British Telecommunications Bill

HL Deb 19 May 1981 vol 420 cc837-88

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 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 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 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 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. 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 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 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 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 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. 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 moved Amendment No. 123: After Clause 50, insert the following new clause:

("Interception of messages

.—(1) A person who—

1. (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);
2. (b) instigates any person engaged in the business of the Corporation to intercept such a message or other matter; or
3. (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—

1. (a) it would assist in the detection of a serious offence;
2. (b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried; and
3. (c) there is good reason to think that the interception would result in a conviction for that offence.

In this subsection "serious offence" means—

1. (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
2. (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—

1. (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
2. (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—

1. (a) the person whose telecommunications it is sought to intercept and the telecommunications in question; and
2. (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 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 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, 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—

1. (a) it would assist in the detection of a serious offence;
2. (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,

1. "(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
2. (ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence".

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—

1. (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
2. (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 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 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 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 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- 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 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 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 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 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 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 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 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 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.

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.

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 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 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 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 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 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 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 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 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 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 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 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.

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 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 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 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 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 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 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 moved Amendment No. 137: 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—

1. (i) which supplies goods or services by way of business;
2. (ii) the affairs of which are managed by its members; and
3. (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 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 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. 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 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 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 moved Amendment No. 141:

Page 50, line 47, at end insert— ("(5) As regards any wholly owned subsidiary of the Post 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 —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.

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 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 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.