally strong desire of the public to be secure from crime or from enemies of the state. Our judgment is that there is a long-standing procedure, with no evidence that it is not working or not proving satisfactory, with parliamentary accountability of the very senior Minister of the Crown who is, in the overwhelming majority of cases, responsible; that no evidence has been produced that this system is not working and that we should stay with it, so long as from time to time we devise ways of monitoring whether in fact it is working reasonably well; and I would turn back to the device which we are currently using and in which most of those who have spoken in the Committee expressed confidence, namely, the work of the noble and learned Lord, Lord Diplock.
With those considerations in mind and with the case which I tried to put at considerable length and in some detail earlier, I hope your Lordships will not seek to move this amendment into our law.
Lord Elwyn-Jones: In view of the support which the amendment has received from, I think, all parts of the Committee except the far distant right-hand corner and the Front Bench opposite, I think it is appropriate that we should test the feelings of the Committee on the amendment.
5.20 p.m.
On Question, Whether the said amendment (No. 123) shall be agreed to?
Their Lordships divided: Contents, 82; Not-Contents, 118.

CONTENTS

Airedale, L.

Davies of Penrhys, L.

Amherst, E.

Elwyn-Jones, L.

Aylestone, L.

Evans of Claughton, L.

Balogh, L.

Gaitskell, B.

Blyton, L.

Gardiner, L.

Boston of Faversham, L.

George-Brown, L.

Bowden, L.

Gladwyn, L.

Brockway, L.

Glenamara, L.

Bruce of Donington, L.

Goronwy-Roberts, L.

Chitnis, L.

Gosford, E.

Cledwyn of Penrhos, L.

Hale, L.

Clifford of Chudleigh, L.

Hampton, L.

Collison, L.

Houghton of Sowerby, L.

Crowther-Hunt, L.

Howie of Troon, L.

Darling of Hillsborough, L.

Hunt, L.

David, B.

Ilchester, E.

Davies of Leek, L.

Inglewood, L.

868

Jacques, L.

Pitt of Hampstead, L.

James of Rusholme, L.

Ponsonby of Shulbrede, L. [Teller.]

Janner, L.

Jeger, B.

Ritchie-Calder, L.

Jenkins of Putney, L.

Rochester, L.

John-Mackie, L.

Sainsbury, L.

Kennet, L.

Segal, L.

Kilbracken, L.

Shackleton, L.

Kilmarnock, L.

Shinwell, L.

Lawrence, L.

Somers, L.

Lee of Newton, L.

Spens, L.

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

Stamp, L.

Stedman, B.

Llewelyn-Davies, L.

Stewart of Alvechurch, B.

Lloyd of Hampstead, L.

Stewart of Fulham, L.

Lloyd of Kilgerran, L.

Stone, L.

Longford, E.

Strabolgi, L.

Loudoun, C.

Taylor of Mansfield, L.

McNair, L.

Underhill, L.

Maelor, L.

Walston, L.

Mais, L.

Wells-Pestell, L.

Milverton, L.

Whaddon, L.

Molloy, L.

White, B.

Oram, L.

Winstanley, L.

Phillips, B.

Young of Dartington, L.

NOT-CONTENTS

Abercorn, D.

Glenkinglas, L.

Abinger, L.

Gowrie, E.

Ailesbury, M.

Gridley, L.

Airey of Abingdon, B.

Grimston of Westbury, L.

Alexander of Tunis, E.

Hailsham of Saint Marylebone, L.

Allen of Abbeydale, L.

Alport, L.

Halsbury, E.

Auckland, L.

Hanworth, V.

Avon, E.

Hatherton, L.

Balfour of Inchrye, L.

Hawke, L.

Bellwin, L.

Henley, L.

Belstead, L.

Hill of Luton, L.

Bessborough, E.

Holderness, L.

Bridgeman, V.

Hylton-Foster, B.

Brookes, L.

Kemsley, V.

Burton, L.

Killearn, L.

Cairns, E.

Kimberley, E.

Camoys, L.

Lauderdale, E.

Cathcart, E.

Long, V.

Chalfont, L.

Lyell, L. [Teller.]

Chelwood, L.

Mackay of Clashfern, L.

Chesham, L.

Macleod of Borve, B.

Cockfield, L.

Mancroft, L.

Colwyn, L.

Margadale, L.

Cork and Orrery, E.

Marley, L.

Cottesloe, L.

Massereene and Ferrard, V.

Cranbrook, E.

Mills, V.

Cullen of Ashbourne, L.

Monckton of Brenchley, V.

Daventry, V.

Monk Bretton, L.

Davidson, V.

Morris, L.

de Clifford, L.

Mottistone, L.

De L'Isle, V.

Murton of Lindisfarne, L.

Digby, L.

Newall, L.

Dilhorne, V.

Northchurch, B.

Donegall, M.

Nugent of Guildford, L.

Dormer, L.

O'Hagan, L.

Ebbisham, L.

Orkney, E.

Eccles, V.

Orr-Ewing, L.

Elibank, L.

Pender, L.

Ellenborough, L.

Portland, D.

Elles, B.

Rankeillour, L.

Elliot of Harwood, B.

Rawlinson of Ewell, L.

Exeter, M.

Renton, L.

Faithfull, B.

St. Aldwyn, E.

Falkland, V.

Sandford, L.

Ferrers, E.

Sandys, L. [Teller.]

Fortescue, E.

Savile, L.

Fraser of Kilmorack, L.

Sempill, Ly.

Gainford, L.

Sharples, B.

Garner, L.

Skelmersdale, L.

Geoffrey-Lloyd, L.

Slim, V.

Gibson-Watt, L.

Soames, L.

Gisborough, L.

Stradbroke, E.

869

Strathcarron, L.

Trumpington, B.

Sudeley, L.

Vaizey, L.

Swinfen, L.

Vickers, B.

Swinton, E.

Vivian, L.

Thorneycroft, L.

Westbury, L.

Trefgarne, L.

Young, B.

Trenchard, V.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 51 [Offences by bodies corporate etc.]:
5.28 p.m.
Lord Lyell Lord Lyell moved Amendment No. 123A:
Page 43, line 4, leave out ("Act") and insert ("Part").
The noble Lord said: I hope I can move this small amendment very briefly. It corrects a small drafting error in the Bill. As the Committee will see, Clause 51 should apply only to the telecommunications part of the Bill and this is what the amendment seeks to achieve. I beg to move.
On Question, amendment agreed to.
Clause 51, as amended, agreed to.
Clause 52 agreed to.
Clause 53 [Documentary evidence as to sums due for services]:
The Deputy Chairman of Committees (Lord Jacques)The Deputy Chairman of Committees (Lord Jacques): The next amendment is Amendment No. 124. If this amendment is agreed to, I shall not be able to call Amendments Nos. 125, 126 or 127.
Lord Mottistone Lord Mottistone moved Amendment No. 124:
Page 43, line 19, leave out subsections (1) and (2).
The noble Lord said: I beg to move Amendment No. 124 and I should also like to speak to Amendment No. 128. I shall explain to your Lordships in due course why I have tabled these amendments separately. These amendments are similar in principle to my Amendments Nos. 96, 98A and 99A which we dealt with last night. Indeed, my remarks in cols. 800 and 801 are wholly relevant. Their object is to put British Telecom under the same obligations to customers as other businesses.
Clause 53 of the Bill, unamended, will confer on the corporation the same exemption from justifying a bill for services which it provides as that which the Post Office now has. It is considered that such an exemption is unjustified and that the clause should therefore be omitted from the Bill. The argument of my noble friend Lord Trefgarne in col. 802, in relation to the earlier amendments to which I referred, that in that case Clause 22(1) was tightly drafted and, indeed, was supplemented by Clause 21, does not seem to apply, in this case. There is not, if I may put it this way, the equivalent of Clause 21. It seems that the phraseology is imported from the Post Office Act 1969, about which I spoke on more than one occasion yesterday in warning the Government that they should not, without very careful thought, transfer these sorts
870
of provision into this Bill where we are dealing once again with a new creature in the shape of British Telecom which will be, as far as possible, competitive. It is in this area that it is competitive.
I should like to make one other point and that is that in the debate on the last amendment, which was taken to a Division, your Lordships may remember that the noble and learned Lord, Lord Elwyn-Jones, made a point of the fact that persons in authority become over-sensitive if their status quo in relation to privilege is threatened. I would suggest that the remarks that the noble and learned Lord made about the Home Office might, in this case, be seen by the Government to apply equally to the Post Office and that they are probably fighting for this very special privilege unreasonably and uncompetitively. I think that in this case perhaps the Government might see their way at least to accepting Amendment No. 124. I have separately tabled Amendment No. 128 because it seems to me that, on the whole, Clauses 53(1) and (2) are more anti-competitive, in a British sense at any rate, than Clause 53(3) which, of course, deals with overseas matters. I would be grateful if the Government could at least give thought to considering Amendment No. 124, even if they turn down Amendment No. 128. I beg to move.
Lord Trefgarne: As my noble friend has pointed out, Clauses 53(1) and (2) repeat Section 69 of the 1969 Act and provide that a certificate from BT stating that a specified sum is due to it from a specified person with respect to telecommunications services is to be evidence of that fact in legal proceedings. The effect of this is that the court would accept the certificate as correct in the absence of any evidence to the contrary. I should like to stress that the court would have to weigh carefully any other evidence brought before it and that a subscriber is quite free to challenge British Telecom's certificate. It is in no sense conclusive.
The need for this provision stems from the special and complex nature of the telephone charges. Unlike gas and electricity, telephone charges are not based on a single measure of consumption, but a range of factors such as the destination of the call and the time of day it is made. It is not sufficient merely to check the subscriber's meter, since a fault elsewhere in the system, such as equipment sending out the wrong pulses, may cause an error if the meter itself is accurate. It is, therefore, more difficult to verify a telephone bill, and the first two subsections merely provide a basis which the court can accept without elaborate proceedings. As I have said, a subscriber is perfectly free to challenge British Telecom's certificate.
The noble Lord will also be aware that the advent of itemised billing with System X will go some way towards dealing with this problem: meanwhile the Telecom Code of Practice provides for arbitration on telephone bills and British Telecom have agreed that the results of this arbitration are to be binding upon them. I had intended to deal also with the amendments of my noble friend Lord Morris, if that should be his wish, but he may prefer to leave them until a later moment. I hope that my noble friend Lord Mottistone will see that the present arrangements are appropriate and will not wish to take the matter further.
Lord Mottistone: I think that I shall have to read with care what my noble friend has said. Fortunately there will be later stages of this Bill and it may be that I shall return to the charge when I have had time to examine what my noble friend has said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.38 p.m.
Lord Morris Lord Morris moved Amendment No. 125:
Page 43, line 21, after ("20") insert ("or otherwise (subject to any term of the agreement to the contrary)").
The noble Lord said: I beg to move Amendment No. 125. This is merely a drafting amendment the purpose of which is not to change the substance of Clauses 53(1) and (2), but merely to delete subsection (2), thus saving net some 53 words in the Bill. Whether my drafting meets the approval of the Government is, of course, another matter, but I have tabled this amendment with considerable care and I believe that it is a minor improvement in the clarity and brevity of the Bill. I beg to move.
Lord Trefgarne: I must confess that I was not quite certain what lay in the mind of my noble friend when he tabled his amendments. However, I think that I am right in saying that the mere drafting improvement which my noble friend seeks to achieve is, in fact, not quite so. As I understand it, the effect of his amendments would, indeed, go wider than that. For example, I understand that any agreements made by British Telecom for the provision of telecommunication services are confined to its own services, but schemes also cover international calls. It is not possible, therefore, to confine Clause 53(1) to services provided solely by British Telecom as, for example, Amendment No. 126 seeks to do. I hope that my noble friend will find that explanation satisfactory.
Lord Morris: That was not what I intended the effect of the amendment to be. I shall look at it again and see whether I can achieve my objective at a later stage of the Bill. In the meanwhile I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 126 to 129 not moved.]
Clause 53 agreed to.
Clause 54 agreed to.
Clause 55 [Power of local authorities to contribute towards new offices or facilities]:
5.41 p.m.
Lord Lyell Lord Lyell moved Amendment No. 129A:
Page 44, line 8, leave out ("their area or any part of it") and insert ("the whole or any part of their area").
The noble Lord said: I hope that I shall not offend my noble friend Lord Morris, but perhaps he will accept that the Government have tabled this particular amendment, No. 129A, in the name of my noble friend Lord Gowrie, as a result of Amendments Nos. 130 and 131 in the name of my noble friend Lord Morris. I understand that, among other things, my noble
872
friend's amendments would be an attempt to improve the drafting. I apologise to my noble friend for pre-empting him in this way, but we are certainly grateful to him for having drawn attention to a slight inaccuracy in the wording of the Bill.
The purpose of Clause 55, which we are now discussing, which repeals in a modernised form the relevant provisions of Section 51 of the Post Office Act 1953, is to empower local authorities to indemnify British Telecom against any losses which it may sustain as a result of establishing or, indeed, maintaining a telecommunications office or facilities, where the local authority considers that the office or facilities would benefit its area or, as we put it, any part of it. The local authority may do so whether or not the office or facility in question is inside or outside the area that will benefit. We hope that the Government amendment makes this point quite clear and we certainly think that it meets the spirit of the amendments of my noble friend Lord Morris. With that, I beg to move.
On Question, amendment agreed to.
Lord Morris Lord Morris had given notice of his intention to move Amendment No. 130:
Page 44, line 12, after second ("the") insert ("said").
The noble Lord said: In the sense that a starving man is grateful for a crumb, I am very grateful that this amendment at least managed to alert Her Majesty's Government. I am delighted that it had precisely that effect.
[Amendments Nos. 130 and 131 not moved.]
5.44 p.m.
Lord Young of Dartington Lord Young of Dartington moved Amendment No. 132:
Page 44, line 21, at end insert—
("(4) Where the local authority does not consider that it would be for the benefit of its area that the Corporation should provide telecommunication facilities in its area, the local authority shall have power to do so itself.").
The noble Lord said: In moving this amendment I should like to say by way of introduction that, as one of the supporters of the previous amendment on which we voted a few minutes ago, how very welcome is the fact that at present local authorities—and we are dealing with local authorities in this clause—are considering a code of practice based on the recommendations of the Lindop Report which would protect the privacy of information which nestles in local authority computers and which derives from social service departments, housing departments and other departments. In this way, if local authorities adopt the proposed code of practice, they will be showing the way to central Government in a very important particular.
I move this amendment in order to achieve two purposes. The first is to make it clear beyond doubt that local authorities have power to establish their own telephone services in their own areas. This might seem rather a strange proposition. British Telecom talks a great deal about economies of scale and very little about "diseconomies" of scale. Is there not living proof to the contrary in one English city, the City of Hull in Yorkshire? As many of my noble

873
friends will know, Hull City Council set up its own phone service under the power given to it by the Telegraph Act 1899. At that time Glasgow, Brighton Portsmouth, Swansea and, of all places, Tunbridge Wells also had their own telephone services. Unfortunately from my point of view, the Post Office of the day browbeat them all into giving up their telephone services, but fortunately failed to browbeat the tough Yorkshiremen of Hull into doing so, and from that day to this the service has continued to prosper.
I regard it as a model of the municipal socialism which will, I hope, be cherished by my fellow Social Democrats and would, in happier days for the Conservative Party, have been cherished by the Conservative Party as well; for instance, by Joseph Chamberlain and, for all I know—and if I had been able to do the research I might have been able to show this—he actually approved what happened in Hull and these other distinguished English cities and towns, as well as Scottish ones.
The service in Hull has become so successful that, despite the fact that it has no share of the lucrative trunk revenue, which is the lifeblood of Telecom, local calls in that city are untimed, the connection charge is still only £25, and there is a standard of personal service which is probably such that only a small operator like Hull would be able to provide. I had experience of that myself when the city council allowed me to conduct an experiment there, which showed the immense value of subsidised telephones to elderly, housebound people living on their own who could not afford the phones out of their own resources, even the 'phones with the very low connection charges that there are in Hull.
Where Hull goes today my hope is that other municipalities will be prepared to follow in the future. Glasgow could turn back the clock and recover the municipal service that it once had; Manchester or Liverpool, Leeds or Birmingham could do the same. I do not pretend to be an expert on the legalities of this, but I understand that the Telegraph Act, which gave Hull municipality the power to run this excellent municipal telephone service, has not been repealed and that nothing in law except a licence exists to stop other local authorities doing what Hull has done. The powers given under the Telegraph Act are supplemented by the more general powers available to councils given, for example, in Section 111 of the Local Government Act 1972, Section 137 of the Local Government Act 1972 and the Local Authorities (Goods and Services) Act 1970.
I have already apologised verbally to the noble Lord the Minister for not having given him notice by letter of the question I am now going to put to him. I hope that he will accept my apology and is prepared to respond, even though I did not give him notice. Could the noble Lord the Minister confirm that my reading of the law is right: that local authorities are legally entitled to start their own telephone services by way of competition with British Telecom? If the noble Lord is not able to confirm that this afternoon, perhaps he would be prepared to write to me on the subject, because I believe the matter is of interest within a number of local authority circles.
I also wish to draw your Lordships' attention to a matter which is just as important: the add-on services
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to the first telephone which have been frequently discussed on previous occasions. As we all know, the Bill gives the right to compete with British Telecom in the provision of these add-on services, and we now know more than we did from the Beesley Report what sort of add-on services are being contemplated. It is not expressly provided in the Bill that non-profit-making local authorities shall have the same right to compete as private enterprise. This is not a theoretical matter by any means. For instance, many local authorities already own computers and some have substantial installations. I hope that the noble Lord the Minister will be able to say that there is no reason in law nor in practice why, in the retailing of British Telecom capacity, local authorities should not be able to sell their own computer services to private business. I hope the noble Lord the Minister will make it clear that this further competition to both British Telecom and private enterprise will be welcomed in the mixed economy which has received some favourable mention from the Government's Front Bench today.
My amendment was put down in order to try to clarify these two questions. I would be delighted if the noble Lord the Minister is able to accept my amendment, but if he is not able to accept the amendment I hope that he will be able to say something reassuring about both these important matters, which concern almost every major local authority throughout the country. I beg to move.
Lord Trefgarne: Although I understand the noble Lord's concern to give local authorities a statutory power to act in accordance with any licence granted under the powers of this Bill, I do not believe it would be right to do this. In saying that, I want to make it clear that the Government fully support the city council of Kingston upon Hull, to which the noble Lord referred, in its continuing wish to run a local telephone system for as long as the electorate of that city wishes it so to do. However, the amendment would give all local authorities—from the smallest parish council to the Greater London Council—the power to act in accordance with any licence under this Bill that might apply to them. That would include all the general strategic licences which we envisage will be granted to all persons, covering key areas of liberalisation.
The amendment could have the effect of enabling any local authority to offer value added network services to the public in so far as the Government decide to liberalise such services and do so by means of general licences. The different tiers of local government could set up in competition with one another as well as in competition with British Telecom. It is not the Government's aim to see public money used to create such competition between public bodies; in the end it would be the taxpayer and the ratepayer who would have to pay, because the ultimate discipline of becoming bankrupt would not be imposed upon these competitors. It is through the pressures of the market place that the interests of the consumer can best make themselves felt. That would not happen fully when the competitor was in the public sector—least of all if one or more of the competitors was inexperienced and had moved outside the functions for which it exists to challenge a large, professional corporation.

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There is nothing wrong in challenge. Challenge is something we want, but challenge should come from businessmen who know how to calculate risk and how to assess market demand. Should there ever be any special case where it was justifiable for a local authority to enter the telecommunications business, then special statutory provisions could be made were they needed.
The noble Lord asked me some particular questions about local authorities, and as he foreshadowed it is not possible for me to give a considered reply at this time. I undertake to inquire into the matters which he has raised and will write to him with the answers. However, I believe that I can deal with one particular matter this afternoon. Section 2 of the Telegraph Act 1899, to which the noble Lord referred and which, if my memory serves me right, was the Act which originally authorised the establishment of local telephone services and of which, as the noble Lord also pointed out, only one remains, authorises local authorities to provide public telecommunications services but only under licence from the Post Office—which will in future be British Telecom. I believe that that is the position with regard to the present service run by Hull Corporation. I hope this explanation of the difficulties which might flow from the adoption of the noble Lord's amendment will persuade him not to take the matter further.
5.57 p.m.
Lord Young of Dartington: The noble Lord the Minister would not expect me to be convinced by his arguments—nor am I. His first argument was that if my amendment was accepted a local authority of whatever size would be able to run a telephone service, and this seemed to the noble Lord the Minister to be self-evidently ridiculous. However, it does not seem ridiculous to me, and neither does it seem ridiculous to the drafter of the clause we are considering, No limitation on the size of the local authority is referred to in Clause 55, and if there is no limitation on the size of the local authority in the main part of the clause, why should it be ridiculous to have no limitation on the size of the local authority in the proposed amendment?
The noble Lord the Minister went on to say that some local authorities are so small that they would not want to run any telephone services, or that it would make no sense at all for them to do so. But on other occasions the noble Lord has not applied the same reasoning to private enterprise. There has been no suggestion that just because a firm is small it will not be able to compete with large firms and with British Telecom with the provision of add-on services.
Lord Trefgarne: If the noble Lord will allow me to interrupt, the point I was endeavouring to make, and I am sorry if did not make it clearly, was that there was a real difference between small firms and small local authorities. The difference is that small firms can go bankrupt whereas local authorities cannot.
Lord Young of Dartington: Yes, I was just coming to that point. The noble Lord the Minister said that the disadvantage of a municipal service—and he has just repeated it—is that it is the ratepayers who would
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pay. That is not the case in Hull. In Hull the ratepayers are not paying for Hull's telephone service. On the contrary, Hull's telephone service is making a surplus which helps to keep rates lower than they would otherwise be. No local authority with any sense whatsoever would think of establishing its own telephone service did it not expect to do so at a profit which would be a relief to hard-pressed ratepayers. Indeed, it could be provided in any licence that might be given to a local authority in the future that there should be no subvention from the rates for any such municipal commercial service as this would be.
The noble Lord the Minister will therefore understand that the arguments do not convince me. However, I cannot pretend that there is a great ground swell of support in the Committee this afternoon for the point of view I am endeavouring to put before your Lordships.
Lord Mottistone: Before the noble Lord sits down, may I say that I too am not in the least convinced by my noble friend on the Front Bench? I was most disappointed in what he had to say as a reflection on the principle of liberalising the whole area of telecommunications. I think it would be much more in accord with the general thinking of my noble friend and those of us who sit on these Benches if he would find his way to being more flexible in considering this point. It is ridiculous to write off small local authorities as not being people who are perfectly capable of running particular services at a profit, which is what we are talking about, or at least under profitable circumstances. Without wishing to offend the noble Lords on the nearer Benches opposite, I feel that it is an area which is worthy of proper consideration and could usefully be expanded, although perhaps not at this stage of the Bill. I thoroughly support the noble Lord in the general principle of what he is trying to do.
Lord Lloyd of Kilgerran: I was also halfway to my feet when the noble Lord, Lord Young, started what was intended to be his final speech. Like the noble Lord, Lord Mottistone, I am unhappy about the reply by the noble Lord, Lord Trefgarne, in this matter, particularly when we consider the terms of Clause 15(8). Clause 15 empowers British Telecom to give licences, and under subsection (8) it says:
"For the purposes of a licence granted under subsection (1), the definition of a class of persons may be framed by reference to any circumstances whatever".
It would seem prima facie that a local authority could be said to be a "class of persons" and therefore possibly entitled to the grant of a licence. I may be wrong in my interpretation of this clause, but I should like to support the noble Lord, Lord Young, in the general theme that he has put to your Lordships today.
Lord Trefgarne: Before the noble Lord, Lord Young, decides what to do with his amendment, there are two points that perhaps I may put before your Lordships in this matter. First, your Lordships seem to imagine that what Hull is doing today, any other local authority could do tomorrow. The difficulty is of course that Hull has been at it for some considerable time and has acquired a good deal of skill and expertise over the

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years. There is no other local authority in that position.
I venture to suggest that however expert they were and however many experts they hired to help them, any other local authority that ventured into this highly complex field—vastly more complex than when Hull entered it so many years ago—would inevitably, in the early years anyway, be making substantial losses which would, I fear, fall upon the ratepayers. In any event, if noble Lords are seeking only to provide for other local authorities to act as Hull has acted for so long, those local authorities could still seek a licence under the 1899 Act, which remains in force, and under which Hull has been operating for all these years.
Lord Brookes: I had not intended to intervene, but there might be others on the Benches on which I sit who can scarce forbear to cheer at hearing our Front Bench in such unqualified terms condemn municipal and public trading as something which could be an irresponsible use, or misuse, of public funds. I hope that that conviction, which I heartily applaud, is going to be a consistent factor in Government policy in dealing with the British Steel Corporation, British Rail, the Coal Board, and all the other ailments from which we have suffered for so long. I merely ask that we be consistent.
Lord Young of Dartington: The noble Minister's last remarks seemed to me to be on the same lines as the remarks we heard from him earlier. It seems that the noble Minister is unable to see the close parallel there is between the arguments that could be advanced about private firms and the arguments that could be advanced about local authorities. The noble Minister said that no local authority would be able to get into this business because they have so much to learn. Could not the same thing be said of a private company which may come into existence precisely because of the operation of this Bill: "No, it cannot be done, because there will be so much to learn and so much expertise to gather"?
This argument, taken further than it has been, would mean that one completely distrusted all new entrepreneurs whether they were private or municipal. That surely would be taking the argument to a ridiculous absurdity. If private firms are going to be allowed to compete—and that is something that many in this House welcome—then local authorities should be able to compete under the same terms, perhaps with a proper restriction about no support from rate funds. Otherwise, there is no rationale that has been presented so far from the Government Front Bench.
I am delighted that I was interrupted, just before I was going to do what I am now going to do, by noble Lords who have expressed their support. I hope that this support will weigh with the noble Minister and his colleagues when they consider what to do at later stages of the Bill and when they consider what to do after this Bill has become an Act. In the meantime, and wishing them rational and happy thinking on the subject, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55, as amended, agreed to.
Clause 56 agreed to.
Clause 57 [Interpretation and extent of Part I]:
Lord Trefgarne Lord Trefgarne moved Amendment No. 133:
Page 45, leave out lines 1 and 2.
The noble Lord said: On behalf of my noble friend, I beg to move this amendment.
Lord Ponsonby of Shulbrede: No doubt the noble Lord will explain to us the purpose of this amendment.
Lord Mottistone: Perhaps I may be able to assist my noble friends. At the time when we were discussing Clause 25 stand part it was said that this would be one of the consequential amendments if Clause 25 was left out, which it was.
Lord Lyell: I have an apology to make to the Committee. It is indeed one of a plethora of amendments that I spoke to. I am grateful to the observant watchdog who goes by the name of my noble friend Lord Mottistone for pointing this out. I apologise to the Committee. Indeed, this was one of eight amendments.
On Question, amendment agreed to.
[Amendment No. 134 not moved.]
Lord Lyell Lord Lyell moved Amendment No. 134A:
Page 45, line 44, leave out ("12(2)") and insert ("12, 17, 18").
The noble Lord said: This is a consequential amendment which takes account of the fact that the Isle of Man authorities have agreed that Clauses 17 to 19, which give the Secretary of State power to make marking orders concerning telecommunications equipment and apparatus, should extend to the Isle of Man.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 135:
Page 46, line 1, leave out ("16, 20 to").
The noble Lord said: With the permission of the Committee, I will speak at the same time to Amendment No. 136. These are two more consequential amendments which take account of the fact that Clauses 17 to 19 and Clause 51 do not extend to the Channel Islands. I am advised that the Channel Islands, contrary to what goes on in the Isle of Man, run their own telecommunications system, and on their behalf I hope your Lordships will agree to these amendments.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 136:
Page 46, line 2, leave out ("50, 52").
The noble Lord said: I spoke to this with the last amendment. I beg to move.
On Question, amendment agreed to.
Clause 57, as amended, agreed to.
Clause 58 [Powers of the Post Office]:
6.12 p.m.
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede moved Amendment No. 137:

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Page 47, line 12, leave out from ("members") to end of line 16.
The noble Lord said: With the permission of the Committee, I will speak at the same time to Amendment No. 138. These amendments are aimed at further liberalising the type of business that can be handled over the post office counter. The theme of the amendment is that the Post Office should be allowed to expand its work across its counters in whatever way it considers appropriate, free from the Secretary of State peering over its shoulder. Clause 58 as drafted provides that the Post Office shall have power to provide services to those bodies falling within subsection (1A), and that says that it can provide such services for:
"(a) any body corporate—

(i) which supplies goods or services by way of business;

(ii) the affairs of which are managed by its members; and

(iii) the members of which hold office as such by virtue of their appointment to that or another office by a Minister of the Crown under any enactment.".

The effect would be that the Post Office could provide services to allow, for example, a member of the public to book an airline ticket on a public airline like British Airways but not on a private one like Laker. That is a ridiculous interpretation of the provision, but as the clause is drafted that appears to be the effect of it. The position in sub-post offices would be even more absurd. They are often situated in shops which also act, for example, as newsagents or stationers and sell such items as groceries and sweets. Why cannot the sub-post office within the shop take on board work from the private sector as well?
The principle here goes to the heart of the Bill. The Government are seeking to place the Post Office in a more openly competitive situation in relation to the private sector. Already they have sensibly drawn back from the privatisation on counters that they are proposing for British Telecom and the mails. The new Post Office Corporation as a whole will be facing much more competition than it has in the past and, if it is to survive and prosper, it must have the ability to take advantage of any appropriate market that is available; and the amendment would facilitate that. It would protect not only Crown Offices but also act as a lifeline for sub-post offices, especially those in rural areas.
Why is there great concern on behalf of the Post Office to get this extra business? The concern arises because the Post Office sees some of its traditional business falling away. For example, the implementation of the Rayner recommendations on the payment of social security benefits would reduce counter business, it is estimated, by 6 per cent. The Post Office plans to get that back through the expansion and promotion of its existing business, especially Girobank, by acting competitively in seeking new public sector business, such as business from local authorities, and by taking advantage of the new powers in subsections (1)(e) and (1)(f) of this clause, and of course by promoting, selling and fostering the increased use of mails.
To win new markets and expand counter traffic, the Post Office, its management and the unions need
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flexibility to do what they feel is right; they need to be able to manage their own business. We have already seen a fruitful conclusion to discussions over productivity on the counters and in the writing rooms behind which service them. A recent agreement between the Post Office and the Union of Communication Workers, which represents 22,000 postal officers and 2,000 postal assistants—those are the grades who work in this area of the postal business—provides for an experimental productivity scheme which, if successful, will produce savings and compensate staff. If all these issues are to be successfully tackled, the Post Office and its employees need the ability to get on with the job without the Minister constantly peering over their shoulders, and without having all the time to go to the Department of Industry for permission to do what they think is in the best interests of the Post Office.
Lord Morris: The noble Lord, Lord Ponsonby, in pleading the case for the amendment, painted a picture which I believe flew straight in the face of reality. He seemed to imagine a series of sub-post office mistresses in rural areas tripping over themselves trying to take the opportunity of benefiting from the market forces available to them. I do not believe that to be the case. The sub-post offices I use are, generally speaking, bitterly complaining about the plethora of bumph-shifting they have to do now, and the last thing they want to do is expand the borders of their responsibilities.
Lord Trefgarne: I have listened with great care to the arguments of the noble Lord, Lord Ponsonby, and I understand that his intention, and that of his noble friend, in tabling the amendment is to allow the Post Office to provide counter services for private as well as public sector bodies under the new Section 7(1A) of the 1969 Post Office Act, as inserted by Clause 58(2) of this Bill. I understand his reasons, but I am afraid that I must disagree with them.
I note that the suggestion embodied in this amendment was raised in Committee in another place by my honourable friend the member for Fife, East, and that at that time my honourable friend the Parliamentary Under-Secretary agreed to look at the point. I have to say now that since then we have looked at this suggestion in some detail, but we have not changed our overall view on the subject.
The noble Lord has criticised this new power for the Post Office as being too restrictive and not allowing them sufficient flexibility. However, I am not sure that he actually acknowledged that it is a new power and that it allows the Post Office to provide counter services for a very much wider range of bodies than they can at present. Your Lordships' Committee may be aware that our decision to include this new power was influenced in part by the decision of my right honourable friend the Secretary of State for Social Services, which my noble friend Lady Young, I think, announced here on 12th May, to change the arrangements for the payment of social security benefits. As was made clear to your Lordships on 12th May, our estimates have indicated that these changes might result in a loss of counter business for the Post Office as a whole of about 5 per cent., which could put at risk in particular some of the smaller sub-post offices.
The Government are of course fully committed to

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maintaining an adequate sub-post office network, and as part of our measures to do so we have decided to give the Post Office this new, wider power in respect of the provision of counter services. Our estimates, made in consultation with the Post Office, indicate that the extra business available through the power, plus the extension of business from existing users, will amount to up to 10 per cent., which is of course more than the loss resulting from the new DHSS arrangements.
The noble Lord is now suggesting that we should extend this power even more and enable the Post Office to provide counter services for private sector bodies. I must point out that, of course, sub-post masters can already make their own arrangements to provide counter services for the private sector over their non-Post Office counters, but this amendment would enable the Crown Offices to extend their activities into the private sector, and we do not believe that that would be right. The Government are committed to reducing the size of the public sector and we are therefore firmly of the view that the Post Office should not enter into fields of activity which would be more appropriately undertaken by the private sector, or which would require specific expertise in a specialised field. I fear that I must therefore resist the noble Lord's amendment.
Baroness Phillips: I should like to raise a point before the noble Lord, Lord Ponsonby, replies. I feel somewhat disturbed and I hope that I have heard the Minister incorrectly. As I understood it, he mentioned the loss of the business of paying out social security benefits. We received a very large deputation of sub-post masters not very long ago. It was a most impressive gathering. I was present, along with other Peers, and I recall that the Minister then gave a solemn assurance that the recommendations of the Rayner Report would not be taken up. It now appears that the Minister is saying that this business is to be taken away from sub-post offices. Is my understanding incorrect? I hope that it is.
Lord Trefgarne: As I said in my remarks just now, speaking from memory—I cannot be precise about the announcement—it was announced on, I think, 12th May that certain social security payments would, I think from the middle of next year, be payable into a bank account, at the wish of the recipient. Of course, that will mean that certain payments at present made over Post Office counters will not in future be made that way. I think that reference was made to other payments that might in future be made on a monthly basis, or a basis that is less frequent than that at present—I confess that I do not have the precise details in front of me—and that point relates to the small percentage loss in the number of transactions to which I referred. That was also one of the factors which led us to bring forward these proposals, which will more than counterbalance the loss which has concerned the noble Baroness.
Baroness Phillips: It is all very well to talk about counter-balancing the loss, but there are customers to be considered. In this instance we seem all the time to be talking about the people who serve at the counter.
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There is great concern in the rural areas over this matter. I know that this point is not strictly within the Minister's particular patch, but it is a very important one. Am I correct in thinking that the Minister is now saying that, if they so wish, individuals need not go to the post office to collect their benefits, but that if they do not so wish, the facilities will still be available at sub-post offices?
Lord Trefgarne: The matter to which I am referring, and on which the noble Baroness is questioning me, was, as I have said, the subject of a Statement made to your Lordships on 12th May. As is normal, the Statement was in fact a repetition of a Statement made in another place. I confess that I do not have a copy of the Statement before me, but the effects of the new arrangements that were then announced are exactly as I said in my earlier remarks, and I do not think I can go farther than that.
Lord Ponsonby of Shulbrede: We appreciate the new power that is being given under the subsection and we appreciate, too, the reasons for it, which the noble Lord, Lord Trefgarne, enumerated in his reply. They were very similar to the reasons that I gave as to why the new powers were being granted under the clause. However, I still feel that the powers could be exercised in an illogical way. I accept many of the Minister's arguments, but I feel that this is a matter that I shall want to look into further and return to on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 138 not moved.]
6.28 p.m.
Lord Morris Lord Morris moved Amendment No. 139:
Page 47, line 41, leave out ("or") and insert ("and").
The noble Lord said: As the Committee is aware, Clause 58 gives power to the Post Office to provide, inter alia, telepost services, and subsection (2) of the clause contains a definition of "telepost service". As Members of your Lordships' Committee can see the definition is divided into three paragraphs, paragraphs (a), (b) and (c). The amendment is an attempt to define "telepost service".
I wish to explain why I have tabled the amendment. "Telepost service" is a modern phrase that of course includes telegrams. Perhaps one day we shall receive "tele letters"—which is a very unpleasant thought. The telepost service expands the current role of the Post Office from that of the traditional, indeed ancient, telegram role, and casts it straight into the area of British Telecommunications.
I suspect that I am being a little simple about this, no doubt not for the first time, but I thought that one of the Bill's major objectives was to split the functions of the Post Office and British Telecommunications. If one of the powers of the Post Office is to remit hard copy communications transmitted by a telecommunications system—which it receives or collects in hard copy—then it is basically performing a function which I should have thought would be better performed by British Telecommunications. On the other hand, if it wishes to maintain the telegram service, which traditionally is a service which receives the instruction

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in writing and delivers the instruction in writing, then my amendment would meet that point. With that, I beg to move, and in so doing I would say that I am speaking to Amendment No. 140 at the same time. I beg to move.
Lord Lyell: My noble friend has sought to explain the reasons for his amendment, and I understand that he spoke to both Amendment 139 and Amendment 140. As far as No. 139 is concerned, it may appear to be innocent—certainly nobody would ever accuse my noble friend of being simple; he tends to do his homework, as the Committee will have observed in the long days we have been discussing this Bill—but I believe that that amendment—the first amendment, at least—would make nonsense of subsection (2) of Clause 58. Paragraph (a) in the definition of what we call "telepost" services points out that the Post Office may receive or collect messages which are to be transmitted by a system of telecommunications. If my noble friend suggests that we should replace "or" with "and", then we believe that this would mean that every communication (in hard form, in soft form or in whatever form may be referred to in the paragraph) would have to be both received and collected in material form.
We think this would be impossible, since the two activities of receiving and collecting are mutually exclusive, for this reason. A communication would either be received by the Post Office when taken there by the customer, or it would be collected by the postman going out on his rounds. But the same communications could not be both received and collected by the Post Office simultaneously. Certainly the Post Office does not intend itself to provide a telecommunications system for telepost, but it will use the network which is provided by British Telecom; and, indeed, it will need a licence so to do.
My noble friend will be interested to hear that British Telecom will provide the telegram service, although the postal business will continue to provide assistance to British Telecom in the delivery of telegrams. I hope I have said enough to explain why we believe that certainly Amendment No. 139 is not necessary in this particular instance.
Lord Morris: I am most grateful to my noble friend. I take no credit for this, but I have managed to extract an answer from him which gives a great deal of comfort to me and will be of immense interest to those in the industry who are concerned about the definition of the telepost service. I am most grateful to my noble friend for his answer, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 140 not moved.]
Clause 58 agreed to.
Clauses 59 and 60 agreed to.
Clause 61 [Control of wholly owned subsidiaries]:
Lord Glenamara Lord Glenamara moved Amendment No. 141:
Page 50, line 47, at end insert—
("(5) As regards any wholly owned subsidiary of the Post
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Office, the Post Office shall secure that, notwithstanding anything in the subsidiary's Memorandum or Articles of Association, the employees of the subsidiary are employed at all times on terms and conditions of employment which, other than as to the identity of the employer, are the same as those of employees of the Post Office employed on like work.
An employee of a wholly owned subsidiary is to be regarded as employed on like work with an employee of the Post Office if their work is of the same or a broadly similar nature and the differences (if any) between the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing their work regard should be had to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of the differences.").
The noble Lord said: I can move this amendment in a very few sentences because it is identical to Amendment No. 30, which we discussed yesterday, except that No. 30, of course, applies to British Telecom and this one applies to the Post Office Corporation. Its purpose is to ensure that the terms and conditions of employees in the subsidiaries are the same as they are for those in the Post Office Corporation itself. This is an entirely helpful amendment to the Government and to the Post Office. We hate the whole idea of the Post Office setting up subsidiaries to carry out any of its activities, but if they are to be set up we want them to go with a swing and succeed. They can succeed only if they have the goodwill—the enthusiastic goodwill—of the employees.
In the main, I imagine, that these employees will come from the Post Office Corporation. There will be personnel transferred from the Post Office into the subsidiary; and when the thing gets going and the whole pattern is established, from the subsidiaries back to the Post Office and from one subsidiary to another. There will be a great deal of transferring. In order to get the support of the Post Office workers, I believe they should be assured that if they are going to be transferred from the corporation to a subsidiary, or back again, or from one subsidiary to another, their terms and conditions will not suffer. We believe, and they believe, that this should be embodied in the legislation. I must say that the Government have helped a little by undertaking in the other place that they will consuit the unions when a subsidiary is going to be established, but the unions are firmly of the opinion—and my noble friends and I support them—that it should be in the legislation.
We are not alone in this. The EEC has moved towards the same position, because in 1977 they issued a directive saying that the same terms and conditions should apply in subsidiaries as in a parent company. Unfortunately, we cannot rely on that directive for one or two reasons which I gave yesterday. First of all, it is permissive; Governments do not have to implement it, and the United Kingdom Government have not yet made any regulations under it. So it is not operative in this country yet. But the main reason why we cannot rely on it is that it would apply only at the point of transfer, and for a very limited time afterwards; there would be no continuing assurance that terms and conditions in the subsidiaries would be the same as they are in the corporation. So we cannot rely on that. Therefore, we believe that this should be written into the legislation.
Let me say this in conclusion. I feel that the Government underestimate—they have always underestimated

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—the anxieties in the Post Office, as it is now, in the telecoms side and the postal side, about this Bill. There is tremendous anxiety; and I would hazard the guess that the week after next, from one of the major unions at its annual conference in Blackpool, we shall hear a great deal about their anxieties under this Bill. I believe that they stem, in the main, from the proposal about the corporation and British Telecom being able to set up subsidiaries, and indeed being directed to set up subsidiaries by the Minister. I believe that those anxieties could be allayed if they were assured that their terms and conditions would not suffer because of subsidiaries being established. That is why I say that this is an entirely helpful amendment and why I hope that the Government will be able to look at it. It may be that they will not be able to accept it today, but, if not, I hope they will agree to look at it between now and Report stage. I beg to move.
The Earl of Gowrie: As the noble Lord, Lord Glenamara, in fact told us, we debated the principle of this issue at some considerable length last week, when we were discussing Clause 5, and I regret that there is really very little that I can add to the remarks that I made at that time, which remarks appear in column 512 of Hansard of 12th May. We believe that the Bill already makes adequate provision in this respect through Clause 4 together with paragraph 2 of Schedule 2, which provide that contracts of employment will be transferred intact when staff are transferred to subsidiaries. You cannot get it clearer than that; and if it is at all helpful to the noble Lord, Lord Glenamara, or even to unions about to confer at Blackpool, I am very happy to repeat it.
However, we do not believe that it would be right to create the permanent links sought between terms and conditions of employees in subsidiaries and those in the Post Office. The management and workforce of the subsidiaries must be free to negotiate whatever terms are appropriate to them. It seems rather extraordinary to suppose that Parliament would have an idea about what these should be in perpetuity. Having given the repeated assurance about the transfer problem which, with Lord Glenamara, I recognise has caused some anxiety—although I have tried to show that it is needless anxiety—I hope the noble Lord will withdraw his amendment.
Lord Glenamara: I am sorry that the noble Earl has repeated the arguments used last week. We feel strongly about this and that it will not succeed unless our fears can be allayed, and that the best way to allay them would be to agree to an amendment of this kind. We shall therefore press this amendment to a Division.
6.39 p.m.
On Question, Whether the said amendment (No. 141) shall be agreed to?
Their Lordships divided: Contents, 51; Not-Contents, 89.

CONTENTS

Aylestone, L.

Boston of Faversham, L.

Bernstein, L.

Brockway, L.

Blease, L.

Cledwyn of Penrhos, L.

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Collison, L.

Llewelyn-Davies of Hastoe, B [Teller.]

David, B. [Teller.]

Davies of Leek, L.

Lloyd of Kilgerran, L.

Davies of Penrhys, L.

Longford, E.

Elwyn-Jones, L.

Lovell-Davis, L.

Evans of Claughton, L.

Maelor, L.

George-Brown, L.

Molloy, L.

Glenamara, L.

Phillips, B.

Goronwy-Roberts, L.

Ponsonby of Shulbrede, L.

Gosford, E.

Ritchie-Calder, L.

Greenwood of Rossendale, L.

Sefton of Garston, L.

Hale, L.

Shackleton, L.

Hampton, L.

Stedman, B.

Houghton of Sowerby, L.

Stewart of Alvechurch, B.

Howie of Troon, L.

Stewart of Fulham, L.

Jacques, L.

Stone, L.

Janner, L.

Taylor of Mansfield, L.

Jeger, B.

Underhill, L.

Jenkins of Putney, L.

Wells-Pestell, L.

Kennet, L.

Whaddon, L.

Kilbracken, L.

White, B.

Kilmarnock, L.

Winstanley, L.

Lee of Newton, L.

Young of Dartington, L.

NOT-CONTENTS

Abercorn, D.

Killearn, L.

Abinger, L.

Kimberley, E.

Airey of Abingdon, B.

Kinnoull, E.

Alport, L.

Lauderdale, E.

Ampthill, L.

Lawrence, L.

Auckland, L.

Long, V.

Avon, E.

Loudoun, C.

Bellwin, L.

Lyell, L. [Teller.]

Belstead, L.

Mackay of Clashfern, L.

Bessborough, E.

Macleod of Borve, B.

Brookes, L.

Margadale, L.

Burton, L.

Marley, L.

Clifford of Chudleigh, L.

Mersey, V.

Cockfield, L.

Monckton of Brenchley, V.

Colville of Culross, V.

Monk Bretton, L.

Colwyn, L.

Morris, L.

Cork and Orrery, E.

Mottistone, L.

Cranbrook, E.

Mountevans, L.

Cullen of Ashbourne, L.

Murton of Lindisfarne, L.

Davidson, V.

Newall, L.

de Clifford, L.

Northchurch, B.

Digby, L.

Nugent of Guildford, L.

Donegall, M.

O'Hagan, L.

Eccles, V.

O'Neill of the Maine, L.

Ellenborough, L.

Orkney, E.

Elliot of Harwood, B.

Orr-Ewing, L.

Faithfull, B.

Rankeillour, L.

Ferrers, E.

Rawlinson of Ewell, L.

Fortescue, E.

Renton, L.

Fraser of Kilmorack, L.

St. Aldwyn, E.

Gainford, L.

Sandford, L.

Gisborough, L.

Sandys, L. [Teller.]

Gowrie, E.

Savile, L.

Gridley, L.

Sempill, Ly.

Grimston of Westbury, L.

Shannon, E.

Hailsham of Saint Marylebone, L.

Sharples, B.

Skelmersdale, L.

Halsbury, E.

Stradbroke, E.

Harmar-Nicholls, L.

Strathclyde, L.

Hatherton, L.

Sudeley, L.

Henley, L.

Swinfen, L.

Holderness, L.

Trefgarne, L.

Hylton-Foster, B.

Trenchard, V.

Inglewood, L.

Trumpington, B.

Kemsley, V.

Vivian, L.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 61 agreed to.
Clause 62 [General control and supervision by the Secretary of State]:
6.48 p.m.
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede moved Amendment No. 142:
Page 51, line 28, leave out ("subsections") and insert ("subsection").
The noble Lord said: I beg to move Amendment No. 142 and with it to speak to Amendment No. 143. The purpose of this amendment is to delete the power of the Secretary of State to direct the Post Office to dispose of its assets. This subsection, together with Clause 64, on derogating monopoly, and with Clause 65, on licensing, constitutes, as noble Lords opposite know, the heart of the Bill and of our opposition to Part II of the Bill, which is the postal side of the Bill. It is also, so far as the Government are concerned, a major ideological point for it facilitates the privatisation of parts of the Post Office and threatens thereby the survival of the countrywide postal service.
It may be true that the Post Office is less vulnerable to this kind of asset stripping than is BT, but we wish by this amendment to stop the Secretary of State from hiving off the profitable activities to the private sector. The future of the Post Office is finely balanced; it is under enormous financial pressure at present and largely so because of the Government's attitude to the financing of nationalised industries. The Government squeeze on cash limits is having a severe impact. In fact, we have debated the principle of this amendment very fully under Part I of the Bill. Therefore, I do not intend to make a long speech on it, as we are discussing a principle very similar to the principle we discussed on Part I, on British Telecom; but we wish to make clear our strong views on this particular matter. I beg to move.
The Earl of Gowrie: As the noble Lord said, we have gone over the principle of this in a different connection. The noble Lord, Lord Ponsonby, suggested that powers would allow the Secretary of State to dispose of any asset owned by the Post Office. But this is not so. The power extends only to those assets not required for the proper discharge of their duties to provide either telephone or letter services. Moreover, those parts of their undertaking which require the benefit of statutory privileges could not be disposed of without legislation since the various enactments only apply to the corporation. I think that the noble Lord's fears are not well-founded. I hope that he will not press the amendment to a Division.
Lord Ponsonby of Shulbrede: I do not think that it would be fruitful to take to a Division a matter which has already been decided. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 143 not moved.]
Clause 62 agreed to.
Clauses 63 to 65 agreed to.
Lord Sandys: At this juncture it may be a suitable moment to adjourn and take other business. I suggest
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we return to the Committee at eight o'clock. I beg to move that this House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

European Communities (Definition of Treaties) (Accession of the Republic of Zimbabwe to the second ACP-EEC Convention of Lomé) Order 1981
6.53 p.m.
Lord Skelmersdale: My Lords, I beg to move that the draft European Communities (Definition of Treaties) (Accession of the Republic of Zimbabwe to the Second ACP-EEC Convention of Lomé) Order 1981, which was laid before this House on 30th April, be approved.
I would also draw the attention of your Lordships to the three treaties listed in the schedule to the order. Item 1 in the schedule is the Accession agreement itself (contained in Cmnd. No. 8150); item 2 provides for unrestricted access for products from Zimbabwe in the area covered by the European Coal and Steel Community (this is contained in Cmnd. No. 8151); and item 3 deals with the manner in which the Community's aid obligations to Zimbabwe under the Accession Agreement will be implemented (contained in Cmnd. No. 8219). The House will be aware that the effect of the order will be that these agreements will be able to operate in this country in accordance with their provisions.
The accession of Zimbabwe to the second Lomé Convention is a step of great significance: it is, on the one hand, a mark of Zimbabwe's place in the world, and, on the other, evidence of the further development of the Community's relations with the developing world. As so often in her short history, Zimbabwe's relationship with the Community is something of an exception: she is one of the very few countries which had has the opportunity to accede to the Lomé Convention although she was not listed in the Treaty of Rome as the dependent territory of a member state.
The Government naturally took a special interest in the preparations for the negotiation of this agreement. As soon as we could we prepared the ground by steering through a special régime for Zimbabwe's trade with the Community which took effect in January 1980. This régime gave Zimbabwe roughly equal treatment with those dependencies of member states which are associated with the Community through what is known as the OCT (the overseas countries and territories) decision; that is, the dependencies of member stafes. This in turn largely mirrors the trade provisions of the Lomé Convention. Through this interim régime, the Zimbabwe Government was able to learn at first hand the extent of the privileged trade access to the Community enjoyed by the ACP (the African, Caribbean and Pacific) states which are signatories to the Lomé Convention. It should be noted that the application to accede to the second Lomé Convention was one of the earliest decisions taken by the Government to Zimbabwe after independence. This is clear evidence of the value the ACP states put on Lomé membership.

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The Community was equally well aware of the importance of Zimbabwe's accession, in particular its political importance. There is a clear European interest in ensuring the emergence of a stable Zimbabwe firmly linked to Europe both politically and economically. Association with the Community through the Lomé Convention, with all the advantages that that gives the ACP, is the natural instrument for this purpose.
Once Zimbabwe had joined the ACP Group of states and her application to accede to Lomé had been approved by the ACP/EC Joint Council of Ministers in Nairobi in May 1980, the next step under the provisions of the Convention was to negotiate an accession agreement with the Community. It was clear from the start that the negotiations would not be easy. Many of Zimbabwe's major exports are product-sensitive for certain Community member states. For example, sugar for France and Belgium; beef for France and Ireland; and tobacco for Italy. But every member state recognised in the end that the political prize at stake far outweighed any small economic cost, and agreement was finally reached.
Throughout the negotiations which lasted from June to October 1980 we kept in close touch with the Zimbabweans so that we could give them any advice they sought on the conduct of the negotiations and could ensure that the outcome of the negotiations was satisfactory for them.
Under the Interim agreement at present in force between the Community and Zimbabwe, Zimbabwe enjoys access for her exports to the Community market which is virtually identical to that provided for in Lomé II; that is, free access for most Zimbabwean agricultural exports, and all her industrial goods, subject only to the safeguard provisions of the convention. Once the accession agreement is in force Zimbabwe will be able to benefit from all the provisions of Lomé II, as well as the special provisions of the agreement itself.
The benefits of greatest importance to Zimbabwe are, first, sugar. The Zimbabweans made it clear from the beginning of the negotiations that access for their sugar was their major interest in Lomé. The Zimbabwean Government hopes to find employment for large numbers of displaced Africans, perhaps as many as 500,000, in an expanded sugar industry. But secure markets are essential if that planned expansion is to succeed. In the negotiations the Community recognised that, by virtue of her former membership of the Commonwealth Sugar Agreement, Zimbabwe was entitled to be allocated a quota of sugar which she could sell to the Community. The quota of 25,000 tonnes which was agreed is equivalent to the old Commonwealth Sugar Agreement quota. Zimbabwe will have the right to sell 25,000 tonnes of sugar to the Community annually from 1st July 1982, on price conditions equivalent to those set out in the Sugar Protocol to the Lomé Convention. The Community has also agreed that Zimbabwe should become a member of the Lomé Sugar Protocol. This will have to be negotiated with the ACP in due course.
Beef. This is also an important product for Zimbabwe. In the accession agreement Zimbabwe has been granted an annual quota of 8,100 tonnes of beef and veal which she will be able to export to the Community once she can meet the Community's animal
890
health requirements. There is provision for review of the quota after two years.
The question of tobacco exports is of particular interest to Zimbabwe. Under the provisions of Lomé II, Zimbabwe's tobacco exports automatically enjoy duty-free access to the Community market. But in order to allay the concerns of Community tobacco producers, it has been agreed that consultations will be held with the ACP producers if ACP imports should be shown to cause problems. The Government will, of course, take into account the interests of United Kingdom tobacco manufacturers in addition to those of Zimbabwe and other ACP producers.
Once the accession agreement is in force, Zimbabwe will also be able to benefit from the aid provisions of Lomé. The Community has agreed to enlarge the European Development Fund, through which Lomé aid is channelled, by 85 MECU (not far short of £50 million) to take account of Zimbabwe's accession. Of this, 40 MECU has been allocated for Zimbabwe's country programme and 30 MECU for regional projects.
The Community will also propose to the ACP that Zimbabwe should be included in the list of landlocked ACP states in Article 155(3)(b) of Lomé II. This will ensure that particularly favourable consideration is given to Zimbabwe's needs as regards a wide number of provisions of the convention, in particular those concerning the application of safeguard measures, derogations from the rules of origin for Zimbabwe's exports to the Community, and the Stabex Scheme (which is designed to compensate the ACP for fluctuations in earnings from exports of certain products to the Community) and the Sysmin Scheme (which is intended to provide some support to certain ACP minerals industries in times of difficulty). In the application of these two schemes a lower level of dependence on the products concerned than that applied to other ACP states will enable Zimbabwe to qualify for assistance. In addition to Zimbabwe's aid allocation under Lomé II, the Community has also made substantial aid funds available to Zimbabwe in advance of accession and 13 MECU (some £7 million) has been allocated to her to help in post-war reconstruction and rehabilitation, and at ZIMCORD, the recent donors' conference in Salisbury, the Community pledged a further 14·5 MECU (some £8 million).
I hope, with this additional information, that the order will commend itself to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 30th April be approved.—(Lord Skelmersdale.)
7.3 p.m.
Lord Goronwy-Roberts: My Lords, the House will be very grateful to the noble Lord, Lord Skelmersdale, for the lucid and very informative way in which he introduced this order which, I hasten to assert from this side of the House, meets with our enthusiastic approval. I gather that the other place stole a march on us this morning but there was not time for either the noble Lord or I to find out what they have made of the order. I doubt if any difficulty arose during their discussion.
The purpose of the order, of course, is common form. The agreements between Zimbabwe as an applicant and the EEC and its member states have to

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be squared, as it were, with the relevant sections of our own Act, the European Communities Act 1972, whereby those treaties are implemented. This order is essential for that purpose and I think it is the last thing we need to do in order to make the accession effective.
I see that Zimbabwe applied to accede to Lomé II soon after independence, I think, in April 1980, and that the agreements to accession were signed in Luxembourg in November last year. Obviously various parts of the sections of the agreements will come into effect on various dates, and the Minister has indicated one or two transitions which will take some months to effect. I was particularly impressed in this regard to hear of the way in which this country has helped the Zimbabwean officials and Government to negotiate their accession. This country, since independence, has extended quite substantial financial aid to the new republic, the new member of theCommonwealth. It has also assisted them in other very essential ways by advice and guidance, and I am sure this is deeply appreciated in Salisbury.
As the Minister has pointed out, there is no doubt that Zimbabwe stands to gain very much from Lomé II in trade co-operation, in financial and technical aid and also by means of the Stabex scheme, designed to stabilise ACP export earnings from certain commodities—in this case particularly beef, sugar and tobacco.
Stepping right outside the Lomé traditions, may I once more suggest to Africa as well as to Western Europe, and indeed to the Commonwealth and to all countries concerned with the future of Zimbabwe and therefore of Central Africa, the possibility of special arrangements whereby certain surpluses in Zimbabwe—these days we have maize very much in mind—could be made available to contiguous countries who suffer very often from devastating famine through lack of staple foodstuffs. I know this does not precisely come within the terms of the order, or indeed within the terms of the Lomé Convention, but I think this possibility is rightly raised—in other words, we expect countries including those in Africa, to apply themselves to the possibility of other forms of aid to advance African prosperity, perhaps through special assistance to a specific member of that community.
The Minister also gave details of the financial help which the Fifth European Development Fund will make available to Zimbabwe. It is gratifying to see that the increase in the funds corpus will be funded as to 80 per cent., or some £88·5 million, by this country. I would repeat that, all told, the British contribution to Zimbabwe since independence is very substantial and it is of course well worth making the point that the viability and stability of Zimbabwe is essential not only to the progress of its own people but to that of central Africa as a whole. A chaotic and poverty-stricken Zimbabwe would very soon add to the already very difficult problems of Central and Southern Africa, and it is most encouraging to see how since last April, politically and economically, there has been this wise guidance and statesmanship in Zimbabwe leading to an increasingly stable state,which in turn contributes to the stability of a very important part of the world politically and economically.
Zimbabwe, of course—many Members of this House who have lived and worked there will know
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those who have made a tremendous contribution to the country—has very great potential mineral and agricultural wealth. Its agricultural surplus, as I mentioned, could well be used so as to alleviate serious discrepancies in the supply of food in other African countries. But, of course, a larger amount of financial and technical aid would be necesssry to effect such a programme than is envisaged even in this very promising and very acceptable system that we are discussing. Indeed, a good deal needs to be done, and a good deal of finance and technical aid needs to be devoted to the development of transportation if these surpluses—which are bound to recur and possibly increase in the future—are to be used meaningfully so as to rebound to the internal prosperity of Zimbabwe and to the survival of many millions of people outside it.
However, while these larger measures still need to be undertaken, possibly within the ambit of something as tremendous as the Brandt proposals, the benefits which will accrue under this order and through the Lomé Convention as it stands are to be welcomed, and welcomed very warmly. Since independence Zimbabwe has indeed been led with great ability and responsibility by Mr. Mugabe and his Government and in approving this order the House will, I am sure, wish to send once more to the Government and people of Zimbabwe our warmest good wishes for their continued progress.
7.11 p.m.
Lord Skelmersdale: My Lords, I am very grateful to the noble Lord, Lord Goronwy-Roberts, for his very sympathetic reception of this order. He asked a number of detailed questions and made comments on some of the things I said. One thing I should like to tell him at this moment—and if there is anything else which, jointly, we feel I ought to be communicating with him about, I shall of course write—is on the subject of maize and other surpluses. The Community is currently considering in what way it can help Zimbabwe's maize surplus to be made use of in neighbouring countries, but there are major difficulties over transporting the maize. I further understand that in recent weeks Zimbabwe farmers have been able to dispose of a considerable amount of the surplus through commercial contracts. So a small step in this direction is being taken. I, like the noble Lord, should like to see this step made considerably greater, and I am sure that it will be.
The noble Lord also made some very kind remarks about myself. I hope that I shall be worthy of them in a few months' time, but we shall see. But I am very grateful to him for what he said. Of course, we are concerned with the progress, in whatever field, of all Commonwealth countries, and Zimbabwe now, under this régime, is certainly no exception to our commitment to further the aims and objectives of the Commonwealth and to do all that we can in London and Britain to help them along their way, in whatever they seek to do. I shall of course refer the noble Lord's remarks to my honourable and right honourable friends and, as I have said, if I have missed anything that I should have said to him, I shall make full use of the facilities to write to him.
The Lord Bishop of Norwich: My Lords, before the noble Lord sits down, may I ask him this question? When he used the phrase "other Commonwealth countries", did he mean that the possibility of the maize being exported might help Uganda, which is in such need of both transportation and all forms of food, and in Commonwealth concerns, in the next month or two especially, may be in real need?
Lord Skelmersdale: My Lords, I did not use the word "Commonwealth" in relation to maize. But I am sure that these are some of the things that will be looked at, both here and in the Community in Brussels.
On Question, Motion agreed to.

Sheriff Courts (Scotland) Act 1971 (Summary Cause) Order 1981
7.14 p.m.
The Lord Advocate (Lord Mackay of Clashfern): My Lords, I beg to move that the Sheriff Courts (Scotland) Act 1971 (Summary Cause) Order 1981, a draft of which was laid before the House on 6th May 1981, be approved. This order will be made under Section 41 of the Sheriff Courts (Scotland) Act 1971, and its purpose is to raise the upper financial limit of the summary cause in the sheriff court from £500 to £1,000. The summary cause was introduced into the sheriff court on 1st September 1976, with an upper financial limit of £500. Since that time, the change in monetary values has been such that the approximate equivalent of £500 is £1,000. This order accordingly increases, as from 1st September 1981, the fifth anniversary of the introduction of the summary cause, the upper financial limit of that procedure to £1,000. The Joint Committee on Statutory Instruments has considered this and has, in its 20th Report, indicated that it has no special point to draw to the attention of the House. My Lords, I beg to move.
Moved, That the draft order laid before the House on 6th May be approved.—(Lord Mackay of Clashfern.)
Lord Boston of Faversham: My Lords, your Lordships will be very grateful to the noble and learned Lord the Lord Advocate for explaining the purpose of the order. I hope the fact that I cannot, unfortunately, claim any expertise in Scottish law will not make my support for him and for his order any less acceptable to him. It is with much pleasure that I join him in inviting your Lordships to accept it.
On Question, Motion agreed to.

Licensing (Amendment) Bill [H.L.]
7.15 p.m.
Lord Gainford: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Gainford.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ALPORT in the Chair.]
Clause 1 [Special hours certificates: amendment of provisions as to revocation]:
Lord Gainford Lord Gainford moved Amendment No. 1:
Page 1, line 7, after ("certificate") insert ("for any premises or for part of any premises").
The noble Lord said: In moving this amendment, also wish to speak to Amendment No. 2. These are technical amendments which seek to obviate a possible ambiguity in the construction of the proposed new subsection (4) of Section 81 of the Licensing Act 1964. I have been advised that the references in Section 81 to "part of premises" are intended to cover the case where a special hours certificate relates to part only of licensed premises or club premises. As the new subsection which is proposed by Clause 1 now stands, it could be construed as enabling a chief officer of police to apply for the revocation of a special hours certificate on grounds of disorderly or indecent conduct in a part of the premises not covered by the certificate. I am sure your Lordships will agree that this would be unjust, and the purpose of these amendments is to ensure that the grounds of an application for revocation relate solely to conduct on the premises, or part of the premises, specified in the special hours certificate. I beg to move.
On Question, amendment agreed to.
Lord Gainford Lord Gainford moved Amendment No. 2:
Page 1, line 13, leave out ("of the premises").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
Lord Gainford Lord Gainford moved Amendment No. 3:
After Clause 1, insert the following new clause:
("Procedure on applications to justices under section 81A(2) Licensing Act 1964
. In section 91 of that Act (procedure of licensing justices) for the words "or 81" there shall be substituted the words ", 81 or 81A(2)".").
The noble Lord said: In moving this amendment, I also wish to speak to Amendment No. 5. These are further technical amendments. Amendment No. 3 seeks to extend the power of the Secretary of State to make rules prescribing procedures on applications to the licensing justices in respect of special hours certificates. His existing powers extend only to applications for the grant and revocation of special hours certificates. They do not extend to applications which chief officers of police will shortly be able to make under a new Section 81A(2) of the Licensing Act 1964, when Sections 2 and 3 of the Licensing Act 1980 are brought into operation.
This will enable a chief officer of police to apply to the licensing justices, or to the magistrates' court, for the imposition of a condition restricting the hours of operation of a special hours certificate on the grounds that bona fide use of the premises for the purpose of providing music and dancing is likely to end at an

895
earlier hour than laid down as a general rule by the Licensing Act 1964; or if it is desirable for the permitted hours to end earlier, in order to avoid or reduce any disturbance or annoyance to residents in the neighbourhood of the premises, and also to avoid the occurrence of disorderly conduct on the premises.
All that this clause seeks to do is to enable the Secretary of State to establish procedures for the police and licensing justices to follow in relation to these applications. The amendment to the Long Title, Amendment No. 5, is to make it consistent with the inclusion of this new clause which deals with a matter other than simply the revocation of special hours certificates. I beg to move.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): May I say a word on my noble friend's two amendments to which he has just spoken and which the Government certainly support. If this new subsection, Amendment No. 3, is accepted and if the Bill is later enacted, it is the intention of my right honourable friend the Home Secretary to re-make the existing licensing special hours certificates rules to take into account the provisions of the new Section 81A(2). The delay in bringing Sections 2 and 3 of the Licensing Act 1980 into operation has been due to the need first to amend the Crown Court rules. The preparation of these amendments is almost complete and my right honourable friend hopes shortly to make an order to bring the Act fully into operation.
Lord Boston of Faversham: The information which has been provided by the Minister, the noble Lord, Lord Belstead, is very helpful and I am very happy to join his noble friend, the noble Lord, Lord Gainford, in inviting your Lordships to accept it.
On Question, amendment agreed to.
Clause 2 [Short title and extent]:
Lord Gainford Lord Gainford moved Amendment No. 4:
Page 1, line 18, at end insert—
("(1A) This Act shall come into operation on such day as the Secretary of State may by order made by statutory instrument appoint.").
The noble Lord said: Amendment No. 4 has a two-fold purpose. In the first place, it is intended to provide adequate time for the police and licensing justices to become aware of the provisions of the Bill after it is enacted. A further reason is to ensure that it does not come into effect before Sections 2 and 3 of the Licensing Act 1980 come into operation.
This Act will provide parties aggrieved by a decision of the licensing justices to revoke or not to revoke a special hours certificate, with the right of appeal to the Crown Court. I am sure your Lordships will agree that it is desirable that this right should exist when, as I hope, the provisions contained in Clause 1 of my Bill come into force. I hope that my noble friend the Minister will be able to give an assurance to your Lordships that it will not be long before the remaining provisions of the 1980 Act come into effect. I beg to move.
Lord Belstead: The reason for the delay in bringing the 1980 Act into force which my noble friend is asking me about is because of the amendment to the Crown Court rules to which I have just referred. It is hoped that these amendments will be incorporated into the rules very soon and the Act brought into force in the early summer.
On Question, amendment agreed to.
Clause 2, as amended, agreed to.
Lord Gainford Lord Gainford moved Amendment No. 5:
In the Title, line 2, leave out ("the revocation of").
The noble Lord said: I have already spoken to this amendment, which I beg to move.
On Question, amendment agreed to.
House resumed: Bill reported with the amendments.
[House adjourned during pleasure from 7.25 until 8 o'clock.]

British Telecommunications Bill
House again in Committee.
Clause 66 [Exclusive privilege of the Post Office with respect to the conveyance etc. of letters]:
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede moved Amendment No. 144:
Page 55, line 24, leave out from ("addressee") to end of line 26.
The noble Lord said: The deletion of this subsection would ensure that the delivery of hard copy transmitted by British Telecom as part of an electronic mail service would be covered by the postal monopoly unless, of course, a licence was issued by the Secretary of State under the provisions of Clause 68. The important point here is that there is no need for the Government to take a decision about this matter now. I think it would be preferable to monitor developments and take such suitable action later, if such action is required. For example, supposing it was decided that it would be desirable for the hard copy to be delivered either by British Telecom staff or by some private operator, there would be power under Clause 68 for the Secretary of State to grant a licence specifically for that purpose. So to that extent subsection (5)(c) is really unnecessary.
However, there are more serious arguments against this particular proposal as well, for it clips away at the basic letter monopoly, potentially damaging the viability of the letter service. There is no question of the Post Office gaining the monopoly of electronic mail at all stages of its progress through the system, if only because transmission by electronic means lies fairly and squarely within the monopoly of British Telecom under Clause 12 of the Bill. For transmission the Post Office is likely to be dependent on British Telecom purchasing the service from them by paying for circuits just like any other licensee. Effectively therefore the issue is restricted to whether the Post Office should have the exclusive privilege of delivering the hard copy element of electronic mail.
The Bill defines a letter as a communication in written form directed to a specific person or address

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and relating to the personal, private or business affairs of the sender or the addressee. The majority of electronic mail hard copy will meet these three criteria. The Post Office itself has a unique and ubiquitous delivery network which is ideally tailored for the delivery of these items to any address in the country without the need for an additional infrastructure—an important consideration in an era of resource considerations.
The Post Office anticipates that electronic mail in hard copy form will form a growing proportion of letter mail in the future and indeed will become a significant proportion of the total mail. For example, electricity bills could be printed by computer and sent over the wire for printing, enveloping and delivery by the relevant local mechanised letter office; and if there is no monopoly on delivery then there is a considerable longer-term risk of the Post Office losing this kind of traffic to operators who will cream off the profitable routes and deliver in major centres, but leave the Post Office with the statutory obligation to serve, as it were, the Highlands and Islands, so in fact increasing its unit costs. The Post Office has the right to some protection for its basic traffic, otherwise the whole fabric of the postal service is potentially at risk.
This subsection as it stands makes the assumption that the Government are thinking of electronic mail hard copy as a premium service involving relatively few high-speed, high-cost messages. That may indeed be so at first, but it is far from being the longer-term pattern foreseen by the Post Office. Indeed, a recent report by the Science Policy Research Unit, commissioned by the Union of Communications Workers, predicts a huge growth in electronic mail, directly affecting the postal traffic. In particular, the report highlights the growth of communicating word processors; basically that is typewriters with visual display units that can store and edit texts of facsimile, like remote photocopying enabling a document to be electronically scanned and transmitted to a distant location over the telephone network and there printed out as a hard copy and a view data which links the telephone and the television set to provide an information service.
Electronic mail will be used particularly on a business-to-business basis and the review makes various forecasts about its impacts. It concludes by predicting a loss of postal traffic of 25 per cent. as a result of electronic mail by the end of this decade. This in turn could lead to a loss of about some 35,000 jobs in the postal service. Therefore, as your Lordships will appreciate, it is vital to the Post Office that it shall continue to have the monoply for the delivery of hard copy from electronic mail services. So this amendment, which will cost the Government very little and is strongly supported by the Post Office Board, is an important one, and there does not really seem to be the need for this particular subsection in any case. I beg to move.
The Earl of Gowrie: When amendments are very close to those moved in another place we try to look at them afresh and to consider them absolutely on their own merits. I have looked at the amendment and I have listened carefully to what the noble Lord, Lord Ponsonby, has said. Nevertheless, I am afraid that
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I have not heard anything which makes me feel that the line taken by my honourable friend the Minister of State in another place should substantially be altered. The noble Lord has argued that the Post Office already has a comprehensive delivery network throughout the country and that resources would be duplicated if rival delivery services for electronic mail were to be established; but surely the very fact that the Post Office has the delivery network should give them a huge head start over any potential competitiors. One wonders what they are fussing about. Furthermore, the noble Lord has argued that the Post Office will lose some 25 per cent. of its traffic if the monopoly is not extended in this way; but I do not believe that this need be the case. The Post Office should not fear this competition when it is in a position to meet it.
The noble Lord has also argued that the exclusion of hard copy electronic mail from the Post Office monopoly is unnecessary at present because if the service proves to be inadequate, then the Secretary of State could use his powers under Clause 68 or Clause 69 to license private operators or to suspend the monopoly entirely in this respect. Certainly that is true in theory, but while it is true in theory I am afraid, as I have said before, that if the Post Office is given the monopoly in this field now, it is quite likely that private operators will be deterred from setting up in this type of electronic mail business, and we shall therefore never reach the point where the Post Office service may in fact be judged to be adequate or inadequate.
This is an issue which we have considered very carefully and at great length, and I must say that I remain firmly of the view—and it is an essential principle of the Bill—that to give the Post Office a monopoly of delivery over hard copy electronic mail could have a very damaging effect on the growth and development of this extremely important new form of communication. Therefore, I would ask the Committee to resist the amendment.
Lord Ponsonby of Shulbrede: I thank the noble Earl for his response to my amendment. I shall read closely what he has said in Hansard and then later decide whether to return to it. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 66 agreed to.
8.12 p.m.
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 145:
After Clause 66, insert the following new clause:
("Interception of mail
.—(1) A person who—

(a) intentionally intercepts the contents of the mail carried by the Post Office;

(b) instigates any person engaged in the business of the Post Office to intercept the mail; or

(c) discloses the contents of any mail intercepted under paragraph (a) or (b) above.

unless acting in obedience to a warrant issued pursuant to the following provisions of this section, shall be guilty of an offence and liable on conviction on indictment to a fine not exceeding £5,000 or to imprisonment for a term not exceeding three years or to both.
(2) Proceedings for an offence under subsection (1) above shall not be instituted in England or Wales except by or with the consent of the Attorney-General, or in Northern Ireland except

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by or with the consent of the Attorney-General for Northern Ireland.
(3) No person shall be guilty of an offence under subsection (1) above as respects any act done by him whilst engaged in the business of the Post Office.
(4) The Secretary of State may, on the application of a chief officer of police or the Commissioners of Customs and Excise, issue a warrant for the interception and disclosure of the mail if he is satisfied that—

(a) it would assist in the detection of a serious offence;

(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried; and

(c) there is good reason to think that the interception would result in a conviction for that offence.

In this subsection "serious offence" means—

(i) an offence for which a person not previously convicted could reasonably be expected to be sentenced to imprisonment for a term of three years; or

(ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence.

(5) The Secretary of State may, on the application of a chief officer of police or the Director-General of the Security Service issue a warrant for the interception and disclosure of the mail if he is satisfied that—

(a) it would assist in the detection of a major terrorist or espionage activity giving rise to external or internal danger to the defence of the Realm; and

(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried.

(6) An application for a warrant under this section shall be made in writing and shall specify—

(a) the person whose mail it is sought to intercept; and

(b) the facts and circumstances in support of the application;

but the Secretary of State may allow any information required under paragraph (b) above to be provided orally and not in writing in respect of an application for a warrant under subsection (5) above.
(7) Except in a case of emergency, any warrant under this section shall be issued only under the hand of the Secretary of State; and, in any such case, shall be confirmed under his hand as soon as reasonably practicable after issue.
(8) In this section "intercept" includes the doing of any act designed to enable an interception to take place, and "intercepts", "intercepted" and "interception" shall be construed accordingly.").
The noble and learned Lord said: This amendment runs parallel to Amendment No. 123 which we discussed and upon which a Division took place. Much the same principles apply in the consideration of this amendment as applied to Amendment No. 123. It is a very important amendment in that it deals with the interception of mail, the right to open private letters between citizens, and as much of a serious invasion of privacy as telephone tapping. The techniques available are very considerable. Interception of mail, opening of letters, curiously enough has not excited anything like as much concern or arousal of public interest as telephone tapping. Whether that is because fewer people know about the fact that letters of citizens are opened than know about telephone tapping, I do not know. The extent of it is not very clear either, and it may well be that I may be able to persuade whoever is to reply, perhaps the noble Earl, Lord Gowrie, to give us some indication of how extensive the practice is.
It was said by one of my honourable friends in another place that the figure for mail interception is
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enormous; that was the adjective he used; and that half a dozen agencies, apparently called "requesting agencies", have a right to demand interception of mail. I do not know whether this is true or not, but it would be helpful if we could have some light thrown upon this by the noble Earl.
Then, the means for carrying out interception of letters and the techniques that are now available, of course, need not make and do not make apparent the fact that the letters have been opened. There are various ingenious devices like rays and carbon lights that can apparently show through envelopes and can record letters. So that here again the possibility of abuse and the instruments for making abuse possible are considerable, although clearly access by those who seek to intervene is obviously much more complicated and more difficult than it is in regard to tapping telephones. If the noble Earl is in a position to enlighten the Committee about the extent of this, I think it could well reassure the public.
So far as the clause is concerned, it seeks once again to give a statutory basis to the right to open the citizens' letters. The present legal position is, in my submission, as uncertain as it is in the case of telephone tapping. Here again we may well find ourselves, when we are arraigned before the European Court of Human Rights, to be in breach of Article 8 of the Convention on Human Rights, which includes among its provisions in express terms the protection of the privacy of correspondence. It reads:
"Everyone has the right to respect for his private and family life, his home and his correspondence".
Once again it would indeed be unfortunate if we found ourselves arraigned and found wanting before that body.
I cannot help recollecting, when I was on the Woolsack, the alarming warnings that were given to me that we might have been in breach of the Convention in regard to the closed shop. This is a much more public and probable, or possible at any rate, field for infringement of rights than the limited aspect of the closed shop.
A great deal was made by the noble Earl, in his speech on Amendment No. 123, of the value of the safeguard provided by the monitoring of my noble and learned friend Lord Diplock, the value of which of course I do not under estimate, within the sphere in which it operates. But there is no Diplock monitoring of letters, as I understand it, no equivalent monitoring to see that this is done in accordance with the tests, within the limitations that are set out in the undertakings and the description of what is done by the Home Secretary in the field of telephonic communication.
What we have done in the new clause which I am moving is once again to set out a strong penalty for those who intercept letters without authority, or instigate persons to do so, or disclose the contents of wrongly intercepted mail. Then we give again the safeguard of the Attorney General in respect of the bringing of proceedings, and then set out the circumstances in which the Secretary of State should properly and within the law issue warrants for the interception and disclosure of mail. As I say, they still enable him to do so—as he himself says is his purpose, and I have no doubt it is—to assist in the detection of serious

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offences; as a last resort measure; and when there is good reason to think it will result in a conviction.
Then in subsection (5), as in the case of Amendment No. 123, there are set out the circumstances in which on the application of a chief officer of police or the Director-General of the Security Service a warrant can lawfully be issued to intercept mail—when,
"it would assist in the detection of a major terrorist or espionage activity giving rise to external or internal danger to the defence of the Realm".
Then it sets out the procedure for the application for the warrant to be made in writing, et cetera. We have been careful there once again merely to set out what the Home Secretary says is his practice in this field. To put it into statutory form will certainly strengthen his position if he is arraigned in the European Court, or indeed if he is brought before the courts of this country. I beg to move.
The Earl of Gowrie: I must confess that in some respects the noble and learned Lord, not for the first time—and I am sure not for the last—has bowled me out because I had not really anticipated that this particular amendment would be moved. The reason is that almost everything—indeed, I think everything—that I said in our debate on Amendment No. 123 applies to the interception of mail. It is certainly my advice that there is no, as it were, class distinction as between interception of mail and telephonic interception.
However, I can give the noble and learned Lord some information. The statistics on the interception of mail were, in fact, in the Home Secretary's White Paper—not the Diplock Report. Therefore, they are available. As regards the question whether Lord Diplock's remit covers mail, I would imagine that it does do so, but I would have to consult the Home Office about that. If I may, I shall write to the noble and learned Lord about that matter if that would be satisfactory to him. However, on the general issues, the Government's position on the interception of mail is the same as their position on bugging. I went into that in some detail and with care when we dealt with Amendment No. 123.
Lord Elwyn-Jones: I would not be discourteous in saying that that answer is less than adequate. Indeed, it hardly touches on nine out of 10 of the points that I raised. However, I certainly did not intend to bowl out the noble Earl. I am not a very good bowler anyway, and he is a very good batsman. Perhaps I should have given the noble Earl greater notice. I am not sure that I am at fault but, in all the circumstances and in view of the fact that, without criticising him, I must say that he has not been able to deal with the points I have raised, I shall not divide the Committee. We have had a Division on the question of the main principles.
Nevertheless, it may well be that I shall return to the matter on Report, by which time the noble Earl will certainly not be bowled out and may—indeed, I hope that he will—have answers to the serious questions that I have raised and which cause concern to the public. In those circumstances and in the light of—I shall not call it a threat—my expectation to raise the matter again, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 67 [General classes of acts not infringing the postal privilege]:
8.23 p.m.
The Earl of Gowrie The Earl of Gowrie moved Amendment No. 146A:
Page 56, line 2, leave out ("the sender") and insert ("either correspondent").
The noble Earl said: I beg to move Amendment No. 146A. Clause 67(1)(c) exempts from infringement of the monopoly the conveyance and delivery of a letter by a messenger sent for the purpose by the sender. This amendment which replaces Amendment No. 146 extends this exemption and allows the addressee of a letter also to send a messenger for the purpose of collecting that letter from the sender. Representations have been made to my honourable friend the Minister of State for Industry in particular from small businesses that an amendment on these lines should be made. I believe that it is a sensible amendment which removes a certain amount of illogicality in the present position which would, for instance, allow me to send a messenger with a letter direct to the addressee—that is to say to the noble Lord, Lord Ponsonby of Shulbrede—but would not allow me to send that same messenger to pick up a letter addressed to me from the person sending it—again, let us say from the noble Lord, Lord Ponsonby.
This amendment should also be seen in the light of our proposed amendment to Clause 67(1)(i), which would put an employee in a broadly similar position with respect to mail addressed to the group in which he is employed, and I think that it is logical to treat the messenger on a similar basis.
The expression "correspondent" is the subject of Government Amendment No. 156, which inserts into Clause 67(3) the following definition:
"'correspondent', in relation to a letter, means the sender or the addressee".
Thus the words being inserted by my amendment, "either correspondent", cover both sender and addressee. This is modest, sensible and practical and I hope that the Committee will accept it.
On Question, amendment agreed to.
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede Amendment No. 147:
Page 56, line 3, leave out paragraph (d).
The noble Lord said: I beg to move amendment No. 147. This is the first of my amendments to Clause 67, and the noble Earl, Lord Gowrie, in speaking to the last amendment spoke of a number of the ensuing amendments which we have tabled to Clause 67. Clause 67 deals with the general classes of act not infringing the postal privilege. Our intention in tabling these various amendments to Clause 67 was to restore the position as it was under the 1953 Act. In fact, I note that our last amendment to this particular clause has attracted the support of the noble Earl, so I am glad that we have his agreement in that respect at any rate.
In view of the fact that a number of the amendments tabled by the noble Earl this evening are effectively amending provisions which I shall propose to delete, probably the best way to make progress—and I am anxious to make progress—is to return basically to our reaction to the amendments moved by the noble

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Earl after they have been incorporated into the Bill. I beg to move.
Lord Swinfen: I should like to raise just one point on this particular paragraph. Why should it be limited to an aircraft only and not a ship as well? I wonder whether my noble friend the Minister when replying could answer that point.
Lord Trefgarne: Let me deal first with the point made by my noble friend Lord Swinfen. The purpose of the special exemption for "air couriers", as they are called, was to enable them to carry on their business. I must confess that we were not originally convinced that they would not be able to do so because of certain intentions which we had in mind in respect of a general suspension of the monopoly as regards express mail. However, we responded to pressure from the air courier companies and, as their business is strictly related to the carriage of express mail by aircraft, "aircraft" were included in the Bill and there was no need, as far as we could see, to include "ships" which were certainly not used for express mail purposes.
Returning to the remarks of the noble Lord, Lord Ponsonby, as your Lordships may recall, my right honourable friend the Secretary of State announced last year that he intends to derogate the postal monopoly in respect of time-sensitive/valuable mail—that is to say, express mail. This derogation will be carried out by means of a suspension of the monopoly under Clause 69. We had intended that the activities of air couriers in this country, to which the noble Lord referred, should be covered, as I said in answer to my noble friend, by that general suspension. However, after receiving a number of representations from the air couriers, my honourable friend the Minister of State decided that there were arguments for putting something more definite in the statute, and he therefore accepted the amendment which inserted this new exemption during the Committee stage in another place.
The amendment would allow an air courier to take mail to an aircraft for onward conveyance out of the country by that aircraft. I must, therefore, emphasise that this exemption will have no more effect on the Post Office monopoly than will the general express mail suspension. It is true that, under the general suspension, carriers of express or time-sensitive mail will be required to charge £1 per item, but I am sure that air couriers would, in virtually every case, charge more than that in any event.
I think that the noble Lord is unduly alarmed by the effect on the Post Office of this new provision, which I do not think will have any greater effect on the Post Office than the general suspension for express mail, to which I have referred. I hope that this will set the mind of the noble Lord at rest.
Lord Ponsonby of Shulbrede: As I indicated when I moved this amendment, I do not at this stage intend to press it to a Division, but I shall take another look at the whole structure of Clause 67 after it has incorporated the various amendments which are being moved. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 147A not moved.]
Lord Lyell Lord Lyell moved Amendment No. 148:
Page 56, line 14, leave out ("addressee") and insert ("addressees").
The noble Lord said: With the Committee's permission, I should like to move Amendment No. 148 and speak to Amendment No. 150. These are two purely drafting amendments. Clause 67(1)(f) and (h) both refer to the conveyance of letters, in the plural. The two amendments that I propose make it clear that these letters, in the plural, may be delivered to more than one addressee. This is a simple and. I hope, fairly straightforward drafting change. I beg to move.
On Question, amendment agreed to.
The Deputy Chairman of Committees (The Earl of Listowel): Before I call the next amendment, I should point out to the Committee that if Amendment No. 149 is agreed to, I cannot call Amendments Nos. 150 or 151.
[Amendment No. 149 not moved.]
Lord Lyell Lord Lyell moved Amendment No. 150:
Page 56, line 25, leave out ("addressee") and insert ("addressees").
On Question, amendment agreed to.
The Deputy Chairman of Committees: Before I call the next amendment, I should point out to the Committee that if Amendment No. 150A is agreed to, I cannot call Amendment No. 151.
Lord Morris Lord Morris moved Amendment No. 150A:
Page 56, line 27, leave out paragraph (i) and insert—
("(i) The sending, conveying and delivery of business letters by means of a person or a number of persons who are associated in business with the senders or the recipients or by a body corporate which is a member of the same group as the senders or the recipients, and the collection of such letters for that purpose.").
The noble Lord said: As your Lordships are aware, subsection (1), inter alio, permits the delivery of a letter by a person in the same group as the sender. However, this freedom is limited to conveyance and delivery by one natural person. I believe that this subsection should provide for the conveyance and delivery by a number of persons in, for example, the chain, alternatively, by a corporate body which is in the same group as the sender.
As currently drawn, the exception contained in Clause 67 does not permit the collection of letters by a person for delivery to a collect catalogue, mail order company. Thus, a person delivering letters to a mail order agent or a customer on behalf of a mail order company, cannot collect any return correspondence from that person. I have a suspicion that the amendment of my noble friend Lord Gowrie, Amendment No. 151–and I may have completely missed this—covers this point. So, I shall not develop the point, but simply ask whether my surmise is correct as regards that. I beg to move.
Lord Trefgarne: I can confirm that my noble friend's fear, which he described, was covered by the earlier amendment of my noble friend Lord Gowrie. I must also add that there are two further difficulties in the amendment of my noble friend Lord Morris, but in the light of my first assurance, I hope that in any event he will not want to proceed further.
Lord Morris: I wish only to express delight. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.35 p.m.
The Earl of Gowrie The Earl of Gowrie moved Amendment No. 151:
Page 56, line 27, leave out from (."of") to ("letters") in line 29 and insert ("letters by a person who has a business interest in those letters, and the collection of").
The noble Earl said: I am afraid that imperfect paper control is being evidenced because I had anticipated a much longer debate over the last amendment. Of course, I congratulate my noble friend on his brevity, even if it has left me somewhat confused.
This group of amendments—and if I may, I shall speak also to Amendments Nos. 153, 156, 157 and 158—has been tabled primarily to meet a point presented to Ministers by the Mail Order Traders' Association, but it also contains some drafting changes to meet some particular concerns which have been expressed to us by the Post Office. These are two separate issues which I shall take in turn.
On the first point, the mail order traders have expressed concern that the provisions contained in the Bill in Clause 67(1)(i) concerning the delivery of letters by persons "associated in business" with the sender would not allow them to carry on their business as they have done for many years, as it would not allow them to use their employees to pick up letters from persons other than those with whom they were associated in business. I understand that employees of mail order companies pick up letters from such "other persons" notably those who act as agents for the companies in the field.
When this point was discussed in another place, my honourable friend the Parliamentary Under-Secretary said that he would consider whether it was possible to make an amendment of this nature, and he promised to consult the Post Office. Since then my colleagues have considered this question very carefully, and it has indeed been discussed with the Post Office, and we have come to the conclusion that it would be right to make these amendments in order to clarify the position for the mail order traders. Now it is true that the wording of the amendments does not limit this particular exemption only to the activities of the mail order traders, and the Post Office has expressed very considerable concern that there could be serious inroads on the volume of their letter traffic. However, we consider that it would in practice be illogical not to allow an employee of any company to pick up letters addressed to his employer from third parties when he will be able to deliver letters to those third parties themselves. We therefore accept that a proportion of the letter mail could be at risk, but we do not believe that in practice there will be any large-scale erosion of the Post Office's traffic just because, as in the case of Amendment No. 146A which we have just discussed, these amendments will not allow an employee of company A, delivering letters to third party companies B and C, to deliver letters between B and C. He will only be able to pick up letters addressed to his employer or another company in the same group as his employer. Thus, the amendments will not permit the setting up of full-scale private delivery
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services between completely separate companies. That is the kind of thing that could create an inroad into the postal monopoly, and that we have rejected altogether.
I also mentioned that these amendments contain some drafting amendments to take account of certain Post Office worries, and in this respect the amendments have been agreed with them. Their concern was that under Clause 67(1)(i), taken with Clause 67(3), it would have been possible for employees of a group of companies to set up their own private delivery service for their own business letters rather than only business letters referring to the business of their employer or another company in the same group as their employer. This was clearly not our intention and these drafting amendments, contained in Amendments Nos. 151 and 153, make it quite clear that the letters being conveyed, delivered and collected, must relate to the business affairs of the company whose employee is actually delivering or picking up the letters, or to the business affairs of another company in the same group as the first company. The term "group" is defined by Amendment No. 151 to mean:
"a body corporate and all of its wholly owned subsidiaries taken together".
I am afraid that I have not been using the language of the Areopagitica. This is a complicated set of amendments, and I have had to take care to explain their exact intent. I commend these amendments despite the rigidity of their phrasing.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 152:
Page 56, line 31, after ("another") insert ("or from a bank to a government department").
The noble Lord said: I hope it might be for the convenience of the Committee if I also speak to Amendments Nos. 154 and 155 and also to part of Amendment No. 157 to which my noble friend the Minister spoke a little earlier. What I shall have to say is relevant to all of these amendments. All of these amendments have been agreed with the existing Post Office. They make drafting changes to the exemption from the monopoly for what are bound to be in Clause 67(3) and described as "banking instruments". Naturally enough, these banking instruments tend to pass between banks. All four of the amendments are necessary to ensure that all the documents which currently pass through the banks' clearing system are covered by the definition "banking instrument" which we shall find in Clause 67(3).
In particular it has been drawn to the Government's attention that certain things called warrants issued by the Commissioners of Inland Revenue and also by the Commissioners of Customs and Excise and by the Department of National Savings pass through the clearing system. These are not covered by the definition of banking instrument as it now stands in Clause 67(3).
This particular point is now covered by Amendment No. 154, and this also adds to the definition "banking instrument" some other kinds of documents which pass through the clearing system. These particular documents were not previously covered. Examples of them which the Committee might be interested to note include

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bills of exchange, promissory notes, postal orders and money orders. All of these are now covered under the definition "banking instrument". Furthermore, we have now been informed that warrants not only pass between banks but are also returned by the banks to the department that issued them. It has therefore been necessary to amend the exemption in Clause 67(1)(j) to make this possible, by allowing banking instruments to pass between banks and between a bank and a Government department. The term "Government department" is defined in Amendment No. 157. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 153:
Page 56, line 39, at end insert—
("(2A) For the purposes of paragraph (i) of subsection (1) a person has a business interest in a letter if, and only if—

(a) he is employed by one of the correspondents or by a member of the same group as one of the correspondents and the letter relates to the business affairs of that correspondent; or

(b) he and one of the correspondents are employed by the same person or by different members of the same group and the letter relates to the business affairs of that person or, as the case maybe, the employer of that correspondent.").

On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 154:
Page 57, line 13, at end insert—
("(aa) any document issued by a public officer which is intended to enable a person to obtain payment from a government department of the sum mentioned in the document;
(ab) any bill of exchange not falling within paragraph (a) or (aa) or any promissory note;
(ac) any postal order or money order;").
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 155:
Page 57, line 16, after ("items") insert ("or any copy of an item").
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 156:
Page 57, line 17, at end insert—
(""correspondent ", in relation to a letter, means the sender or the addressee;").
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 157:
Page 57, line 21, at end insert—
(""government department" includes any Minister of the Crown and any Northern Ireland department;
"group" means a body corporate and all of its wholly owned subsidiaries taken together;").
The noble Lord said: This is the last in the series of four amendments to which I spoke, and I beg to move.
On Question, amendment agreed to.
8.44 p.m.
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede moved Amendment No. 158:
Page 57, line 31, leave out subsection (4).
The noble Lord said: I am glad to know that, for once, I am moving an amendment that will be accepted.
On Question, amendment agreed to.
Clause 67, as amended, agreed to.
Clause 68 [Savings for things done under a licence]:
Lord Glenamara Lord Glenamara moved Amendment No. 159:
Page 57, leave out from beginning of line 39 to ("the") in line 40 and insert ("A licence may, with the consent of, or in accordance with the terms of a general authority given by, the Secretary of State, be granted by").
The noble Lord said: In moving this amendment I should also like to discuss Amendments Nos. 165, 166, 167 and 168.
Lord Trefgarne: If the noble Lord will allow me, may I suggest that it would be appropriate to consider Amendments Nos. 172, 173, 174 and 175 at the same time?
Lord Glenamara: We shall see. When we discussed Clause 15, which is the sister clause to Clause 68, I described it as the heart of the Bill. This clause is also the heart of the Bill; this Bill has two hearts, or perhaps a split heart, because this is the clause which, from the postal side, empowers the Minister to grant licences which derogate from the postal monopoly. These are licences defined in any way the Minister chooses, to do anything whatsoever which falls within the postal monopoly. The licences can be for any period of time. The power of the Post Office to grant licences under Clause 3 of the 1953 Act falls.
Clause 68 contains extremely sweeeping powers allowing the Secretary of State to promote extensive privatisation. Like the word "liberalisation", I think that "privatisation" is a horrible word which has come into general use nowadays. This clause would promote extensive privatisation of any of the services within Clause 66(1). It is under this clause that the Secretary of State plans to encourage express services, document exchange services, and charities to deliver their own mail. Together the derogation stated under Clause 67 and the likely ones under Clause 68 would immediately cause the Post Office to lose 1 to 2 per cent. of its mail traffic. The Post Office can ill-afford to lose 2 per cent. of its mail traffic. The Post Office in Britain, as elsewhere, is one of the most labour-intensive industries in the economy. It has problems enough without losing any of its revenue.
I do not know whether noble Lords noticed, but earlier in our debate, when we were discussing the pension fund, the noble Lord, Lord Hawke (who I believe is no longer with us) said that telecommunication workers were on to a winner but postal workers were on to a loser. I take it that by that he meant the postal business is scarcely viable. Certainly it cannot afford to lose 2 per cent. of its mail traffic.
Again, the Secretary of State is here taking exorbitant powers as he did on the telecommunications side in Clause 15, and because licences can be granted by him at any time Clause 68 hangs like tht sword of Damocles over the Post Office. There is an additional and very important point; there is no provision whatever for monitoring the licences which the Secretary

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of State issues. The Government can grant a licence and yet it has not set any curbs or any method of regulating the private companies to which the Secretary of State grants licences. What an extraordinary state of affairs that is. There are strict controls governing the provision of Post Office letter services, and in the matter of tariffs, the Government and the Post Office Users' Council have clear and definite roles to play.
When the noble Lord replies I would like him to say whether, in the event of a licence being granted to someone to carry part of the mail, the Post Office Users' Council will have a role to play with regard to that company. There are also very strict operational safeguards applied to the Post Office. The Post Office is subject to the most intense departmental interference. The noble Lord, Lord Winstanley, quoted the number of occasions on which the present Secretary of State has interfered in the running of the Post Office under this Government, compared with interference by the previous Government. In my own case the figures were four times under the previous Government and I think 24 times under the present Government.
The Post Office is subject to the most intense Government interference, and also of course to Parliamentary scrutiny of its operations. But the private companies who are going to get licences under this clause will be subject neither to departmental interference nor to Parliamentary scrutiny. However, I should like to make a suggestion, and I intend to convey it to the right quarter. I hope very much that one of the new Select Committees in the other place will step in and fill this gap and will monitor the companies to whom licences are given. I hope they will take up that proposal.
The most pernicious aspect of this clause is the absence of any realistic definition or limitation on the Secretary of State. If this is carried, the Secretary of State, or any subsequent Secretary of State so long as the Bill remains on the Statute Book, can license whatever takes his fancy. I may say that the strangest things take the fancy of the present Secretary of State. This clause amounts to privatisation by executive action. The Minister is asking for enabling powers to enable him to privatise whatever he likes in the Post Office. I wonder what the party opposite would say if a Labour Government introduced a general Bill to enable them to nationalise anything they liked. The Conservative Government, of course, are doing that in reverse.
May I make it clear, as it was made clear in another place, that when the Labour Party returns to power in two years' time, or whenever it is, we shall immediately call in for review all licences granted under this clause with the intention of revoking them? We shall not hesitate to use the same powers that the Conservative Government are taking to restore the monopoly and protect the Post Office system. Quite frankly, if I were a private operator I should think very hard indeed, very carefully, before taking up one of the Secretary of State's licences.
The purpose of our amendment is to preserve the status quo; to drop the Secretary of State from the power to give licences and to leave that with the Post Office as it is now. Only the Post Office would
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have the ability to grant licences. Surely that is the right thing to do. Why should the Government have the ability to chisel away at the monopoly, depriving the Post Office of its much-needed revenue by positively inciting all the cowboy firms in the country to grab their share of the profitable mail services?
Why should the Government interfere at all? In their manifesto they gave a specific promise—and have taken the trouble to get a copy of the paragraph in the Conservative Party manifesto of the last general election, which I intend to quote in a subsequent debate this evening. Let me read what they say in that paragraph, which is headed "Nationalisation". They say:
"We want to see those industries that remain nationalised running more successfully, and we will therefore interfere less with their management and set them a clearer financial discipline in which to work".
They say "interfere less". Why should they interfere at all? Why interfere with the Post Office in this way and deprive it of much-needed revenue? All we are trying to do is to see that the Conservative Government keep that promise that they made in their manifesto, and do not interfere with the Post Office's monopoly to issue licences. I beg to move.
8.55 p.m.
Lord Trefgarne: In tabling these amendments the noble Lord is trying to take away all powers from the Secretary of State to make derogations from the postal monopoly, whether that be done through licensing under Clause 68 or suspension of the monopoly under Clause 69. As regards licensing, it appears that the noble Lord would wish to return to the status quo whereby only the Post Office would be able to issue licences for activities otherwise falling within the monopoly, albeit only on the authority of the Secretary of State. Then on suspensions of the monopoly he is suggesting that the Post Office itself should be given a power to end the monopoly.
However, my right honourable friend the Secretary of State has said that he wants to be able to make derogations from the monopoly, either generally or in respect of specific categories of mail, in situations where the Post Office is not providing a satisfactory service. Such a situation might arise in the event of industrial action in the Post Office, either in one particular area or throughout the country, resulting in a cessation or serious decline in service, or if, after due warning, the Post Office performance has been unsatisfactory for other reasons within its control or simply if it fails to meet demand for a particular letter service.
If the Secretary of State did not have these powers in Clauses 68 and 69, he would simply not be able to carry out his stated policy and thus ensure the best service to the customer. Even if he gave the Post Office a general authority to issue licences or suspend the monopoly, he would have no means of ensuring that they did so in the circumstances where he considered it to be appropriate.
It may be of some help to your Lordships if I describe briefly the way in which we envisage that these powers will be used. Above all, I should say that we have no intention of using these powers arbitrarily in such a way as seriously to damage the Post Office's interests. Indeed the powers may only be used after consultation

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with the Post Office and they will of course be given every opportunity to put forward their views. Furthermore, I do not envisage that the powers will be used frequently; what I do hope and expect is that the very existence of these powers will act as an incentive to the Post Office to provide an adequate service and thus obviate the need for their use. The powers should thus, when they are used and even when they are not, help to achieve our prime aim, which is the provision of the best possible postal service to the customer. However, we do have some plans for use of the powers as soon as the Bill is passed and my right honourable friend has announced these already: we intend to allow charities to deliver Christmas cards and document exchanges to transfer mail in bulk between themselves, and we intend to derogate time-sensitive/valuable (that is to say "express") mail from the monopoly, which is a matter I referred to a few moments ago. The first two derogations which I just mentioned will be carried out by means of the issuing of licences under Clause 68, and I should point out here that in each of these cases, charities and document exchanges, it will not be necessary for individuals to obtain separate licences; rather, the Secretary of State will issue a general licence covering a class of people.
The derogation in respect of express mail will, however, be carried out under the powers of suspension in Clause 69; in effect, the monopoly will be suspended in favour of any person wishing to run an express letter service subject to such conditions as may be set out in the suspending order; one such condition which we plan to impose is the minimum charge of £1 per letter carried. It is not possible to issue licences under Clause 68 for all persons, since that clause only allows the granting of licences to specific individuals or classes of person. In time it may be appropriate, after full consultation with the Post Office, to make further derogations from the monopoly, but these three are all we have planned for now.
In conclusion, therefore, I can repeat only that these powers must rest with the Secretary of State rather than the Post Office if he is to be able to carry out his policy of ensuring the best service to the customer by allowing others to provide letter services in situations where he considers it appropriate. In all cases the Post Office will be fully consulted. I hope that, in the light of what I have said, the noble Lord will not wish to press his amendments.
When moving the amendment the noble Lord, Lord Glenamara, asked some specific questions, first about POUNC, the Post Office Users' National Council. I nca tell him that POUNC will remain responsible, as the consultative body, with regard to the Post Office, but will not have a role to play in respect of any of the private companies who in due course are offering some of the services. As for monitoring, something may be said on that when we come to later amendments. Suffice it for me to say that at present we should not wish to impose on private companies new monitoring arrangements peculiar to them which were not in general applied to other commercial interests.
The noble Lord complained that we were seeking a provision to enable us to privatise, as he put it, anything we liked. Of course the Bill relates specifically to the Post Office, and the part we are discussing now is
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the postal services only. It has long been part of our policy, and was certainly included in past manifestos, that we should liberalise the monopoly in the postal services, and that is what the Bill is about.
Lord Glenamara: I fear that I did not note the additional amendments which the Minister said he wished to discuss. Would he tell me which they are?
Lord Trefgarne: We are dealing with Amendment No. 159. In addition, I suggested we might consider this discussion to be covering Amendments Nos. 165 and 168 inclusive and Amendments Nos. 172, 173, 174 and 175.
Lord Mottistone: I was distressed to hear the noble Lord, Lord Glenamara, issue threats as part of his speech. He seemed to feel that monopoly was sacrosanct and that monopoly controlled not only the Post Office but was the best way of handling things. He must have witnessed over the last 30 years that monopoly systems have not worked as efficiently as, I am sure, everybody hoped they would when they set them up in the first place. In fact, in general terms for all sorts of reasons the Post Office is not providing as good a service today as it did 30 years ago, so there is surely some justification for thinking there could be arguments for having some of the responsibilities of the Post Office freed—liberalised, as my noble friends call it—so that other people can take them up and at least provide some measure of competition against which the Post Office can measure its own performance.
To round off an argument by saying, "When we get back into power we shall reverse the whole thing and call in"—"revoke" was the word I think the noble Lord used—"all the licences", is no way to run the country. We must experiment, not get stuck the way we always have been; we must experiment and try new things. Let us do that in the way the Bill is trying to do it, with relatively small amounts of the business; 2 per cent., the noble Lord was talking about, and that is reasonable. If the whole thing was being run on the basis of, say, 60 per cent., that would be a different matter.
We must get ourselves out of the mould into which we have been cast and try experiments in all sorts of directions. This is one of the bold ways in which it is being done, though in my view it is being done in too mild a style. Let us hope the Secretary of State in due course does more rather than less than my noble friend was saying. Let us not get stuck with the thought that monopoly is the only answer. I implore noble Lords opposite to cast off the great shibboleth of imagination in which they have cast themselves. Let them look widely and think about new things. They should stop bothering about the past and acknowledge the errors of their ways, and then perhaps we can get a new picture in this world.
Lord Underhill: What the noble Lord, Lord Mottistone, said may sound very nice to him. He talks about experimenting, but let us see what the Bills says. It gives full powers to suspend or give away any service carried out by the Post Office. Therefore, the noble Lord should not just talk about powers to experiment. Indeed, the noble Lord, Lord Trefgarne, said there was

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no intention to use the powers arbitrarily. Where is that said in the Bill? We may have a Secretary of State who will not use the powers in an arbitrary way, but once the powers are on the statute book they will be there for any Secretary of State to use.
The noble Lord then said they would not be used frequently. That is not said in the Bill. Very importantly, he said three activities were planned "for now", which must mean he is contemplating the possibility of conducting further experiments and innovations which, in the end, will destroy the present Post Office system. It is all very well to be told that things will be done "after consultation with the Post Office", but what if the Post Office says, "If one of these activities is taken away, it will imperil our service"? Will the Secretary of State listen to that, or will he say, "The powers are in the Bill and I am going ahead irrespective of what the Post Office says"?
I see noble Lords opposite smiling at what Lam saying. I agree that the Post Office had rather fallen down two or three years ago, but it has pulled itself back and is innovating new services itself. It is based on a system which has spread throughout the world, yet we are one of the few countries which want to mess about with our Post Office in this way. Once services are started to be taken away, what will be the result? The only services that people will want to take are those which make a profit. As I asked on Second Reading: Who will want to deliver in the Highlands and Islands? The answer is, only the Post Office, which is built on a national system with common services. I remind noble Lords opposite that while words may sound all very well, they must look at what is actually in the Bill and the powers being given to the Secretary of State. They will see that the Bill gives him power to take anything away from the Post Office and destroy the whole of the services.
Lord Brookes: I sense the sadness that the Committee may be about to divide on this issue. For many of us here, and for many outside, that will be a matter of real regret. To most of us the Post Office is a commendable institution, well established and historically well run, with the occasional hiccup here and there; something which renders a great corporate service to us, something which, through the postman (who to many of us is a cheery friend) is a necessary symbol and part of our lives. To hear it cast in terms of something which is to be lightly and readily disregarded by any Government, whether of the Right, the Left, or the centre, is I think a measure of exaggeration of anything that any of us would believe would happen or is likely to happen in real life.
In short, if the Post Office is as good in the future as it has been in our history, it will survive on its own merit. If it ceases to be so good, then against that contingent risk it should not require the defence of special privilege, which should be accorded to no monopoly. I think it sad that in a nation which I think always regrets retrospective legislation we should tonight have heard condemned to instant death any future opportunism, efficiency and effectively pursued to serve the cause of the public, and should have been told that a future Labour Government would kill it, regardless of its quality, its merits, or the necessity for its existence. I particularly deplore that coming from
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the Front Bench opposite, from a noble Lord who is elegant in mind, and I am sure in purpose, too, and I hope that he will not press harsh thoughts of this kind at this stage in our discussions.
Lord Ponsonby of Sholbrede: I had not intended to intervene in the debate on Amendment No. 159, but since the debate is covering also Amendments Nos. 173, 174 and 175, I feel I should now state yet again that the point of the latter amendments—to which my noble friend Lord Glenamara did not speak when he moved Amendment No. 159—is to restore to the Post Office the sole right that it has at present to lift the monopoly, to restore the status quo under the 1953 Act. As the Committee will realise, we and the Post Office regard this as a vital issue. Bearing in mind the discussion on previous clauses, the Committee will appreciate how vital it is that the basic letter monopoly is preserved. What is at stake is whether or not the Post Office is able to manage its own business.
There is no conceivable justification for giving the Secretary of State carte blanche to suspend the monopoly as and when he chooses. What is especially curious is that he already has power, under Clause 66, to grant licences if he wants to erode or suspend the monopoly. Now, under these partiular clauses, he wishes to have dictatorial powers. Besides being unacceptable in principle, that could have a damaging effect on the management and industrial relations in the Post Office.
In the light of the more ample powers taken by the Secretary of State under Clause 66 (on licences), it is evident that this proposal is about using a stick to beat the workers in the Post Office. It is about blackmailing the Post Office workers not to take industrial action. We object in principle to the Secretary of State using the threat of lifting the monopoly to deny Post Office workers the rights that other workers have. It is for that reason that I support the latter amendments in the series of amendments that we are now discussing.
Lord Glenamara: First, I should like to say a few words about the intervention of the noble Lord, Lord Mottistone. I am becoming very tired of being accused of issuing threats or spreading alarm and despondency. This is the third time that this has happened in the debate. I have been a parliamentarian for a very long time. I have not been in your Lordships' House for so very long, but I have been in the Palace of Westminster for very many years, and as long as I am a parliamentarian I shall regard it as part of my duty in opposition to point out to the public the probable effects of Government actions, policy and legislation. That is my job in opposition. So I hope that noble Lords will not accuse me of spreading alarm and despondency or issuing threats.
I believe that when one is a member of a party it is equally important, where one is able to do so, as I am, with great clarity, to tell the public what a future Government of my own party would do—and I have done that absolutely clearly. The noble Lord, Lord Brookes, did not listen to what I said, and I hope he will do me the honour of reading what I said, tomorrow.
The noble Lord, Lord Mottistone, said that the Post Office was not as good as it was 20 or 30 years ago.

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I quite agree with him; it is not. But can he tell me a Post Office in the world which is? Has he any experience of the American Post Office, the Canadian Post Office, the French Post Office or the German Post Office?
Lord Mottistone: I have some experience of the American Post Office, which has consistently been inferior to ours and is today; but I do not think its standard has changed much over the last 30 years. I do not know for what reason—at least, I have my own ideas but I would not advance them at this stage—but the standard of our Post Office back in the 1950s was infinitely superior to what it is now. The American Post Office, which is worse, has been pretty consistent; and I would say the same of the French Post Office.
Lord Glenamara: The noble Lord confirms what I said; the American Post Office could not get any worse. It is one of the most inefficient Post Offices in the world, with all its mechanisation. I would say this, as I did on Second Reading: I believe that with all its faults the British Post Office is probably the most efficient Post Office in the western world. I do not know anything about Post Offices in the eastern world, but certainly it is in the western world—with all its faults. Of course, its difficulties arise from the fact that it is a very labour-intensive industry, with all the problems which that nowadays involves. That is the trouble. Certain things can be mechanised, but no machine can take the letters round and push them through the letter-boxes. They must employ a great many people, and that is the cause of the difficulties.
The noble Lord said that we should all become brave innovators. I listened carefully to what he said, but that bears no relationship to the way Conservative Governments act. This Bill has nothing whatever to do with innovation. The whole purpose of this Bill is to provide still more pickings for private enterprise; that is what this Bill is about.
I should like to thank the noble Lord who replied from the Front Bench, Lord Trefgarne, for giving more information about the Government's intention on licences, but I am very sorry and sad about what he said on the question of POUNC. He confirmed that it is not going to have any function in relation to licensees. But why not? If they are carrying out part of the functions which the Post Office are carrying out now, why should not the Post Office Users' Council monitor their operations which are at present done by the Post Office, as well as monitoring the operations of the Post Office itself?
Then the noble Lord said that the companies to whom licences are given will not be monitored, but the Post Office will be monitored. It will be monitored by the Users' Council; it will be monitored by the Secretary of State; and it will be monitored, and not half monitored, by a Select Committee in another place. But none of those three things will apply to its competitors, who are exactly on all fours with the Government's proposals on telecommunications. This is not fair competition; it is grossly unfair competition. British Telecom is going to be subjected to unfair competition; the new Post Office Corporation is going
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to be subjected to unfair competition. I think our points of view are irreconcilable on this, but, with Clause 15, we regard this as the core, the centre, of the whole Bill, and I would advise my noble friends to press this to a Division.
9.18 p.m.
On Question, Whether the said amendment (No. 159) shall be agreed to?
Their Lordships divided: Contents, 24; Not-Contents, 57.

CONTENTS

Blease, L.

Lloyd of Kilgerran, L.

Boston of Faversham, L.

McNair, L.

Brockway, L.

Molloy, L.

Clifford of Chudleigh, L.

Ponsonby of Shulbrede, L.

Collison, L.

Ritchie-Calder, L.

David, B. [Teller.]

Sefton of Garston, L.

Davies of Leek, L.

Stewart of Alvechurch, B.

Glenamara, L.

Stewart of Fulham, L.

Greenwood of Rossendale, L.

Stone, L.

Jeger, B.

Taylor of Gryfe, L.

Listowel, E.

Underhill, L.

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

Winstanley, L.

NOT-CONTENTS

Abinger, L.

Grimston of Westbury, L.

Airey of Abingdon, B.

Hatherton, L.

Auckland, L.

Henley, L.

Avon, E.

Holderness, L.

Belstead, L.

Inglewood, L.

Bessborough, E.

Kemsley, V.

Broadbridge, L.

Long, V.

Brookeborough, V.

Lyell, L. [Teller.]

Brookes, L.

Mackay of Clashfern, L.

Brougham and Vaux, L.

Margadale, L.

Buxton of Alsa, L.

Marley, L.

Caithness, E.

Montgomery of Alamein, V.

Cockfield, L.

Morris, L.

Colville of Culross, V.

Mottistone, L.

Cork and Orrery, E.

Murton of Lindisfarne, L.

Cranbrook, E.

O'Hagan, L.

Cullen of Ashbourne, L.

Orkney, E.

Digby, L.

Rankeillour, L.

Donegall, M.

Redesdale, L.

Ellenborough, L.

Sandys, L. [Teller.]

Elliot of Harwood, B.

Sharples, B.

Ferrers, E.

Skelmersdale, L.

Fortescue, E.

Stradbroke, E.

Gainford, L.

Strathclyde, L.

Gibson-Watt, L.

Swinton, E.

Gisborough, L.

Trefgarne, L.

Glendevon, L.

Trumpington, B.

Gowrie, E.

Vivian, L.

Gridley, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.26 p.m.
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede moved Amendment No. 160:
Page 57, line 40, leave out from beginning to ("for") in line 42.
The noble Lord said: In speaking to Amendment No. 160, I am also addressing my remarks to Amendments Nos. 161, 162, 163, 164, 169, 170, 171 and 172. This clause, as drafted, empowers the Secretary of State, after consultation with the Post Office, to grant licences for the doing of things falling within the postal monopoly. We have already debated the desirability

917
of transferring this licensing power which currently resides with the Post Office to the Secretary of State and it is not my intention, in moving this amendment and the following amendments, to re-open that issue.
My concern here is rather the extent of the powers which it is proposed to confer on the Secretary of State. They are couched in the very widest of terms. For example, it is left open to him if he wishes to grant licences which are unconditional and irrevocable. He can set conditions and provide for revocation; but the clause is silent on the mechanics of the revocation procedure where the conditions are flouted by licensees.
The Secretary of State can grant a licence to persons of a class, the definition of which may be framed by reference to any circumstances whatever. Anybody who falls within that class, however dubious his character, can take advantage of such a licence since there is no requirement on the Secretary of State to ensure that people or organisations that he licenses are fit to run the postal service. Moreover, a class licence, if revocable, can only be revoked against the whole class. Surely, the deterrent of revocation should exist for cases of flagrant abuse of a licence; but the deterrent can be meaningful and effective only if it can be applied to the individuals who warrant it.
I believe that these are serious defects. My belief is not founded on mere hypothesis. There is an example in recent history of the Post Office which points at least to the need for some measure of control over the appointment of licensees and the desirability for some check on their activities. I refer of course to the Post Office strike in 1971. At that time the Post Office exercised its existing powers to licence others to handle mail. Experience showed that while some operators gave a reasonably good if necessarily limited service, others appeared to be more concerned with the selling of philatelic items than with the carrying of letters, and they also fell far short of the standard which the public expects. Indeed, when the strike was over, there were a number of instances of licensed operators dumping—or at least attempting to dump—on the Post Office mail which they had not delivered, and some of this mail dated back several weeks. Post Office managers at that time were too heavily committed to coping with the effects of the strike to be able to vet or monitor these operators; but the need to do so quickly became apparent.
I am convinced that consumer interests demand that we should not ignore the lessons of history. I do not believe that it is sufficient, as some may argue, to leave this to market forces. Of course, if a tailor makes a bad suit for a customer one changes one's tailor. But we are talking here about the carriage of mail, and when we find out that mistakes have occurred there is no remedy and an important letter has gone astray; so the market force argument is going to be small consolation to those members of the public who, on the strength of an operator's claim that he is licensed by Her Majesty's Government, may have entrusted their mail to a villain or to an incompetent operator.
Therefore, what these amendments standing in my name and that of my noble friend seek to do is to introduce some basic devices into the clause which will protect the public from the risk that potentially unscrupulous and grossly incompetent operators will
918
be licensed without any check to carry mail. Let me emphasise that the devices I am advocating are quite basic. The improvement I seek is modest. There is a good case for maintaining that it should be incumbent on the Secretary of State, having granted licences, to monitor the performance of licensees and subject them to the same rigorous scrutiny as will no doubt continue to be applied to the Post Office. But I am not pressing for that and I am conscious of the need to keep any machinery simple.
Essentially the amendments seek to enable the Secretary of State, instead of licensing all persons of a class indiscriminately, to state his intention to grant individual licences to persons of a class who satisfy him that they are fit and proper persons to hold a licence, to require him to maintain a register open to public inspection which records details of licences granted and to whom, and contains references to the services licensed. They will require the Secretary of State to impose on all licensees the condition that each item of mail bears an endorsement identifying the licensee, and they will set out the specific circumstances in which the Secretary of State may revoke licences.
I should have explained why I consider that the Secretary of State should interest himself in the bona fides seeking a licence, and I should now like briefly to speak to the other changes which I have described. In the clause as drafted, a licence can be to persons of a class as well as to a particular person. However, as I said earlier, once the Secretary of State has issued a licence to a person of a class he would have no idea at all who was taking advantage of it; nor would the public.
The amendments will ensure that the Secretary of State not only keeps a record of those who are entitled to carry on licensed activities, but that he also makes that record available for public inspection. I do not think that such requirements will impose intolerable burdens on him or his department. What I have in mind is quite simply that all licensed carriers of mail will endorse on each item their name and licence number.
Despite the use of the word "written" in the amendment I am proposing—that is new subsection (2A)(e)—I envisage the use of a stamped impression, and the Interpretation Act 1978 will permit this. This is not unreasonable. We all now take it for granted that each letter carried by the Post Office carries an invitation—whether that is a stamp, a franking mark or a printed impression—that the Post Office service is being used. I can see every reason why, in a competitive situation, every carrier should be identifiable in this way. Otherwise, how will the public know to whom to complain or, indeed, which carrier to recommend, in the light of the service which they have been given by a particular operator. On the question of the revocation of licences, the amendments impose what, I suggest, are very reasonable criteria for helping the Secretary of State to decide whether or not to revoke a licence.
Those are the modest objectives of these amendments. Unfortunately, in turning those objectives into draft legislation, it has been necessary for the amendments to be couched in rather more lengthy terms than, ideally, one would wish. But I should not want to lay myself open to the charge that the legal and practical implications of what I am seeking to do have not been

919
thought out in full; they have been and the amendments demonstrate that. There are no hidden catches.
It might, of course, be argued that, as the Government have said that they do not envisage that they will use their licensing powers frequently, it is unnecessary to have even the minimum machinery that I have suggested. But the Government have, after all, already declared their intention of using the Secretary of State's powers as soon as the Bill is enacted to grant general licences to cover the different classes of person. The classes suggested were charities to deliver Christmas cards, document exchanges and the transfer of mail in bulk. In my view, however much or little the Government may exercise their powers, the public have the right, first, to know the extent to which they are actually being exercised; and, secondly, to be assured that the persons to whom Government licences are granted are fit persons, who will honestly and speedily deliver mail entrusted to them. These criteria apply just as much to the delivery of Christmas cards, and the book tokens, record tokens and postal orders that will undoubtedly be enclosed with them, as to any other class of mail. For all these reasons, I commend this series of amendments to your Lordships. I beg to move.
The Deputy Chairman of Committees (Lord Greenwood of Rossendale): If your Lordships agree, we shall discuss with this amendment, Amendments Nos. 161, 162, 163, 164, 169, 170, 171 and 172.
9.38 p.m.
Lord Trefgarne: I have, as always, listened most carefully to the noble Lord's explanation of this long and complicated set of amendments, and I understand him to be saying that these are really modest and reasonable requests. However, I must say that it seems to me that their effects would be far from modest, in terms of the bureaucracy needed to administer them. The noble Lord said that it was a grave error for the Bill not to include any express provisions laying conditions on persons who operate private letter services under a licence issued under Clause 68, but we do not believe that such detailed provisions are necessary in primary legislation.
Clause 68(1) empowers the Secretary of State to impose any conditions at all in the licence, thus giving him the necessary flexibility to fit each situation. Any person operating under a licence who breaks those particular conditions will be in breach of the postal monopoly and thus guilty of an offence. Moreover, I must point out that any customer who has a complaint against a private operator will be able to take up his complaint in the courts, should he so wish. I do not, therefore, believe that it is right to suggest that we are abandoning the poor gullible customer to his fate. The powers are there to impose such conditions as are appropriate. And, of course, the Post Office has to be consulted before any licence is issued and will no doubt put forward its views on the matter.
But I must resist these amendments for another reason as well. As I said, I believe that the effect of the noble Lord's amendments would be to set up a whole new bureaucratic licensing system within the Department of Industry, and this is something which
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we expressly wish to avoid. My right honourable friend the Secretary of State has said clearly on several occasions that in the two areas in which he intends to issue licences—the delivery of Christmas cards by charities and the bulk transfer of mail between document exchanges—those licences will be issued to a class of persons and that it will not be necessary for each person who intends to take advantage of that licence to apply for his own individually. At present we have no plans to grant any other licences, but should we do so I expect that those other licences will also be general in nature. Thus, although I appreciate the noble Lord's sentiments and the spirit in which he has proposed these amendments, I must resist them because I believe that they are both unnecessary and impracticable.
Finally, may I point out that even when private operators have been licensed to run particular letter services the final decision as to who should be entrusted with his mail lies with the customer. He will of course always be able to choose the Post Office if he is not prepared to trust the alternatives.
Lord Ponsonby of Shulbrede: I find that reply by the noble Lord not at all satisfactory. I have in mind that what is not provided for in any way in his reply is how somebody who receives a communication—a Christmas card, shall we say—which is grossly delayed in its delivery is to know to whom to complain. One part of my amendment would have made it easy for such a complaint to be lodged. The noble Lord might be able to be more helpful to your Lordships if he could indicate what sort of conditions would attach to the granting of a licence. Would there be some of the sorts of conditions which I think I indicated should be attached to the granting of a licence in the series of amendments which I moved?
Lord Winstanley: Before the noble Lord responds to that point, may I raise another to which I hope he may be able to respond at the same time. I do not necessarily support this group of amendments as a whole; I accept part of what the noble Lord said in reply with regard to unnecessary bureaucracy, controls and so on. The narrow point with which I am concerned is that it is a fact, as the noble Lord knows very well, that the Post Office Act relieves the Post Office of any common law liability in respect of any damage done or any loss, however caused, to anything carried through the post. They have complete relief from common law liability. One cannot sue the Post Office for negligence with regard to the mail, although we know that the Post Office have now introduced both their own code of practice and certain methods of compensation.
I think that in reply the noble Lord made it utterly clear that the issue of a licence for some kind of limited carriage of mail did not carry with it immunity from the common law. He made it clear that it would be perfectly possible for anybody who suffe loss through negligence or any other cause as a result of the carriage of something by a licensee to have a common law remedy through the courts.
With regard to the question of Christmas cards being sent by a charity and being delayed in the mail, I cannot regard that as such a distressing loss or delay that the ordinary citizen would want to go to the

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courts. However, the possibility of licensing might extend much more widely in the future. I know that the examples which the noble Lord has given are very restricted, but in future there might possibly be a licensee whose work was more comprehensive and perhaps of more significance, in whose case loss could be of real concern to an individual. It is absolutely clear that then there should always be some readily available way whereby the person who has suffered such loss can identify the person against whom he may have to bring some kind of common law action. On that narrow part of the noble Lord's group of amendments, perhaps one might hear a little more from the noble Lord in reply.
Perhaps he could say whether or not things which are carried in some future situation by some future licensee should be required to carry some kind of identifying message so that those who are concerned about damage, loss or whatever would know to whom they must make application.
Lord Ponsonby of Shulbrede: I am not thinking about anything so extravagant as the noble Lord suggested, such as a legal action about the late receipt of a Christmas card. Surely the point here is that there may be a number of charities who involve themselves in (shall we say?) the delivery of Christmas cards, and as somebody who receives Christmas cards unfranked, with no identification, falling continuously through one's letter box in the pre-Christmas and also the post-Christmas period, one will be very interested to know in fact what sort of service is being given by the various organisations and charities who are doing this and who in fact they are. I really cannot see the problem of identification marks being put by the carrier on to the particular class of mail which is being delivered.
Lord Trefgarne: I think the noble Lord is quite right to point his finger at all sorts of things which it might be appropriate for licensees to do, such as, for example, putting their name and address, and possibly also the telephone number, on the communications which they handle, but I do not think that what the noble Lord is proposing is appropriate for primary legislation like this. This is just the sort of thing that perhaps ought to be imposed in certain cases as a condition of the licence that is issued.
As I have said, the Post Office will of course be consulted before these licences are issued and I have no doubt that they will wish to suggest to the Secretary of State just these sort of conditions. I think this argument applies to the rather limited services which we are at present contemplating, and equally to the more comprehensive services which might perhaps come one day and which worried the noble Lord, Lord Winstanley, rather more. The conditions which will be attached to the licences are to be considered in each and every case. I am certain that conditions which are appropriate for one licence might not be appropriate for another, and the views of the Post Office will be taken into account in arriving at a decision as to exactly what conditions are to be imposed in any particular case. I hope that explanation is helpful and that the noble Lord will not wish to take the matter further.
Lord Ponsonby of Shulbrede: The noble Lord, Lord Trefgarne, is always very helpful to your Lordships, and indeed I am mindful that in earlier debates on other legislation this year there were matters which were not suitable for primary legislation and he was able to help your Lordships considerably by placing in the Library certain details—and what particularly comes to mind is the articles of association of companies which it was proposed to set up. So your Lordships were able to see what the noble Lord and his department had in mind in regard to particular items of legislation. I think it would be very useful to your Lordships if the noble Lord could place in the Library before Report stage the sort of conditions which would attach to the issuing of a licence.
Lord Trefgarne: I am afraid I am not in a position to give an undertaking to do that, but I will undertake to see whether there is any more information that I can give to the noble Lord on this matter by means of private communication between now and the next stage of the Bill; and then, if the noble Lord is not satisfied, he can raise the matter again on another occasion.
Lord Morris: I believe I can be of assistance to the noble Lord, Lord Winstanley. I have always believed the Christmas mail was carried by Santa Claus.
Lord Winstanley: I am grateful to the noble Lord for his assistance, but before we finish with these matters, as I suspect we are about to do, would the noble Lord give an absolutely categorical assurance that there is no question at any time of a licence to the licensee carrying with it the legal immunity which is at present enjoyed by the Post Office under the Post Office Act?
Lord Trefgarne: As I understand it—and without considering the matter further I would have to qualify the assurance—the noble Lord's understanding of this matter is correct. If I am wrong, I will write to the noble Lord and let him know.
Lord Ponsonby of Shulbrede: In view of the noble Lord's remarks and his promise to be as helpful as he can in letting your Lordships know by one means or another the sort of conditions he would envisage attaching to the licence, I do not intend to press this amendment this evening. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 161 to 172 not moved.]
Clause 68 agreed to.
Clause 69 [Suspension of the postal privilege]:
[Amendment No. 173 not moved.]
Lord Lyell Lord Lyell moved Amendment No. 173A:
Page 58, line 34, at end insert—
("(1A) For the purposes of an order made under this section, any definition of a class of letters may be framed by reference to any circumstances whatever.").
The noble Lord said: This is a brief amendment which we believe does fit into this clause. I hope I may make

923
a brief explanation of its necessity. The Committee may know that Clause 69(1) empowers the Secretary of State to suspend the postal monopoly for such period and to such extent as he may specify. The Secretary of State has already said that he may use this power to suspend the monopoly entirely, or merely in respect of a particular geographical area, or alternatively in respect of a particular class of letters. In one special case, he intends to use the power to suspend the monopoly in respect of time-sensitive or valuable—in short, express—letters, and he has said that he will require all carriers of such letters to charge a minimum fee of £1 per item.
There have been doubts expressed to us that the clause as drafted may not have allowed this particular suspension of the monopoly. The purpose of the amendment that I am moving is to make it quite plain that any of these doubts as to the meaning of the word "extent" are resolved in favour of the widest possible interpretation. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 174 and 175 not moved.]
On Question, Whether Clause 69, as amended, shall stand part of the Bill?
Lord Winstanley: Before we finally decide that very weighty matter, I understand it is possible that the noble Lord the Minister might have further comments to make on matters which arose under this clause and the earlier clause, further information which he might be in a position to give to your Lordships' Committee.
Lord Trefgarne: Under an earlier amendment, the noble Lord, Lord Winstanley, asked me whether certain privatised services would enjoy any exemption from liability as do existing postal services. I am now able to give the noble Lord a categorical assurance that they will not enjoy any such immunity.
Clause 69, as amended, agreed to.
Clause 70 [The Post Office to be subject to limited liability in respect of certain inland packets]:
9.55 p.m.
Lord Lyell Lord Lyell moved Amendment No. 176:
Page 59, line 28, at end insert ("at the time when they are posted").
The noble Lord said: I beg to move Amendment No. 176. Clause 70 amends the law in relation to the Post Office's liability for loss of or damage to letters and other postal packets. I hope that it may be of some assistance to your Lordships if I explain, albeit briefly, that the effect of this particular clause is to allow the Post Office to accept legal liability for loss of or damage to a wider range of postal packets than it is able to do at present. As a result, the arbitration procedures in the code of practice can now be binding on the Post Office and, indeed, the Post Office have accepted that they will be legally bound by the findings of the arbitrator. I believe that the Committee will welcome this improvement in the rights of customers and especially the rights of customers of the Post Office.
Turning to the details of this particular amendment, I point out that, since its effect is not immediately obvious from Clause 70(3), I hope that I may be able to explain the resulting wording in Section 30(4) of the 1969 Act as it would be amended by Clause 70(3) of the Bill before us tonight. It would read as follows:
"The Post Office shall not be liable under this section in respect of a packet of any description unless any such conditions as are required by a scheme under Section 29 of this Act to be complied with in relation to packets of that description at the time when they are posted have been complied with in the case of the packet".
The effect of the amendment is to put beyond any doubt at all that the Post Office can only impose conditions requiring particular things to be done relating to the time before the packet is posted. For instance, the Post Office will be able to require a customer to obtain a certificate of posting before they undertake the conveyance and delivery of a postal packet; they will not, however, be able to make production of the certificate a pre-condition of their being liable for loss of or damage to the packet. Of course a court would be able to accept other evidence that the certificate had been obtained, for instance, from eyewitnesses who were present. The addition of the words in the amendment emphasises that the Post Office will be in a similar position to other suppliers of services, and I hope that the Committee will agree that that is the right policy. I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 176A:
Page 60, line 12, at end insert—
("(8) This section shall come into operation on the appointed day.").
The noble Lord said: I beg to move Amendment No. 176A. The purpose of this particular amendment is to ensure that the clause takes effect on the appointed
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day rather than, as at present drafted in the Bill, at Royal Assent. Of course we would accept that this means that the new régime of liability will not come into force until a little later than otherwise would have been the case, but this, I am afraid, is necessary because of a number of legal complications.
Clause 70 modifies Section 30 of the Post Office Act, and Section 30 sets out the liability imposed on the Post Office in connection with the carriage of registered mail. This power is also to be extended to cover other categories of mail. But the Post Office will not be able to publish a new scheme containing its terms and conditions of service compatible with the modified Section 30 until the Bill before us tonight is enacted. Since it would not be possible in practice for this scheme to be published immediately the Bill receives Royal Assent, if only because the exact date might not be known very long in advance, there will be a danger of a hiatus when the law has been changed but the Post Office scheme has not yet been changed to correspond with it.
I am sure that the Committee will agree that such a hiatus would be undesirable and this problem can be avoided by delaying the coming into force of Clause 70 until some time after Royal Assent, as Section 13 of the Interpretation Act will allow the Post Office to publish its scheme after Royal Assent but before Clause 70 takes effect. I am afraid that this is a little complicated, but I have made it as clear as I can. I beg to move.
On Question, amendment agreed to.
Clause 70, as amended, agreed to.
Clauses 71 and 72 agreed to.
Clause 73 [Borrowing powers of the Post Office and its wholly owned subsidiaries]:
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 176B:
Page 61, line 28, leave out ("with the consent of the Secretary of State and the approval of the Treasury").
The noble Lord said: We have now arrived at Clause 73, an important clause dealing with the borrowing powers of the Post Office and its wholly-owned subsidiaries. In view of the long debate that we had last night on an amendment initiated by myself in relation to Clause 26, I move this amendment, No. 176B, by way of a probing amendment in order to ascertain the views of the Government in relation to the Post Office and whether or not they are similar to those that they held last night in relation to the borrowing powers of Telecom.
With the leave of the Committee, I should also like to speak to Amendment No. 176C. On these Benches we believe—as I hope I made clear last night—that the quicker we get rid of the odd PSBR rule, the better for British Telecom and the Post Office. In view of the massive investment involved, we consider that British Telecom and the Post Office should be free to find their own money for capital investment in the private market.
Last night the amendment that I initiated concerned the powers of British Telecom to raise money tempor-

927
arily by way of overdraft or otherwise. I submitted that it would be proper to delete from that clause the words that British Telecom should only borrow temporarily:
"with the consent of the Secretary of State and the approval of the Treasury".
At that stage in relation to British Telecom the Government said that even for temporary borrowing the consent of the Secretary of State and the approval of the Treasury were needed. Therefore, my amendment failed. But Amendment No. 176C is concerned with the powers of the Post Office to borrow otherwise than by way of temporary loan. In my submission the Post Office, for the purpose of borrowing otherwise than by way of temporary loan, should be free to go to the market and, therefore, Amendment No. 176C is directed to removing from subsection (2)(b) the words:
"with the consent of the Secretary of State and the approval of the Treasury"
I do not know whether the Government are differentiating between the borrowing powers which are necessary for British Telecom and those which are necessary for the Post Office. I anticipate that the Government will take the same view, but because of the importance of the matter I think that it should be made clear to the Committee whether or not the Government have any difference of view as to the borrowing powers of the Post Office as against those of British Telecom. Therefore, I beg to move Amendment No. 176B.
The Earl of Gowrie: I have to say to the noble Lord, Lord Lloyd of Kilgerran, that the position as between British Telecom and the Post Office is identical.
Lord Lloyd of Kilgerran: I am obliged for that categoric assurance that the position with regard to the borrowing powers of the Post Office is the same as it is for British Telecom in relation to temporary loans as well as to long-term loans. I am very grateful to the noble Lord for giving that positive assurance.
Amendment, by leave, withdrawn.
[Amendment No. 176C not moved.]
Clause 73 agreed to.
Clause 74 agreed to.
Clause 75 [The Post Office's accounts and audit thereof]:
10.6 p.m.
Lord Lyell Lord Lyell moved Amendment No. 177:
Page 64, line 14, after ("has") insert ("after consultation with the Post Office and").
On Question, amendment agreed to.
Clause 75, as amended, agreed to.
Clauses 76 to 78 agreed to.
Clause 79 [Powers of Treasury to dispose etc. of the shares of Cable and Wireless Limited]:
Lord Glenamara Lord Glenamara moved Amendment No. 178:
Page 67, line 4, after ("State") insert ("and the Chairman of Cable and Wireless Limited").
The noble Lord said: In moving this amendment I should also like to discuss Amendments Nos. 179 and
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182. I shall say most of what I have to say when speaking to Clause 79 and will move the other amendments very briefly. This is a very bad Bill indeed. It is a Bill that is going to do great harm to the telecommunications system, to the postal services, to subscribers in rural areas, and to electronics manufacturers. The proposal in Clause 79 is in a category of its own. This proposal is sheer, crass stupidity. One of my honourable friends in the other place described this clause as "industrial sabotage". It is worse than that; it is sabotage of an important British national interest. I am intensely proud of being British. The people of this little island have contributed so much to the forward march of mankind. They have created vast new countries and have given those countries enduring constitutions, our language, our skills, and our laws. They have built great ports, great cities, great railways and great roads on almost every continent. I believe that no nation has done so much for mankind and for civilisation.
Whatever one may think about imperialism and empires, the British Imperial era did exist. One of the good things that emerged from that era was that we built up a worldwide system of telecommunications, often under the pressure of events. For example, the line from the United Kingdom to India was created very quickly as a result of the invasion of Afghanistan by the British in India. It was done without any reference to London because that would have taken too long. The system was built up throughout the Empire initially by submarine telegraph cables, by the ancestor of a Member of your Lordships' House, Lord Pender. In a very few years a girdle of submarine cables was thrown around the earth. In the early decades of this century that was followed by the new radio links to the Commonwealth and the Empire, and then sensibly the two came together to form Imperial Communications Limited.
Just as the Roman Empire left behind a network of roads, some of which are still in use today, the British Empire left a legacy of a vast network of Commonwealth communications. It exists today partly as a system of submarine telephone cables with enormous capacity—some carrying up to 5,000 telephone conversations simultaneously—and partly as a system of earth stations and satellites. Your Lordships may not know it but this whole vast network of Commonwealth communications is co-ordinated in the Commonwealth Communications Financial Organisation. The indebtedness of one country to another is co-ordinated through the Commonwealth Telecommunications Financial Organisation.
Of course the largest self-governing Commonwealth countries now own and run their own international telecommunications, but within the Commonwealth Telecommunications Organisation. But the smaller Commonwealth countries, and those which are still colonial territories—and there are still one or two of them—have their international communications run with great skill and competence by Cable and Wireless, who have provided satellite earth stations in many small countries round the world and given them worldwide telecommunication links which are as good as those of major developed countries. To give only two examples: Gambia, which everybody knows now was the home of Kunte Kinte, now has an earth station and is in satellite

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contact with the rest of the world. So has Belize on the other side of the Atlantic. Two small countries and Cable and Wireless have given them first-rate telecommunications.
This is a major contribution to the economies of these developing countries: a really major contribution. As I pointed out in the Second Reading debate, Cable and Wireless do this also for non-Commonwealth countries. Bahrain, for example, certainly has the best telecommunications between Europe and Hong Kong, and probably one of the best systems in the world. In the case of Bahrain both the internal telephone system and the external telecommunications are provided by Cable and Wireless. I have driven in a car along the street in Bahrain and dialled a number in London and got through in a few minutes. You can do that from a motor-car in Bahrain. All that is provided by Cable and Wireless.
I also pointed out in the Second Reading debate how many newly independent countries in the Indian Ocean and the Pacific rely on, and trust, Cable and Wireless for their external telecommunications. Our naval influence in these areas may have gone but this vital British influence remains, thanks to this wholly-owned British company. Apart from the fact that Cable and Wireless have woven a web of tremendously worthwhile and lucrative British influence around the globe, they are our most consistently successful publicly-owned industry.
It is all this—and I have explained this at great length because very little is known about Cable and Wireless in this country—that the Government are putting at risk. I ask the noble Earl, Lord Gowrie, to believe that that is not rhetoric. They are putting this at risk in order to get a one-off payment to the Exchequer—if ever there was an example of eating the seed corn this is it; Cable and Wireless have paid £10 million in dividend this year and a vast amount of tax—and in order to provide more pickings for private investors. I do not know how many thousands of listed securities there are on the London Stock Exchange, but in order to provide one more they have to savage this successful, excellent British company.
Now why will it be put at risk by what the Government are proposing? First of all I believe there is great danger of it falling into foreign hands. I shall not discuss that now because it comes up on another amendment. Secondly, I believe that it could lead to the disintegration of Cable and Wireless. It certainly could lead to the disintegration of the Commonwealth Telecommunications Organisation, which is a bit of the Commonwealth that really works; a mechanism which functions very well indeed: one of the most successful aspects of it.
A great deal more information should be given to the Committee by the noble Earl about the Government's consultations with Governments of countries where Cable and Wireless operates. How many Governments, for example, in the Government's view are now likely to nationalise Cable and Wireless operations in their countries? How many? In particular, I should like him to tell us—and I asked him during the Second Reading debate, but he did not tell us—about the two territories where Cable and Wireless earn about 80 per cent. of their profits; Hong Kong and Bahrain. What about the partial nationalisation there? Is it not
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a fact in Hong Kong that the price of Hong Kong's acquiescence in this is that they are insisting that a joint company be established in Hong Kong consisting of Cable and Wireless and the Hong Kong Government? At the present time of course all the Hong Kong profits of Cable and Wireless are remitted to London. If that happens, what will happen to the profit in Hong Kong? The whole of it will not be remitted to London. A good deal of it will go to the Hong Kong Government if the Government become a major shareholder. Is that the price of their acquiescence in this plan, and does it mean a major reduction of Cable and Wireless profit from there? Is it a fact that similar arrangements are being discussed in Bahrain and that they too will insist on something like this Hong Kong pattern of a joint company between the Bahrain Government and Cable and Wireless?
I do not want to be misunderstood, but in some respects—I felt this acutely when I was its chairman—Cable and Wireless is rather like a house of cards; it depends for its stability on the most sensitive political handling both by Government and by the company itself. I am afraid that the crude commercialism of this Government and their approach to the company is absolutely alien to Cable and Wireless, to its history and to its careful and sensitive mode of operation. Specifically, may I have a reply to the point on Amendment No. 182: has the Commonwealth Telecommunications Organisation agreed to this by resolution? I ask that because, if this happens, it will be the only non-Government organisation in the whole Commonwealth to be in the Commonwealth Telecommunications Organisation. I should therefore like to know if they have agreed to it by resolution. I beg to move.
10.17 p.m.
The Earl of Gowrie: I am sure that all noble Lords on this side of the Committee are no less proud about being British than the noble Lord, Lord Glenamara. Again, as so often—and we must accept this as a difference of view—he tends in our view to try to confuse nationally-owned assets with national assets, and we do not necessarily make that connection. There is no reason why privatising a company or selling Government holdings in that company should make it any less or any more successful. The questions of the ownership of shares do not seem to me to be the integrally important thing about the direction of such a company.
The noble Lord treated us to a historical perspective very clearly and interestingly about the history of this company in terms of the British Empire. He will be just as aware, however, that the British Empire started life as a mercantile and commercial enterprise, and there is no reason why the commercial activities of Cable and Wireless should not be, if anything, strengthened by the proposals we are seeking to make.
All of us have different bees in the bonnet or different ideologies or doctrines. My own, and I do not mind declaring it, is that modern Governments. including my own, are obsessed by the ownership of assets. There is no reason I can see for Governments as organisations to own any assets or shares at all. It does not seem to do them much good, and if I had my way there would be a far more rapid and greater programme of privati

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sation, and I hope that my noble and right honourable friends will slowly and surely come round to my point of view.
We made it clear in a Statement on 9th March that the decision to dispose of part of the Government's current shareholding in Cable and Wireless was taken with the full knowledge and agreement of the court of directors. We recognise that the size of the Government's shareholding is an important factor in the company's commercial activities and in particular in its relations with overseas Governments, for whom it provides telecommunications services. There can be no doubt that the Government, and indeed any Government, would wish to consult the chairman of the company before selling any shares. I appreciate therefore the motive of the noble Lord, Lord Glenamara, in the first amendment, but I do not see that it is necessary. In any case, as it stands, the amendment is open to the objection that it imposes a statutory obligation on the Treasury, rather than on the Secretary of State, who is in fact responsible for the company and who should therefore be responsible for carrying out consultation on any decision by the Government to sell shares.
Turning to Amendment No. 182, I would say that I appreciate and indeed share the concern expressed by the noble Lord about the connection between Cable and Wireless and the Commonwealth, and I hope that I can reassure the noble Lord that the Government did not make a final decision about selling shares in the company without taking close account of the formal relations as they exist.
Reference has been made to the fact that after the last war Cable and Wireless's operations were taken into public ownership in the United Kingdom and in some Commonwealth countries as a result of Commonwealth initiative. It might help the Committee if briefly I say why the circumstances today are very different and why, therefore, it would be quite inappropriate for the British Government to be obliged to ask the CTO to agree any proposal to sell shares in Cable and Wireless, as is proposed in the amendment.
The Commonwealth Conference resolution of 1945, which led to nationalisation of the company, was passed when Cable and Wireless owned and operated all the facilities and services which comprised the Commonwealth's international telecommunications network. After the disruption of the war some Commonwealth Governments—those of Australia, New Zealand, Canada, India, South Africa and Southern Rhodesia—felt that they would be better able to protect their vital communications links if they took over the operations themselves. Nationalisation of the company's operations in those countries and in the United Kingdom was accepted and embodied in the Commonwealth Telegraphs Agreement in 1948, and a Commonwealth Telegraphs Board was set up to administer the operating agreements signed between the partner Governments, their national operating bodies, and the board itself. Other Commonwealth countries joined this organisation in subsequent years and Cable and Wireless would have been a signatory as a national operating body in some of those countries.
However, the arrangement was replaced in 1966 by the existing Commonwealth Telecommunications
932
Organisation (the CTO), following another Commonwealth Conference. The CTO is not in itself a decision-making body. Its constitution provides for Government meetings at an official level. The conference convenes at 3-yearly intervals and all independent Commonwealth Governments are eligible to take part. Neither Cable and Wireless itself, nor its overseas operations, have anything official to do with the conference. The council is composed of representatives of Governments who are partners in the collaborative financial arrangements of the CTO. As with the conference, Cable and Wireless has no formal status in the Council. The company simply provides telecommunications services under franchises on behalf of some of the partner Governments. The British Government's representative on the council is an official of the British Post Office. He also acts as the representative on the council on behalf of a dozen British overseas territories and associated states with some of which Cable and Wireless has franchise agreements.
I can assure the Committee that the present relationship between Cable and Wireless and the CTO has been examined very carefully. There is no legal obligation to consult the organisation about our policies vis-à-vis Cable and Wireless, and I believe that we are no longer under any moral obligation to do so. The nature of the company's Commonwealth connection is now quite different from what it was in 1945. That is not to say we would deny that the services provided by the company are still a significant part of the international network between many countries with past or present associations with the Commonwealth; for example, by the very nature of its services Cable and Wireless happens to be closely involved with the CTO's financial arrangements, which come under the CTO Council's responsibilities. Out of courtesy to the CTO and its member Governments arrangements were made to notify the organisation before the decision to sell shares last March.
The noble Lord, Lord Glenamara, asked me one or two specific questions. My advice is that protection from foreign control will be contained, as it is now in the articles of association. Cable and Wireless is not a member of the CTFA and therefore cannot affect the CTFA's future. None of the overseas Governments has in fact objected to the sale of shares; and the Hong Kong licence was in any case due for renegotiation. I hope that noble Lords will be persuaded that the Government undertook all necessary overseas consultations before the final decision to sell shares in Cable and Wireless, and would always consult in the event of further disposals. I therefore hope that if the noble Lord, Lord Glenamara, presses his amendment the Committee will reject it.
10.26 p.m.
Lord Mottistone: Perhaps I might intervene before the noble Lord replies. I qualified as a naval signal officer in 1944–45, and had dealings thereafter with Cable and Wireless for many years, with the greatest possible regard throughout all those years for the high quality of Cable and Wireless. The only point I should like to make is that at the time I qualified Cable and Wireless was an independent company, before its nationalisation. It was of a very high quality then.

933
Indeed, a lot of the historical facts which the noble Lord, Lord Glenamara, gave us, which I entirely agree with, came about before the nationalisation in 1946.
At Second Reading the noble Lord rather implied that this was a new move to denationalise something in some regard—and obviously not wholly, in view of what my noble friend Lord Gowrie has just said. It is not; it is a reversion to what it was before, and it probably is not a full reversion to what it was then. We must not get worried about the quality which this great company has maintained through both its private existence, when it built itself up (which is significant in itself), and the time when it had to be nationalised. It may be that this suited the other countries of the Commonwealth, but that is a matter of which the Navy was not aware.
But this is not something which need affect the efficiency of this great company in any way at all; and I should have thought that there was every other reason, such as my noble friend has so very eloquently put to us, why there should be changes. We should march with the times; we should not be pinned back to 1946. We should look forward and see how we can develop. We should give Cable and Wireless a chance to get better, rather than stay stuck. I should have thought that, really, the noble Lord, in the best interests of Cable and Wireless, which he obviously served well, would do as well not to proceed with this amendment or with any of the others.
Lord Kennet: The noble Earl, Lord Gowrie, has, as he often does, enlivened the debate by introducing some general principles by reference to which the particular issue before the Committee may be judged. They were two. His first principle was that the distinction between national assets and nationally-owned assets was a false one, and should not be taken account of in this matter. At this point I think he was drawing a picture somewhat akin to the Japanese economy and saying that we should go in that direction: if it is British it does not matter whether it is public or private.
His second principle was that it makes no difference to the commercial success of an entreprise whether it is publicly owned or privately owned. If I misunderstood him I apologise, but I think that is what he was saying, that intrinsically it should not make any difference to the success of an enterprise whether it is privately or publicly owned, as an abstract proposition. He then passed, thirdly, to express a hope, which I took to be a personal one, expressed by one Minister among many, that his own Government would go faster towards the privatisation of commercial enterprises. I have this question for him, assuming I have summed up his two general propositions correctly. In those circumstances, why does he hope that privatisation will go yet faster than it is going?
The Earl of Gowrie: I think it is a little wide of the amendment but that is perhaps my fault for introducing at this late hour some general principles; but the noble Lord, Lord Kennet, was good enough to be interested in my principles, so I had better qualify a little what he said. Other things being equal, there are great advantages in commercial enterprises being denationalised and being private. The qualification exists where there are defence considerations or where there are security
934
implications or the rest. What I think would illuminate the noble Lord most about my position which he is kind enough to be interested in, is if he looked at the interesting debate in this Committee that took place yesterday on the problems created by the ability of public sector corporations to borrow money. I argued then that one of the central political debates in this economy which cut across party lines at the present time was on the problem of the funding and financing of Government debt. As I say, other things being equal, privatised companies are able to go on to the money markets with much more independence than if they remain in the public sector. That is one of the reasons—and there are others if one likes to adduce them all—why I would like more privatising done, much though I dislike the particular word.
Lord Glenamara: I do not intend to press these amendments to a Division because they are three technical points. I should point out to the noble Earl, Lord Gowrie, that he has a number of inaccuracies in his brief. Looking at the balance sheet of C and W he will see whether C and W is involved in the CTFO. It is. it receives all its payments from Commonwealth countries via the CTFO. They are technical points. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 179 not moved.]
Lord Glenamara Lord Glenamara moved Amendment No. 180:
Page 67, line 4, after ("time") insert ("not earlier than 1st day of January 1985").
The noble Lord said: The purpose of this amendment is obvious. The Government have no electoral mandate of any kind for doing this. The purpose of the amendment is to defer implementation until after the general election. Earlier I said that I had taken the trouble to obtain a page of the Conservative Party manifesto. It says that they will sell back to private ownership the recently nationalised aerospace and shipbuilding concerns; they will sell shares in the National Freight Corporation to the general public and relax the Traffic Commissioner Licensing Regulations. They are the only specific denationalisation proposals mentioned.
I take it that the public who want to know what Conservative candidates will do about nationalisation will look at the paragraph of the manifesto headed "Nationalisation". There is no mention of Cable and Wireless; they have no mandate whatever to do what they are doing to this company. I do not believe that the electors imagine for a moment that they will be foolish enough or doctrinaire enough to sell off our most successful publicly-owned company—and this enables them to sell off the entire 100-million shares.
If this amendment is agreed—and I intend to press it to a Division—the Labour Party will state in terms—and this is the second time I have said what the next Labour Government will do—in the next general election that they will not use the powers provided in Clause 79 to dispose of the shares. This will give the electors in the next general election the chance to find out what Cable and Wireless is, what it does, what it stands for in the world, and how much it is

935
contributing annually to the Exchequer in tax and dividends. They can question candidates at the general election about it, make their views known and arrive at their own decisions. Nothing could be more sensible or democratic than that. Therefore, I beg to move this amendment deferring the selling of any shares in Cable and Wireless until not earlier than 1st January 1985.
The Earl of Gowrie: Given the premises on which the noble Lord, Lord Glenamara, has pursued his arguments and defended his amendments, I am not surprised or in any way shocked at this one. I think that it is a little bit disingenuous to think that anybody in the public was really left in the dark about the fact that the policies under which the Government fought the last election included substantial measures of privatisation. If electoral manifestoes spelt out every clause of every Bill that was liable to be brought before the House they would be less read than they are.
I can tell the noble Lord that it is the Government's intention to achieve our objective of selling some of our shares in Cable and Wireless, subject of course to obtaining the necessary powers in this Bill, well before the next general election. I have no doubt that by the time that comes along the noble Lord's amendment will be redundant, and I suggest, as a result, that he does not pursue it tonight.
Lord Glenamara: The noble Earl did not tell me whether he told his electors that he intended to denationalise Cable and Wireless or whether he knows any Conservative candidate who mentioned Cable and Wireless in the election. However, I certainly intend to press the amendment to a Division.
10.37 p.m.
On Question, Whether the said amendment (No. 180) shall be agreed to?
Their Lordships divided: Contents, 18; Not-Contents, 46.

CONTENTS

Blease, L.

Ponsonby of Shulbrede, L.

Boston of Faversham, L.

Ritchie-Calder, L.

David, B. [Teller.]

Shackleton, L.

Glenamara, L.

Stewart of Alvechurch, B.

Greenwood of Rossendale, L.

Stewart of Fulham, L.

Jeger, B.

Stone, L.

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

Underhill, L.

White, B.

McNair, L.

Winstanley, L.

Molloy, L.

NOT-CONTENTS

Abinger, L.

Donegall, M.

Avon, E.

Elliot of Harwood, B.

Belstead, L.

Ferrers, E.

Broadbridge, L.

Fortescue, E.

Brougham and Vaux, L.

Gainford, L.

Buxton of Alsa, L.

Gibson-Watt, L.

Caithness, E.

Gisborough, L.

Cockfield, L.

Glendevon, L.

Colville of Culross, V.

Gowrie, E.

Cork and Orrery, E.

Grimston of Westbury, L.

Cranbrook, E.

Hatherton, L.

Cullen of Ashbourne, L.

Holderness, L.

936

Kemsley, V.

O'Hagan, L.

Long, V.

Redesdale, L.

Lyell, L. [Teller.]

Renton, L.

Mackay of Clashfern, L.

Sandys, L. [Teller.]

Margadale, L.

Sharples, B.

Marley, L.

Skelmersdale, L.

Marshall of Leeds, L.

Stradbroke, E.

Montgomery of Alamein, V.

Swinton, E.

Morris, L.

Trefgarne, L.

Mottistone, L.

Trumpington, B.

Murton of Lindisfarne, L.

Vivian, L.

Resolved in the negative, and amendment disagreed to accordingly.
10.44 p.m.
Lord Glenamara Lord Glenamara moved Amendment No. 181:
Page 67, line 4, after ("dispose") insert ("to any citizen or citizens of the United Kingdom or to any company or companies which are completely controlled by a citizen or citizens of the United Kingdom").
The noble Lord said: With this amendment, if I may, I should like to discuss Amendments Nos. 183 and 184. The purpose of these amendments is to call attention to the first of the two dangers I mentioned when moving previous amendments—namely, that Cable and Wireless may, if the shares are sold, fall into foreign hands. I know the Government have said they intend to sell only up to 49 per cent. of the shares; but I point out that this Bill empowers the Government to sell all the shares in Cable and Wireless and to do so without any further reference to Parliament. Does anybody really believe that, with a monetarist Chancellor of the Exchequer of the kind we have now, the Secretary of State for Industry will not have his arm twisted over the next three years? Of course he will: quite well.
So the 49 per cent. announcement is no safeguard against the company falling into foreign hands. Of course, when the company is put on the market it is possible to ensure that the shares do not go to foreign nationals but, in a free market and particularly in the EEC, Cable and Wireless shares could end up in the hands of a subsidiary of a French company, a German company, an Italian company, a United States company or any other foreign company, and there is nothing anybody can do about it.
From what Ministers said on Second Reading, the Government do not intend, even initially when the shares are floated, to ensure that they are sold only to British nationals. I realise at once that because of the nature of Cable and Wireless there is a dilemma here. I myself urged the Government some time ago, if they were going to sell these shares, to give some preferential allocation to the employees of the company, and I am glad that they agreed to do that. On the other hand, the majority of employees of Cable and Wireless are not United Kingdom citizens; they are nationals of the overseas countries where the company operates, and this is the problem. O really has to consider where the balance of advantage to everybody concerned.
Should everyone, United Kingdom and overseas staff, be allowed a preferential allocation when the shares are sold, with the near certainty that Cable and Wireless will fall into foreign ownership? Or should there be a preferential allocation of shares in this United Kingdom company only to United Kingdom

937
nationals, with, one would hope, much less chance that it would fall into foreign hands? Neither of these alternatives is entirely satisfactory. But that is how it is, I am afraid, in Government, in business and in life. It is a choice of the more satisfactory of two unsatisfactory alternatives.
But I myself have no doubt about what my choice would be. I would risk being charged with unfairness—and I do not think the charge would be made, knowing Cable and Wireless's national staffs—in order to keep Cable and Wireless in British hands, because that would be in the best interests of all the staff, United Kingdom and overseas. So the overseas national staffs of Cable and Wireless might lose out in the preferential right to buy shares initially, but their security would be much more likely to be assured; and they are reasonable people who, I am certain, would accept this, if it were put to them. So I believe that the Government are making a great mistake in selling the shares initially to foreign nationals. I feel that they should be confined to British nationals, which I believe—I cannot be certain—would help the company to remain in British hands. I beg to move.
The Deputy Chairman of Committees: If your Lordships agree, we will discuss Amendments Nos. 183 and 184 with this amendment.
The Earl of Gowrie: These amendments would, in any case, be insufficient to achieve the end of trying to prohibit any shareholding in Cable and Wireless by foreigners, since they would not control trading in new issues of capital. Leaving that aside, it is well-known that trade in company shares is a notoriously difficult thing to regulate altogether. I can, of course, understand the noble Lord's desire that Cable and Wireless should remain British; it is a successful company and a valuable national asset. But to prohibit any foreign shareholding would be quite inappropriate for a company like Cable and Wireless. The noble Lord himself made the good point about employees' share participating schemes, which he would wish to have—and I would—and it would be quite extraordinary if employees of the company were prohibited from employee participation simply because they were foreign nationals. That would he an astonishingly illiberal form of provision for so famously international a company.
Of course, there is a great difficulty in trying to define in a few lines of statute the necessarily complex provisions required to prevent foreign control of the company. Part II of the Industry Act 1975 runs to 10 sections and seven pages alone. But the question of foreign shareholding will, as Cable and Wireless themselves have recognised, continue to be a matter appropriate for the articles of association of the company which will need to be reviewed before the sale of any shares. This is in line with precedent—for example, British Aerospace. In addition to the fact that the Government are remaining a majority shareholder, the noble Lord's anxieties are not well placed. I would therefore ask him to withdraw the amendment.
Lord Glenamara: T do not intend to press these amendments to a Division. I think that the Government are wrong. They are making a great mistake and
938
running a very great danger. I do not think it matters what is written into the articles of association. This could happen. As the noble Earl himself said, it is notoriously difficult to control this situation, particularly in the EEC. However, we shall watch very carefully indeed what happens to the shares of Cable and Wireless. I hope the Government will take any steps which are available to them—I am grateful for what the noble Earl said about re-writing the articles of association—to safeguard the position.
Amendment, by leave, withdrawn.
[Amendments Nos. 182, 183 and 184 not moved.]
Clause 79 agreed to.
Clause 80 [Extended application of the Telegraph Acts]:
On Question, Whether Clause 80 shall stand part of the Bill?
10.52 p.m.
Lord Morris: Clause 80 extends the definition of "telegraph" as contained in the Telegraph Act 1963. As the definition of "telegraph" in that Act is the peg upon which every single piece of legislation in this field is hung, I think it is very important to know, in a few words, what the effect of this clause is. I could go banging on about this for a very long time, taking your Lordships through the history of the Telegraph Acts from 1863 to the present day, but I do not wish to do so at this late hour.
Lord Trefgarne: Your Lordships will be relieved to hear that we are not to be given the history of the telegraphs since heaven knows when! My noble friend has asked about the purpose of the clause. The original wording of Section 3 of the Telegraph Act 1863 defined "telegraph" in terms only of wires, which are usually made of metal. This was in keeping with the technology of the time. But British Telecommunications are now using optical fibre cables which are made of glass. The new definition of "telegraph" therefore includes optical fibres and therefore ensures that all the legislation covering telegraphs and telegraph works or wires extends to the new optical fibre cables.
I hope your Lordships will agree that this is a sensible change.
Clause 80 agreed to.
Clauses 81 to 87 agreed to.
Schedule 3 agreed to.
Clause 88 agreed to.
Schedule 4 [General transitional provisions]:
Lord Lyell Lord Lyell moved Amendment No. 185:
Page 110, line 8, leave out ("Part I") and insert ("this Act").
The noble Lord said: This is a minor technical amendment. It corrects a slip in the drafting. It ensures that the transitional provision contained in paragraph 1 of Schedule 4 will apply wherever changes are made in any part of the Bill, not just in Part I. I hope this amendment is acceptable to your Lordships. I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendments Nos. 186 and 187:
Page 111, line 1, after ("years") insert ("or that year")
Page 111, line 6, leave out ("and third") and insert ("third and fourth").
The noble Lord said: It may be for the convenience of the Committee if I move these two amendments together. These again are two technical and minor amendments to the transitional provisions of the Bill. They take into account the definition of the words "accounting year". I beg to move.
On Question, amendments agreed to.
Lord Lyell Lord Lyell moved Amendment No. 188:
Page 111, line 42, at end insert—
("(2) Any charges fixed under any such scheme, so far as so relating, shall have effect as fixed under a scheme made under section 20.
(3) A scheme made under section 20 which is to come into effect on the appointed day may revoke or amend any such scheme as is mentioned in sub-paragraph (1).").
The noble Lord said: This is a technical amendment covering the transition from the Post Office to British Telecom. It ensures that there is continuity in any schemes which contain the conditions under which the telephone service is supplied. I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendments Nos. 189 and 190:
Page 112, line 6, at beginning insert—
("(1) Sections 26(3), 27(2), 73(3) and 74(2) shall have effect as if—

(a) any money borrowed by the Post Office the liability to repay which is transferred to the Corporation by this Act were money borrowed by the Corporation and not by the Post Office;

(b) any sums issued by the Treasury in fulfilment of a guarantee under section 38 of the 1969 Act, being sums the liability to repay which is so transferred, were sums issued by the Treasury in fulfilment of a guarantee under section 29 and not a guarantee under the said section 38; and

(c) so much of the debt assumed by the Post Office under section 33 of the 1969 Act as is so transferred (in this paragraph referred to as "the Corporation's assumed debt") were money borrowed by the Corporation and not part of the debt assumed by the Post Office.

Page 112, line 11, at end insert—
("(3) The rate of interest on the Corporation's assumed debt and the date from which interest is to begin to accrue, the arrangements for paying off the principal of the said debt and the other terms of the said debt shall be such as the Secretary of State, with the approval of the Treasury, may from time to time determine; and different rates and dates may be determined under this sub-paragraph with respect to different portions of the said debt.
(4) The Secretary of State shall give notice in writing to the Corporation of any determination under sub-paragraph (3).
(5) Any sums received by the Secretary of State by way of interest on, or repayment of, the Corporation's assumed debt shall be paid into the National Loans Fund.").
The noble Lord said: These are consequential upon the vast list of amendments that I moved, I think it was on the first day of our deliberations on Committee stage—what we might call the "Mottistone amendments", since my noble friend was able to remind me of the group earlier today. I beg to move.
On Question, amendments agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 191:
Page 112, line 15, after ("shall") insert ("so far as so relating").
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 192:
Page 112, line 20, after ("shall") insert ("so far as so relating").
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 193:
Page 112, line 21, at end insert—
("(2) Section 53(1) shall have effect as if any sum due to the Post Office before the appointed day under the provisions of a scheme made under section 28 of the 1969 Act, being a sum the right to recover which is transferred to the Corporation by this Act, were a sum due to the Corporation under the provisions of a scheme made under section 20.").
The noble Lord said: This is a consequential amendment upon an earlier amendment moved on the first day of Committee. I beg to move.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Schedule 5 agreed to.
Clause 89 [Repeals and savings]:
Lord Lyell Lord Lyell moved Amendment No. 194:
Page 74, line 15, at end insert—
("(2A) Notwithstanding the repeal by this section of the said Act of 1961, the Exchequer and Audit Departments Act 1866 and the Exchequer and Audit Departments Act 1921 shall continue to have effect with the amendments made by Schedule 1 to the said Act of 1961.").
The noble Lord said: This is a technical amendment. I beg to move.
On Question, amendment agreed to.
Clause 89, as amended, agreed to.
Schedule 6 [Enactments repealed]:
Lord Lyell Lord Lyell moved Amendment No. 195:
Page 129, line 22, column 3, leave out from ("Act") to end of line 26.
The noble Lord said: This is another technical amendment which follows an earlier amendment which we discussed on the second day of the Committee stage. I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendments Nos. 196 and 197:
Page 130, line 11, column 3, after ("Schedule 4") insert ("in paragraph 2(1), in the Table, the entry relating to section 3 of the 1953 Act and")
Page 130, line 50, at end insert—

("1968 c. 60

The Theft Act 1968.

In Schedule 2, in Part I, paragraph 8.").

The noble Lord said: I think it convenient to move Amendments Nos. 196 and 197 together and I should like to speak also to Amendments Nos. 199 and 200. These four amendments add some additional repeals of enactments which, to the surprise of your Lordships, will be either spent or will become so after the creation of British Telecom. I hope that would suffice as an explanation this evening. I beg to move.
On Question, amendments agreed to.
Lord Morris Lord Morris moved Amendment No. 198:
Page 131, line 8, after ("(b)") insert ("(c)").
The noble Lord said: I believe, no doubt wrongly, that if this amendment were not to pass, the limitation of liability not of British Telecom but of the Post Office with regard to failure, interruption, suspension or restriction of its telecommunications service would be retained in the law. I fail to see the necessity of that as I was firmly under the impression that the intention of the Bill was to split the telecommunications from the postal service of the Post Office. I beg to move.
Lord Trefgarne: I hope my noble friend will not seek a long and detailed explanation of this. We went into the principle of this matter at an earlier stage of the Bill, and I hope my noble friend will be satisfied with the explanation I gave at that time.
Amendment, by leave, withdrawn.
Lord Lyell Lord Lyell moved Amendments Nos. 199 and 200:
Page 131, line 35, at end insert—

("1974 c. 8

The Statutory Corporations (Financial Provisions) Act 1974.

In Schedule 2, paragraph 4.").

Page 131, line 37, column 3, at end insert ("In Schedule 4, paragraph 5.").
The noble Lord said: I spoke to these two amendments earlier. I beg to move Amendments Nos. 199 and 200.
On Question, amendments agreed to.
Schedule 6, as amended, agreed to.
Clause 90 agreed to.
House resumed: Bill reported with the amendments.

British Railways Bill
Committed to an Unopposed Bill Committee.
Whitehaven Harbour Bill
Brought from the Commons, read 1a and referred to the Examiners.
British Railways (Victoria) Bill [H.L.]
Returned from the Commons agreed to.