Lords Sitting of 16 July 1982

Preamble
The House met at eleven of the clock: THE LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of London

Railway Modernisation Costs: London-Bedford
Lord Gainford: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how much capital was spent on the electrification of the railway between Bedford and St. Pancras.
The Earl of Avon: My Lords, the most recent estimate made by the Railways Board of the total cost of modernising and electrifying the London to Bedford railway line is £153½ million at mid-1981 prices. Almost 40 per cent. of this figure is for work on re-signalling as well as track and route improvements which will also benefit diesel hauled Inter-City and freight traffic.
Lord Gainford: My Lords, I thank my noble friend the Minister for that Answer. Arising out of the information that the money includes design for new trains, has he any information about the dispute between British Rail and ASLEF concerning the fact that these trains require only one driver and not two? The result is that these trains have been idle up to now.
The Earl of Avon: No, my Lords, I have no further information on the dispute about which we had a Statement very recently. In a letter to the unions on 25th June the board suggested progress on several productivity issues, including this one, and proposed a three-month experiment with driver-only operations between London and St. Albans and dual manning open stations between St. Albans and Bedford. I understand that the NUR have not accepted this suggestion.
Lord Underhill: My Lords, is it not a fact that this question indicates the lack of adequate publicity for both sides of the dispute? Is it not a fact that this is one of three proposals which arose out of the original ACAS discussions? Is it not a fact that these three proposals have been referred to the national tribunal for discussion without any preconceived ideas on both sides? Moreover, is it not a fact that the NUR have said that trains can run on this route with the extra additional man while the discussions take place?
The Earl of Avon: My Lords, the NUR have put up counter proposals. I am not quite sure what are the three proposals to which the noble Lord refers. However, there were six productivity proposals last year and discussions throughout the year have been continuing on this matter.
Lord Underhill: My Lords, the three proposals which arose out of the ACAS discussions were the open manning of stations, which would relieve men for other duties and save money; the single manning of passenger trains; and the new train concept of customer service on trains with assistance also to the driver with rather reduced safety provisions.
The Earl of Avon: My Lords, that is what I thought the noble Lord was referring to. Discussions started last year, and the noble Lord, Lord McCarthy, has also commented on this matter.

Embassies: Planning Control
11.8 a.m.
The Earl of Kinnoull: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will review the planning control of foreign embassies and consulates within the London area in view of the recent destruction of the Chinese consulate in a conservation area.
The Earl of Avon: My Lords, Her Majesty's Government are satisfied that foreign Governments generally have a responsible and co-operative attitude with regard to proposals for the buildings they occupy and I therefore see no need to carry out such a review.
As I explained to the House in March 1981, the need for demolition of the facade of property owned by the Chinese Embassy in Portland Place arose because during the course of demolition of the rear of the building (for which consent had been granted) the district surveyor expressed concern about the structural condition of the facades; and Westminster City Council accepted that they should be taken down in the interests of public safety. The facades will, however, be rebuilt in replica.
The Earl of Kinnoull: My Lords, may I thank my noble friend for that reply? Can he say whether plans have now been submitted and when the work is likely to start on this site? Secondly, referring to the somewhat grey area between planning control of embassies and diplomatic privileges, is it possible legally to say that the Chinese consulate could acquire a building in Parliament Square and erect a pagoda?
The Earl of Avon: My Lords, embassies and consulates are subject to the planning laws of this country and, although their diplomatic status can lead to the occasional problem, I do not accept that the position is anywhere as facetious as my noble friend's last suggestion implied. The present position at the

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Chinese Embassy is going along according to plan. I am not quite sure what state the plans have reached at this moment.
Lord Strabolgi: My Lords, may I ask the noble Earl whether the Government are aware that the present Chinese Embassy in Portland Place has great historical associations for the Chinese and they are very anxious that it should be restored to its original state?
The Earl of Avon: My Lords, I hope my original Answer did not imply anything else but that the Chinese Government have accepted full planning responsibilities for that site.
The Earl of Kinnoull: My Lords, is my noble friend aware that I was not being facetious irrationally? I am thinking, of course, of the Iranian Embassy. May I ask my noble friend whether the dangerous structure notice that was served on the Embassy some years ago has yet been put into effect and what is happening on the issue?
The Earl of Avon: My Lords, the Iranian Embassy have been told that it is their responsibility to render the building safe. Her Majesty's Government have supported the efforts of the Westminster City Council to bring this about. We are continuing our contacts with the Iranians about who is responsible for the cost of repairs to the building. Discussions are currently in progress.

Meteorological Service: Annual Costs
11.12 a.m.
The Earl of Kinnoull: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the deep concern at the size of the annual charge of the Meteorological Service (£13·6 million in 1980–81) that is passed on to the civil aviation industry by the Civil Aviation Authority, they will publish a report following the current review of this service showing how annual costs are made up; and whether consideration will be given to the use of alternative competitive services by the industry.
The Earl of Avon: My Lords, the Meteorological Office is included in the Government's programme of resource control reviews. This review is now in progress. There will be consultation with the Ministry of Defence, Department of Trade, the Civil Aviation Authority and civil operators. While the industry is, of course, free to explore other services, the Civil Aviation Authority needs a central forecasting service and the costs of it have to be recovered.
The Earl of Kinnoull: My Lords, I am grateful, and I am sure the House is grateful, to my noble friend for his many Answers this morning. Can my noble friend say when this internal report will be likely to be completed, and when it will be published?
The Earl of Avon: My Lords, it is expected that the findings of the review will be made public. No firm date can be given at this stage, but it is likely to be published before the end of the year.
Baroness Burton of Coventry: My Lords, may I ask the noble Earl two questions arising from that? Am I correct in my understanding that Mr. Ian Sproat has asked Mr. John Dent, the new chairman of the Civil Aviation Authority, to conduct a review into the functions of the Civil Aviation Authority? If that is correct, as I believe it is, would it be the case that the matter referred to by the noble Earl, Lord Kinnoull, will be included in that review?
The Earl of Avon: My Lords, indeed, there is the other review in progress, and I am sure they will include this kind of issue.
The Earl of Kinnoull: My Lords, could my noble friend say whether in future the Met Office will be able to give a breakdown of figures when charging the aviation industry as it does?
The Earl of Avon: My Lords, I am not sure whether they can give a breakdown of figures, but it may be of interest to the House to know that the total out-turn budget for the year in question was £54 million, so that the proportion paid by the CAA was not all that large. Some two years ago the Treasury looked into this issue and, as I understand it, both parties were happy with the result.
Lord Bruce of Donington: My Lords, can the noble Lord give the House information as to whether this £13 million charge was a negotiated charge between both parties or whether it was arbitrarily imposed? It is important that the House should be able to distinguish between the two arrangements.
The Earl of Avon: My Lords, when there was a little difficulty two years ago, the Department of Transport and the Civil Aviation Authority were expressing disquiet about charges. The Treasury examined the method of calculating this element of the charge and they concluded that it was reasonable and, indeed, that it was difficult to visualise a fairer approach.

Prisoners: Ministerial Responsibilities
11.14 a.m.
The Earl of Longford: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why departmental responsibility for prisoners in general is allocated to the Parliamentary Under-Secretary of State, Lord Elton, while that for life prisoners is allocated to the Minister of State, Mr. Mayhew.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, my right honourable friend the Home Secretary has allocated to me, under

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him, responsibility for the management of all prisoners, including those serving life sentences, but has allocated to my honourable and learned friend responsibility, under him, for criminal justice matters, including decisions about the release of life sentence prisoners.
The Earl of Longford: My Lords, may I thank the noble Lord for that answer and ask him, as an enlightened man who obviously cannot defend this arrangement and as a loyal Minister who cannot do anything else, whether he will take up the matter again with the Home Secretary and with his honourable and learned friend Mr. Mayhew?
Lord Elton: My Lords, the noble Earl makes an unwarranted assumption when he says that I would not wish to defend the present arrangement, because it works rather well. Therefore, I do not think, although of course I will bring the noble Earl's concern to the attention of my right honourable friend, that I will be pursuing it with quite the vigour that he would wish.
Lord Avebury: My Lords, may I ask a question about one aspect which does not seem to work very well, and that is the disparity in treatment between prisoners sentenced for life and prisoners given determinate sentences for similar offences?—because, as the noble Lord will be aware, there are many cases where a life sentence may be given for offences other than homicide. Is it not possible, because two different parts of the Home Office consider these cases, that those sentenced for life serve an inordinately long time in prison compared with those who are given determinate sentences?
Lord Elton: My Lords, it is generally assumed that life sentences are meant to be longer than sentences for a determinate period.
Lord Avebury: My Lords, I am sorry: I did not explain myself properly. I was referring to the disparity in actual time served between the two categories of sentence given. The difference between determinate and indeterminate sentences is out of all proportion to the difference in the gravity of their offences, because of the fact that they are considered in different parts of the Home Office.
Lord Elton: My Lords, the arrangements within the Home Office do in fact involve a very high level of advice to the Home Secretary in each case, and in the case of the life sentence prisoner the Home Secretary has to have the advice of the Lord Chief Justice and of the trial judge, if he is available, as well as a recommendation from the Parole Board. The Parole Board, of course, also deals with determinate cases. The discrepancy to which the noble Lord refers is not as great as he supposes, I think, and rests entirely upon the merits of each case.
Lord Boston of Faversham: My Lords, would the Minister accept that I, and I am sure all Members of your Lordships' House, have an immense amount of respect for his honourable and learned friend the Minister of State, Mr. Mayhew, and indeed for the abilities of the noble Lord, Lord Elton, which are
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well known throughout your Lordships' House. However, would he agree that the arrangement which is presently in hand is different from that which has taken place on certain occasions in the past under previous Administrations, and that there is some illogicality in separating these responsibilities between two different Ministers? Might it not be appropriate for him, perhaps in consultation with both the Home Secretary and his honourable and learned friend Mr. Mayhew, to look further into this matter and see whether in fact it is the best arrangement that could be made?
Lord Elton: My Lords, I thank the noble Lord for the considerable courtesy of the way he introduced his question. Of course my right honourable friend always pays close attention to what is said in this House and will consider what the noble Lord said in the second part of his question. I should not like to make a more elaborate commitment than that, beyond reassuring your Lordships that, although, on the face of it, there may appear to be an illogicality in remitting the régime for life sentence prisoners to one Minister and their release to another, when you see the importance of the question of release in the context of criminal justice policy and public concern, I think it is right that there should be a fresh pair of eyes looking at that particular issue at ministerial level; but I will draw to the attention of my right honourable friend what the noble Lord has said.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that it is common form over the decades, as well as being common sense, that within a department various duties are allocated to various Ministers, because one cannot do the lot, with the Minister in the Cabinet being supreme and making the final decision if there is anything that is considered to be not right?
Lord Elton: My Lords, I am obliged to my noble friend and I quite agree with him.
Lord McCluskey: My Lords, can the Minister tell us about the position in Scotland? If the justification for this division of responsibility is one of principle, as he seems to suggest, is it not the position that there is no such division in Scotland, and that the matters which are said to be separate, and properly separable, are, in fact, handled by one Minister in Scotland?
Lord Elton: My Lords, the Question that I was asked related to England and Wales—an area with which I am modestly familiar. Things may well be different in Scotland, and that would probably be because the population differs, at least in respect of number, if not of anything else, and presumably the criminal population is equally reduced.
Lord Brockway: My Lords, in view of the fact that many occupants of local prisons are now being removed to long-term prisons because of the overcrowding, can the Minister say whether under this new arrangement there will be better co-ordination between the two than there has been in the past?
Lord Elton: My Lords, even if that were the case, it would be a different question.

The NHS Pay Dispute
11.22 a.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, with your Lordships' permission, I shall now repeat a Statement being made in the other place by my right honourable friend the Secretary of State for Health and Social Services:
"With permission, Mr. Speaker, I should like to make a statement on next week's threatened industrial action in the National Health Service. The health service unions affiliated to the TUC have called for a three-day national strike throughout the health service starting on Monday. This action is in support of their claim for pay increases of 12 per cent.
"Each health authority will do everything it can to maintain services and to minimise the effect of action on patients in accordance with the guidance we issued in 1979. The Government have made contingency arrangements to maintain emergency services where these are withdrawn. But I must warn the House that if industrial action is taken for three days patients will suffer. In the previous 24-hour stoppages the response was patchy but seriously disrupted services in some places. If the strike goes ahead out-patient appointments and non-emergency admissions will be cancelled and waiting lists for operations will grow longer. Past experience suggests that not even emergency services can be guaranteed in all areas.
"Mr. Speaker, I believe that in the light of this, the health unions should now urgently reconsider their case for taking industrial action. Their claim for a 12 per cent. increase in pay and improvements in holidays and hours of work, making a claim of 20 per cent. in all, is quite unjustified. Over £400 million has been provided for increases in pay this year. That is our final offer and there is no more money. The offers made by the Whitley Councils are for average increases ranging from 6 to 7½ per cent. This compares with settlements around 6 per cent. for civil servants, teachers and the armed forces. The money on the table, backdated to 1st April, is substantial. We estimate that average earnings would increase by £6·00 a week for a male full-time ancillary worker, £7·50 a week for a staff nurse, over £9·00 a week for a nursing sister and £11·00 a week for a leading ambulanceman.
"In addition, the Government have already started talks on permanent new arrangements for determining nurses' and midwives' pay, which we want in operation by next April. I have also offered to have talks with the health unions about improving arrangements for their pay in the future. Mr. Speaker, on pay for this year the right action for the unions would be to return to the Whitley Councils and begin discussions. On future arrangements for pay, talks between myself and the unions could start at once. I urge all those working in the health service not to take industrial action. Such action will only damage the health service and put patients at risk."
My Lords, that is the end of the Statement.
Baroness Jeger: My Lords I thank the noble Lord the Minister for repeating the Statement, though I am sure he will appreciate that we do not welcome it. Of course, we share the Government's anxiety and concern for the welfare of patients, and I am sure that that anxiety is felt by many of the staff concerned. But the Government cannot escape responsibility for the situation which has caused this terrible dilemma in our health services. This has been made worse by the information to regional health authorities that they will have to find one-third of the increase in pay, mean though it is, because the health authorities are not fundraising authorities and they can provide that money only by reductions in their services. This must be a Government responsibility.
Of course, we appreciate that there has been an increase in pay, but with an inflation rate of over 9 per cent. it really is unfair to expect some of the lowest paid workers in this country to accept a rise of from 6 to 7½ per cent. The Minister chose very carefully his examples of increases accepted by other public servants. He did not mention that judges have received 18 per cent. and that senior civil servants have received 14 per cent. Moreover, not only are these percentages higher, but the base line on which the percentages are worked out is infinitely higher than for these low paid workers.
I also have to ask the noble Lord about the figures he gave of the estimated increase in real terms. Is he disputing the facts given in a letter to The Times this morning by Mr. Geoffrey Drain, the General Secretary of NALGO, who says that when translated into money some of the increases will mean as little as £1.52 to £3.63? Those figures are quite different from those in the Statement. I also have to ask the noble Lord whether it is a fact that residential staff face large increases in their accommodation charges and that, therefore, there will be a net loss for many of the nurses and other workers in the health service?
Because I really want to be constructive, as I am sure we all do, could the Minister look again at the possibility of going to arbitration? This method was used earlier this year for a dispute in the teaching profession and it seems to me that we are in a desperate log jam of a situation. If the unions would agree to arbitration, as I believe they would, would the Government look again at this possibility?
Lord Rochester: My Lords, we on these Benches should like to join in thanking the noble Lord for having repeated the Statement. We join also in urging the health unions now urgently to reconsider their case for taking industrial action, as the Statement puts it. We hope, too, that they will now accept the Secretary of State's offer to have talks about improving arrangements for their pay in the future. As is well known, we have long considered that there is an urgent need to establish agreed long-term arrangements for pay determination covering not only nurses or even all those employed in the health service, but the public services as a whole. Is the noble Lord aware—I am sure he is—of our belief that it is only in this way that particular categories, such as health service workers who now feel unfairly treated, can be expected to renounce industrial action?
Lord Trefgarne: My Lords, I am obliged to the noble Lord, Lord Rochester, for his response to this Statement, but less obliged to the noble Baroness, Lady Jeger, for her response. The position of the Opposition now contrasts very sharply with the position that pertained in February, 1979, when there was industrial action in the health service at that time. On those occasions, Mr. Ennals, who was then the Secretary of State for Social Services, said:
"I believe we should condemn industrial action that does damage to the health service, whether it comes from doctors, nurses or anyone else who works in the service".
The Opposition of that day, now consisting of my honourable and right honourable friends, supported the Government on that occasion in their opposition to industrial action in the health service. But now, in the face of the very generous offer which has been made to the health service workers, in the face of the very substantial increases which have been made in the pay of health service workers since we came into office, we find that the Opposition are attacking us and supporting, it seems, the industrial action which is being taken. This is quite disgraceful.
It is not possible to say that action can be taken in the health service without affecting patient care. That is what the unions allege and it simply is not true. In the face of these difficulties—and they are likely to be very serious in the face of the three day industrial action which will take place next week if the unions do not change their minds in the meantime—the effect on patients will be very grave indeed. I hope that the Opposition will reflect very carefully on the effects of the action which they are supporting.
Lord Kilmarnock: My Lords, we on this Bench thank the noble Lord for repeating the Statement which has been made in another place. We single out in the Statement the reference to permanent new arrangements which we welcome in principle, but we very much doubt whether permanent new arrangements can be successful outside the framework of a sensible national incomes policy. We regret the disruption and the suffering which will be caused. I should like to ask the Government whether at this stage they have washed their hands of the matter. Is there not possibly a case for arbitration which the Government have, rather consistently, set their face against?
Lord Trefgarne: My Lords, perhaps I may deal with the question of arbitration which was also raised by the noble Baroness, Lady Jeger. It is for the Government to decide how much money is available for the purpose of salaries and other wage payments in the health service. The individual allocation of those moneys is for the Whitley Councils. So arbitration, of a kind at least, takes place within the Whitley Councils. The only possible result of arbitration would be increased salary awards, and I regret to have to tell your Lordships that the money is not available for any increased salary payments. For that reason, the Government have felt it right not to agree that arbitration should take place. The noble Baroness, if I may revert to her remarks—I am sorry that I did not deal more fully with what she said earlier—also referred to the TSRB salary awards, particularly to judges, which were announced a few
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months ago. The fact of the matter is that nurses are, in percentage terms, better off now in relation to 1979 than even judges are.
Several noble Lords: Oh!
Lord Trefgarne: Yes, they are. Nurses are something like 20 per cent. better off now in real terms than they were in 1979, whereas judges now are only 14 per cent. better off than they were at that particular time. So the TSRB award had a very considerable element of catching up involved in it—and not all the catching up has yet taken place—while nurses within the health service have more than caught up with any arrears which may have existed at that time. As for the letter in The Times to which the noble Baroness referred, I have not seen it, but it is perhaps worth saying that in producing their figures for increases the trade unions have consistently referred to basic pay and not to average earnings. Basic pay of course is very much less than average earnings, because it does not include things like overtime and shift payments.
Lord Campbell of Alloway: My Lords, would my noble friend the Minister agree in the context of this Statement that a limit should be set on so-called sympathetic action, especially in the state-controlled sector where there is no identity of interest with the trade dispute and where the apparent purpose of such action is to bring pressure to bear on the Government? May I ask my noble friend whether it is the legitimate business of the miners' union to support this strike, or the ASLEF strike, by picketing and the provision of substantial donations? And is this support lawful under the existing law, or even constitutional within the rule books?
Lord Trefgarne: The position, my Lords, on secondary action, as I understand it—it is of course a comparatively complex legal matter—is that where an employer believes that he has suffered damage by way of secondary action he has the right to take civil action against those who conduct the secondary picketing, for example for the recovery of damages. It is not a criminal act but it is clearly a civil offence. It is therefore for the health authorities to consider in any particular case whether they think they have suffered damage and, if so, to seek to get appropriate redress.
Lord Mishcon: My Lords, the Minister used, I think rather tactlessly, the word "disgraceful". Would the Minister care to suggest to this House what action is available to a group of lowly paid workers who are refused arbitration and whose verbal protests go unheeded? Is there anything other than industrial action which he can suggest they can take? And would the noble Lord the Minister, when referring to precedents in recent administrations, tell the House whether there is any precedent for interviewing nurses and offering them an increase in pay which is higher than that for another group of workers represented by the same unions and for leaving the other representatives of the unions in another room and allowing them to read in the newspapers about the offer made to the nurses? Would he not describe that sort of conduct as not only foolish but also disgraceful?
Lord Trefgarne: My Lords, the noble Lord asked what action was open to those who felt aggrieved in circumstances such as those in which the health service workers now find themselves. I would answer that that would depend literally upon the circumstances in which they found themselves. I think they have been made—indeed, I am certain that they have been made—a very fair and reasonable offer. The right course of action for them, therefore, is to desist from the threat of industrial action and to remain at their posts and at the same time for their representatives to go back to the Whitley Councils to begin discussions on the distribution of the very substantial funds—£400 million, no less—which are now available for distribution through the Whitley Councils. As for the second matter which the noble Lord raised, it is the case that the funds which we have made available to the nurses' Whitley Council is slightly higher in percentage terms than the funds which are available for the other groups of workers. But it is right, I believe, that the workers who are specially concerned with patient care, and who in the distant past, at least, have had a very unsatisfactory deal, should be recognised in this way, and I am quite convinced that the Government have made the right move in that direction.
Baroness Jeger: My Lords, why does the Minister seem to criticise trade union leaders who quote the increases available in terms of basic pay? Surely it is basic pay which we are arguing about. If the Minister is basing his figures on overtime earnings, surely it means that the Government's policy is one of compulsory overtime in order for these people to earn a decent living.
Lord Trefgarne: My Lords, the Government's policy is no such thing. However, I have been asked to give an accurate indication of the money which workers take home in their pay packets at the end of the week. Surely that is the right figure to offer to your Lordships, not some other figure which appears only on a piece of paper. As I said in the Statement, a male, full-time ancillary worker only working three or four hours a week of overtine—which is not very significant in total working terms—gets an increase of something like £6 a week.
Lord Gisborough: My Lords, would my noble friend accept that most of his noble friends on this side accepted and agreed with most of the statements made by members of the party opposite at the time they were in Government and were in the same situation, with the only exception that it seems that we have been much more generous?
Lord Trefgarne: My Lords, as I indicated in answer to an earlier question—to the dismay, apparently, of the noble Lord, Lord Mishcon—it is indeed the case that the Opposition at the time of the last serious dispute in the health service did stand by the Government, and it is a pity that we do not have the same support now.
Lord Molloy: My Lords, is the noble Lord, Lord Trefgarne, aware that the analogy he drew with the situation in 1979 is not going to help this current situation in any way whatsoever but only damage it,
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because much of that action was totally unofficial and was condemned by the general secretaries of quite a number of the trade unions involved? I believe he ought to withdraw that statement. Is the noble Lord also aware that the figures he read out—for which I gather he is not responsible—which were produced in another place, are wholly inaccurate, are connived at, and will bring great bitterness into this dispute and make no contribution to resolving it? Is he further aware that even the Secretary of State tried to improve the situation but that he is second to the diktat of the Treasury? Although at the time of the general election the Government said that there would be free negotiation between employers and trade unions in this country, they have completely reneged on that. They have made the promises of Dr. Jekyll and implemented those of Mr. Hyde.
Lord Trefgarne: My Lords, I doubt whether the patients will be able to detect the difference between unofficial action and official action which the noble Lord, Lord Molloy, asked us to observe. The fact of the matter is that if one is a patient in hospital and the services of the staff are withdrawn, it makes no difference at all whether that is official or unofficial action. As to the figures I adduced in the Statement and which my right honourable friend has prepared, and to which the noble Baroness, Lady Jeger, also referred, these are, as I said before, the figures reflected in the wage packet at the end of the week, and I would have said that they are the most helpful ones.
Lord Harmar-Nicholls: My Lords, is my noble friend Lord Trefgarne aware that most observers would have to suspect the protests coming from the Benches opposite, when one compares the attitude they adopted when they had the responsibility of Government, with what they are saying now—particularly in light of the fact that they have never moved from their claim for 12 per cent.—which is above the figure of inflation and twice that given to the Armed Forces?
Lord Molloy: Like the Top Salaries Review Body.
Several noble Lords: Order!
Lord Trefgarne: My Lords, my noble friend is quite right in drawing comparisons. Since 1979, the total pay bill in the National Health Service has increased from £4 billion to £8 billion, which is precisely a 100 per cent. increase. The total costs in the health service at the same time, and the total money made available to the health service by the Government since 1979, has increased from £7·7 billion in 1979 to £14·5 billion for the current year. These are very substantial sums. They surely indicate our total commitment to a flourishing health service. At the same time, the staff has significantly increased, too. I do not believe that we can be accused of neglecting the health service. We are making enormous resources available and yet, at the same time, we are not supported by the workers.
Lord Oram: My Lords, is it not absurd to continue to argue in percentage terms, as the noble Lord the

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Minister did, in making comparisons between the needs of a judge and the needs of a nurse? Is not the appropriate cost of living index in the case of a judge a very different thing from the appropriate cost of living index in the case of a nurse?
Lord Trefgarne: My Lords, I am not aware of the standard or cost of living of individual judges, or for that matter of individual nurses. The fact is that there was a substantial element of "catching up" involved in the pay award made to judges, and it applies to only a very small number of people. It might be worth saying in that same context that the total number of nurses has increased in the same period by some 10 per cent. and now stands at something approaching half a million.
Baroness Jeger: My Lords, I apologise for intervening again, but the noble Lord the Minister did not, I believe, answer one of my questions; I know I asked several. Is it not a fact that many nurses and other residential staff will be faced with considerable increases in charges for their meals and accommodation, which may more than absorb this modest increase?
Lord Trefgarne: My Lords, I understand that the accommodation charges are still under discussion with the Whitley Council and it is too early to draw the comparison which the noble Baroness wishes me to draw.
Baroness Gardner of Parkes: My Lords, in relation to the last question, is my noble friend the Minister aware that although superb accommodation is provided in some places, the amount charged, even after the proposed increase, will still be far below anything that could be available to anyone in London?
Lord Trefgarne: My Lords, I believe that is the case. It is also the case that student nurses and nurses asked to live in sub-standard accommodation enjoy substantial discounts.
Several noble Lords: Enjoy?

Criminal Justice Bill
Lord Sandys: My Lords, on behalf of my noble friend Lord Elton, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 29,

Schedule 1,

Clauses 30 to 36,

Schedules 2 to 5,

Clauses 37 to 44,

Schedule 6,

Clauses 45 to 52,

Schedules 7 and 8,

Clause 53,

Schedule 9,

Clauses 54 and 55,

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Schedule 10,

Clause 56,

Schedule 11,

Clauses 57 to 59,

Schedule 12,

Clauses 60 to 66,

Schedules 13 and 14,

Clause 67,

Schedule 15,

Clause 68,

Schedule 16,

Clauses 69 and 70.

—(Lord Sandys.)
On Question, Motion agreed to.

Derelict Land Bill
11.45 a.m.
The Earl of Avon: My Lords, I beg to move that this Bill be read a second time. Before I deal with the content of the Bill, may I draw attention to a correction which has had to be made in the Explanatory and Financial Memorandum? When the Bill was considered in another place it was amended to enable reclamation schemes carried out by the English Industrial Estates Corporation to be eligible for derelict land grant at the same rates as already enjoyed by local authorities. The resulting change in the memorandum required by this amendment was not. I regret to say, carried through properly. As your Lordships have no doubt noticed, a corrigendum slip has now been provided; the text of the Bill itself is perfectly in order. The Bill I bring before you today is modest in size and chiefly a consolidation measure, but it does contain important new provisions which we hope will be of great advantage to the new drive on derelict land reclamation in England and Wales.
Last December my right honourable friend the Secretary of State for the Environment announced his new initiative on derelict land in England. This initiative is designed to encourage local authorities and the private sector to work together in joint ventures in reclaiming and then developing land for industrial, commercial and other purposes. This is what are called "Category A" schemes. Grant priority is now being given to schemes in which public sector reclamation is immediately followed by private sector development under an already planned arrangement between the authority concerned and a developer. The aim is to bring land with the right potential into productive development, create employment and revitalise rundown urban areas. The Government have been encouraged by the response to the scheme this year, and my right honourable friend has recently issued an invitation to all local authorities to apply for grants for similar schemes in 1983–84. In administering these new priorities local authorities and the department will, if Parliament approves the Bill before us, have the advantage of having all derelict land legislation being contained in one volume instead of being spread out among three or four different Acts as detailed in the memorandum.

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Turning to the detailed provisions of the Bill, Clause 1 is devoted mainly to repealing and re-enacting the existing legislation, but it does include three important new provisions. The explanatory memorandum mentions two new provisions, which is correct in drafting, but in fact one of them divides into two parts.
At present, the private sector, nationalised industries and statutory undertakers can obtain grant towards reclaiming derelict land, at the rate of 50 per cent. for every area in England of the net loss incurred in carrying out the works involved. This provision was introduced by the Local Government, Planning and Land Act 1980. But the take-up of this grant has not been as great as it might have been, and in order to give greater encouragement to the non-local authority sector the Government have decided to raise the grant rate to 80 per cent. in the assisted areas and derelict land clearance areas. This is provided for in subsection (5). In other areas the rate will remain at 50 per cent., just as it is and has always been for local authorities in these other areas. That is the first new provision in the Bill.
The second new provision concerns the English Industrial Estates Corporation. When examining the ways and means to encourage more take-up of grant by the non-local authority sector, the Government decided that the English Industrial Estates Corporation was in a special position. As noble Lords will know, the corporation is essentially an instrument of the Government's regional policy. Its task is to help relieve unemployment in the assisted areas of England by providing industrial and commercial sites as well as premises where the private sector cannot or will not do so. The same functions are performed in Scotland and Wales by the Scottish and Welsh Development Agencies respectively. But these two organisations also administer derelict land clearance grant, and they are able to do so at the rate of 100 per cent. The Government think it is important that the English Industrial Estates Corporation when providing premises in the assisted areas should have the opportunity of simultaneously clearing away existing dereliction at the 100 per cent. rate of grant available to the Scottish and Welsh Development Agencies. Subsection (5)(b) achieves this.
The third new feature is an extension in the arrangements for designating derelict land clearance areas. At present the Government (in practice the Secretary of State for Industry) makes these designations by order under Section 8 of the Local Employment Act 1972. The purpose of this power is to enable 100 per cent. derelict land grants to be paid to the local authorities in the areas so designated instead of 50 per cent., just as happens in the assisted areas.
Areas so far designated are parts of the West Midlands conurbation and areas centred on Derby, Nottingham, Stoke on Trent, Corby and parts of the London Docklands. The justification for designation is quite simply that the economic situation in a particular locality is such that designation would be particularly appropriate with a view to contributing to the development of industry in the locality. These words are reflected in the re-enactment of this part of the 1972 Act in paragraph (a) of subsection (8).
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The extension in these arrangements which I have referred to lies in paragraph (b) of subsection (8). This enables derelict land clearance areas to be designated without reference to the justification required in (a) provided the consent of the Treasury has been obtained.
The new provision in subsection (8)(b), which will be exercised primarily by the Secretary of State for the Environment, will enable derelict land clearance areas to be designated where economic reasons may not justify it but where there are other reasons, principally the need for environmental improvement, perhaps of a limited but intensive nature. I do not expect the use of this power to be at all extensive because the areas where derelict land grant is most needed lie largely in the assisted areas and derelict land clearance areas already designated, where of course the need to improve the environment is equally present.
Clause 1 applies only to England as does Clause 3, (to which I will turn to now). Clause 2 is concerned with Wales alone, and I will come to that later. Clause 3 contains two minor provisions. First, in subsection (1) it gives local authorities a general power to carry out reclamation works on land which has collapsed or is collapsing due to underground mining operations other than coal mining. The power to grant aid such work was taken in the 1980 Act. What is missing is a power for authorities to acquire, or to carry out works on, collapsing land, and subsection (1) supplies this.
The second provision, in subsection (2), enables local authorities when purchasing compulsorily land for reclamation to purchase other land which is not derelict but is required in connection with the reclamation—an example is spreading land, a site next to the derelict land which is needed for working purposes. The present power is thought to relate only to the derelict land, and subsection (2) will make the position quite clear. Powers of compulsory acquisition of such working sites are well precedented.
Now may I return to Clause 2. As I said, this clause applies to Wales only. What it does is formally transfer to the Welsh Development Agency, which administers derelict land clearance grant in Wales, the powers given to the Secretary of State for Wales in the 1980 Act. Briefly, they will enable grants to be paid by the agency to any person instead of only to local authorities; first, where land has become or is likely to become derelict as a result of surface collapse due to underground mining operations; second, towards the cost of surveys to discover the extent of dereliction; and, finally, for infrastructure connected with development. These powers are already held by the Secretary of State for the Environment for exercise in England, and were approved by Parliament in the 1980 Act.
The Government are much concerned that, in pursuing their initiatives on derelict land reclamation with its priority towards regeneration of the old industrial areas and urban areas generally, all the forces that can be empowered to spur regeneration should be marshalled together and group action taken to achieve a flow of improvement from initial land transformation through to completed development, with the public and private sectors working jointly to achieve that result. This Bill is designed to makes its own contri-

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bution to that end, and I commend it to the House. I beg to move.
Moved, That the Bill be now read a second time (The Earl of Avon.)
11.55 a.m.
Baroness Birk: My Lords, may I first thank the Minister for his very clear exposition of the Derelict Land Bill which is before us today, which enables us all to understand it without giving me the burden of having to go over it again or ask many questions which I might have had to ask if it had not been so clearly put before us, both in the Bill and in the Minister's explanation.
We on these Benches welcome the provisions of this Bill. The Government have recognised the importance of consolidating legislation where the provisions are at the moment set out in fragmented form in four different Acts. In parenthesis, I hope that this happy example means that serious and urgent consideration is also being given to the even more complex and fragmented legislation on town and country planning, which has not been consolidated since 1971.
Equally, I think similar consideration should begiven to consolidating the 1977 General Development Order which has also been changed in myriad ways during the lifetime of the present Government. This would give great legislative solace. I hope the Minister and the House will forgive my slight digression, but while we are in the mood for consolidation I thought it better to push the point at this time. Long-term land reclamation schemes in areas like Durham and West Yorkshire have over the last 15 years significantly changed the landscape of major industrial regions, and the reclamation clauses attached to the planning permission in the Town and Country Planning (Minerals) Act, which we saw through this House and another place in 1981, have added to that process in a very positive way.
It is an historical phenomenon with which people have lived for over two centuries now that the productive process of coal mining and other opencast industrial activities have brought ugly and unproductive consequences in their wake. On 26th October 1967 in another place my noble friend, Lord Cledwyn, at that time the Secretary of State for Wales, said, in col. 1911:
"One of the results of the disaster at Aberfan was to give a new stimulus also to the effort to clear up the land left derelict by industrial processes of the past, a problem of which everyone has long been uncomfortably aware, especially in the mining valleys of South Wales. The objective of this effort is not only to reclaim land now useless so that it may be available for housing or other beneficial use, but also to make those areas more attractive to incoming industry and for those who live in them."
I think those words still hold up today, some 15 years later.
Fifteen years later, in spite of some considerable progress, there are acres of dereliction which bring gloom, devastation and depression to the people who have to exist in them. The efforts being made in Toxteth, for example, following the riots last year, are specifically to try to bring enterprise, employment and hope to this explosive conurbation, which has much more than its fair share of derelict land. There are large hideous pockets of dereliction in many districts of our own capital city which have resulted in areas like
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decayed teeth sticking out, to which industry and commerce are difficult to attract, and from which people move out if they can afford to do so.
Local authorities have shown quite conclusively that they have the expertise and the capacity to carry out such reclamation, but it is essential that resources must be made available to them. Indeed, it is on the question of resources that I do wish to express our first point of concern. In a period of very severe and very harsh local government cuts, the question that must hang over all of us is whether it is going to be realistic and practical to bring what are excellent recommendations into being. It is very important that this should be taken very much into account.
We certainly do not object to the increase in private sector grants, because it is right that this very difficult problem should be tackled both by the public and the private sectors. But I do disagree with those—not the Minister fortunately—Members of another place, and probably some noble Lords here, who feel that the grant to the private sector should have been increased to 100 per cent. As the Minister said in another place at Column 529 on 25th June:
"I accept that the private sector may not find this the most attractive prospect"—
he was talking about there not being a 100 per cent. Grant—
"but we should bear in mind that that sector has owned derelict land for a long time. It must accept that it has owned land which has fallen into dereliction, but has done nothing much about it. So the Government decided to do something about the grant rate"—
but not to lift it beyond 80 per cent.
When making another point the Minister also said that he thought—and this is quite right and ought to be appreciated by those people who are concerned with private enterprise—that it is important for the private sector to have its own stake in this, rather than for the whole thing to be covered by Government grant. In principle we do not object to the grants being made available at 100 per cent. to a wider range of local authorities. But what does, however, concern us is the fact that the Government have indicated that the provisions of the Bill will not lead to greater public expenditure. In fact, that is spelt out as one of the financial effects of the Bill. If that is the case—and I find it difficult, if it is to be effective, for there not to be at least some increase in public expenditure—then the consequences of the Bill could well be that the limited amount of jam available in the form of higher grants, would have to be spread more thinly. Areas with major dereliction problems and substantial and successful reclamation programmes, will have fewer resources to continue their work.
This is something about which the Association of County Councils is very concerned, as they have said in a letter which I received yesterday and which I imagine other noble Lords received as well. They point out:
"There is currently only £44·7 million available for reclamation of derelict land by local authorities. Of this about £8 million has been allocated to the new priority schemes involving development by the private sector immediately reclamation has been completed, £6·5 million to specially earmarked projects (including for example the Consett and Corby steel works and the Stoke garden exhibition), and the remainder, about £30 million, for ongoing commitments and other new schemes for start in

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82/83 … The Association is concerned that some areas in non-metropolitan counties which have traditionally suffered from dereliction, e.g. the coal mining counties like Durham, Northumberland and Nottinghamshire as well as some of the larger cities like Bristol, Leicester, Nottingham, etc. which have derelict land problems, may be penalised at the expense of a few metropolitan centres which may receive the bulk of the money available".
It is, I agree, a very difficult problem because the metropolitan centres, to which they refer, are of course in very great need themselves. So it would seem that resources will have to be found when necessary, because they themselves by reclaiming the land will be a very important factor in generating wealth, productivity and employment in this country. We cannot afford any cutback in the derelict land reclamation programme—indeed, it needs to be substantially increased. If there are to be higher grants to more recipients, then the total allocation must be substantially increased. When the Minister replies, I hope that he will be able to say something rather optimistic and not just sympathetic—and something that is positively helpful as regards this matter.
In almost any comment involving power exercised by the Department of the Environment, we return, inevitably, to the by now notorious provisions of the Local Government Planning and Land Act 1980. There is real concern that, if local authorities do take up the grant expenditure available to them, they may then find themselves penalised as so-called over-spenders. That, of course, would be nonsense and would be entirely counter-productive. I should be happy if the Minister could put our minds at rest over that. Let the Government have the courage of their convictions, and, if derelict land restoration is to have the priority that it requires, it must be without any long-stop limitations which may of course please the Treasury, but will ensure that the Secretary of State's objectives are only realised in a very haphazard and uncontrolled way.
I shall return to questions of detailed changes when this Bill is considered in Committee. There is, however, one point to which I should like to draw attention now. There are a number of major sites, such as grossly polluted ex-gaswork sites in areas which attract now—and under the Bill, as I understand it, will still attract—only the 50 per cent. derelict land grants, and which are not being restored because they are not eligible for 100 per cent. grant aid. There are circumstances, I would suggest, when it is at least appropriate to consider the making of grants to specific sites at a percentage higher than would be available on other less grossly polluted sites in a particular area. I hope that this will receive favourable consideration. What I am really asking for is that there should be some flexibility so that, when there is a really outstanding example of an area which is entitled only to a 50 per cent. grant, an exception will be made in that case if the real need can be shown.
I am also concerned about the problem of toxic waste, which is something that not only could cause trouble in the present, but even worse, we shall be burying poison—and it is still being buried—which will affect posterity. A great deal of derelict land is still being used, unfortunately, for this purpose.
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All in all, the Bill is a move, certainly a very big move, in the right direction. If it is to have any real impact, it must—and I keep coming back to the same point—be backed by adequate finance. This will result in more employment, better housing, increased production and an improvement in our visual quality of life. Therefore, I welcome the Bill. We on these Benches welcome the Bill and hope to see it not only on the statute book soon, but actively and urgently implemented.
12.9 p.m.
The Earl of Caithness: My Lords, the Government are to be commended for bringing forward this Bill and I should also like to thank my noble friend, Lord Avon, for the way in which he explained the Bill to the House. We are all concerned about inner city dereliction and the loss of agricultural land for development. If this Bill helps to remedy the present situation, it must be welcomed; but the tragedy is that, although well-intentioned, it fails to solve the problems of derelict land in private ownership. It is on this point that I wish to concentrate. I am sorry if my speech sounds rather like a Committee stage speech; it is not meant to do so. However, I have to take issue with the noble Baroness, Lady Birk. The noble Baroness read a quotation from Hansard. As she will well know, there are many reasons for land becoming derelict and a lot of the land in private ownership that has become derelict has done so as a result of Government interference, local authority interference and planning authority decisions, and so it is not necessarily the private sector's fault.
In 1980, the Local Government Planning and Land Act was passed and extended the Secretary of State's powers to provide a derelict land grant to private applicants at a rate of 50 per cent. It was a good idea, but bad luck on the private applicant who still had to make up the 50 per cent. loss. Only two years later, the rate of grant is to be increased to 80 per cent. But the catch-22 situation still remains. The Government, on the one hand, are saying how generous and encouraging they are; but the private applicant still has to face a 20 per cent. loss and this will inevitably result in a continuing lack of applicants for grant from the private sector.
Would noble Lords venture into a scheme which already has a built-in loss of 20 per cent. and in the knowledge that they will incur further additional costs which are not eligible for grant and the cost of which probably cannot be passed on to the eventual purchaser? The additional costs to which I refer are, in this instance, likely to be special foundations that are needed for housing or commercial development, and these can be very costly. It would not be in any way an economic proposition.
We have had an indication from my honourable friend Mr. Giles Shaw, an Under-Secretary of State at the Department of the Environment, that the question of grant to the private sector might be looked into again in a further 12 months' time. Can my noble friend confirm this and, if there is no improvement in the grant take-up by private applicants, will the rate of grant be increased? If this is so, why have three bites at the cherry in only one term of office? It would be much better to raise the grant now.

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At the moment, there is some 60 per cent. or 70 per cent. of derelict land in England in the ownership of the local authorities. There is an allocation of a paltry £1 million for derelict land in non-local authority ownership—that is, statutory undertakers, nationalised industries and private people. On the other hand, £45 million is available for local authorities. Is not that a ridiculous situation and should not the Government say that there is an allocation of £46 million and that the rate of grant will be 100 per cent. for everybody who applies and is successful?
I hope that the Government will be sympathetic to these points when they are raised in detail at later stages, or I fear that the Bill will not solve one of its main intentions. It is similar to the Government's aim of trying to help small businesses, yet when it comes down to details they are only prepared to help in the production of factories for small manufacturing businesses, thus severely limiting the opportunity for small businesses in general. If the overall aim in this instance is to provide finance for urban redevelopment, why do they not do a proper job, having learned the lesson of two years ago?
12.13 p.m.
Lord Gisborough: My Lords, briefly I should like to speak on one particular matter. Dereliction in town areas is very likely to produce the situation whereby the area can be redeveloped, and therefore be financially rewarding, whether for the individual or for the local authority. But in the case of a national park, even if the land is restored from its use as pit heaps or whatever, which caused it to become derelict, it is highly unlikely to have any residual value, apart from after a long period when perhaps a few sheep can be grazed on it. Therefore, perhaps my noble friend the Minister can explain why there is only a 75 per cent. grant for local authorities in national parks as against a 100 per cent. grant for land which afterwards will be of some use.
12.14 p.m.
The Earl of Avon: My Lords, I am grateful to the noble Baroness, Lady Birk, and to my noble friends for the welcome and helpful approach to this particular Bill. The noble Baroness mentioned, as an example, Wales and perhaps I might say at the beginning of my remarks that Wales has led the rest of the United Kingdom in the field of land reclamation. The derelict land unit in the Welsh Office was set up in 1966, following the tragedy of the Aberfan disaster, and in its 10 years of existence it reclaimed some 7,750 acres of land and made a significant start on the major areas of industrial and mining dereliction.
The work of land reclamation was transferred to the Welsh Development Agency, when it was founded in 1976, and the agency has continued to do an excellent job. This is important and useful work which can only be done slowly, but over recent years much progress has been made and the work done with great professionalism. Many areas of the Principality have been entirely transformed; the environment greatly improved, and the threat of unsafe industrial tips removed. Between 1976 and 1979 over 2,000 acres were reclaimed. Since 1979, schemes have been
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approved to reclaim some 2,000 acres. An additional 2,750 acres are in the agency's programmes for the next few years.
The noble Baroness, Lady Birk, mentioned one particular point in the Explanatory and Financial Memorandum to the Bill about increasing public expenditure. This is a formal statement to indicate that the Bill itself does not imply an increase in expenditure. Increases are a question to be decided by the Government from time to time as a matter of policy. The noble Baroness touched on resources and I shall now attempt to put her mind at rest about that.
It is not the Government's intention that the new provisions in the Bill should have an adverse effect on levels of derelict land reclamation by local authorities. Naturally, it is impossible to predict what will be the size of provision for the future under public expenditure survey decisions taken year by year, but I can say that it is the Government's intention to maintain a healthy and consistent public sector provision for derelict land reclamation.
Following on this, I must make it clear that we expect derelict land reclamation to play a bigger role in urban policy. To this end priority will be given to schemes which, by the development of reclaimed land, bring employment and new vitality to the run-down areas of our cities and towns. Such schemes in future will have a first call on funds.
The noble Baroness mentioned the idea of giving 100 per cent. grants instead of 50 per cent. grants to deserving schemes in non-100 per cent. areas. We think that this would involve difficulties of judgment, and it would be at some odds with the concept of designating areas in general need of economic uplift or environmental improvement in which a reclamation drive is being concentrated.
Baroness Birk: My Lords, before the Minister leaves that point, if there were not only a deserving but an outstanding case, would it be possible for that area to be designated for that purpose?
The Earl of Avon: My Lords, if it falls within the criteria, or very nearly so, of economic uplift, yes, it would be. Arrangements have been made for most of the areas which are due to lose assisted status in 1982 to be designated as DCLAs by the Secretary of State for Industry under existing legislation. This will give the authorities concerned continuing entitlement to 100 per cent. grants for reclamation. The necessary order was laid before the House on 9th July.
My noble friend Lord Caithness was particularly concerned as to why we did not at the moment raise the private sector grant from 80 per cent. to 100 per cent. The Government have carefully considered the rate of grant which should be paid to the private sector, nationalised industries and other public bodies to encourage them to reclaim derelict land. The take-up of grants in this sector has been disappointing and we accept that a 50 per cent. rate is too low. We hope that an increase to 80 per cent. in the assisted areas and derelict land areas will provide sufficient stimulus to encourage private developers to take more seriously the development opportunities for derelict land while at the same time providing an incentive for the most

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economic use of public funds by ensuring that the private sector has a 20 per cent. stake in the cost of reclamation works. I can confirm that if we find that the increase does not work, we shall be prepared to look at it again.
My noble friend Lord Gisborough mentioned the local authorities in national parks. I would point out that the 75 per cent. rate is allowed for reclamation by local authorities in national parks under the National Parks Act 1949. This is a historic rate and has been left untouched. In point of fact, there is practically never any reclamation required in national parks.
The noble Baroness, Lady Birk, also mentioned toxic wastes. As she knows, at the moment we are in the middle of the hazardous waste projects and I hope that she will hear more about that next week. It is part of Government policy to try to regenerate the inner urban areas so that land is not taken at the expense of green fields. On that happy note, perhaps I could commend this Bill, which has been generally received very well by all parts of the House, to the House for Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Lloyd's Bill
12.20 p.m.
Lord Windlesham: My Lords, I beg to move that this Bill be now read a third time. It is more than three months since the Second Reading of the Lloyd's Bill, which took place on 1st April. After a full debate the House gave the Bill a Second Reading and committed it to a Select Committee, as is the normal practice with an opposed Private Bill. Two Instructions were agreed: the first relating to the effect on the Lloyd's community and on the insuring public of the compulsory divestment by Lloyd's brokers of their interests in managing agencies and vice versa; and, secondly, to give special consideration to the exemption conferred upon the society by Clause 14 of the Bill.
The whole House owes a debt of gratitude to the Select Committee under the chairmanship of my noble friend Lord Nugent of Guildford. The Committee met for 19 days to hear counsel presenting arguments for the promoters and for the petitioners against the Bill. There were six groups of petitioners in all. Several witnesses were called. They were examined and cross-examined; and all of this was done, as those of your Lordships who attended any of the sessions will know, with patience, thoroughness and unfailing courtesy.
The proceedings in front of the Committee and the consideration given to the Bill by the Select Committee in private amounted to one of the longest in recent years. But it is not only for their endurance that the Committee are to be congratulated, but for the quality of the scrutiny that they brought to bear. The Special Report on the Bill, which was ordered to be printed on 28th June, is before the House today. It is a notable contribution to the public understanding of the workings of a subtle and complex institution. It is clearly
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written. It combines brevity with insight, and is a great credit to the noble Lords who sat on the Committee and to the staff who assisted them.
From what I have said it may not be altogether a surprise to learn that with one amendment the Select Committee reported in favour of the Bill. But even if it had not done so, it would have been less than generous for anyone with the interests of the House at heart not to have expressed gratitude for a task well done. Today, we have the opportunity of hearing from the chairman of the Select Committee, and also from all four of the noble Lords who sat with him as members of that Committee. After listening for so long and so patiently they have certainly earned the right to be heard today. I shall look forward, and I know the whole House will, with much interest to what they have to say.
I should also like to say that it is a great pleasure to see the Secretary of State for Trade on the Government Front Bench. I am aware that he has several public engagements to carry out today, but it is an encouragement to the promoters of the Bill to know of his interest in this measure, having taken over responsibility for the department after the Lloyd's Bill had begun its lengthy process through Parliament. I shall not rehearse again the arguments on the three main issues which occupied almost all of our debate on Second Reading and were then considered so thoroughly by the Select Committee.
To recapitulate briefly, the three issues were, first, the classification of the membership into two distinct categories for the purposes of electing a broader-based council to which the power to make by-laws is to be transferred. Second, the statutory requirement to separate, within a period of five years from Royal Assent, the ownership of brokers and underwriters at Lloyd's—the so-called divestment provisions. Third, the exemption from liability in damages which is contained in Clause 14 of the Bill. This clause imposes certain restraints but only, it should be noted—and this cannot be said too often—on members of the Lloyd's community, a description which is defined for the purposes of Clause 14 in the Bill itself. Thus there is no limitation on the rights of policy-holders or on other members of the public.
These restraints preclude this strictly limited class of people from claiming damages from their own society when it is exercising in good faith its powers of control. The immunity was referred to by several of your Lordships in the course of the debate on Second Reading, and it was the subject of an Instruction moved by the noble Lord, Lord Lloyd of Kilgerran, and agreed to by the House. On each of these three main issues the Select Committee, as is explained in the Special Report, ultimately came down in favour of the promoters of the Bill.
In paragraph 94, on page 19, which dealt with the proposed immunity, the Select Committee reported they were:
"conscious that only an exceptionally strong case could justify Parliament placing a corporate body above the law by exempting it from liability in damages at the suit of a member of the Society. But the Committee concluded by a majority that Lloyd's had made out such a case; first, because the nature of Lloyd's business was unique in scale, if not also in kind; secondly, because the new powers in the Bill to be given to the Committee of Lloyd's required them to exercise much closer control over the whole of this world-wide trading complex than before. Without some

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measure of immunity there was a danger that the Committee of Lloyd's might not be able to act with the speed, discretion and firmness necessary for the healthy trading life of Lloyd's".
Thus by a majority—the qualification is important and is stated in the report—the Select Committee accepted the special circumstances put forward by Lloyd's.
In evidence before the Committee, however, some doubt arose regarding possible actions against the Society for libel or slander. Lloyd's had previously obtained counsel's opinion on the drafting of the Bill and did so again in the course of the proceedings before the Select Committee. Witnesses made clear that there was certainly no wish on behalf of Lloyd's to try and secure any special protection in cases of malicious defamation or any other libel falling outside the existing defences of qualified privilege and fair comment.
During the course of the proceedings before the Select Committee, therefore, the Committee of Lloyd's put forward an amendment to remove any exemption from actions for libel or slander from the Bill. That is now included in the Bill which is before us this afternoon as a new subsection, subsection (5), of Clause 14.
That is all I have to say about the contents of the Bill and the work of the Select Committee, and I shall listen with close attention and interest to the speeches made in the debate. I end with one observation. As has been recognised in the course of the debates on the Bill in both Houses, Lloyd's is a unique national institution. It represents much of the financial and commercial genius of Britain in the past and is capable of boundless potential—it is no exaggeration to make such a claim—in the future.
This Bill is a touchstone; it aims to strengthen Lloyd's by reforming its constitution and by overhauling its procedures. These are ambitious objectives. They are made all the more remarkable by the fact that the drive and motivation towards such fundamental change have come from within, from the Committee and Society of Lloyd's as a whole, not as a consequence of Government intervention, nor in response to outside forces.
I believe that in the Bill and in the lengthy preliminaries before it was brought before Parliament, we have witnessed a rare example of far-sighted and courageous leadership by those who have been elected to represent the interests of Lloyd's as whole. Their vision and tenacity deserve to succeed. I hope that when the Bill is enacted, which I trust will be very soon, it will pave the way for the benefits which are sought and have been so hard earned, not simply for Lloyd's but for the insuring public, for the City of London, and for the business reputation of Britain abroad. My Lords, I beg to move.
Moved, That the Bill be read a third time.—(Lord Windlesham.)
12.33 p.m.
Lord Nugent of Guildford: My Lords, I thank my noble friend Lord Windlesham for his very generous compliments to the members of the Select Committee, including myself, and to the clerk, and I echo them. No chairman of a Select Committee ever had better colleagues than I had, both in the wisdom they contributed
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and in the generosity of the support they gave me. Especially I wish to pay tribute to our clerk, who had a monumental job to do in looking after us, in managing the papers and in the draftsmanship, and I was glad to hear the compliment my noble friend paid.
As my noble friend said, we had three issues to consider, and Instructions relating to two of them, and on the first, the issue of classification, we had a petition. The petition was related to the division of the membership into working and external members. The petitioners opposed this on the grounds that they considered it to be divisive because the membership would be divided into two electoral colleges for the purposes of the election of the new Council of Lloyd's. The petitioners contended that the external members also would be deprived of a vote on the membership of the working committee.
We gave careful thought to the petition, but we took into account the fact that the new structure of membership, divided, as it is, into working and external members, is part of the machinery in the Bill to give external members—that is, the names—for the first time a statutory right to eight seats on the new Governing, Council, thereby an effective voice in the policy decisions of Lloyd's. As no external member has ever been elected to the Lloyd's Committee in the past, it was clear to us that, on balance, the position of external members would be substantially improved by the Bill, so we had little difficulty in deciding that the petition should be rejected.
The other two petitions, on immunity and divestment, raised issues of far greater weight and importance, and both of the subjects, as my noble friend said, were Instructions from this noble House. I take immunity first, out of order in the clauses in the Bill, because of its major political importance. We all recognise that the Bill's proposal to give the future Council of Lloyd's immunity against actions for damages in negligence brought by members of Lloyd's raises an issue of great constitutional importance. In fact, in my parliamentary career of nearly one-third of a century it is unprecedented. Indeed, the disposition of Parliament today is to legislate to constrain individuals and corporations to live and act within the law rather than to give them privileges to live above it.
Thus, the question which the Committee of Lloyd's had to answer was: accepting that Lloyd's should be self-regulating, is the task of regulating its trading life of such exceptional difficulty that the Council of Lloyd's cannot effectively do it without immunity from legal action by its members? Our consideration of this issue started from the point that all parties agreed that the new Council of Lloyd's would need some measure of protection if it is to exercise effectively its greatly increased powers under the Bill.
The petitioners advanced four alternative methods of protection which we studied closely. Our reports shows that three of them were obviously non-starters. But the fourth alternative, commended particularly for consideration by the Fisher Report—of an insurance policy for Lloyd's Council against legal action by members—we considered in some detail. In the event, we found that the size and nature of such a policy presented insuperable difficulties. As one witness put it, it would become a one-horse race;

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there would be no other policy like it. Thus, probably it would be necessary to go outside Lloyd's to complete the policy, and probably to insurers overseas. The normal obligation to consult insurers when challenged by a legal action would be objectionable enough for Lloyd's in any event, with the long delays and publicity and so on, but when overseas insurers are included, it would be even more so; the whole world would know of a threatened suit, with obviously immensely damaging consequences for Lloyd's.
We concluded, therefore, that this form of protection was not adequate and that legal immunity was the only effective method. The case for this exceptional treatment for Lloyd's lies in the scale and nature of its trading business, and my noble friend referred to it in the report. This consists of hundreds of independent traders designing and selling insurance policies to private citizens, public corporations and governments in over 100 different states all over the world. The annual premium income is over £2,000 million and, as we know, the value of invisible exports is some £600 million a year. There is no other public corporation which is responsible for trading operations on such as vast scale or of such complexity. That was the first major factor that weighed in my mind.
There is a secondary factor—mechanical, but of great importance. It is that Lloyd's must get an annual permit of trade from the Governments of foreign states in which members trade. The permit is granted only when the application to trade is accompanied by our Department of Trade's certificate of solvency for Lloyd's as a whole. The certificate requires the audited accounts of every member of Lloyd's—every member of Lloyd's. But where a member was bringing an action for damages against the Council of Lloyd's, it might not be possible for his annual audit certificate to be signed, and then the Department of Trade could not grant a certificate of solvency for Lloyd's as a whole. Without that, trading is barred in most foreign states—an impossible penalty.
Those were the two factors which weighed most in my mind—there were many others that are mentioned in the reports—and convinced me that Lloyd's is indeed an exceptional case, and that immunity against legal actions by members is justified in the interests of effective self-regulation. One bears in mind the point that my noble friend Lord Windlesham made—that the main purpose of the Bill is to give Lloyd's more effective powers of self-regulation, so that there can be assured a prosperous future for Lloyd's in this rapidly changing world. So the majority of our committee concluded that without a measure of unity of this kind, there was a danger that the Committee of Lloyd's might not be able to act, in the words of the report, with the "speed, discretion, and firmness" necessary to achieve that end.
My noble friend referred to the amendment narrowing the immunity by deleting actions in slander or libel, and that we were glad to agree, to make the provision as narrow as possible. So we commend this very important clause, Clause 14, to the House in its amended form. I should record what I know we are to hear later: that the noble Lord, Lord Foot, dissented. With his distinguished legal background, and his marvellously lucid exposition of his reasons, I could understand
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how he felt. We were sorry that we could not be unanimous, but we still felt convinced that in the majority we were right.
Finally, I turn to the matter of divestment. Your Lordship's Instruction was in front of our minds, but as paragraphs 54 to 57 of our report relate, the drastic change to mandatory divestment required by the Select Committee in another place as the price of its approval of the Bill, triggered off a salvo of petitions from leading brokers and underwriters, which ensured that every aspect of this complex and perplexing issue was argued out in front of us.
Of course, had the Bill proceeded as originally promoted by Lloyd's, with enabling powers to deal with divestment by law, the arguments about divestment would have been hammered out within Lloyd's over the next couple of years, and eventually decided by its vote. It is academic now to reflect on the relative merits of that course of action.
The weight of evidence against mandatory divestment on the grounds that not only would it be unfair to brokers and underwriters forced to sell their interests, but also, even more importantly, that it would be damaging to Lloyd's future competitiveness in world markets, was formidable. We had to balance that against the evidence of Lloyd's Committee, supported by two independent reports of Cromer and Fisher, that underwriting would be stronger if independent of broker ties, with the underlying thought that at the end of the day underwriting is the guts of Lloyd's business.
In hearing the lengthy evidence on the Bill, I have learned enough about the trading life of Lloyd's to comprehend the almost infinite complexity of the weave of its trading relationships. Thus the result of any particular course of action cannot be predicted with any certainty, and can be only a matter of judgment. Unlike immunity, which is a clear constitutional issue, which a politician can judge with some confidence, divestment, at the end of the day, is a matter of commercial judgment. In my view, it would have been preferable that the men of commerce should take the decision themselves.
But as the strange history of the Bill obliged our Select Committee to judge between promoters and petitioners on this vital commercial issue, I felt that the promoters, the elected Committee of Lloyd's, backed by the 93 per cent. vote of the members at the Albert Hall meeting, should be given the benefit of the doubt. The virtual certainty that losing the Bill, if it were amended to reverse the Commons amendment, would have immensely damaging implications for Lloyd's, added further weight to the scales to persuade me to support the mandatory divestment clauses in the Bill.
I recall Oliver Goldsmith's charge against Edmund Burke:
"Too fond of the right to pursue the expedient",
and here I have consciously pursued the expedient. It is an awesome task to decide the future of the great trading society of Lloyd's, which has served our country so well, and it was with a lively sense of this responsibility that I avoided Goldsmith's charge, and chose "the expedient". I trust that the future will show that it was "right", too!
12.46 p.m.
Lord Mishcon: My Lords, by some administrative error my name, as the spokesman for the Opposition on this important Bill, was omitted from the list of speakers and I trust that your Lordships will not claim immunity as a result of hearing my address this afternoon. First, I should like to add my tribute to the chairman of the committee, the noble Lord, Lord Nugent of Guildford, whose face is familiar and very much liked in this House, and whose administration of committees of this kind has once more been a great benefit to your Lordships, thanks to his long public experience. I equally wish to express my gratitude to the members of the committee, who have been extremely industrious. I noticed that they sat on 19 days—and 19 days consisting largely of hearing learned counsel; an experience which some of us who have been privileged to have had have at times found a little tiring. Therefore, one expresses gratitude to the members of the committee with some emphasis.
On the last occasion, at Second Reading, from these Benches I had the privilege—which I now have the great pleasure of repeating in the presence of the Secretary of State, who I am very pleased to see here today with us—of saying that we wished to support with every effort we could a Bill which allowed a great national, an international, institution to put its house in order after 100 years. We also looked with some admiration at the democratic way in which the society itself had endeavoured to sound the views of its members on all the controversial issues dealt with in the Bill.
I do not at all intend to take the time of the House in going through the issues of classification, nor indeed the other issue upon which we spent considerable time on the last occasion—that of compulsory divestment—on which the committee itself heard much evidence, considered the matter in the greatest of detail, and came to a determination which I now think completely fulfils the Instruction that the House gave to the committee. Therefore, I am quite sure that the House itself will now to wish to accept the decision that was reached.
I should like for a few moments to deal with the important consideration of immunity. The noble Lord, Lord Nugent, called it a great political issue, and so it is. I have read with the greatest of care the part of the report relating to this question, and in all humility I should like to advise that the Society of Lloyd's insures itself, as well as Members of this House, and the learned clerk of the Committee who drew up the report, against the dangers of using double negatives. I say that only in the sense, I hope, of amusement, as your Lordships will see if you would kindly turn to paragraph 96 of the report. On Second Reading I ventured to say that, whatever else immunity might bring to the Society, it should not bring immunity against libel and slander; or at least, I intimated, that was a matter which ought to be very carefully considered. My voice was not the only one that sounded that note, but it is gratifying to know that the Select Committee decided in the end that libel and slander should not be part of that immunity. We know very well, of course, that the Society would be protected in our law against a successful defamation action if the element of malice or bad faith could not be proved. That is because there would be qualified privilege in those circumstances,
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and that qualified privilege could only be upset if malice or bad faith were proved.
I now invite your Lordships' attention to the way in which this has been dealt with in paragraph 96—and I read the paragraph:
"The Committee concluded that with an amendment to narrow its terms Clause 14 should be allowed in the Bill. They noted that as drafted the Clause exempted the Society from actions for libel. The Committee did not think it very likely that libellous conduct would occur without an element of bad faith or malice—in which case the Society had no protection …".
That obviously should read, I feel, unless I am very much mistaken,
"The Committee did not think it very likely that libellous conduct would occur with an element of bad faith or malice";
and in that event, of course, the society would have no protection. So I once again plead, not only for the careful use of double negatives but, if possible, the use of the affirmative in all our legislation. Indeed, I pleaded for that yesterday afternoon on the Transport Bill. I plead again now, even in the case of reports of Select Committees, and I would only say once more that possibly it is a risk that mentally we ought to insure ourselves against in the future.
To get to the principle of the matter, I am so glad that the noble Lord, on behalf of the Select Committee, in its report, emphasised the exceptional nature of Lloyd's and the question of this immunity being given to it. It is a precedent that can be set only in the most unique circumstances. Indeed, I should like, if I may, to suggest myself that the wording in the first sentence of paragraph 94 of the report is not strong enough for the record. It says:
"The Committee were conscious that only an exceptionally strong case could justify Parliament …".
I myself would have preferred the wording,
"only a unique case could justify Parliament …".
This is a unique case; and, having had my doubts at Second Reading but having read the most careful way in which this important issue was dealt with, I myself can now see that with the exception of libel and slander that immunity should be given to Lloyd's as a completely unique case, and as no precedent for professional or other bodies that might seek to jump upon a bandwagon which is not, in my view, available to them at all.
My Lords, I should like to complete the argument and then, to your Lordships' relief, sit down. The noble Lord, Lord Nugent, mentioned the question of the possibility of insurance as an alternative to this indemnity. He covered the point so fully that I certainly do not wish to say anything more about it. The Committee, I notice, were carefully enough to go through other alternatives which were very much in our minds. There was the question of the possibility of having to apply to the court before somebody—that is, a member—could bring an action against the Society, and obtain the leave of a High Court judge.
The answer to that one, in my view, was given very carefully and very fully in the report, and it is this. Of course, if you go to the court and you argue the case that there is absolutely no cause of action available with any justification at all, there are two responses. First of all, there is the response that you are getting the publicity which everybody is trying to

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avoid in that very argument, because the court has to go into all the facts. Secondly, such a remedy is already available to any defendant. He can go to the court and, if he substantiates his allegation that there is no cause of action shown at all upon which the plaintiff can proceed, he can get that action struck out.
It was also a thought in our minds at Second Reading—and it had been expressed elsewhere—that maybe protection under Section 48(8) of the Companies Act might be appropriate in this case; namely, that one could go to the court and plead, so far as the Society were concerned, that it had acted honestly and in good faith. The answer in the report is the correct one. If one has to go into the whole of the issues of whether, on the facts, the Society acted in good faith and acted honestly, it is almost a trial of the whole action, and immunity itself, therefore, which has a prima facie case (if not further) already made out for it, is already upset by the publicity given in that way.
So one can, I think, be satisfied, too, that the third thing that occurred to us is also inappropriate; namely, that members themselves should give an undertaking that they would not sue, that they would not bring any proceedings. There the report says quite correctly that there might be a legal difficulty under the Unfair Contract Terms Act 1977 because that might well be deemed to be an unenforceable and unfair term.
So that on this very grave political issue, with all of us, I believe, saying, with our hands on our hearts, if we approve the amendments to the Bill that come before us at Third Reading, that this is a unique case and that no other corporations or bodies should expect the same treatment, that we have recognised this as not setting a precedent, I think the House can safely agree very humbly with the findings of the Select Committee, and again thank them for the careful way in which they carried out their important duties.
12.59 p.m.
Lord Wigoder: My Lords, may I first of all thank the noble Lord, Lord Windlesham, for the moderate and helpful way in which he introduced this debate at this stage, just as, indeed, he introduced the debate on Second Reading some little time back. On that occasion I was the Member of your Lordships' House who moved the Instruction on divestment, and it is therefore appropriate, perhaps, that at this stage I should now, for just one moment, bid it a sad farewell.
I think I indicated at that time that I really came into this matter by chance in the sense that I happened to know, not in any way in a Lloyd's context, some of the senior members of one of the petitioning companies, C.E. Heath; and on a social occasion many months ago I was rash enough to suggest that if they wanted me to intervene at any time and I thought it appropriate to do so, they were of course at liberty to mention the matter to me. When they invited me to move that Instruction, I took the view that it was my task to satisfy myself that there was an arguable case. I came to that conclusion, and I moved the Instruction. I think now it is clear that all the members of the committee and, indeed, all the Members of your Lordships' House who have followed the proceedings and have read the report, would not dispute that there
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was an arguable case. It was clearly a matter on which there were weighty considerations to be put forward on both sides.
We know now the 'committee's conclusions on the divestment issue and it is hardly surprising in those circumstances that I should again have asked my friends C.E. Heath what their reaction has been to the committee's report. Clearly I am under no obligation to put it before your Lordships. I do so only because I think after careful reflection that it might be helpful. Their reaction has been, first, that they would very much like to express their deep appreciation of the great care so obviously shown by the committee to the arguments put before them.
Because of the rather curious history of the divestment issue, it is perhaps fair to say that this was the first time throughout the progress of this Bill upon which the divestment issue had been fully and carefully argued. They would like me to say that they are very mindful of the obvious care and skill with which the case was put on both sides and of the clear devotion to their cause shown by all members of the committee. Secondly, it is clear from my conversations with them that they still view the results of the committee's deliberations with a tinge of sadness. That is inevitable, having regard to the great commercial importance of the decision to which the committee came.
Thirdly, they, no doubt like the other petitioners, are distinguished and loyal members of Lloyd's. They want to see this Bill on the statute book and they take what I am sure your Lordships will regard as the responsible view that, in those circumstances, reluctant though they have been to welcome the findings of the committee, they would regard it as inappropriate to pursue the argument on divestment any further at this stage in your Lordships' House.
Perhaps the only other comment that I need make is in a sense an obvious one. I cannot help wondering in what other body apart from your Lordships' House it might be possible to find five people of the experience and distinction that was shared by all the members of this Select Committee, who would be able and willing to give 19 full days of their time to an issue of this sort without any thought of reward except the reward of knowing that they were dealing with a matter of the greatest consequence and dealing with it to the very best of their powers.
It is, I think, right that I should echo the comments that have been made and will be made in your Lordships' House of congratulation to the whole of the Committee for the quite magnificent task that they have performed on this occasion and perhaps I can end by saying that I would hope now that now this Bill will go on the statute book at the earliest possible moment and that it will lead in time to an ever more distinguished future for this very distinguished organisation.
1.4 p.m.
Baroness Denington: My Lords, may I start by saying that I found that sitting on this particular Select Committee an absolutely fascinating and riveting experience because the issues that we were discussing were not only vitally important to Lloyd's, which is a great national institution which brings us tremendous invisible earnings, but they were of national importance, certainly when we come to the question of immu-

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nities—a constitutional issue, as the noble Lord, Lord Nugent of Guildford, has said. If I may say so, I delighted in the chairmanship of the noble Lord, Lord Nugent of Guildford. It was a great pleasure to sit under his chairmanship and in the company of my most congenial colleagues who sat with me.
May I also at this moment thank the noble Lord, Lord Wigoder, for his remarks and thanks to us. They are gratefully received but I just thought it was a privilege to be a member of this particular committee. Before going on, I should like also to pay my tribute, as did the noble Lord, Lord Nugent of Guildford, to the staff. We were magnificently served. Staff of various grades have been mentioned. I should like to mention—and they were thanked by the committee—the stenographers, who really did a most magnificent job. We were wonderfully served.
I am not going over the arguments. I do not think one needs to do so. They have been spoken to already and your Lordships have the report before you. But there were at least three separate issues before us and I am going to speak on them very briefly from my own personal point of view. On the issue of classification I was not impressed by the case of the petitioners. I agree with the noble Lord, Lord Nugent of Guildford, entirely that the external members will now have eight members on the Council of Lloyd's, whereas before they had nobody. I cannot see that this is going to be divisive and this issue did not cause me any trouble at all. Whereas, when we come to the other two issues, those of divestment and immunities, I found the issues exceedingly difficult to decide; and the decisions that I came to, after searching thought, were on balance, and the balance was very fine, particularly on the issue of divestment. It was extremely difficult. I think that I was not the only one that felt that way.
These were two issues of quite a different order from the issue of classification. I was always conscious while trying to weigh the arguments for and against that were put before us so clearly and helpfully, of the fact that Lloyd's must have this Bill; that they cannot lose it; that this is vitally important to them. This became clearer and clearer day by day; because even those who were putting forward alternative proposals to us and who, for reasons we understood, did not like divestment kept saying to us: "We must have the Bill. We are objecting, but we in Lloyd's must have the Bill. Lloyd's need it". This, therefore, made the issues that we had to decide much more difficult; because this compulsory divestment, instead of leaving it, as has been said, to Lloyd's to deal with by means of its own internal organisation and by-laws, was written in by the other place. It was a fact that we had to be careful not to lose sight of.
It was impressed upon us over and over again that the Albert Hall meeting, had, by the great vote that has already been quoted, accepted compulsory divestment. That vote was taken but it was not, in my view, a free vote. It was taken by people with a gun at their heads. It was perfectly plain that they were being told: "You must vote this way or else you will not get the Bill". That to me was evidence that, although one knew that possibly those people there were 50–50 or 60–40, one way or another, in their view on the Bill, they were voting for getting the Bill; and this reinforced the importance of getting the Bill and making a decision that would get it.
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I shall not go over the arguments, as I have said. They were very worrying arguments against divestment. We heard arguments that it would create difficulties for operation overseas, in new markets, in the third world countries, and so on, where markets are opening up. We heard very, very weighty arguments indeed. There were the difficulties of disposal of assets and firms being faced with loss of money. There were difficulties for staffs. In the end, I thought to myself that the Cromer Committee raised this point 10 years ago—that is a long time ago. The Fisher Committee came out in favour of compulsory divestment. The Council of Lloyd's, when it was put to them in the other place, said that they accepted it and recommended it to the Albert Hall meeting.
These were all people who knew the insurance world; who knew their business. I could not for one moment think that these were people who in the end would stand by and recommend anything that was going to be damaging to Lloyd's and to the industry. It will raise difficulties but they are a great people and they will surmount these difficulties. Therefore, I think it was that thought that in the end made me come down in favour of compulsory divestment, but it was to me a very difficult decision.
Also, immunities was a difficult issue: should we put these people above the law? It was quite clear that Lloyd's sometimes—perhaps more than sometimes—gets very difficult issues where a very swift judgment has to be given to take action to stop damage to Lloyd's as a whole. There are arguments for and against, and my noble friend Lord Mishcon has gone over some of the alternatives. We weighed them exceedingly carefully. I admit I decided—but not without misgivings—that in the end I would vote for immunity.
I do not like special cases and this is a special case. I think that perhaps the word "unique" might well be adopted. As I say, I have just tried to give my own reactions and why I voted as I did. I can only hope now that this Bill will move very speedily to become an Act. The Council of Lloyd's, the new council and its powerful committee, will be faced with very great problems. I have not any doubt that they will solve them and that they will emerge in the end strengthened in many ways. They will emerge, I hope and firmly believe, to battle on in the new circumstances of the expanding world of trade as it is today and they will be able through their strength to increase their share of the insurance market. I certainly have great faith that they will do that.
1.15 p.m.
Lord Foot: My Lords, I shall confine myself, simply to the issue and the question of immunity. As the noble Lord, Lord Nugent, has disclosed already, I was the minority voice on the matter of immunity—and not for the first time in my life I found myself in a minority of one. In those circumstances, I hope that the House will think it not inappropriate at any rate that I should indicate in the briefest possible terms the reasons why I came to the conclusion which I did. I am sorry to use the phrase "not inappropriate" because it is a double negative, and I apologise.
May I make one or two general comments. The first is that in the committee in dealing with this exceedingly

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difficult task we had some very considerable advantages. The first was that our proceedings were presided over by the noble Lord, Lord Nugent. All of us who sat on the committee will be aware of the way in which he controlled its affairs and the penetrating questions that he addressed to witnesses from time to time. For my part—and probably this is a view which is shared by the other members of the committee—in discussing the organisation and the operations of the Lloyd's market, I was moving into uncharted territory. A large part of my task was to try to comprehend how the Lloyd's market works. It was in that regard that we derived very considerable benefit, as I think, from the wisdom and the guidance of the noble Lord, Lord Nugent.
The other advantage that we had was in the presentation of the case, both on the part of the promoters and on behalf of the petitioners. We were listening to advocacy of the very highest order and more than once during the proceedings I was reminded of the tribute that Sir Patrick Hastings once paid to his colleague and adversary Norman Birkett. Possibly some Members of the House will remember it. He said: "If it had ever been my lot to decide to cut a lady up in small pieces and put the pieces in an unwanted suitcase, I should without hesitation have put my future in Norman Birkett's hands. He would have satisfied the jury, (a) that I was not there; (b) that I had not cut up the lady; and (c) if I had, she thoroughly deserved it anyway". It was oratory and advocacy of that order of which we were the happy recipients in the committee.
May I then turn to Clause 14, which is the clause which gives this immunity to Lloyd's. What kind of immunity does it give to the Society of Lloyd's? If I were to try to put it in its simplest terms—and the clause is a lengthy one—the substance of it is this: it provides that once this Bill becomes law, if the Council or Committee of Lloyd's, acting in pursuance of their regulatory and disciplinary functions, fail to exercise reasonable care; if they are negligent in the performance of those duties and a member of the community of Lloyd's suffers damage as a result of that negligence—and the damage could perhaps be ruin—then that aggrieved person is precluded from going to the courts to seek a remedy in damages. That is what the clause provides.
It seemed to me from the very outset that that was so startling a proposition that if it were to be acceded to and accepted, it would be necessary for the promoters to point to some extraordinary circumstance or circumstances in the Lloyd's situation, and failing that, it would not be the duty of Parliament to accept any such unprecedented immunity.
The proposition contained in that clause offends against some of the most elementary and fundamental principles of law, as I think, and as the noble Lord, Lord Nugent, indicated, is really agreed by all of us. It gives to the Corporation of Lloyd's an immunity from suit for which, so far as I know, there is no precedent and no parallel. It offends against the principle that all of us are equal before the law. It offends against the principle that anyone who is injured by the wrongdoing of another should be entitled to seek redress in the courts of the land. It offends against the principle that where someone owes a duty
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to another to take care, and he fails in that duty, he shall then be made to make reparation to the person who has been so injured.
Those are some of the basic principles which are offended against by this clause, and of course, they are not lawyers' points. The law of negligence, as it has been developed by the common law over the centuries, is not some esoteric legal concept; it is one of the essential elements in a good society, because what it recognises and underlines is that in a good society you should be governed by the golden rule. It recognises the doctrine that we are all members one of another, and it recognises that, in carrying on our affairs, whatever they may be, we are under a duty to pay due regard to the rights and the interests of other people. That is what the law of negligence is all about.
Nor is that rule of law an unduly onerous one. It does not say that if anybody makes a mistake, and somebody is injured as a result of that mistake, the person making the mistake must always pay for it. It says nothing of the kind. It says only that in the conduct of our affairs, all of us must show that degree of care for the interests of other people to whom we owe a duty which might be expected from the honest and reasonable man. That is what the law of negligence is about. Therefore, from the very beginning, I have looked to the promoters to point to some quite exceptional circumstance, or circumstances, in the organisation of Lloyd's or, in the Lloyd's situation, as would justify so radical a departure from all these basic principles of law, and indeed so radical a departure from the situation which has prevailed at Lloyd's over the last century. They have never enjoyed previously any immunity of this kind.
Having listened to the whole of the argument in the committee, I think the simplest thing for me to say is that it did not seem to me that any such compelling argument in favour of this immunity emerged. Of course, this is all a matter of judgment; it is all a matter of balancing one thing against another. I do not like differing from my noble colleagues and I readily understand why they came to a conclusion different from mine. But, as the argument developed, my original apprehensions and reservations about this proposal were reinforced, and they were reinforced partly by the curious history of this immunity clause.
The proposal for such immunity first saw the light of day in the Fisher Report. Until then, so far as I know, nobody at Lloyd's had ever sought such an immunity and nobody at Lloyd's had contemplated the grant of such an immunity. The Fisher working party based the whole of their argument and justification for such an immunity, and for this special protection to be given to the Society of Lloyd's, upon one argument. That was the argument that, unless the Corporation of Lloyd's were given this immunity, they might be inhibited in carrying out their regulatory functions by the fear that they would be attacked in the courts by some aggrieved member. That was the whole basis on which Fisher recommended this immunity. In so far as he did recommend it, Fisher did not in fact positively recommend this proposal. The Fisher Committee put forward three possible alternatives, one of which of course was insurance.
But, in so far as the case for the promoters rested upon the judgment of the Fisher Committee, they were

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in the position of relying upon the arguments which Fisher had used. And the strange thing was that, as the argument developed in the committee, many new reasons and justifications for this immunity were advanced, to which Fisher has made no reference at all; and at the end of the day the Fisher justification of this clause had almost disappeared from sight. If your Lordships care to look at, I think, paragraphs 76 to 84 of the special report, you will see there all the various arguments that were put forward by the promoters in support of this proposal. None of them was a reason or argument which had been advanced by the Fisher working party. It seemed to me that that method of going about things was a reflection upon the case for the promoters. But that was Fisher's justification; that is, that Lloyd's might be inhibited by the fear of being sued.
There are two observations I should like to make about that. The first is that we had the opportunity in the committee of seeing as witnesses a very formidable array of members of Lloyd's and members of the Lloyd's Committee, and of members who had previously been on the Lloyd's Committee. If ever I had to go tiger hunting—that is something which at my age is perhaps a little improbable—and if I had the choice of whom I would take as companions, I would unhesitatingly select the whole Committee of Lloyd's, on the ground that in such a confrontation the only people likely to be intimidated would be me and the tiger!
But the case does not rest entirely upon that. As the promoters' case was developed, as I have said, a variety of new arguments were adduced as it were, to buttress the argument put forward by Fisher. I did not myself find that that was a very convincing development. It was certainly open to the interpretation that the Fisher justification for this immunity was possibly regarded as a pretty shaky ground upon which to rest their case and that they should call up reinforcements of other considerations in order to justify the immunity. At the end of the day, of course, it was a question of judgment. We were not deciding facts; we were not pronouncing upon facts. We had to use our judgment to see whether we thought that the heavy burden of proof, which I thought rested upon the promoters in this case—I think everybody would agree about that—had, in fact, been discharged. I can say no more than that I thought, after due consideration and with all regard to the views of my colleagues, that at the end of the day that duty had not been discharged.
1.31 p.m.
Lord Reigate: My Lords, I shall endeavour to be fairly brief. I think that I am the first noble Lord to have spoken in this debate who has to declare an interest as an external member of Lloyd's, or what I choose to call a name. I should first like to add my thanks to the Select Committee for so well completing their mammoth task. Nineteen days is a long stint, and I speak with all the sympathy of one who has just surfaced from a Select Committee which sat for a mere eight or nine days. But, in our case, they included—which they were lucky not to have—a cold, wet tramp around Epsom Downs and Walton Downs.
This is one of the best Select Committee reports that I have ever read. It is lucid and cogent, it puts the
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petitioners' case as well and as reasonably as the promoters', and it comes to certain conclusions which I happen to think are the right ones. But that is not the sole reason for my praise. All of us who have followed and studied this Bill must always have had some misgivings about certain parts. At one time, I had my own doubts on divestment; I have rather reactionary views on the matter of classification and I do not at all like the idea of the external members having representatives. I am so reactionary that I think the right man to represent me is my agent, and whoever he and the other agents choose are the right people to govern Lloyd's. But this would be rather like trying to attack the Reform Bill of 1832 in the stage that it has now reached.
On the subject of immunity, I listened with interest to the noble Lord, Lord Foot. I hope that I may be excused from arguing with such an experienced and astute lawyer, and, of course, I was not a member of the Select Committee. He said that the subject was not mentioned until Fisher, but I think it would be right to say that the changes in Lloyd's in the course of the last 10 years since Cromer have been very great. They are always changing. It is one thing to say that they produce one lot of reasons in one year and more in another, but it is growing in complexity the whole time.
The other argument that I would put forward, which the noble Lord might not find very acceptable, is that I am one of those who are surrendering the right to sue the Corporation of Lloyd's. I do so gladly, in conjunction with my other colleagues in Lloyd's. I think it is right for the corporation and I really do not feel that I am deprived of any great right in so doing. One other thing which I should like to do, in this rather longer than usual Third Reading debate, is to give a word of praise for the promoters and, in particular, for Sir Peter Green and the team of colleagues whom he has had working with him. They have had immense patience throughout the nearly two years since the Bill was first mooted. The promoters have had much criticism and, to listen to some of the critics, the Committee of Lloyd's has been anathematised as if it had been a reincarnation of the Star Chamber. I cannot help thinking that they, the House and the whole membership of Lloyd's will feel thankful when this Bill ultimately reaches the statute book, and we can all say that we hope that there will not have to be another Lloyd's Bill in our lifetime.
1.35 p.m.
Lord Redcliffe-Maud: My Lords, I rise as a member of the Select Committee who, I think, knew less than anyone in the House this afternoon about Lloyd's when I was honoured by the invitation to be one of the five members. I want to say "Thank you" to the House for having given me the privilege of serving on that Select Committee and to echo very briefly—because that is all that we can do at this stage—what has been said about the chairman, who undoubtedly played a major part in leading us to what I believe were the right conclusions. I should also like to thank all my colleagues on the Select Committee, particularly those who, like myself, have not been much experienced in the work of Select Committees and, still less, in the work of Lloyd's.

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I am very grateful and, if I may boldly say so, I think that Parliament should be very grateful to the House of Lords for their part in what I believe will be a very important passage of a Private Bill into an Act. To my mind, there is not the slightest doubt that we did more than the other place had the opportunity to do, or chose to do. That is said in no disrespect to the other place, but we heard a great deal of evidence on what it was right that Parliament should have evidence heard on, and if we were asked to say that the House of Lords or, at least, a Second Chamber is a necessary part of our great constitution this, in a very small way, is an excellent example of how necessary we are.
The 19 days "hard", which have been referred to as what the members of the Select Committee gave, was a fraction of the time that I, as an ignorant Cross-Bencher, had to give in the course of serving on that Select Committee, and I think I speak for all other members of the Select Committee on that. There was a mountain of evidence given in the transcripts in the other place, and that became increasingly important as we realised that we were having some evidence which had
not been given and had, therefore, not been considered in the other place. This particularly concerned the question of what damage might be done to Lloyd's and, therefore, to the country and to our international position in the insurance world, if compulsory divestment became the law of the land. I think it was expedient that we had the task of reading what the other place had heard and said, as well as what was said before us and listened to.
There was that addition to the 19 days "hard", which I make no complaint about at all, and the mercy was that it came at a time of cosmic convulsion. In my opinion, it was a great mercy for us to have this clear job which we had been asked to do, and which exhausted a great deal of our time and energy, instead of feeling some kind of responsibility for intervention in the world stage of the Falklands.
I do not want to add to what has already been said about classification, except that, like the noble Baroness Lady Denington, I felt that on balance the external members were going to have a better chance of playing a useful part in the management of Lloyd's with a division of the working and the external members, with the invaluable right to have their own electoral college for the Council of Lloyd's, as well as other provisions, with which I shall not trouble the House, under which certain changes could be made only if each electoral college voted separately and was satisfied.
Turning to immunity, I would not dream of trying to meet the characteristically lucid and convincing case against it which the noble Lord, Lord Foot, has made this afternoon. Nevertheless, I was immensely strengthened in my view, which does not agree with that of the noble Lord, Lord Foot, by what the noble Lord, Lord Mishcon, said. I should like to express to him my thanks for his speech today and for the help which he has given to the House on this matter. I was also relieved to find that he had the clear understanding that this is unique and is no precedent, though none of us can seriously believe that future Parliaments will pay any attention at all to what we think. However,
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it is important that we should be on the record as saying that we believe that the case for doing this in any other context will have to be made. But do not let us kid ourselves. We are in fact creating a precedent—and a very dangerous precedent, too.
Again so much has been said about divestment that I shall be very brief. This question of conflict of interest has interested me as a humble student of local government for a long time. I had the privilege of being chairman of a committee appointed by Prime Minister Heath to look at the question of conflict of interest in local government. For example, an estate agent might know, as a city councillor, about plans which have not yet been made public but which will affect his clients' and his own interests. Nobody can persuade me that there is any law which can compel him to prefer the public interest to his own or to his client's interest.
Therefore, I came to this with a strong prejudice. So far as divestment is concerned, where there may be a potential conflict of interest between the broker, with his duty to put first the interest of the insured, and the underwriter whose primary interest must be how to dispose of the money of the names, and of those others who will contribute to the insurance policy, my feeling was that the more clearly defined those two groups could be the more likely in the long run was justice to be done. I was struck by the common fact between my experience in local government and my lack of experience in Lloyd's that it is not only when there is a scandal that this problem becomes important. The scandal, please God, is not frequent. In Lloyd's it has not been frequent, and in local government, except for a short period, it has not been frequent, either. But that does not mean that every day there is not pressure on the people concerned to choose the just answer to a question which perhaps in the short run is of even greater interest to them in their private capacity or in their group capacity as broker or underwriter. Therefore, I was prejudiced in favour of separation.
On the other hand, we had a flood of evidence, particularly from across the Atlantic, that the competitive edge of Lloyd's in the world would be blunted if, as was suggested by many witnesses, we had mandatory separation of broker and underwriter when the international trend, meaning mainly in the United States, was in the opposite direction; that what clients now want increasingly is a package deal; and that the difference between broker and underwriter is an old anomaly which clients would be very happy to see disposed of. I was impressed by those arguments—as, indeed, we all were. On the other hand, I came back to the view that very little had been done about implementing what I think was in Cromer's mind in the 10 years between 1969 and 1979. Both the Cromer and the Fisher reports pointed to the real danger of a conflict of interest spoiling the good work of Lloyd's. I was particularly impressed by the Fisher report. By a majority of six to one—the one was not a member of Lloyd's—they came to the clear conclusion that mandatory separation was the way in which they would put it into a Bill. Perhaps most important of all was the fact that the chairman and the two deputy chairmen of the Fisher Committee, with all their experience of what is not on the record but which is extremely relevant,

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led Lloyd's to the view that there should be compulsory divestment.
Finally, there was the haunting fear, as the noble Baroness, Lady Denington, rightly pointed out, that the overwhelming vote at the Albert Hall meeting and at the various other meetings was tainted by the fact that the people there were not really voting for mandatory divestment but for the Bill, that the best was the enemy of the good and that although it would be right not to have divestment they wanted the Bill so much that they voted the way they did. This is why I brought my mind to bear on the question of how we should report to the House, determined that I was not going to be influenced, or encourage my colleagues to be influenced, by the consideration that however damaging divestment might be it would be still more damaging not to have the Bill. So I found myself returning to my original prejudice: that on divestment the whole hog now was better than any method which would delay it, which would lay one open to the possibility of the mega-brokers exercising influence—in evidence they had powerfully sought to influence me—in favour of going what they would say was the internationally traditional way. This is not the way of Lloyd's which believes in competition, and ruthless competition, with no collective security.
So I came to a conclusion. I was thankful that my colleagues confirmed my feeling by their ultimate conclusion on divestment. We were unanimous in thinking that this was the time to act and that the future was uncertain, and that no one but a fool would be able to prophesy what the outcome or consequences of this Bill would be—but that, on balance, this was the way to go and that in fact the other place had been right to get the promoters to change the Bill while it was before them and propose what is before us. I therefore very much hope that the House will go along with our conclusions in the Select Committee. I thank my colleagues once more for their colleagueship in the House and for allowing me to be a member of the Select Committee.
1.50 p.m.
Lord Thomas of Swynnerton: My Lords, like other noble Lords and the noble Baroness, Lady Denington, who were members of this Select Committee and who have already spoken, I should like to say what an honour it was to have served on the Select Committee. I should like to say what a privilege it was to have served under the chairmanship of my noble friend, Lord Nugent of Guildford, and what a pleasure it was to have the services of such an admirable and patient staff. On the three questions which were at issue before us, I also would like to explain why I voted in the way that I did and took the attitudes which I did. On the question of classification I thought—unlike my noble friend Lord Reigate—that it was desirable that the names should be able to be represented in future automatically as members of the new council which is being established.
On the question of compulsory divestment, we were guided a great deal not only by learned counsel but also by the report of the Fisher Committee, which has been mentioned a good deal, and by the report of the Cromer Committee, of which we saw a little. We were
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aware that those were august committees, but we were also aware that august committees can make august mistakes. We came to the conclusion—or I did—that the Fisher Committee in particular had perhaps neglected the international trend towards concentration of ownership of broker and underwriter. I thought that the Fisher Committee gave inadequate evidence of real abuse arising from the present circumstances. I did not think that the promoters presented adequate evidence to suggest that we should take a strong view of this subject. I thought also that the Fisher Committee overstated the inevitability of a conflict of interest between broker and underwriter. Like the noble Lord, Lord Redcliffe-Maud, and the noble Baroness, Lady Denington, I felt it probable that the promoters had been a little high-handed in respect of their critics, since, after all, they themselves had accepted that there was probably an opposition of something between 40 per cent. and 60 per cent. over the question of compulsory divestment within the Lloyd's community.
Nevertheless, it was obvious that the international trends in this matter are unclear. The word, "kaleidoscopic", was used by Sir Peter Green in the course of his evidence when describing what was likely to happen in the future, and I thought that that was probably true. It was obvious that there had been some abuse in respect of the relationship between broker and underwriter in the past and that there could be more abuse if the already greatly expanded membership were to grow even further. After all, the membership of Lloyd's has grown from 4,000 in 1970 to 20,000 in 1980. I suspect that it may well grow substantially in the next 10 years, perhaps to 30,000 or so.
I was not really convinced by the arguments that Lloyd's was losing markets in the third world—to use a phrase I dislike, but I cannot think of a better one—particularly because the third world undoubtedly has standards of morality often very different from our own. Let us not forget that, as well as being poor, the third world is often corrupt. Even if the Committee of Lloyd's may have been high-handed, they obviously had to reach a decision of some sort on this matter as soon as possible in the interests of everyone concerned. After all, they did organise this meeting at the Royal Albert Hall to which reference has been made. The opponents of the Committee of Lloyd's seemed, on their own evidence, to have been, in my judgment, often dilatory, contradictory and even pusillanimous.
For example, we were shown letters from brokers who controlled underwriters who said that they were opposed to mandatory divestment but nevertheless they would vote in favour of it because of the importance of the Bill. I was not at all impressed by that conduct. I did not think that the money needed to ensure a fair and responsible divestment was going to be difficult to find and also that the £80 million which will probably be needed to buy out the 114 different agencies will not turn out to be very large in Lloyd's terms. I thought that Sir Peter Green was correct to suggest to us that compulsory divestment would probably increase the independence and responsibility of underwriters. Certainly this will cause changes in Lloyd's but having read Mr. Gibbs' admirable history of Lloyd's I was aware that change has characterised Lloyd's very often in the past; Lloyd's is no longer a marine monopoly as it was in the 18th century.

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On the question of divestment, I accept finally that it was desirable to write this matter into the Bill itself rather than to leave it—as it was envisaged it would be desirable to do before the issue reached the other place—since we saw a number of resourceful brokers who no doubt—if the other brokers on the present Committee of Lloyd's are like them—would ensure that this would never come about unless it was written into the Bill. Although, as several of my colleagues suggested, this is a nice question in many ways, I thought that the Committee of Lloyd's should be given the benefit of doubt.
On the third question—that of immunity—I must say that I found this to be a much more difficult matter. I largely agree with the philosophical approach eloquently put forward today, as it was in our Committee, by the noble Lord, Lord Foot. I believe that all immunities are bad. I did not believe that the promoters of Clause 14 quite appreciated the enormity—I use that word quite neutrally in this case—of what it was that they were proposing. I did not see that Lloyd's had in the past been much inconvenienced by the absence of immunity. I thought it highly undesirable, even if there was some suggestion that Lloyd's thought it a perfectly ordinary matter, if this set a trend towards a demand for such immunity in other self-regulating bodies. Nevertheless, in the end, I did support the Bill for the following reasons.
First of all, I did see that the immunity asked for is limited, since it does confine the immunity from litigation to the Lloyd's community. It does not in any way affect the rest of us nor the general public. Therefore this is a fairly modest constitutional measure, even if it is extremely important to Lloyd's. Lloyd's did agree to remove from this matter the critical issue of libel and slander. More important, it did seem to me—and in this respect I differ from the noble Lord, Lord Foot—that the future of Lloyd's as it has been conducted in the past and is conducted at the moment would be seriously threatened if this was not agreed. This is because, as implied in paragraph 78 of the report, the extension of the membership of Lloyd's from 4,000 to 20,000, and probably much beyond that in the future, will bring in a wholly new type of member, name or even active working member. These new recruits will plainly, as has happened in the last ten years, include many foreigners from countries whose laws and social systems are quite different, and therefore the old family atmosphere of Lloyd's, further already transformed, will change further. This extension of the numbers of Lloyd's, as decided upon deliberately, as far as I can understand, in the late 1960s, has certainly altered the character of the institution already, but they thought that they had to do that in order to ensure the survival of Lloyd's at that time.
One of the difficulties in international litigation is, of course, the fact that witnesses cannot be subpoenaed if they live abroad. Other ways which were made clear to us as possibilities of dealing with this matter, as my noble friend, Lord Nugent, and the noble Lord, Lord Redcliffe-Maud, have suggested, such as insurance, did not seem to be adequate. I felt that Lord Nugent put our explanations for the report on this matter particularly well. It was unlikely that confidentiality would be assured. I think the point, with which I
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agreed, was made quite often in the evidence that the Committee of Lloyd's or the Council of Lloyd's would if this clause were not given to them, be likely to seek to settle actions to avoid publicity, whereas in fact their insurers, whoever they were, might wish to fight them. Therefore there would be, as you might say, an adversarial conflict within the body of Lloyd's itself on such issues. The issue of the global certificate of solvency seemed to me a very important one.
So I came to the conclusion, reluctantly, very unenthusiastically, and aware of the dangers of the precedents which were being set (to which Lord Mishcon referred), that, if Lloyd's is to survive as it is at present—and I accept that it is a unique, extraordinary and admirable institution—with 20,000 members instead of 3,000, coming from all over the world, something like this immunity would be desirable. So I supported it. I thought it was desirable that Lloyd's should survive more or less as it is at present. The essential point to me in the end was that the acknowledged evil of granting immunity was lesser than the evil of otherwise allowing Lloyd's to decline and fall. I was comforted by the fact that in the end the immunity conferred is extremely restricted, and, as I said earlier, does not effect the general public.
I, like others who have spoken, hope very much that this Bill will enable a great British institution, now internationally more conscious than ever, to survive and prosper for the rest of this century and beyond.
2.4 p.m.
Lord Hacking: My Lords, congratulations are so easily and generously given in your Lordships' House that it is hard to extend a special congratulation and special thanks without entering into language of excessive superlatives. However, this is a moment for extending special congratulation and thanks to the noble Lord, Lord Nugent, and the other members of his Committee. The report of the committee is a fine piece of workmanship, and in "the quality of their scrutiny"—to adopt the good words used earlier by the noble Lord, Lord Windlesham—the committee began by taking great pains to understand what is Lloyd's and what is the Lloyd's insurance market, and then to consider the contentious clauses within that understanding. If the noble Lord, Lord Foot, found that in his work on the committee "a large part" of the task was to "comprehend the Lloyd's market", then he and every member of the committee should be congratulated on that understanding. If indeed the Committee of Lloyd's, now that the heavy burden of this Bill has almost passed from them, are thinking of publishing some guide to convey understanding of the Lloyd's market to outsiders, they would not do too badly, I venture to suggest, by adopting many of the passages contained in the opening paragraphs of his report. I refer to paragraphs 5–19.
I have commended the Committee on their understanding of the Lloyd's market because I believe it is by this route that the committee did come to the right conclusion—and the right recommendation—concerning the immunity clause. In the words of paragraph 94 of their report, Lloyds is "unique in scale if not also in kind". I repeat that—and I am repeating words I used at Second Reading—even though limited to restricting members of Lloyd's

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Society against suing their own society—and it does not prevent one member of Lloyd's suing another—Parliament should indeed be very slow to grant immunity to anybody and thereby put that person above the law. As I believe Lord Foot has wholly appropriately put it, the question before the committee was, did the promoters discharge the heavy burden of proof that lay on their shoulders? It is, as again the noble Lord, Lord Foot, pointed out, a question of judgment.
The arguments on both sides were long and sometimes complex. As the transcript of the sixteenth day records, arguments of leading counsel took the whole of that day in presenting the points to be made on both sides. But, for me, the most significant argument is contained in paragraph 82 of the report. Permitting members of the Lloyd's community to sue their own society would breach a fundamental concept—I prefer the word "concept" to the word "rule", which the report uses—of the operation of the Lloyd's market, where each person, to paraphase that motto, trades "for himself and not for another". Therefore, within this vital concept, there should not be the shifting of one member's responsibility on to the membership of the society as a whole, as represented by the Lloyd's Society.
That concludes my observations on the immunity clause, which was the clause which gave me special concern before I came to speak at Second Reading. It only remains for me to join with other members of this House in wishing this Bill well and wishing Lloyd's well, with the hope that the Bill will rapidly now receive the Royal Assent, and the Committee, with its immunity, can get into action.
2.8 p.m.
Lord Grimston of Westbury: My Lords, I do not wish to detain your Lordships for more than a very short time and, like my noble friend Lord Reigate, I need to declare an interest not only as a member of Lloyd's but also as chairman of an underwriting agency and a non-executive director of an associated broking company.
I welcome wholeheartedly the Select Committee's conclusions on the three main issues. I only wish in the process of my few remarks to comment on divestment. Before I do that, however, I should like to pay my tribute to the members of the Select Committee who I believe nearly all started without knowing any of our rather unique language. My observations on the divestment issue centre very much on a lot of the evidence which was given by, largely, the so-called "mega-brokers", the petitioners.
Little emphasis has been given in the Select Committee's report or, indeed, by the petitioners to the fact that the brokers will actually still maintain very strong commercial links with the market at Lloyd's through being able, rightly and properly, to own members' agencies. Unless I have been unobservant, I do not see any reference to this particular point in the Select Committee's report, but I believe that it is a matter of great importance and highly desirable.
The second point is again one as regards which in both Houses, where I listened on many occasions to the hearings, evidence was given and arguments were put forward that Lloyd's would lose a lot of business as a result of the mandatory divestment of managing
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agencies. I do not believe that that is true. In my experience, always where we have been divested, we have actually managed to gain business. I do not think that, if the Lloyd's market is offering the right conditions for overseas business, there will be any lack of business coming forward. Therefore, I was extremely pleased to find that the Select Committee did not, in fact, pay a great deal of attention to that particular argument. It only remains for me to thank everyone who took part in this unique examination of the Bill for their great effort.
2.11 p.m.
Lord Sandys: My Lords, we are nearing the end of our consideration of this very important Bill. The road has been a long and sometimes arduous one, both in your Lordships' House and in another place. Although this is a Private Bill, it does enjoy the full support of Her Majesty's Government and of my noble friend Lord Cockfield, the Secretary of State for Trade, who has closely followed the progress of the Bill and was present during the early stages of this debate in your Lordships' House. I am confident that the House will similarly give the Bill the same support.
My noble friend Lord Cockfield much regrets that he has had to fulfil an important engagement; hence I am here to represent as a pale shadow his own views. Both he and I would like to express great appreciation of the skill and fairness with which my noble friend Lord Windlesham has steered this extremely important Bill through its various stages in your Lordships' House and of the outstanding contribution of my noble friend Lord Nugent of Guildford, who has just resumed his seat. My noble friend Lord Nugent has led the Select Committee with great distinction and I feel that we all owe him a great debt of gratitude for the public service that he has performed.
I am told that the Bill has broken a number of records for the time devoted to a Private Bill at various stages of its passage. But we should not begrudge the time and care expended on the Bill. The subject is important and the issues complex. It is entirely appropriate that the most careful consideration should be given to the matter. The House recognised this at Second Reading by giving instructions to the Select Committee to give special consideration to the two issues in particular, which have given rise to so much comment in the debate this afternoon. The committee have carried their task with the utmost care and diligence. I am sure that the whole House will share my feelings in thanking the Members of the committee, under the chairmanship of my noble friend Lord Nugent for their efforts on our behalf.
I must also congratulate the committee on the special report that they have produced. Those who have followed this Bill will be aware of the quite extraordinary complexity of the affairs of Lloyd's and the evidence presented on the controversial issues—evidence presented to the committee over a period of some 19 days. I can only say that in their report the committee have summarised the issues and the conflicting arguments with exemplary clarity and fairness, and I think that all speakers in the debate have reflected that view.

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The issues, as the committee make clear, are deep and difficult ones. No one could claim—I think no one has claimed—that all is black and white. Ultimately, a balance must be struck and a decision reached on the weight of the evidence. I believe that on all major points the committee have reached a sound and well-reasoned decision. Their conclusion is that, with certain amendments agreed by the promoters, the Bill should now be accepted.
2.17 p.m.
Lord Windlesham: My Lords, we have had a lengthy debate on Third Reading this afternoon, but it has been worth every minute to have heard a notable series of such well-informed speeches. I do not think there is any new matter that has been raised which calls for a reply from me. The degree of like-mindedness which has been demonstrated has been remarkable. It is worth commenting that that is as it should be at the end of the long-drawn-out passage of a Bill through Parliament. After all, it is the purpose of Parliament—is it not?—to mediate between and to reconcile conflicting interests which may be affected by legislation. As we have seen, the two Houses have both acted according to their distinctive procedures. They have also reacted to each other, particularly on the issue of divestment, and now near the end of the road we are close to a consensus of view.
It is true in the course of the debate we heard a dissenting view on the issue of immunity in the powerful speech made by the noble Lord, Lord Foot. Borrowing a remark from his own speech, I think we were all conscious that we were listening to advocacy of the highest order.
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In conclusion, I should like to thank the noble Lord, Lord Sandys, for speaking on behalf of the Secretary of State for Trade and for the support that the Government have given to this important measure and to ask the House to grant the Bill a Third Reading.
On Question, Bill read a third time, with the amendments, and passed and returned to the Commons.

Greater London Council (Money) Bill
Brought from the Commons, read a first time, and referred to the Examiners.