Lords Sitting of 20 January 1983

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Chichester):
The LORD CHANCELLOR on the Woolsack.

Airline Tariffs: IATA Request
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what response they have made to the request from IATA that key Governments should establish their present position towards observance of filed tariffs made by airlines and whether they agree with IATA that programmes for "market clean-up" cannot be successful without the support of Governments in principle and in practice.
Lord Lyell: My Lords, the Government have made it clear that they fully support the efforts of the airlines, both in IATA and in the Board of Airline Representatives in the United Kingdom, to reach agreement to move back to charging approved fares. Both IATA and BARUK have the Government's support for their current efforts, but the success of "market clean-up" programmes depends on the airlines rather than on Government. We have repeatedly stressed that we must look to the industry to put its own house in order and we are glad that it is now trying to do so.
Baroness Burton of Coventry: My Lords, is the Minister aware that he has completely misunderstood the Question? Is he further aware that it really reduces one to despair in pursuing the Government in these matters? May I ask him whether he recalls that in the letter which he sent to me this week he said:
"In their revised form the operating permits will state clearly that one of the conditions of operation is that fares charged shall be approved by the United Kingdom aeronautical authorities"?
May I ask the Minister whether, when these operating permits are given and that condition obtains, the Government intend to see that the permits operate and the clause is kept to?
Lord Lyell: My Lords, I must apologise if the noble Baroness believes that I have either misunderstood or have failed to answer the Question. I would stress that that is a matter of opinion in your Lordships' House. But as regards the noble Baroness's second question, I am sure she will be aware that the purpose of inserting tariff clauses into permits is to clarify the legal obligations of the airlines themselves to charge the officially approved fares. As I am sure the noble Baroness has heard from me, and indeed from many others at this Box, the Government are firmly of the opinion that this is a matter for the airline industry itself. We support all the efforts that have been made
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by the industry and we believe the noble Baroness will agree that there is increasing success.
Baroness Burton of Coventry: My Lords, I do not know whether the Minister is being obtuse or whether I am, but we do not seem to be making any progress at all. May I ask him whether he is aware that what he has said, so far as supporting the airlines is concerned, is not worth the time that he has given to it? I am asking him whether, as IATA has asked the Government, if these permits are given to airlines the Government will check that they are abided by.
Lord Lyell: My Lords, the answer that I gave may not be worth a great deal so far as the noble Baroness is concerned, but I would stress to her, and to your Lordships, that it happens to be the truth and is definitely laid down. So far as the keeping of the permits is concerned, this depends upon bringing a case to the courts and, as I and others have repeatedly told the noble Baroness, there is a problem in bringing these cases to the courts and, above all, in the courts dealing with such cases between—I would stress this to the noble Baroness—a willing buyer and a willing seller.
Baroness Burton of Coventry: My Lords, if the House will permit me, is the Minister aware that I am not wanting anything brought to the courts? I am simply asking him whether, when these permits are given to airlines and they have a clause in them saying that the fares must be observed, the Government will take steps to see that the fares are observed; and, if not, whether they will withdraw the permits.
Lord Lyell: My Lords, the first steps which the Government would take would be legal steps—and those are the ones that I mentioned—in the courts. Before the Government withdrew a permit that would be a matter for discussion between the Government authorities and the airlines, and there might be more than one of them.
Lord Beswick: My Lords, I wonder whether the noble Lord is being entirely right or fair about this. Is there not an obligation on the national organisation here, when they give a licence on certain terms, to see that those terms are carried out? Is not a difficulty here that, if the terms are enforced in this country and not in other countries, you are putting British airline operators at a disadvantage in the international market? That is the real problem. Instead of all this other nonsense, could not the Minister say that the Government will make an effort to get an agreement among other Governments to enforce the conditions under which licences are granted?
Lord Lyell: My Lords, of course the Government will seek to obtain agreement with other Governments. We are very grateful to the noble Lord for pointing out that enforcement in this country could be harmful to British airlines.
Lord Monson: My Lords, would the noble Lord agree that an earlier Conservative Administration abolished retail price maintenance on most consumer goods, to the great benefit of almost everybody, and

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therefore that it would be a retrograde, if not an illogical step, for the present Conservative Administration to enforce retail price maintenance on airline travel?
Lord Lyell: My Lords, as I am sure the noble Lord will be aware, there are international agreements between the airlines themselves as part of that great industry, and it is not for the Government to intervene in agreements entered into between the airlines.

Further Education: Proposed Statement
3.7 p.m.
Baroness David: 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 when they will make a statement on The Legal Basis of Further Education, as Lord Elton said in answer to a Starred Question on 21st October 1982 that they hoped "to be able to make a Statement shortly". (Col. 228.)
The Earl of Swinton: My Lords, I cannot give a date for this statement, but it should be possible soon.
Baroness David: My Lords, I can only express extreme dissatisfaction with that Answer. In October I was told by the noble Lord, Lord Elton, that there would be an early statement. Three months later I am told that it will be soon. It is not a satisfactory situation. May I say that a great many people——
Several noble Lords: No!
Baroness David: My Lords, may I ask the Minister whether he realises how many people who work in the adult education field—and, indeed, in the field of further education, the 16-to 19-year-old field, and the field of special education—are very worried that the Government are taking this so lightly that they have made no statement within 15 months on all the comments coming in on this document The Legal Basis of Further Education?
The Earl of Swinton: My Lords, I am not altogether surprised that the noble Baroness was somewhat disappointed with my original Answer. However, I would deny that the Government are taking it lightly. It is just the opposite. They are very conscious of how complex this matter is, and the review that was sent in attracted a great many comments from many interested bodies. There is a lot of very careful consideration being given to this, and that is the cause of the delay. Indeed, my right honourable friend recognises the considerable interest in this matter. I cannot commit him to a precise date, but it really should not be very much longer.
Baroness David: My Lords, may I ask the Minister why it is possible to make absolutely snap decisions about the education of 14-to 18-year-olds—that can be done almost overnight—when this matter has been neglected for so long?
The Earl of Swinton: My Lords, as I said, this is a very complex matter. It certainly has not been neglected, and the Minister is deciding when he will make his statement.
Lord Renton: My Lords, may I remind my noble friend that during the proceedings on the Education Bill 1981, in which so much was done to help the mentally handicapped, anxiety was expressed about the further education of the mentally handicapped? Will he give an undertaking, if he is able to do so, that when we have the Government's statement the needs of the mentally handicapped will not be overlooked?
The Earl of Swinton: My Lords, I will certainly give my noble friend that undertaking. In fact, some work has been done on this already. The largest group of handicapped students are those with moderate learning difficulties. There is a need for curriculum development, supplemented by staff training for teachers who work with these students. The department and the further education unit have taken steps to respond to this need. The further education unit is publishing guidance on a curriculum framework directed at meeting the educational needs of students with moderate learning difficulties. The department is to finance a project which is to be commissioned by the further education unit to assist the wider dissemination of good practice among teachers of the handicapped in further education and the production of teaching materials. These steps should help to improve the provision.
Lord Mishcon: My Lords, may I revert to the Answer which was given by the noble Earl to my noble friend in the first instance and repeat a question which is often asked by the Opposition of the Government: How soon is "soon"?
The Earl of Swinton: My Lords, "soon" is as soon as I said it was to the noble Lord's friend.
Lord Stewart of Fulham: My Lords, if I may follow up that point, can the Minister tell us whether "soon" is sooner than "shortly" and "shortly" earlier than "early"?
The Earl of Swinton: My Lords, I do not wish to commit the Government to a definite statement on whether "soon" is sooner than "shortly" or "shortly" is sooner than "soon", but I think that "soon" is probably as shortly and as soon as possible.
Baroness Darcy (de Knayth): My Lords, would the noble Earl agree that it is particularly essential for facilities for further education to be integrated for the physically handicapped, along with their able-bodied peers, at a time when they are beginning to enter into the adult, able-bodied world?
The Earl of Swinton: My Lords, I indeed agree with noble Baroness, Lady Darcy (de Knayth), on that point. The review recognised that existing legislation makes no specific reference to the needs of handicapped students. The White Paper Special Needs

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in Education noted that this would be one of the matters to be considered as part of the wider review of the legal basis for further education.
Baroness Davis: My Lords, may I finally ask the Minister to take into the account the fact that some handicapped people—this question has been raised by two noble Lords—develop rather more slowly than their peers? They have to make up for time spent in hospital and so on. Can the Minister therefore please ask the department, as they are apparently still considering the matter, to consider that post-19 young people may need special attention and an extended period during which they can claim perhaps free fees, and so on, because they develop more slowly than their able-bodied and not handicapped peers?
The Earl of Swinton: My Lords, I shall certainly bring that point to the attention of my right honourable friend and also to the attention of the department.

Oil Exploration: UK Continental Shelf
3.13 p.m.
Viscount Hanworth: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider setting aside funds arising from North Sea oil revenues to promote exploration of the continental shelf around the north and west coasts of the British Isles bearing in mind the difficulties likely to be encountered in those deep waters and the possibility of useful finds.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, it is not the Government's policy to set aside receipts of taxes and royalties from North Sea oil and gas production for specific purposes. They simply form a part of the general tax receipts which fund the Government's expenditure programme. However, we encourage the economic exploration and development of the United Kingdom Continental Shelf through a range of other policies.
Viscount Hanworth: My Lords, I thank the Minister for his Answer. May I ask him what other policies are likely to induce the oil companies into exploration in a very difficult area? Does he agree that at the moment it looks extremely unlikely that there will be any further major finds in our existing oilfields? Therefore, the possibility of finds on the continental shelf are extremely important for the future.
The Earl of Avon: My Lords, if I may, I shall give a threefold reply to the noble Viscount. First, it has not so far been found necessary to offer any incentives or special terms to explore frontier areas. The Government would not, however, rule out the possibility of such incentives where this was considered necessary. Secondly, under the current tax régime, fairly generous relief is available. Successful exploration and drilling
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costs are allowed in full against the field to which they relate. The third point is that the recent auction, which was concluded only yesterday, on the whole produced fairly good results.
Lord Strabolgi: My Lords, may I ask the noble Earl whether the Government are aware that in the view of the oil companies the present tax régime is a positive disincentive to further exploration? Now that we have the good fortune to have an Energy Minister in this House, will he urge on his colleagues to try to do something about it? Representations were made before the last Budget, but absolutely nothing was done.
The Earl of Avon: My Lords, of course I am aware that the industry is not satisfied with the general level of taxation of North Sea oil. Extensive consultations have been under way with the United Kingdom offshore operators' association in recent months. I would, however, draw the noble Lord's attention to the petrol revenue tax on exploration expenditure which, on my reading of it. seems to me to be quite generous. I know that I can now no longer hide under the words, "I shall take it back to my right honourable friend", but I will, of course, take his remarks to heart.
The Earl of Lauderdale: My Lords, is my noble friend aware, first, that his appointment to the Department of Energy is much welcomed? Secondly, is my noble friend aware that a deep hole was bored three years ago in the Rockall Trough, led by the British National Oil Corporation with the participation of the main oil majors? The results were very disappointing, and most oil companies are now more interested in the North Sea than in the North-West.
The Earl of Avon: My Lords, I am grateful to my noble friend for his kind remarks. I am also grateful to him for the lesson which he taught me in his secondary question. I was indeed aware of some aspects of the Rockall Trough, but I am grateful for the further information.
Baroness Gaitskell: My Lords, may I support the noble Viscount's Question? It seems to me to be absolutely sensible. I do not think that we need look to suffer at this time economically. I think that we should definitely take it up.
The Earl of Avon: My Lords, I am not absolutely clear about the noble Baroness's point, but I shall certainly read it in Hansard.
Lord Tanlaw: My Lords, may I ask the noble Earl also to accept my congratulations? At the same time may I ask him whether or not he agrees that this is the role which Britoil should be performing: exploring the waters around our shores and not those of other people's shores in the Middle East and the Far East?
The Earl of Avon: My Lords, I think it should be open to a wide field of people to do this, which we in this country are doing and which other countries do. Hence, Britoil is going outwards.
Viscount Massereene and Ferrard: My Lords, is my noble friend aware that local people in the Hebrides have known for some time that there is a shale belt? If there is shale oil, it is highly likely that there are very large deposits off the Hebrides.
The Earl of Avon: My Lords, I am grateful to my noble friend for his intervention. Having listened to him frequently on the Wildlife and Countryside Bill, I know with what expertise he speaks.
Lord Taylor of Gryfe: My Lords, would the noble Earl agree that the privatisation of BNOC and the fact that Britoil is now the exploration arm in the North Sea limits the Government's ability to take initiatives in this field, whereas BNOC, which was Government-owned, could be an instrument of Government policy in this area? Would the noble Earl also agree that by the privatisation arrangements we have lost the ability to take the initiative in this direction?
The Earl of Avon: My Lords, the noble Lord will be perfectly aware what my reply is going to be: that the Government believe in the working of the free market forces. This is the reason why we took this particular action.
The Earl of Lauderdale: My Lords, will not my noble friend agree that Britoil now enjoys freedom from Treasury control and can therefore go into the market in a big way?
The Earl of Avon: My Lords, I am happy to be sitting on the fence between this particular game of tennis.
Lord Airedale: My Lords, do such considerations apply to the excessive profits accruing to the gas industry as a result of Government policy?
The Earl of Avon: My Lords, I would not like to say that any excessive profits are accruing which are not to the benefit of the consumers. In fact, there is at the moment a freeze on gas prices.

Middle East Talks: PLO Representation
3.19 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the important role which Britain has played in recent years in an endeavour to move towards a stable peace in the Middle East, and acknowledging the need to understand the views of all concerned, they are prepared to consider the request of the Arab League to have a representative of the Palestine Liberation Organisation in its delegation for talks with them.
Lord Skelmersdale: My Lords, the House will realise that this is a fast-moving situation. Following
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the postponement of the Arab League delegation visit in early December, we have been working with the Moroccan Government to find a mutually acceptable basis for the visit to go ahead. Welcome progress has been made on many of the details.
Lord Molloy: My Lords, is the noble Lord aware that that is a most ambiguous statement and helps no one? Is the noble Lord further aware that over the past 12 months the Government have strenuously sought to find a lasting peace in the Middle East; that this Government have sought to stop the killing and slaying and atrocities; and that both the former Foreign Secretary and the present Foreign Secretary have declared unequivocally that no examination of the situation to achieve a lasting peace can be undertaken without the participation of the leaders of the PLO? Is he further aware that following the first statement, when the Arab countries decided to see the leaders of the Security Council of the United Nations, our country was high on this list; and that they were faced with almost an ultimatum from some where—
Noble Lords: Order!
Lord Molloy:—and one does not know whether it was from the Foreign Office or from Downing Street?
Noble Lords: Order!
Lord Molloy: Is he further aware that there is a possibility that this country will lose a great opportunity to make its contribution to achieve peace for all in the Middle East?
Lord Skelmersdale: My Lords, I am afraid it was impossible to catch all the points made in the supplementary question put by the noble Lord, Lord Molloy. However, I can agree with him on his second point. So far as his first point is concerned, in which he accused me of making an ambiguous statement, I suggest that the statement means exactly what is says. We are dealing with the Moroccan Government on this matter and it is for them to decide when the time is right to make an announcement.
Lord Wells-Pestell: My Lords, will the noble Lord repeat the assurance given by his Government and his party on a number of occasions that they will not have dealings or discussions with the PLO until the PLO gives an assurance that it recognises the existence of Israel?
Lord Skelmersdale: My Lords, on several occasions we have explained the kind of step which would make such a meeting possible: a clear statement from the PLO accepting Israel's right to exist—if necessary, on condition that Israel accepted legitimate Palestinian rights and confirming that they had renounced terrorism. I stick by that.
Lord Shinwell: My Lords, will the noble Lord, Lord Skelmersdale, say how it is possible for the Government to recognise representatives of the PLO when none of the Arab countries who are not democratic in character refuse to recognise the right of the State of

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Israel to security and to stop interfering in Israel's affairs? Is he aware that all the attempts at intimidation and adverse comments and criticism can produce no beneficial effects until, collectively, the Arab countries recognise the State of Israel?
Lord Skelmersdale: My Lords, the delegation about which we are talking is a collective Arab delegation of the Arab League. Nobody in this country has ever said—and I do not believe it has ever been suggested before the noble Lord's supplementary question—that the PLO should be a member of such a delegation.
Lord Nugent of Guildford: My Lords, is my noble friend aware that we shall never reach a settlement of this long running difficulty until the PLO's voice is heard in some way in the international context? However much we may sympathise with Israel—and I dare say that most of us do—we shall have to find a way for the PLO's voice to be heard in this context.
Lord Skelmersdale: I entirely agree with my noble friend, my Lords, but I will add to his comment that it is absolutely essential that this voice is not accompanied by threats of arms.
Lord Kennet: My Lords, there is very wide interest in this country and beyond in the outcome of contacts between the British Government and Morocco as a result of the failure of the delegation to include London in its earlier tour. Can the Government tell us why it is that news of the success of those discussions is expected to come from Morocco rather from this country or from both countries simultaneously?
Lord Skelmersdale: My Lords, it is because the King of Morocco is to lead the delegation and it is for him to say who are to be members of the delegation or otherwise.
Lord Paget of Northampton: My Lords, is the noble Lord, Lord Skelmersdale, aware that the PLO is an organisation of assassins publicly pledged to obtain its ends by assassination? Is he aware also that it has won its position by assassination and of the fear it has created in the Arab world? Remember, the PLO has assassinated far more Arabs than it has assassinated Jews. This is not a Question about Israel but one about us; that we must never acknowledge or accept an assassination society pledged to violence.
Lord Skelmersdale: The PLO may have won its position by assassination, my Lords, but we are all concerned to make very clear that it will not keep it by that method. Further than that, this Question is not about the PLO but about the delegation I have described.
Lord Clifford of Chudleigh: My Lords, while admitting that two wrongs do not make a right, is the noble Lord, Lord Skelmersdale, aware that the whole pattern of post-war terrorism was set by the Irgun Zvai Leumi and the Stern Gang? Those of us who were on the receiving end in 1946—and I refer to the King David Hotel and the Orange Grove murders—are somewhat amazed that 37 years later the Government
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are taking what seems to us to be a one-sided view of another organisation and are so upsetting the whole diplomatic approach to peace in the Middle East.
Lord Skelmersdale: No, my Lords, I was not aware of the facts behind the noble Lord's supplementary question. I do not believe that it is a one-sided position; we have bent over backwards to be eminently fair and eminently reasonable to all the parties to this dispute.
Lord Hankey: My Lords, is the noble Lord, Lord Skelmersdale, aware that most sensible people who are not beleaguered on this horribly controversial question will be extremely glad if the Government can find an amicable solution which will enable discussions to continue among all concerned with a view to finding a solution to this problem, which may one day affect the peace of the world?
Lord Skelmersdale: My Lords, I entirely agree with the noble Lord, Lord Hankey, and this is exactly what we have been trying to do since before this Question was put down in December.
Lord Brockway: My Lords, in view of the deep need for a solution to the Middle East problem, does the noble Lord, Lord Skelmersdale, not agree that the evidence of all those who have interviewed the Arab League and the PLO indicates that they would be ready to accept the borders of Israel in return for concessions about the West Bank and the area of the border; and that they are only withholding a declaration for that purpose because of negotiations which are taking place? Should we not forget what has been said in the past and welcome that indication as a reason for negotiation?
Lord Skelmersdale: My Lords, I agree that it is an indication, but I do not believe that it is an acceptable indication to any other party until one of the leaders of the PLO makes this assertion in public.
Lord Molloy: My Lords, is the noble Lord, Lord Skelmersdale, aware that what many of us on both sides of this House seek is a march towards peace and to stop the massacres which have occurred in the Lebanon from ever happening again; and that Jews and Arabs not yet born shall be left without that hatred in them to hurt one another and to be at each other's throats? Is there not a danger if we do not agree to see the PLO in the Arab delegation? As President Reagan himself has said,
"The story of the search for peace and justice in the Middle East is a tragedy of missed opportunities".
Will the noble Lord not agree to take this matter back to the Foreign office for the whole question to be reexamined—not in the interests of just Arabs or Israelis but of world peace and justice?
Lord Skelmersdale: My Lords, I fully expect a very early announcement on the delegation to this country from the Arab League, which will include visits to Her Majesty the Queen, the Prime Minister and the Foreign Office. Further to that, I believe that all of us in this area should work to fulfil the prophecy in Isaiah, that the wolf shall dwell with the lamb.

Business of the House
3.30 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Bellwin will, with the leave of the House, repeat a Statement that is to be made in another place on the Serpell Report.
I would also, with the leave of the House, like to make a Statement about next week's business. On Tuesday of this week my noble friend the Leader of the House told your Lordships that there was likely to be a debate on the report of the noble Lord, Lord Franks, next week. I can now confirm to the House that the debate will take place on Tuesday next, 25th January, on a Motion in the name of my noble friend the Leader of the House. The Report stage of the Health and Social Services and Social Security Adjudications Bill will now be taken on Tuesday, 1st February; and the debate in the name of the noble Lord, Lord Mackie of Benshie, on the report of the Select Committee on the European Communities Committee on the olive oil market, will now be taken on Thursday, 3rd February.

Mental Health Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to introduce a Bill to consolidate the law relating to mentally disordered persons. I beg to move that the said Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

National Heritage Bill [H.L.]
The Earl of Avon: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order:

Clause 1,

Schedule 1, Part I,

Clauses 2 to 8,

Schedule 1, Part II,

Clauses 9 to 15,

Schedule 1, Part III,

Clauses 16 to 21,

Schedule 1, Part IV,

Clauses 22 to 28,

Schedule 2,

Clause 29,

Schedule 3,

Clause 30,

Schedule 4,

Clauses 31 to 33,

Schedules 5 and 6,

Clauses 34 to 36.

—(The Earl of Avon.)
On Question, Motion agreed to.

Data Protection Bill [H.L.]
3.32 p.m.
The Lord Chancellor: My Lords, aficionados of "Yes Minister" will recollect that in the chapter described as "Big Brother" Sir Humphrey Appleby advised his Minister (who had been severely shaken by an encounter with my former adversary, the late Robert McKenzie) that legislation would be necessary to deal with the potential dangers of the data bank. This Bill, of which I now rise to propose the Second Reading, is yet another example of the soundness of Sir Humphrey's advice, and the lame way in which truth follows painfully in the wake of fiction.
As long ago as 1973 another place debated the Younger Report on Privacy, and even so long ago as 1978 Sir Norman Lindop's committee published its own well-informed report. But since then information technology has taken off. It is well and truly airborne. Great benefits have followed its advance into, and above, the stratosphere—increased efficiency and the ability to perform tasks previously incapable of fulfilment; vast new prospects for the optimistic forecaster of the future. The Government, as Sir Humphrey Appleby would doubtless wish his Minister to say, are fully committed to the importance of information technology, sometimes known as IT. This Bill is not, therefore, Luddite in its intentions. It is not designed to shackle it. Nevertheless, it is designed to insure against the public disquiet at some of the possibilities of abuse in the hands of potential owners of data banks, including, of course, the Government themselves. What are the grounds of this disquiet? First, there is the fear that other people whose identity we may not know may possess computer-fed information about us, the accuracy of which we cannot correct. "How did they get my name?", we sometimes ask ourselves when some unknown advertiser blandly informs us by post that we are the lucky winners of a free gift if only we hurry, hurry, hurry to purchase his wares. This may be harmless enough, or at the worst only a temporary nuisance. But suppose the information is potentially harmful? Suppose it is held by a computer owner with power? Suppose—and this may be the rub—there is no control over the use to which it is put? Worst of all, suppose the information as well as being embarrassing may also be wrong, or at least misleading? How can we hope to put it right if we do not know who owns it or to what purpose he means to put it? These are the fears we must do our best to dispel.
Our first objective has been to take account of the work of the Lindop Committee. I do not use the word "implement", as Sir Humphrey might have done. After five years it is obvious that refinements and adjustments will have been necessary. But I hope the members of that committee will feel that we have built upon their work, and, where we have diverged, will also feel that we have at least taken account of it and diverged for intelligible, perhaps even sufficient reasons.
My Lords, I must now say that there is also an European dimension to all this, and this dimension is as much economic as political. By reason of their recent history, perhaps, European nations are, if anything, even more apprehensive than are we about

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what I might call the Big Brother aspects underlying this Bill. Even under their democracies, in some of those countries there exists a horrible thing called a PIN. PIN is an acronym for "personal identification number". In each of those countries a PIN is assigned to each citizen, which, combined with the ability to link individual citizens' files with one another, could give rise to serious abuse.
Serious or not, European concern has emerged as a consensus, and this European consensus is contained in a Convention of the Council of Europe and a series of guidelines on the part of the OECD. It is the purpose of this Bill, apart from its intrinsic merits, which I shall be endeavouring to describe, to enable us to ratify that convention. Indeed, if our infant industry in IT is not to be strangled at birth, or at least subjected to severe malnutrition, it is vital that we should do so, since countries with the protection of personal data will inevitably restrict their exports to countries of lesser breeds without the law, among which, without the Bill, we should have to number ourselves.
My Lords, the Bill itself is the product of extensive consultation with countries who already have data protection and experience of using it. My right honourable friend Mr. Timothy Raison visited no less than four European countries last September, and in October the Fourth International Conference of Data Protection Commissioners, which was actually held in London, gave opportunity for further discussion. In practice, each country has followed its own line of legislation, and so, in the event, does ours; and this is why this Bill is somewhat longer than an ordinary Bill enabling the ratification of a convention.
In the nature of things, however, the Bill is designed to deal with the problems of data stored in computers and the like. I do not mean thereby to imply that there are no dangers or no problems connected with manually-stored data. Of course there are. We all know about them, and they have been with us for a long time; but these are obviously different in scale, and would obviously require to be dealt with by the solution of different and perhaps more difficult problems of enforceability—and, I should have said, they are of nothing like the same urgency in legislative priority.
Perhaps with that introduction I could turn to the Bill itself. Those who are interested in seeing purposive principles embodied in legislation, like my noble friend Lord Renton, for example, will turn at once to Schedule 1. In the immediate past the eight principles enumerated in Schedule 1 may look for a European parentage. But in truth and in fact, their real ancestor is the work of the Younger Committee. These principles, scheduled to Clause 2, are really what this Bill is about. Perhaps I may, therefore, summarise them, though in doing so I know that I am oversimplifying.
The first principle is that data should be fairly and lawfully obtained. The second is that data should be held only for specified and lawful purposes. The third is that the use and disclosure of the data should be restricted to those purposes. The fourth is that the data held should be related to the purposes I have mentioned, and should be adequate but not excessive
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for them. The fifth is that data should be accurate and up to date.
The sixth principle is that they should not be kept longer than is necessary for the specified purpose. The seventh is that the individual (somewhat inelegantly referred to, I am sorry to say, as the "data subject") should have the right of access to the data and, where appropriate, have the right to secure correction or erasure. The eighth requires security measures to be taken to protect data against unauthorised access, disclosure, alteration, destruction or accidental loss. So much for the principles on which the Bill is founded. These entitle me, I think, to describe the Bill as one for the protection of the individual against potential abuse, either by the Government or by others. Now I want to come to the practice. Part II of the Bill provides the administrative machinery. The basis of this machinery is the compulsory registration of data users (that is, holders of data) and computer bureaux (that is, those who process or distribute data on behalf of others). This registration is protected by the criminal law—by sanctions provided in, for example, Clause 5 of the Bill—and is policed by a registrar. He is independent of government, is to be appointed by letters patent and will hold office on terms with security analogous to that of a High Court judge; that is, removal on resolution by both Houses (Clause 3 and Schedule 2). His decisions will be subject to appeal to a quasi-judicial tribunal. The chairmen and deputy chairmen of that tribunal are to be experienced lawyers, to be appointed by the Lord Chancellor. The lay members, however, are to be appointed by the Secretary of State. I am summarising Clauses 3, 13 and 14, and Schedules 2 and 3.
I come now to the essential sanction, which is the registrar's power to deregister, or issue what is called an enforcement notice. Clauses 10 and 11 refer. This power will be equally subject to appeal, but will be armed with a power of entry on a magistrates' warrant. These are the teeth of the Bill, the object of which will be to enforce compliance by the data user and the data bureaux, although only where the processes of persuasion and negotiation have failed.
I come now to Part III of the Bill. This supplies the rights of the so-called data subject, that is, the individual citizen. Clause 21 gives him right of access to the data. Clause 22 provides for compensation for inaccuracy. Clause 23 provides compensation for loss or unauthorised disclosure of the data. Clause 24 gives him a civil remedy to enforce rectification or erasure of data. I must emphasise that these rights are additional to, and not in substitution for, existing legal rights; for instance, in defamation, contract, copyright or any other legal rights which the Government may wish to confer on him as a result of the Law Commission's report and the forthcoming report of the Scottish Law Commission on Breach of Confidence.
There are of course certain exemptions in the Bill. The House will agree that these have to exist, but will wish to scrutinise them in detail with a view to drawing a balance between the rights of the public, on the one hand, and the rights of the individual, on the other. The Government's standpoint is that these exemptions should be kept to a minimum. Only national security data and data used for domestic

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purposes are wholly exempt from registration. In other cases, the exemption is only from limited provisions—principally the requirement to give subject access—and in such cases applies to crime, taxation and national immigration control (Clause 28), health and social work (Clause 29), judicial appointments (Clause 30) and certain miscellaneous, statistical and research data (Clause 32). I am advised that each of these is compatible with the convention.
In each case, except national security data, the operation of the exemption will be policed by the registrar and open to review in the courts. The Government recognise that, in the police field and other similar areas, the registrar will need professional but independent advice if he is to act on an informed basis. My right honourable friends the Home Secretary and the Secretary of State for Scotland have agreed to make available to the registrar, whenever he should require it, the assistance of Her Majesty's Inspectorates of Constabulary.
The Government will be subject to the same rules as other users or bureaux (Clause 35). Clause 38 provides for an appointed day, followed by two-tier provisions for the transition of the Bill into operation.
I am conscious that I have taken up a good deal of the time of the House, but this is an important Bill. I am also conscious that, for the sake of clarity, I have omitted a great deal which we shall wish to discuss in Committee or in later speeches in this debate. My noble friend Lord Elton will be speaking in reply, and I know the House will expect him to do it well; but I hope I have given the House what I might call a Second Reading guide to the Bill.
It is an intricate Bill. It is a Bill designed to give the individual protection against the dangers inherent in a new, but intrinsically valuable, technology. It is a Bill inaugurating what in this country is, I think, a new but in some ways proven—and I hope where unproven it will prove effective—method of enforcement. I therefore beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
3.50 p.m.
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble and learned Lord the Lord Chancellor for so disarmingly guiding us through this Bill. It contains a large number of thickets and, I am afraid, a large number of traps. I must make the position of my noble friends and myself clear: we have grave misgivings about many aspects of the Bill.
There has been public concern for a very long time—and, as the noble and learned Lord has said, that has not diminished—about the fact that in this country the individual has been exposed to serious risks from computerised information systems, against which the laws of our country did very little to protect him. In Britain we have no legal right to privacy. The danger was first authoritatively exposed as long ago as 1970 in a Justice report called Privacy and the Law, with which some noble Lords will be very familiar. The outcome of that initiative after a private Member had endeavoured in another place to introduce a Bill
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to deal with it, was that the Labour Government then in office appointed the Younger Committee, whose report two years later endorsed the threat to the individual citizen and his privacy and said that something should be done about it.
During the succeeding years of the Conservative Administration—and I shall endeavour not to be too party political about this—nothing was done about it. But when the last Labour Government took office in 1974 they took up the issues and in 1975 the Home Secretary published the White Paper entitled Computers and Privacy, together with a supplement, Computers: Safeguards for Privacy. The White Paper said:
"The time has come when those who use computers to handle personal information, however responsible they are, can no longer remain the sole judges of whether their own systems adequately safeguard privacy".
In fulfilment of the undertakings given in the White Papers that were then published, there was set up a Data Protection Committee under the chairmanship of Sir Norman Lindop. After two years of intensive work, they reported in July 1978, and their massive report was published in December of that year. The Lindop Committee made the most wide-ranging study of the subject which has ever been undertaken in this country. They faced all the complex issues which it presents, and consulted every interest that seemed to be concerned. They received no fewer than 307 submissions and met no fewer than 50 times and their sub-committee met no fewer than 32 times.
The committee proposed the setting up of a statutory data protection authority with powers to inspect computer systems and to conduct spot checks to ensure that all personal data were handled with due regard for security and for accuracy. They asked for detailed codes of practice to be drafted by the data protection authority for various categories of computer users, and wanted them to take the form of subsidiary legislation and to acquire the force of law. Alas! those major recommendations have been ignored and, indeed, rejected in the Government's Bill, and I greatly doubt—although naturally I have not been able to consult them at all—whether the members of the Lindop Committee will be content with this Bill, which I think they will regard as a pale shadow of their own proposals.
The report having come out at the end of 1978, the recommendations unfortunately fell on stony ground. The new Administration thought it right to consult all the people who had previously been consulted and who were concerned, all over again. Nothing more happened until yet another three years had passed since Lindop reported, when in March 1981 the present Home Secretary announced that the Government intended to introduce legislation.
What at last induced the taking of action? I have no doubt that there was some concern for the privacy of the individual, but the stimulus was a rather different one. While we had been waiting in this country for national protection, the countries of the Council of Europe had not been so inactive. Many of them had legislated and, as the noble and learned Lord, the Lord Chancellor has indicated, in order to harmonise their domestic provisions they entered into an international

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convention. It is that convention which has now presented a pistol to the Government's head.
As a result of the convention, there has arisen in this country an unprecedented alliance calling for legislation: industry, commerce, the trade union movement, the entire computing community, the consumers and not least those who are concerned for the liberties of the subject and the interests of the individual man or woman. For the convention contains what, in contemporary parlance, one can only call a "guided missile": it creates a "common market" of data protection within which information about individuals can circulate freely, but whose boundaries are drawn around those who have taken the trouble to legislate responsibly for the protection of the privacy of those individuals. Beyond those boundaries personal data can be inhibited. That could spell economic death almost to any nation that wilfully remains outside those boundaries, for the "common information market" may now legitimately inhibit the flow of personal information to countries that deliberately remain outside it.
In our modern, post-industrial economy, information is the crucial key to survival. Without information, Lloyds, for instance, would go bankrupt tomorrow, for it is no more than an information centre that happens to be situated in the City of London and of course it has its own reputation for integrity as one would suspect. Without information none of our British-based multinationals could survive for even a week. The other nations of the Council of Europe could apply a stranglehold to our economy if they were minded to do so. It was in those circumstances that a reluctant Administration saw the necessity to legislate—and in the nick of time. The question that will have to be considered is whether or not the Bill complies with the terms of the convention or is outwith it, as I fear it will be my task to suggest in a moment or two, at least as regards some of it.
Now we have a Bill which one newspaper has described as "a mouse amid the white tape"—rather an attractive picture, but not a very reassuring one in any circumstances. As the noble and learned Lord has said, first, the Bill creates an independent registrar. As the noble and learned Lord also said, his function will be to adjudicate between the needs of what I agree are unattractively called "data subjects"—namely, the millions of those whose records appear in information systems—and "data users", those who keep the records and use that information for their own particular purposes.
Obviously, the registrar must be independent, both of data subjects and, even more, of data users, who are the stronger parties. But above all, I submit, he must be independent of the Government. The Government are far and away the principal users of computerised information systems holding data about individuals. We, therefore, welcome the fact that the registrar is to be appointed by the Crown.
But how independent will he be? I fear that it is very often in the small print of schedules to Bills that the biggest tigers can be found to lurk. It is, I submit, the case here. In Schedule 2 to the Bill we find at paragraph 4 that the Secretary of State controls the
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appointment of the registrar's staff, controls the budget of the registrar's staff and controls his pensions. The appointments that are there referred to are all subject to the approval of the Secretary of State, given with the consent of the Treasury.
When we come to examine the registrar's powers and duties we see a remarkable imbalance. He has a wide variety of powers, but he has virtually no duties; no statutory duty is imposed upon him, except to keep accounts and each year to lay before each House of Parliament a general report on the performance of his functions. In the field of data protection, which ought to be the primary cause for concern, no statutory duty is imposed on him, except to instruct his staff and to prepare and maintain the register. For instance, subsection (1) of Clause 10 of the Bill, which deals with enforcement notices, reads:
"If the Registrar is satisfied that a registered person has contravened or is contravening any of the data protection principles he may serve him with a notice ("an enforcement notice")".
It is left to his discretion whether he does anything about it. If the contraventions are substantial, surely the registrar should be placed under a duty to intervene?
He is given neither a power nor a duty to investigate complaints, whereas we submit that surely he should have both. If anyone complains to the registrar that the provisions of the Bill have not been complied with, the latter need do nothing if he so chooses. For instance, if a member of his staff happens to discover a serious breach of the excellent data protection principles to which the noble and learned Lord has paid tribute—they, of course, come from the Council of Europe's convention—and reports a scandal, the registrar is again free to do nothing if he so chooses. Even if that staff report shows that many people have suffered grievous damage as a result of the breach, there is no duty on the registrar to tell the victims that that has happened. Indeed, if he were to tell them, gratuitously, it might well be that it could be contended that he was exceeding his powers.
Further, one wonders how it is supposed that a single registrar can competently do all the things that will be expected of him. The present Government's White Paper on Data Protection envisaged an advisory committee, and that seems to us to be very sensible. No single person, even with the most competent staff, can, we think, begin to understand all the ins and outs of modern computerised information systems and have expert knowledge on the subjects which are critically important in the most sensitive areas of data protection—prevention and detection of crime, public administration, law and the use, design or manufacture of data equipment.
The advisory committee which was recommended was, it is true, to advise the Government rather than the registrar, which we found a curious order of precedence. I should have thought that it should be for the registrar primarily to receive the advice and to have to listen to the advisory committee. But when we look at the Bill we find that none of these things is provided for. The advisory committee has vanished from the scene, like Banquo's ghost. It is no longer there; not even to advise the Government, let alone the registrar.

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The Lindop Committee understood very well that no single individual could perform all the functions that ought to be performed in data protection and, as I have indicated, therefore advised an independent multi-member data protection authority with wide supervisory powers—an entity somewhat like the Parliamentary Commissioner for Administration.
Those omissions are grave, but I now come to what I believe to be the most defective provision in the Bill; namely, Clause 28. Not only are the provisions of that clause strongly opposed by a large number of interests, not least by the medical profession—and we shall be interested to hear the noble Lord, Lord Smith, on this—but, in my view, if it stays in the Bill, it may be thought to be wholly outside the provisions of the convention, particularly the exemption of the assessment or collection of any tax or duty, and even more clearly the control of immigration. If this contention that I make is right, non-compliance—which would be involved in acceptance, as it stands, of Clause 28—would defeat one of the main purposes of the Bill; namely, to secure compliance.
If enacted in its present form, it would mean that highly confidential and sensitive information could be secretly disclosed to the police, the Inland Revenue, the Customs and Excise and the immigration authorities, without any indication on the data protection register that anything of this kind was even possible. The Lindop Committee, in a memorandum which was submitted to the Home Office in June 1982, described this as:
"palpable fraud on the public"—
very strong words indeed.
It may, of course, be contended that these provisions to which I have referred have the authority of Article 9 of the European Convention, and that may conveniently be found at page 9 of the White Paper of April 1982. But, in fact, that article only allows derogations which constitute:
"a necessary measure in a democratic society in the interests of protecting State security, public safety, the monetary interests of the State, or the suppression of criminal offences."
In my submission, immigration control does not come within those exemptions, and it is certainly doubtful, in my submission, whether taxes and customs duties do either. The European Court of Human Rights has always construed the word "necessary" in a very narrow sense. I submit that it would be difficult to argue that in a democratic society it is necessary for the police, let alone the Inland Revenue, the Customs and Excise or the immigration authorities, to have secret access to all computerised personal information systems in this country.
It is, your Lordships may think, striking that just five weeks before this Bill was presented in this House the Home Office presented in another place the Police and Criminal Evidence Bill, which adopts a totally different policy for the same problem. Under Clause 10 of that Bill, the police are also given power to obtain access to confidential records, but only on the order of a circuit judge, to be made only if he is satisfied that a serious arrestable offence has been committed and that evidence about it cannot be obtained in any other way. I submit that that solution is surely just as apt for computerised records as for any
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others. In due course, if the Bill proceeds, we shall be putting down amendments to provide for such arrangements in this Bill also.
Clearly a great deal will have to be done to this Bill in its subsequent stages if the House gives it a Second Reading. There are many grave omissions in the Bill, like the lack of any opportunity for the registrar to endorse codes of practice, and, indeed, the lack of provision for codes of practice. There is the lack of opportunity for a data subject to have his record corrected otherwise than by a court order—an expensive and lengthy process. There is the lack of any definition of "research".
Other sins of omission and commission in the Bill will, I apprehend, be raised in all parts of the House. I fear that perhaps the Chief Whip—who, fortunately for his happiness, is not here at the moment—may have to face a long, long, long series of anxious debates upon those matters which are omitted or indeed wrongly included in the Bill. It is regrettable that, in a matter affecting our country's standing in Europe, the Government's approach to this Bill appears to have been to try to get away with as little compliance with the convention as it can. We on this side of the House regard the Bill with serious misgivings.

The Serpell Report
4.13 p.m.
The Minister of State, Department of the Environment (Lord Bellwin): My Lords, with the leave of the House, I beg permission to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Transport. The Statement reads as follows:
"With permission, Mr. Speaker, I will make a Statement on the Serpell Committee Report on railway finances.
"I am publishing today the full reports to me and copies are now available in the Vote Office. The committee was appointed on 5th May last year after the British Railways Board had proposed a review. As the House knows, the committee was chaired by Sir David Serpell, who has held many public offices including membership of the Railways Board for a number of years. The members were Mr. Bond, a member of the board of the Rank Organisation, Mr. Butler, a partner in Peat, Marwick, Mitchell, and Mr. Goldstein, a leading transport consultant and engineer. Their work was delivered to me immediately before Christmas, and I informed the House on 23rd December, and copies were sent forthwith to Sir Peter Parker. There is a majority report by Sir David Serpell, Mr. Bond and Mr. Butler and a minority report by Mr. Goldstein.
"The committee was asked to examine and report on the shorter term financial prospects of the railway and on the options for many years ahead. The majority document fully reflects this. The minority document by Mr. Goldstein gives more attention specifically to the longer term, and places a different emphasis on certain aspects.
"The Government are grateful to the committee for its hard work and speedy efforts. The reports

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explore the broadest range of issues about our railways of any inquiry since nationalisation. I should particularly like to take this occasion to pay tribute to Sir David Serpell, who has discharged a most difficult task with great ability and integrity.
"The railway serves many customers and communities. It also requires major support from public funds which this year will exceed £900 million. There has been growing concern about the state of the railways, their cost and their future. These reports now give us a basis for decisions and for action.
"The committee does not support the view that yet larger injections of public funds are needed to preclude extensive closures, or that large parts of the system are at risk from lack of maintenance with present levels of support. No major backlog of renewals was demonstrated to the committee's satisfaction. Nor did the committee accept the case for what it called 'a high investment option', although it recognised the need for some changes in existing investment priorities, and for possible increased investment in the late 1980s.
"Nor do the reports recommend huge rises in commuter fares, as some wild speculation has suggested. The best way to keep fares down is by cutting costs; the reports point to large scope for that. Nor do they suggest that safety should or would be prejudiced.
"The committee has given close attention to the opportunities for considerable improvements in efficiency and the reduction of costs over the next five years. It has drawn attention to particular areas where present shortcomings need to be remedied.
"I welcome the efforts by Sir Peter Parker and his board to improve their management arrangements, to reduce costs and to get rid of restrictive practices. The reports now published point to further large scope for improvements in efficiency. I have made it clear to the British Rail chairman that I regard these improvements as the top priority for action flowing from the committee's reports, and I remain confident that they can be achieved. Vigorous and immediate action by the board will have my full support.
"The committee has not made recommendations about closures or the longer term shape of the railways. It has set out broad illustrative options for consideration. It would be quite wrong to respond with snap judgments or closed minds to any of these ranges of options, whether they concern track and signalling, rolling stock, network size or fare structure, or new objectives for the Railways Board. The committee makes it clear that more work would be needed to be done to translate these illustrations into policy options. Indeed, it would be foolish to come to settled conclusions on any one of these questions in isolation. Other questions—such as the relationship between road and rail services and subsidies for public transport generally, the introduction of private capital and the relationship between British Rail and the private sector—also remain to be determined.
"The public have the right to know more clearly
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what value for money they are getting from their railway services and how funds for public transport can best be used. We now have the opportunity for informed discussion about the sort of railway that we want and are prepared to pay for. It is on this basis that the Government now propose to reach lasting decisions which will be in the best interests of the nation."
My Lords, that concludes the Statement.
4.18 p.m.
Lord Underhill: My Lords, the House will be grateful to the noble Lord for repeating this Statement, and certainly we appreciate that time has been far too limited to assimilate all the details of this lengthy report and the substantial supplementary volume which accompanies the report. The Statement mentions the terms of reference, and the report itself says that the review has been concerned with railway finances and not transport policy. We do not believe that decisions can be made on the railway system in isolation from a comprehensive transport policy. Railway finances cannot be divorced from the aims and objectives desired for rail in transport policies. We are pleased that the Statement that has been read says that it would be foolish to come to any conclusions on any question in isolation.
I shall not attempt to deal with details of the report. However, the report seems to be critical of the injection of public investment, and the Statement of the Government would appear to go somewhat along those lines. The committee made no real investigation into the possibility of rail electrification, and did not appear to take this overmuch into consideration. The emphasis in the committee's report is on savings and efficiency. Of course, we all want to see the maximum savings made and efficiency in the railways, as in any other nationalised institution. However, there is need to take into consideration the analysis on productivity and performance issued only in the last few days by British Rail; no reference is made to that in the Government Statement.
Some of the savings which are suggested are rather worrying. For example, it is suggested that there should be a lower level of track maintenance and some savings on signalling costs. There would appear to be challenges to British Rail statements about the safety position at the moment of some levels of track maintenance. On those issues we need the views of practical working railwaymen. That is essential; but we do not have them. The report seems to be negative on most areas of possible growth. That is instanced by the comments on Speedlink, when it is suggested that the board should go easy on any preparations it feels are necessary to try to get increased custom for Speedlink.
Some of the six options for the future propose drastic curtailment of the network, and it has been suggested—as some noble Lords will be aware, this was stated clearly in the "Today" programme this morning—that some of the options do not reflect any real understanding of traffic flows and railway patterns. On those points we obviously need the views and observations of practical working railwaymen.
There is no account in the report of international comparisons. We must ask why Britain seems to be

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one of the few Western democracies which is behind in placing emphasis on the need for a strong rail system. The report is confined to railway finances, and that seems to have been the case in isolation from social concerns; inadequate attention would appear to have been paid to social needs, environmental considerations, safety aspects and energy savings. Indeed, those aspects seem to have been set on one side from the report.
The Statement refers to wild allegations about the report referring to high increases in London and the South-East. However, the report suggests that there could be a review of the season ticket discount, and obviously that would have a considerable effect. Later it admits that that could lead to the difficulties of increased road congestion. Therefore, we have a contradictory statement in the report.
There are proposals for the running down of British Rail Engineering; it is very critical of what most people regard as a very efficient undertaking. There is also the somewhat alarming suggestion that consideration might be given to the purchase of rolling stock and rails from abroad. I hope the Government will reject that out of hand, not only because of our efficient British engineering works but because of the exhortation to buy British wherever possible. I fully agree with the Statement's comment that there should be no snap judgments. I agree that there is need for informed discussion. It is therefore absolutely essential, if that is to be done, that we have the observations of British Rail on the proposals and suggestions in the Serpell Report.
One paragraph in the report says that the Secretary of State should set out publicly his policies on the network, with strategic objectives and financial support. We believe there is need for a full debate, not only of the Serpell Report but of the aspects which the report did not consider; that we should debate at the same time the comments and replies, which should be obtained, of British Rail, with preliminary reports from the Government, before firm decisions are taken on what is a vitally important matter for the whole nation.
4.24 p.m.
Lord Tanlaw: My Lords, we on these Benches are grateful to the Minister for repeating the Statement which has been made in another place. We are also relieved that the leaks have stopped and that the report has at last been published. Indeed, at one stage the leaks became a positive deluge and it was difficult to know how to react. To add a further discordant note, as the noble Lord, Lord Underhill, mentioned, the report, to which we did not have access, was discussed on the radio programme "Today" this morning. When a controversial report of this importance is published and we do not have access to it, though journalists have, and we are expected to comment on it outside the Chamber, we are in very great difficulty. The Government should prevent that from happening, and perhaps they will give an explanation as to why it happened this time.
I am not able to go into the detail of the matter—for the reason that has been given, the shortage of time—including some of the matters with which the noble Lord, Lord Underhill, dealt. I would ask the
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Government a question for guidance. The independence of the Serpell Committee is already questionable by the very fact that two members of the four-man committee used their own partnerships to present reports to the committee itself. There is nothing wrong in that, but it is particularly worrying when one member of that committee writes—at 10 days' notice, according to the opening letter of the report—an independent report of his own using his own specialist consultants to do so. I am simply asking whether there is a ruling on this matter. Otherwise, without such guidance, it must devalue the independence of such a report, and it must be a little unorthodox, to say the least, with a report of such a controversial nature.
Like the noble Lord, Lord Underhill, I should like to know when a debate on the report will take place. I have a Motion down on the subject, but I should like guidance from the Minister on when we are likely to have an opportunity to debate the report in full.
4.27 p.m.
Lord Bellwin: My Lords, I am grateful to the noble Lords, Lord Underhill and Lord Tanlaw, for their observations. Lord Underhill said there was need to take into consideration, first of all, the latest statement issued by British Rail on efficiency. Absolutely certainly. I am sure that that is so, and I am sure it will be taken into consideration. He was concerned about the options proposed—a drastic curtailment of the network, he said—when the Statement makes it quite clear that what are put forward are simply options, not proposals. They are options available, and hopefully they will stimulate debate, but they are no more than that. The noble Lord then said that the views of others needed to be considered, including those of British Rail, and I absolutely accept that, too; they most certainly do, and they will be considered. I assure him of that.
He said there was no report on the international pattern. In fact, the committee was not asked to look at the international scene. Foreign circumstances vary considerably, not least because of geography and social practices, and it is difficult to draw anything from them other than conclusions. The noble Lord then said that the report was very critical of British Rail Engineering. Indeed it was. The Government's reaction is that we shall want to examine the options identified by the committee, but basically this is really a problem for BREL's management, and they will certainly need to seek greater effiency in their organisation as a whole. The noble Lord did not—and I know he would not—quarrel with that as a philosophy. Finally, he hoped there would be much debate before decisions, and I gladly confirm that that is exactly what the Government have in mind.
I was concerned about what the noble Lord, Lord Tanlaw, said concerning the observations made this morning, before the report was published. I can only tell him that no copies of the report were issued, not even to journalists, until 2.30 this afternoon. If the noble Lord then asks, "How, then, did it come about that such comments were made?" I can only reply, would that he would but come into the department in which I work and tell us how to prevent it. It would also have been necessary to tell the previous Government how to prevent it because, so far as I am aware,

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there is as yet no solution. Maybe one day—who knows? I can only regret, as does the noble Lord, that this took place, sympathise and feel equally badly about it.
The noble Lord then said that it was perhaps unfortunate that there was a minority report. In all committees of this kind there can always be, and often are, minority reports. I, myself, sat on such a committee for 15 months, at the end of which there was a minority report. It is perhaps better if there is unanimity but, on the other hand, it might fairly be said that that is the strength of the whole procedure, that an individual can feel free to disagree with his colleagues; and that is what has happened in this case. As to when a debate will take place, I am sure that the noble Lord would agree that the most important thing is that there should be, first of all, broader debate generally and then, certainly through the usual channels, I am sure there will be no difficulty in arranging a debate in your Lordships' House. I hope that I have covered the points raised by noble Lords.
4.31 p.m.
Lord Taylor of Gryfe: My Lords, I should like to associate those on these Benches with the congratulations and thanks of other noble Lords to Sir David Serpell, for a number of years a former colleague of mine on the British Rail Board. I very much respect his judgment and his wisdom. May I add my personal congratulations to the noble Lord, Lord Bellwin, as this is the first opportunity I have had of addressing a question to him since his elevation.
Despite my deep concern on railway matters, I cannot be tempted into a debate on the subject, since we had the report only at about 2.45 this afternoon, but I very much welcome the final statement of the noble Lord, Lord Bellwin. He said that it is on this basis that the Government now propose to reach lasting decisions—"lasting" is a strong word—which will be in the best interests of the nation. Like the noble Lord, Lord Underhill, I hope that this further look at the railways within the context of a transport policy in general will not delay some of the changes that are suggested in the Serpell Report.
It would be extremely sad and unfortunate if the momentum of change which has been initiated under Sir Peter Parker's régime were to be held up until we conclude long debates and comprehensive reviews on the whole transport policy of this nation. I would welcome an assurance from the Minister that that momentum of change will not be suspended merely because this report has arrived in this House. May I also ask him to comment on the references of British Rail to the model on which the network size was calculated. They raise some serious questions about the credibility of the mathematical model on which the size of the railway network conclusions were based.
May I also ask the Minister that when preparing his submission following the examination of the report and the general public debate, he will look at the British Rail Engineering Works problem which is highlighted in the report, and look at propositions in terms of a mixed-economy solution, with the involvement of private capital along with state capital in the
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development of this powerul engineering concern. These are the matters which concern us greatly. Like other noble Lords, I welcome the reference to "no snap decisions" but no undue delay, and I look forward to the opportunity of discussing this report in great detail.
Lord Bellwin: My Lords, I am grateful to the noble Lord, Lord Taylor of Gryfe, for his personal congratulations; I thank him sincerely. His point about there being no loss of momentum of change is a very valid one and I would suggest that the fact that the work of the committee was first started in May and that my right honourable friend had stressed that he needed to have something without undue delay, indicates the Government's concern that there should be action, that we should not lose the momentum. Certainly, we have no intention of doing so. On the other hand, there is the point made by the noble Lords, Lord Underhill and Lord Tanlaw. I think everyone will go along with those. It is very important that if there are to be "lasting changes" then there is all the more reason that they have to be very well thought through and talked through—which is not to say that procrastination is the answer. It is not; and we do not intend that it should be. We intend that there be every opportunity for everyone to put their view, albeit not in a long cycle of time. On that I certainly assure the noble Lord.
As to the other points that he made, we will take careful note of what he said. He has much experience with this whole matter, and I hope that when the opportunity arises he will put forward his personal views and make sure that they are understood, and we will want to hear them.
4.37 p.m.
Lord Nugent of Guildford: My Lords, may I thank my noble friend for his Statement, and he and his right honourable friends for setting up this inquiry. May I also thank Sir David Serpell and his committee for the report. Is my noble friend aware that we appreciate that the Government are trying to strike the right balance between this huge sum of money, £950 million a year, which the taxpayer is now providing for subsidising the current operations of the railways, and the sort of natural sympathy which most of us have for the railways themselves? I dare say that in my generation it dates back to our childhood wish to be an engine driver but, certainly, the sympathy is there and we do feel for the railways, especially if we could see a steam engine. That really does give us a thrill.
Is my noble friend aware that there is no doubt about the over-capacity of the existing system and the overmanning of the existing system, and that what the general public is worried about is the danger that there may be a further modernisation of the already overbuilt system? In these post-war years there has been a tendency to modernise the outdated system. Is my noble friend aware that what we are looking for now is a realistic appraisal of what the rail system for the future is required to be—and then a modernisation of that? That is not going to be an easy thing to achieve between the logistics of a railway, on the one hand, and the feelings of public sympathy, on the other.
My noble friend concluded by saying that his wish is to give value for money to the taxpayer. Would my

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noble friend take note that at least on this side of the House (and, I believe, on all sides of the House), this is something that we all most earnestly wish to see, and that we understand that he has a formidable problem to modernise the ideas of the workforce in the shape of the trade unions and the NUR, and especially the drivers, who show themselves most reluctant to recognise the realities of the situation?
Lord Bellwin: My Lords, I am grateful to my noble friend for reminding us that that is precisely what the Government are trying to do, to strike a balance. No one quarrels with the objective of striving for efficiency. It is vital when we are talking of sums of this magnitude that we have efficiency. There is also the angle of the social aspect of all transport, including railways. The trick is to find the right balance.
The problem of overmanning and over-capacity is not something peculiar to this particular industry. It is something which we see in so many other areas as well. It is a problem of our times. In looking for solutions, I think that one has to have courage not to fall into the pitfall that my noble friend properly mentions. At the same time, we bear in mind that there may be other views as well and we must listen to them. That is what we are trying to do. I conclude answering my noble friend by repeating again that the one thing we will not do is to procrastinate and refuse to do something where it ought properly to be done.
Lord Somers: My Lords, I also thank the noble Lord for repeating the Statement. May I ask him whether he has noted that I have at present a "No Day Named" Motion about the future of the railways? If the noble Lord thinks that it would be better to wait until the Government debate takes place, I shall gladly withdraw my Motion.
Lord Bellwin: My Lords, I am grateful to the noble Lord. I suggest that he discusses that with the usual channels, who will best advise him. So far as I am aware, we have no date as yet for a specific debate. The noble Lord will do best to raise the matter in that way.
Baroness Vickers: My Lords, may I too thank my noble friend for the Statement. Will he let me know whether there are to be consultations with people in various areas? We were very successful, for example, in keeping Pewsey station open, because we had a very good committee. Mr. Lloyd of Paddington is a very good manager. Has he been consulted, and will he be consulted about the details? The suggestion on page 77 regarding trains terminating at Exeter will be disastrous to the tourist trade, and it will also make difficulties for the servicemen and women returning to Plymouth and Devonport.
Lord Bellwin: My Lords, I am most anxious to stress that the report refers to options. It is no more than that. I entirely take the point that my noble friend Lady Vickers makes. Her main concern is that there should be consultation. Of course that is right; but I want to stress that it is not consultation on a proposition, because that is not what the Government are bringing forward today.
Lord Northfield: My Lords, I appreciate what the noble Lord says about no procrastination; but may I put one simple point to him: Is it not the case that many of the peripheral counties of the country, which were previously part of my responsibility at the Development Commission, are having enough difficulty in attracting new industry to diversify their employment base, and if there is much delay those difficulties of getting new industry to replace the old and to rebuild their economies are going to be enormously increased? Industry and new investors are going to wait to see whether any extreme option is chosen by the Government. Therefore, is it possible for the noble Lord to convey to his right honourable friend the point that it would be a good idea if an early Statement were made saying whether any extreme options were under serious consideration?
Lord Bellwin: My Lords, I hear what the noble Lord, Lord Northfield, says. Certainly everything said in this debate will be brought to the attention of my right honourable friend. I feel sure that he will not want to jump the gun at all. I understand exactly the point that the noble Lord is making, and its importance.
However, this is not something that is arriving here in connection with a new situation; this is something which has been going a long time. It is the Government's concern that a report of this kind should be brought forth without delay, as it has been. I am saying that in terms of time what we now have to do is make sure that we get it right—and all the more reason if it is to be lasting. His point is valid and we shall think about what he says.
Lord Glenkinglas: My Lords, will my noble friend accept that we all appreciate what he says about the security of this report? Does he not remember that in the old days there was a Mr. Chapman Pincher who had a direct line to the Ministry of Defence? This now seems to have spread to every single Ministry. He may remember—but I cannot—one single report that has not been leaked to the press in some form or another in the past year or two. It really is an insult to Parliament.
Lord Bellwin: My Lords, I deeply sympathise with what my noble friend says. Perhaps—mentioning the Ministry of Defence in particular—now that someone else is there they will do it better; but they did not do it better when he was in the other department. We suffered as much as everybody else.
Lord Ardwick: My Lords, the question of leakages is running rather hard politically. May I confirm what the noble Lord has said? I was with some of my old colleagues, leader writers in Fleet Street, at lunchtime. They were not expecting to get their copies of the report until 3.15 this afternoon, and they were worried to death, for they have to analyse this report between 3.15 and "close copy" time, which is about 8 o'clock nowadays in Fleet Street offices.
Lord Bellwin: My Lords, what can I say except—being on the receiving end, as I and my colleagues so often are—"would that there was a solution"?

Data Protection Bill [H.L.]
4.45 p.m.
Second Reading debate resumed.
Lord Wigoder: My Lords, I sense all around me a determination and an anxiety to proceed with the debate on the Data Protection Bill. When Liberals heard that there was to be legislation on this subject, we hoped that it would achieve three separate objectives. First, that anyone holding data about other people should be placed under a firm obligation to ensure that those data were accurate, were properly safeguarded and were not misused; and that there would be a way of effectively enforcing that obligation. Secondly, that the citizen should in general have the means available to him of ensuring that the data were accurate; that if not accurate they were rectified; and that if not rectified, or no longer needed, they should be destroyed. Also, that there should be an effective way of enforcing that right.
Thirdly, we hoped that the Bill would provide that, so far as possible, business efficiency through increased computerisation and mechanisation would be encouraged rather than hampered; and, in particular, that no barrier should be raised to international industrial co-operation or international trade because of any inadequate data protection system in this country. Against those objectives, one is bound to agree with the noble and learned Lord, Lord Elwyn-Jones, that this Bill falls far short. It does not achieve very much. Indeed, it does not try to achieve anything more, so far as one can see from the Bill, than the bare compliance with the terms of the European Convention.
We must take this Bill on the terms offered. There was much eager anticipation that there would be a comprehensive measure for the protection of privacy. This Bill does not set out to achieve that purpose, and does not claim to do so; and it may be difficult for us at later stages in this Bill to amend it in order that it might in fact do so. If I may say so on a personal note, this Bill remains one of the most difficult Bills to discuss that I have ever read. I felt at times that I was in the position of trying to attack a jellyfish with a wad of cotton wool. On examination, I came to the conclusion that the reason why I felt this difficulty was the fundamental problem that nobody in your Lordships' House really knows what it is that we are talking about. I can understand anyone who adds, sotto voce, "speak for yourself.
The real problem that arises in this Bill is that in many ways the crux of it lies in the regulations which the Secretary of State is taking power to make, and as to the content of which none of us at the moment has any idea. May I give one or two illustrations of that? In Clause 2(3), (4) and (5) the Secretary of State takes power to look at the principles that are so important and are set out in the schedule. The Secretary of State may then by order modify or supplement them, provide additional safeguards, modify not only the principle but also the interpretation of the principle as set out in another schedule, and make different provisions in relation to data consisting of information of different descriptions.
In Clause 4(7) the Secretary of State takes power to make orders to vary the particulars to be included on
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the register in due course. In Clause 29(1)—a crucial clause in many ways where the protection of data is concerned—the Secretary of State has power by order to exempt from the subject access provisions or to modify the provisions relating to the physical or mental health of the. data subject. In subsection (2) he has powers similarly to make orders exempting other organisations in relation, for example, to social work as distinct from physical or mental health. Finally, in Clause 32(1) the Secretary of State takes further powers to exempt from the subject access provisions personal data consisting of information, first of all, where the disclosure is prohibited and, secondly, where it appears to the Secretary of State to be of a confidential nature of a particular sort.
How this Bill is going to work in due course will depend vastly on the orders and regulations which are made under it by the Secretary of State, and I do hope that when the noble Lord the Minister comes to wind up this debate he will recognise that it is very, very difficult to ask your Lordships to treat this "jellyfish" as a pig in a poke and to support the Second Reading of a Bill which gives such vast discretionary powers in due course to the Secretary of State, without some clear indication at this stage of what it is the Secretary of State has in mind under these various clauses, what form of orders he proposes to lay and what matters he proposes to deal with.
That is one of the difficulties that I felt about this Bill when I read it. The other difficulty is, of course, that although there was much talk in Lindop and again in the White Paper about codes of practice playing a crucial part—and indeed Lindop did suggest statutory codes of practice—we are left at the moment completely in the dark as to whether there are to be codes of practice, and if they are to be on a voluntary basis we have no idea at this stage what they might contain.
In that situation this is a difficult Bill to debate in any constructive way. Perhaps it is fair to say that, even in the state in which it is. without knowing what the orders are or what the codes of practice may contain, clearly, serious problems will be raised. I would rather not deal in general terms with those problems but take them in relation to one particular organisation of which I have knowledge, not in order either to advertise that organisation or to indulge in special pleading, but because there are problems which we shall face in that organisation which will be similarly faced by many other sections of industry.
Therefore I refer, if I may, to the private medical insurance body called BUPA, of which I happen to be chairman. I begin with this proposition; Inevitably we have on computer a vast amount of personal data. It is personal data that concerns the medical and personal history of our subscribers. We also have, because we do screening for prevention purposes, a vast amount of computerised data that comprise diagnosis and prognosis of the various patients who are seen at those centres.
The first matter that arises is this: most of that information is on files and it goes to the computer from the file. There is—is there not?—something logically absurd about placing us in the situation in which, if the information has gone from the file to the computer, then all the provisions of this Bill will apply,

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and if it is still on our file and has not yet been passed to the computer, then none of the provisions of the Bill will apply. Indeed, one can extend it by saying that there is a very large quantity of personal data contained in the files of hospitals and doctors which is not at the moment subject to computerisation but where some control is clearly necessary in the interests of security and in the interests of the proper and accurate compilation of those records.
There appears to be an absurdity about the refusal of the Government to extend this whole question of data protection to data whether manual or computerised, and to limit it in the way the Government have in this Bill solely to computerised information. The second problem that we shall face, as will many others, concerns precisely what is meant by the definition of "data" in Clause 1(2) of the Bill. The word is defined there as meaning—
"information recorded in a form in which it can be processed by equipment operating automatically in response to instructions given for that purpose".
In fact, with the rapid development of computer technology, almost any information can be processed in that way or is likely to be able to be processed in that way in the very near future.
May I give a simple example?—a letter from a consultant to a general practitioner or from one of our medical centres to a general practitioner, setting out the diagnosis of a patient. That letter, as I understand the definition, can be processed by equipment operating automatically and thus come within the provisions of Clause 1. There is no difficulty about that. There are internationally recognised codes for classification of diagnosis and there would be no difficulty at all about bringing that within the provisions of Clause 1(2). It is, of course, of crucial importance to the medical profession as well as to ourselves—and no doubt we shall hear further about this in the course of the debate—because under Clause 21(1)(b) there may be circumstances in which the medical practitioner or the insurance company may be obliged to disclose the contents of the report to the subject, the patient, upon whom the report is made. That clearly will give rise to very serious difficulties unless a rather more accurate and precise definition of Clause 1(2) can be reached.
Indeed, one takes it a little further. Does the definition apply—and I do not pretend to know the answers to these questions—to microfilm equipment, which can in fact be retrieved through the use of buttons and keys? Does it apply to word processors in certain circumstances? Does it apply to electronic mailing equipment? These are all matters which cannot be dealt with by the simple definition offered to us in Clause 1 as it stands.
I refer to the problem that will face anyone who has information about the medical condition of a patient or of an insured person, and of course it is against that background that Clause 29 becomes so very vital. I have already referred to the fact that Clause 29 provides for the Secretary of State by order to exempt from the subject access provisions information as to the physical or mental health of the data subject. I think it is essential that before this Bill goes very much further the Government should make it perfectly clear what they have in mind, in particular in relation to the
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physical medical health of the data subject. It happens frequently with my own organisation, for example, that we have to ask a subscriber's doctor, with the subscriber's permission of course, for an up-to-date medical report. The doctor notifies us maybe that the patient has a malignant tumour. The doctor may well say to us, of course, that it is very undesirable that the patient should know about this matter. Will there, under the Bill, be a right by the patient to access to those records, or would it perhaps not be better to amend the Bill very firmly to ensure that the right of subject access, which is highly desirable in general terms, should be excluded when it relates to medical information which has been disclosed in confidence, and where the medical practitioner certifies that it might be harmful to the health of the patient for that information to be disclosed?
Again, it goes further than that in relation to medical information, because of Clause 28, which has been referred to also by the noble and learned Lord, Lord Elwyn-Jones. Under that clause it appears that, in certain circumstances, medical information may be released, indeed must be released, to the police. That again requires careful consideration, and perhaps some guidelines from the British Medical Association as to its propriety. If medical information is to be released to the police for any purposes, it is surely necessary that there should be safeguards; that the police should be made to undertake that it will not be used for any purpose other than the one for which it was obtained and that it will be destroyed when it is no longer relevant.
One other aspect of disclosure of information to the police that I might mention, curiously enough deals with the reverse side of the matter. There may very well be occasions when bodies, such as that to which I have referred, will want to disclose computerised data to the police I am not now talking about medical data—in order to assist the police, and may be prevented from doing so, as I understand it, by the terms of the Bill. For example, fraud cases are not unknown in insurance circles. It may be highly desirable that an insurance company should want to disclose its data about a particular person in those circumstances in order to assist the police with their inquiries into such a fraud. Yet, in regard to the third principle, it looks as though the insurance company concerned would be in clear breach of principle if it sought to do that.
Indeed, the third principle provides that data should not be disclosed in any manner incompatible with the purposes for which they are held, unless it is proposed to go to the interpretation part of the third principle in the second schedule and say, in effect, that that of course is all right, provided one has registered that that is a purpose for one's obtaining the data. As I understand it, that would mean that if any organisation felt that at any time it might wish, in order to prosecute someone, to disclose personal data to the police, it would have to register under the Bill that one of the purposes of its holding the computerised data was for the purpose of assisting the police. If I may say so, that seems to me to make an absurdity of that part of the matter.
There are many other points that I would wish to deal with. Perhaps I may be forgiven if I deal with

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them at a later stage rather than now. The question raised by the noble and learned Lord, Lord Elwyn-Jones, about the totally inadequate powers of the registrar; the question as to whether written references that happen to have been computerised would be made available to the subject of the references; the question of the status of children, whether children should be given a right of access to their records or whether parents ought to be given a right of access in certain circumstances to their children's records—all these are matters to be considered with some care when we come to Committee.
I have perhaps said enough to indicate for the moment that I would find it a little difficult to give unqualified support to the Bill at this stage. I console myself with two thoughts. One is that I think I shall be in good company, and the second is that we shall have the opportunity, in due course, of seeking to improve this Bill. For the moment, I am grateful to the noble and learned Lord the Lord Chancellor for the elegant way in which he introduced the matter, and particularly for his introductory remarks referring to a current television programme. I hope that your Lordships will forgive me if my answer at this stage is a resounding, "No, Minister".
5.7 p.m.
Lord Hunt of Fawley: My Lords, this Bill is about how data can be collected, stored and protected by many people from many different professions and in other parts of our work. In my profession, the medical profession, we have relied on the Hippocratic oath for more than two thousand years. It has done us extremely well, in that anything private between doctor and patient, which it is important should remain strictly private, cannot be divulged for any reason. But modern civilisation has led to a breakdown of this. As time is running short, I will give just one good example. A doctor has a patient who is the driver of a train. He suddely discovers that this patient is developing epileptic fits. He has, for the safety of hundreds of passengers, to tell the railway authorities about this. That is a strict violation of the Hippocratic oath but is essential under modern conditions.
For this reason, very few medical students now take the Hippocratic oath. I myself took it 50 years ago but I left out several clauses with which I did not agree. I have discussed this matter with a great many people, including the noble Lord, Lord Wigoder, and many of my colleagues, and we believe that it cannot be changed and improved. We want something new, and I myself very much hope that this Bill will be the new something that we are looking for.
The Bill contains a great many clauses. I believe that too much stress has been laid on computerised medicine and computerised detail and not enough on manual collection. We have more than 20,000 general practitioners in this country, with their accompanying health centres, group practices, nurses, and so on, and all of them are making notes about patients. More than 95 per cent. of those notes are manual and not mechanical. I do not believe that the Bill stresses this enough. I very much hope that the parliamentary draftsmen on the next draft will take this into account
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and perhaps lay more stress on the manual collection of material than on mechanical collection. This manual collection is very important. It is much more important than the other at the moment, and we must not forget that. Time is getting short, and that is all I have to say.
5.10 p.m.
Lord Smith: My Lords, to a doctor, this Bill reveals certain potential dangers to patients and I think I might put some of them briefly before your Lordships. I have used the phrase "potential dangers" because I am sure that the Government will have foreseen these risks and will have planned to avoid them. It is the duty of any persons responsible for keeping medical information to keep it safe, and this Bill should be used to place a statutory responsibility upon them to do so. Furthermore, I believe that the data on manual as well as on computer systems should be included.
Any form of legislation in this field, including statutory instruments, should have the positive approval of Parliament. The same criteria for safeguarding information must apply to the public sector as to the private sector, and there must be no transfer of medical information to the police without the patient's knowledge.
Though the majority of doctors regret that a data protection authority will not be set up, as envisaged by the Lindop Committee, they would support an independent registrar reporting to Parliament via a Select Committee. No doubt the registrar will be independent of Government and, perhaps, appointed in the same way as the Parliamentary Commissioner for Administration—the ombudsman.
It is very important that the registrar's duties, as well as his powers, are specified clearly in any legislation. He must be required to initiate action where necessary; for example, the registrar must have powers to initiate court proceedings on behalf of individuals. To give advice to the registrar, I believe that an advisory health team, comprising medical and lay representatives, should be set up and a good case could be made out for setting up an appeals tribunal whose members had a knowledge of health care ethics. At the Committee stage of this Bill, we shall be able to make sure that the dangers to patients are avoided. But I am certain that the Government have a grip on this situation and, for that reason, I am sure that most doctors will approve of this Bill.
5.13 p.m.
Baroness Trumpington: My Lords, may I first apologise for the fact that, owing to a long-standing engagement, I shall not be able to listen to what will, no doubt—prodded by the words of my noble and learned friend the Lord Chancellor—be a magnificent speech from my noble friend the Minister. May I also say that I listened with great respect to the words of my noble friend Lord Hunt of Fawley, and with pleasure to the noble Lord, Lord Smith, who spoke so eloquently and with such authority for, I believe, the first time since his illness.
When I had the honour to second the Motion for a humble Address in reply to her Majesty's most gracious Speech at the opening of this Session of

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Parliament, I particularly welcomed the Government's proposals for the Bill which is before us today. I said:
"It is essential that those responsible for these [data] files should make sure that the undeniable advantages that they can obtain from automatic data processing do not at the same time lead to an undermining of the personal privacy of the individuals about whom data is stored." [Official Report, 3:11:82; col. 8.]
I believe that we all recognise the importance of this subject. Many of us would wish to see this Bill go somewhat further, so as to extend at least some of its proposals to, for example, manual records.
But there is another aspect to which I wish to draw attention. It is the question of the sanctions proposed by the Bill for its effective enforcement. This Bill creates at least six new criminal offences—probably more. At any rate, Clauses 5, 6, 10, 12, 15 and 16 all contain provisions which say that non-compliance with what is laid down will constitute a criminal offence. So far as I can see, none of the things which are to be prohibited are things which ought to be allowed, bearing in mind what this Bill sets out to achieve. In other words, I have no quarrel with the subject matter of the prohibitions in those clauses. But what I venture to question is whether it is really necessary to invoke the awesome majesty of the criminal law in every case, in order to give these prohibitions the force of law. For example, the very first penal sanction in the Bill is found in Clause 5(1), which states:
"A person shall not hold personal data unless an entry in respect of that person as a data user, or as a data user who also carries on a computer bureau, is for the time being contained in the register."
Noble Lords who are members of the legal profession will know what I mean when I say that this clause creates an offence of strict liability; that is to say, no criminal intention is required to be proved in order that there should be an offence under this clause. Elsewhere in that very clause one finds a requirement—a very proper requirement, let me emphasise—that a data user, or, in other words, the firm with the computer, shall not use computerised personal data for any purpose,
"other than the purpose or purposes described in the entry,"
in the register. Quite right, too!
But what of the sanctions? These are found in Clause 5(5), which is somewhat revealing. It states,
"Any person who contravenes subsection (1) above or knowingly or recklessly contravenes any of the other provisions of this section shall be guilty of an offence."
Your Lordships will be quick to gather that the Bill draws an important distinction between an offence under Clause 5(1), as compared with other offences under Clause 5. For all the other offences under the clause, including the one I mentioned of improper use of data, it is necessary to prove that what was done wrong was done "knowingly or recklessly". No such requirement applies so far as concerns the offence under Clause 5(1)—holding personal data without being registered. There liability is split.
Some of us are alarmed at the growth of the use of offences of strict liability, of which this is but one example. Indeed, some of us are worried at the apparently inevitable use of criminal sanctions, sometimes requiring criminal intent in one form or another, sometimes requiring none, which seems an inevitable concomitant of almost any Bill these days.
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The time has surely come for us to question and to challenge this onward march of the criminal law. Is there not some other way in which Parliament might prohibit and regulate, without having always to resort to the draconian sanctions of the criminal law?
This is a subject which has caught the attention of a number of worthy bodies in recent times. In 1980, Justice, the British section of the International Commission of Jurists, published a report entitled Breaking the Rules, which advocated the introduction into the law of a new category of transgression, which they referred to as a "contravention". They said this:
"… drawing a formal distinction between crimes and contraventions in English law would go some way towards increasing respect for the remaining truly criminal part of that law, and that would be an important benefit".
A little later on, Justice said in its report:
"In future legislation, Parliament would need to apply its mind specifically to the question whether new categories of conduct to be regulated should be made crimes or contraventions, and provide accordingly".
I agree with Justice about this, and wonder to what extent Parliament ought to try, in the context of this very Bill before us today, to explore the possibility of making some of what are in the Bill criminal offences into what Justice calls contraventions.
But they are by no means the only ones to put forward that point of view. In 1981, the Justices' Clerks' Society published a report entitled Decriminalisation—an Argument for Reform. Your Lordships will appreciate that justices' clerks are better able to judge than practically anybody else what should or should not be made a criminal offence. The society argued that:
"a large section of the population does not regard most of the recently created offences as 'crimes'. The view is growing that these offences are not indicative of the sort of evil of mind that justifies criminal prosecution. Most regard such offences as mere 'contraventions', deserving of penalty but not the stigma of a criminal conviction".
As an ex-magistrate, I certainly agree with this assertion. On page 11 of the explanatory report of the Council of Europe concerning the Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data, we read:
"It should be noted that the convention gives clear and precise indications on the purpose to be achieved by each principle, but leaves to each party the manner of implementing it in its own domestic law".
Finally, the Consumers' Association, the publishers of Which? and champions of worthy causes, including at least one which is close to my heart, published a book entitled Towards a Middle System of Law. They take the argument a little further and actually spell out the kind of sanctions which we in Parliament could introduce into legislation like this if we felt that it was not always appropriate to use the criminal law to give the force of law to what we are enacting. The Consumers' Association put it this way:
"Nowadays practically anything can be a crime. The statute book consists of thousands of things which Parliament has decided to prohibit, for one reason or another. Each year they add a lot more. It is debatable whether some of these things need to be forbidden at all. That is another argument. But is it really necessary always to make a crime of something that has to be prohibited or controlled, saying it is a crime if you don't comply? What else could be done? The answer at the moment is nothing. Either it is a crime or it is legal".

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A little later in their book the Consumers' Association ask what would happen to these regulatory offences if they ceased to be crimes. The answer they give, and I will quote it, is this:
"They would become infringements or contraventions or transgressions of a new legal system—the middle system of law. In future, people who broke this type of law would be liable to a civil penalty instead of a fine or imprisonment under the criminal law".
All this makes good sense to me, and I suspect that it might make good sense to a large body of opinion in this House. If it makes sense to us, why do we not apply that good sense here and now to this very Bill? If we are to start somewhere, why do we not start today?
In conclusion, let me return to the sanctions that are in this Bill. Clause 21 gives to the ordinary citizen the right of access to personal data held by data users about him. It is a very important right and I greatly welcome it. But what is the sanction? It is found in subsection (8) of Clause 21. This gives the citizen the right to get a court order compelling the data user to provide information about what the data user has stored in his computer about the citizen. That is all very well, but does it go far enough? Ought there not to be some more powerful sanction to support this important provision?
I appreciate that, in the context of this Bill, I have raised a huge question. But it is one that this House and Parliament in general ought to face. I think we ought to listen to what worthy bodies such as those I have quoted are saying and apply it to legislation that is before us. There is no time like the present.
5.25 p.m.
Lord Hatch of Lusby: My Lords, for the first time since I entered this House I have to start with a similar apology to that just made by the noble Baroness, Lady Trumpington. Before the Second Reading of the Bill appeared on the Order Paper I had contracted to attend a meeting at six o'clock this evening. I shall be extremely brief. I hope, however, that the speakers who are to follow me will not follow my example, so that I may get back in time at least to hear the noble Lord the Minister who is to reply. I apologise to the succeeding speakers, and if I am unable to be here when the Minister winds up I apologise to him also.
I should like to select three of the principles that were read out by the noble and learned Lord on the Woolsack at the beginning of the debate. Principle 2 states that personal data shall be held only for one or more specified and lawful purpose. Principle 3 states that personal data held for any purpose or purposes shall not be used or disclosed in any manner incompatible with that purpose or those purposes. Principle 7—this is from Part I of Schedule 1 on page 28 of the Bill—states:
"A data subject"—
in plain English, a person—
"shall be entitled—

(a) to access at reasonable intervals and without undue delay or expense to personal data of which he is the subject; and

(b) where appropriate, to have such data corrected or erased".

I select those principles because of the one point, and the one point alone which I want to make in this
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Second Reading debate on the Bill. That refers, as my noble and learned friend Lord Elwyn-Jones pointed out in his opening remarks, to Clause 28 on page 21 of the Bill. Over the last few years—indeed, some of us would say going back for the last 15 or perhaps 20 years—we have seen a trend, emanating in particular from this Government but also to be seen in previous Governments, including those of my political complexion, towards categorising different forms of citizens of the British Isles. We have seen a trend towards first, second and third class citizenship. I am afraid that this trend is continued in the Bill. In the Nationality Act, in the immigration regulations and in the treatment of overseas students we have seen a very clear move towards separating citizens of this country who have different skin colours.
Exemptions are stated in Clause 28 for those who may not have the privilege of the principles which I have quoted. Those exemptions will be those people whose personal data will not be sacrosanct and those who will have only a limited opportunity to examine their own personal data. They are designated as being affected by:

"(a) the prevention or detection of crime;

(b) the apprehension or prosecution of offenders;

(c) the assessment or collection of any tax or duty; or

(d) the control of immigration".

I believe we all have to accept that when the word "immigration" is used in law, by the media, or in this House it is very widely accepted by the public that "immigration" refers to people with non-white skin colours; very largely, I say. To some of us it is offensive to link together the question of the control of immigration—which, let us be frank, means very largely the immigration of coloured people into this country—with the offences mentioned before:

"(a) the prevention or detection of crime;

(b) the apprehension or prosecution of offenders;

(c) the assessment or collection of any tax or duty".

It is offensive to link the control of immigration with such offences. As my noble and learned friend Lord Elwyn-Jones pointed out in his opening remarks this afternoon, we should warn the Government Front Bench and in particular the Government Chief Whip that we shall keep them up for a very long time at Committee stage in order to remove this offensiveness.
When we think of the wide openings which are being made in the protection of the individual, irrespective of his skin colour, by the inclusion in this clause for the control of immigration we think also of the way in which this exemption can be used against people some of whom are citizens, and many of whom wish to become citizens, of these islands. I hope that the Government will recognise that a considerable section of the population of the British Isles will share my sense of offence that this aspect has been included in this way.
At Committee stage we shall have the opportunity of probing into this more deeply and of giving the Government examples of the kind I am sure they can find for themselves of how this could be used; of how we are discarding the protection of the law for a large number of the citizens of this country. It is on that point alone that I wanted to contribute to this Second Reading debate, with the warning that some of us on this side of the House, and I hope some on the other

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side of the House, too, see how offensive this subsection of Clause 28 is, and we hope they will help us at Committee stage to convince the Government that it should be removed.
5.35 p.m.
Viscount Colville of Culross: My Lords, I hope that the noble Lord, Lord Hatch of Lusby, will forgive me if I do not follow him on that particular subject and also if I do not speak for one and three quarter hours, in order to allow him to return from his meeting to listen to my noble friend; my modest notes would have to be stretched considerably beyond my capacity.
I well remember the beginning of the process on the subject of privacy to which the noble and learned Lord, Lord Elwyn-Jones, has referred, because I was at the Home Office at the time when the Younger Committee was reporting. I believe it has been gradually accepted since then that the first approach should be on the question of computerised data. Therefore I am not surprised and I am in no way disappointed that this Bill should concern itself with this particular matter. At the very least, my noble and learned friend the Lord Chancellor has pointed out the advantages of bringing ourselves within the European Convention so that we may gain the international advantages that will obtain as a result of ratification and implementation of that convention, and I would have hoped that your Lordships would have started off with the intention of welcoming this Bill on the broad basis that that is what it does.
This Bill has given rise to a substantial volume of correspondence, consultation and thought. There is no reason why one should not go wider than the terms of the European Convention itself and there is no reason why, for example, the legislation in any municipal jurisdiction should not deal with manual records. On the other hand, the convention itself is perfectly plain in Article 1 that it is intending to deal with automatic processing of information. If your Lordships will be good enough to listen to me for a few minutes, it may perhaps occur to some of you, to follow my train of thought, that this itself is not a wholly simple matter.
I have had an opportunity to discuss these draft clauses on the commercial front as opposed to some of the more specialised areas which have been discussed so far in this debate. I very much take up the point made by the noble Lord, Lord Wigoder, that we must ensure that the provisions of this Bill complement the increase in business efficiency which is a very important part of the commercial and industrial scene today. If I may, and I am afraid that this is without notice, I should like to make a few general points to my noble friend Lord Elton about the practicability of some of these aspects and to ask him a few questions, which I obviously cannot expect him to answer today. However, I believe that some people will be rather relieved if they can think that in due course Parliament will look at matters which are causing some worry.
One of the difficulties has been that the White Paper did not contain very many details of the proposed legislation. It was presented in rather general terms and it was not until just before Christmas that the Bill was printed, which was therefore the first time that
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many of those involved in the compilation and use of computer data had an opportunity to look at the details of this Bill.
The noble Lord, Lord Wigoder, has given some examples of the type of data which are intended to be comprehended by the definition in the first clause of the Bill. This is fairly important. There is the point that some noble Lords would like manual data as well as electronic data included within the protection of the registration procedure given by the Bill.
Let us for a moment look at what the Bill already comprehends in terms of the definitions it gives. There is in the definitions very broad scope for the electronic collection of material and its subsequent use. The general reaction that I have received in the business world is that the Bill is a fair and reasonable attempt to tackle this. But there is apprehension that, if the definitions remain as they are—and I appreciate that there are difficulties in terms of the convention in constraining them too much—there is the likelihood that a very large amount of unnecessary computer detail will have to be registered and considered by the registrar in the course of the process of setting up his occupation and his register. The timetable for this is set out in broad terms in Clause 38, and we know from the Explanatory Memorandum that the registrar is only going to have 20 staff", so he is not in fact equipped with a very large amount of time or assistance—and I think this is probably right—to allow him to look with a critical eye at a very large amount of unnecessary material.
I will give a few examples of what may or may not be thought to be unnecessary material. As the Bill is at present drafted, it appears to some of us who have discussed the matter that there would be no way in which one could avoid registering a compilation on the computer for purely internal purposes within a company of the payroll of the company, because it inevitably involves more than the name and address of the person. It involves his wage rates, PAYE contributions, national insurance and probably pension contributions as well. Not only would that happen during the period when a person was employed, but it would have to continue during the period when he was drawing his pension, so one would have ex-employees on the register as well.
I am not sure that Her Majesty's Government necessarily wish this material to be registered. I am far from clear that they would wish this material to be open to public access under Clause 9 of the Bill, because I feel fairly certain that, if a rival wished to find out what was the rate of pay in a concern with which it was competing, access to the registry under Clause 9 could be an extraordinarily profitable method of approach. So, not only from the point of view of clogging up the works in the registrar's proceedings but also from the point of view of the desirability of public access, I wonder whether the Government would wish to have that sort of information registered and subsequently available.
There is a very similar problem where you have, as is not uncommon nowadays, a group of companies which have chosen, at any rate at the present, to centralise their accounts on a computer which serves

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more than one company. There are certainly within the group with which I operate—I do not think I have to declare an interest because it is merely a matter of information—at least three companies where there are a number of subsidiaries, all of which together with the parent company use a central computer for the purposes of a great number of commercial affairs, including the dealings with individual customers, and, of course, the question of whether or not they have paid their bill. In these circumstances, if you have the computer operated by one of the companies in the group and used by a number of others, as I read the draft legislation in the Bill, we have a situation where the central company will probably have to register itself as a computer bureau and all the other companies individually will have to register themselves as data users, all in respect of the same data on the same computer under the same jurisdiction. I do not see under the drafting as it stands any way of avoiding this. Nor do I consider that it is necessarily what the Government had in mind when they set the whole matter up, particularly bearing in mind the timetable and the burden of work on the registrar which I have mentioned.
Then, if we have these materials, this data, all available and registered on the computer, there is the point on which I have already touched momentarily about the facilities under Clause 9 for making the information contained in the entries in the register available for inspection by members of the public. Under what circumstances, I wonder, could my noble friend tell me either now or in due course, is this material going to be available? Of course one appreciates at once that individual persons who have their details recorded on data held within a computer ought to be able to look at them, and of course, under the provisions of the Bill, correct them and so on. But that is not what Clause 9 says. It gives, as it were, a completely free rein to members of the public to fish out of the computer almost any information they think fit, and it is not subject to any very substantial safeguards. If the computer contains the sort of information that I rather think it will, and the register therefore provides this as a subject of consultation by the public, a large number of commercial secrets, or at any rate commercially sensitive information, will be open to the public at large, to those who wish to make a comprehensive search of the register.
Lord Mishcon: My Lords, I wonder whether the noble Viscount, with his usual courtesy, would allow this short intervention, which I make only because we are all so anxious to follow very valuable points which he always makes. Clause 9 of the Bill only provides a public right to look at the entries in the register, which will merely show that somebody is using a computer for certain purposes. There is no public right under Clause 9 to look at what is in the computer.
Viscount Colville of Culross: My Lords, the noble Lord, Lord Mishcon, has probably saved my noble friend three and a half sentences in his speech. If that is right, then it would be a very welcome reassurance to some of those who have been reading this Bill, and who certainly have not absorbed the point with the rapidity with which the noble Lord has done. There
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are genuine fears about this which I am sure one ought to put at rest, because it is the sort of thing which creates the atmosphere which would be antagonistic to acceptance of this legislation as at present drafted. The noble Lord may well be right. I will wait with interest to see what the Government have to say about it in due course.
On the subject of practicability, there is a slightly more recondite point which has been drawn to my attention which I think I do understand, although I am not attempting this afternoon to follow a formally legal line of reasoning. There are, of course, many commercial activities which require, at any rate nowadays, the registration on computers of individual details relating to sales or hire of apparatus. Any large company which operates a computer-based system of this sort, primarily for the purposes of seeing, for instance, that rentals are paid on a television set or something of that sort, is also liable to use the information for other purposes which I think are not wholly illegitimate, such as sending those customers information about further services which may be obtained.
The difficulty arises out of an understanding of the way in which the principles in Schedule 1 are to be interpreted in relation to the registering of information. The principles are, of course, important because the registrar has to pay attention to them in deciding whether or not he will accept the registration, because he is entitled under Clause 7 to refuse if he thinks that the principles are likely to be contravened.
The question really arises of how, in practice, some of these principles are to be construed and implemented in the course of an ordinary commercial activity. For instance, if one hires out a piece of equipment to someone, is one supposed at that particular moment to tell that person of all the possible uses to which one might conceivably put the information which subsequently is to go on to the computer? When one hires a small item of domestic equipment, does one have to tell the hirer, or make the shop assistant automatically tell him, that his name will go on the computer and that he may well be the subject of leaflets which are sent from time to time describing the firm's activities and other services which may be available? Furthermore, does one have to tell him at that time that it is possible that other associated or interested companies will be allowed to use the fact that the hirer is a customer and to send information to him by way of a mail or something of that sort, so that he may be in receipt of further information about the services or equipment that is available?
One must look at the question whether the information contained in the data has been obtained fairly and lawfully, which is the first principle in Schedule 1. No one wants to make heavy weather of this, but it is a matter of clarification of what exactly people will have to do in order to make sure that the registrar will be certain that the purposes to which they propose to use the data will be in accordance with the principles. I am bound to say that on one interpretation—the one that I have just put forward—it could be a little tedious and onerous, not only for the assistant in the shop but also for the customer. However, if that is what is intended, it will have to be done. There is a great deal of clarification which some people would like to have

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about the way in which this will affect the ordinary, simple, individual commercial transaction in shops dealing with all sorts of different commodities.
Although the noble and learned Lord, the Lord Chancellor said that these principles came from the Younger Report it is, after all, a slight novelty that we have the jurisdiction of a quasi-administrative tribunal being interpreted in accordance with general principles of this sort. I am not in any way opposed to it. It may be that we are halfway to the European type of legislation if we introduce principles of this sort, but if we are to have them in this country I should have thought that we need fairly clear guidelines about the way in which the registrar is to interpret in individual cases the meaning and the import of these principles so that people can know what information they have to provide when they go to the registrar for their initial registration, and for any subsequent changes.
These are a few small practical points. They do not in any way derogate from what I have said about the general welcome to this legislation I have been able to collect from a number of my commercial contacts. However, just as others have had reservations about the rather more different aspects of the exceptions and exemptions, so I think there is for the purposes of acceptance in the commercial world and the ever-increasing use of computers a further need for explanations on exactly how this will work. I hope that in the course of discussion on this Bill in both Houses, but particularly here so that there will be the maximum time for comprehension, we may get that clarification from the Government.
5.55 p.m.
Lord Hankey: My Lords, I was very interested to hear the speech of the noble Viscount, Lord Colville of Culross, because he is always immensely practical while having great legal knowledge and experience behind him. I have learned over the years to appreciate very widely his intellectual approach which is combined with enormous common sense.
I hesitate to intervene in this debate among so many learned Lords, but I think that certain practical aspects of this legislation need to be mentioned. I suppose I must declare a certain interest in that I am a director of one of the larger building societies that has an enormous computer operation covering the whole of the United Kingdom. However, I am not speaking on behalf of that society or of any business or association. What I have to say is entirely on my own responsibility.
Most of industry accepts, as indeed I do, and also the noble Viscount, Lord Colville of Culross, that some legislative framework for the handling and transmission of name-linked data is now desirable, both for its own sake and so that we can co-operate with our partners on the Continent. I am not sure that the Bill gets that framework quite right. I have serious doubts about it. Frankly, I am a little alarmed that the Government should want to set up a huge quango, as the data protection registrar and his office will be, with such extensive powers to licence, control, interfere with and, if necessary, suppress computer users. If ever there was a time when commerce and industry of all sorts should be set free from annoying restrictions,
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limitations, petty official interference and taxation, surely that time is now.
The Government have performed gallantly to control inflation, but they have been slow to understand and to help solve the problems of industry. Without a re-expanding and successful industry—expanding especially into the new fields that science is opening before us, such as data processing—the Government will never really cure inflation; they will merely have a recession. So much industrial success must now depend on data processing in its wider aspects. The use of computers, as I think has been made clear but I want to say again, is increasing rapidly. Computers are getting steadily cheaper, more powerful relative to their size, easier to install, easier to use and, most important of all, more popular and more widely accepted and understood, particularly by children.
The market changes almost every month as new equipment comes forward and new uses are found for it. All the banks use computers, all the large companies and the corporations. A tremendous number of small industrial organistions of every sort use computers and a great number of small companies use data processors of different types. Private people are buying them for the home. Schools and libraries are using them, and so on. We have heard much today about the way the doctors are using them. Hospitals are using them. The work of the registrar will be absolutely enormous if all this material has to be covered. It is vital that the system should not be crystallised either now or later, otherwise we shall become rigid. That, I may say, is a typical British error in almost every field of activity. As soon as we become traditional—and even this will become traditional in a few years—we are lost and everyone else makes rings round us.
I want to make another rather unpleasant point. Having been a civil servant for 38 years, I know that most officials most often tend to say, "No". I am afraid that the new system will, for that reason, turn out to be rather inflexible and static, and that would be really disastrous. In this area of industry where change is constant and bewilderingly rapid, we really must not create anything like our planning system. All too often companies and corporations hear, "No" from the local planning authority to some proposal which they have put forward. They then appeal to the Ministry; they employ a QC; it costs them £2,000; two years go by; the Japanese or the South Koreans come in and take the market away or the market changes; the item is no longer relevant and our industry suffers. I speak with a certain knowledge of the planning authorities.
If this new quango is equally bad for business in this new field of data processing, it will be very bad indeed for United Kingdom industry for which the official world, anyhow, very often shows little understanding. I speak with some knowledge of the official world. Therefore, I want to press the Government strongly to make the new system more flexible than it is at present in the Bill. I support those who favour civil penalties rather than criminal ones, although I hesitate to say that in front of so many noble Lords with infinitely greater knowledge of these matters than I possess.
I come back to flexibility and I should like to give a few examples. I do not want to be unconstructive and

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I shall do my best to make a few suggestions to show the type of thing that I have in mind. Let us take as an example the procedures for new registrations and alterations under Clause 7 of the Bill. If new requirenents oblige the data user to apply for a new registration or an alteration of registered particulars—for instance, because he has found a new use for his data processing facilities—he may not know for a period of up to two months whether or not he will be allowed to meet that requirement. This can be seen in Clause 7(1), (5) and (6). A two-month delay could really unduly restrict business activity. Therefore, I suggest that much needed flexibility might be enhanced if the presumption that approval has been given were to be brought forward to the moment when the application was filed with the registrar. We could limit that facility, if we so wished, to those applicants who already appear in the register in respect of previous registrations. Such a procedure would save the registrar's office an enormous amount of interim correspondence and meanwhile the opportunity to act as described in new registration details would be unlikely to be abused by the data user because he would be afraid of being struck off the register.
Then I come to deregistration notices and the power to remove the data user from the register. In order to carry out his supervisory task effectively, the registrar must have the power to prohibit practices which are not acceptable in any shape or form. But removing a data user from the register would be an enormously drastic thing to do; it would bust his business—absolutely bust it. Nowadays there are neither the staff nor the means of paying the staff to do the job in the old way—they are not there and they could not do it anyway. So in contemplating deregistration, the registrar should be asked to weigh up the interests of the data subjects who are likely to be affected.
The Bill makes no mention of the registrar's duty to look after the interests of the data users and to encourage data users to improve their standards. In my view this is very important. It is not a matter of just scratching them off the list. We want the registrar system to make the system better and this idea ought to appear somewhere in the Bill. I hope that your Lordships will think that this is a really constructive suggestion. Somewhere there should be a more explicit statement of the high priority to be given by the registrar towards educating users to achieve higher standards of practice. It would be useful to have that in the Bill.
I now come to what is really a similar point; namely, how do the Government see the role of the registrar? Is it a positive and constructive role or mainly a negative or prohibitive one? After what I have said about officials liking to say, "No" and to operate in that way, your Lordships will see why I am afraid of this distinction. Somehow it ought to appear in the Bill, otherwise we shall not get the registrar leading off with the correct foot.
The Bill is silent as to whether the registrar should use the carrot or the stick. Therefore, I would like it said that one of the duties of the registrar is actively to assist data users and computer bureaux to find ways in which they can bring substandard practices up to an acceptable level, certainly before knocking them off
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the list. It should be shown in the Bill that deregistration is really only a matter of last resort. Perhaps it would be a useful idea if there could be a conditional deregistration notice and the deregistration would only become effective if improvements demanded by the registrar had not been made within a certain specified time. I ask the Government to mull over this thought in the hope that it may be useful because I believe that it will be useful to industry.
I return to what I consider to be a very difficult point. The Bill as drafted will require the data user to declare all types of published information including that which is readily available in works of reference. I am thinking of Who's Who, the Directory of Directors and so on. There are masses of such documents. This information is already public and by putting it into the computer and saying that it now acquires an enormous sensitivity, we are in danger of making something dangerous to reveal which is already revealed and available to loads of people. There are all the addresses in the telephone directories and the names and addresses in the electoral register. Your Lordships may not realise it, but a great many commercial companies use the electoral register in order to compile lists of addresses, and so on, which they will use. I often wonder—as I know many of your Lordships do—why on earth people write to us with all sorts of brochures saying that one will acquire a mini next week if only one will fill in some form. It is incredible, but that is the way it happens. There is absolutely no point in this work being used to expand the work of the registrar.
In my view some distinction ought to be drawn between sensitive items and items which are already public. I have a hunch that this appears already in the European convention, but I admit that I have not been able to trace the particular clause. If we do not make this distinction, we deprive industry of the scope for self-regulation, which it is very desirable that it should be encouraged to do because it makes industry conscious of the need for good behaviour. It certainly lands on the registrar an enormous quantity of material and expands his costs. Please do not forget that the establishment of this registrar and his office is an extra burden on industry. I see from one of the introductory pages of the Bill that it will cost £650,000 a year, which industry will have to pay.
I fully agree that personal data relating to matters of a racial, religious, political, medical, sexual or penal nature should require registration. There are various other categories which obviously require registration. That I fully recognise, but I should like this to be done in such a way that it hampers industry as little as possible. Perhaps there is a distinction to be made between factual information and inferential judgments based on that information. When one presses the buttons on a video screen and it comes up with a mass of information, it may often contain opinions quoted from some newspaper or person. There is perhaps a useful distinction there.
I hope that your Lordships will not regard this as an unconstructive intervention, but I have very great concern about anything which would shackle British industry in a field which is the subject of so much hope, so much progress, such bewilderingly rapid

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change, and where our people are making huge strides forward.
6.12 p.m.
Lord Digby: My Lords, this is a Bill that I approach with some trepidation because, although I believe that the Bill is necessary, I also believe that, unless we are very careful, we may find ourselves doing more harm than good. It is an old cliché that legislation too often has the opposite effect to that which Parliament intends. Therefore, although I support the principle of the Bill, I think it is vital that the practices, the practicalities and the effects on individuals should be thoroughly tested at the Committee stage, which I am sure we shall do.
I must confess that my instinct tells me to follow the example of my family crest, which is the ostrich, described by my wife as, "Head in the sand and hope for the best". It is not always an entirely bad principle. However, I was trained as a soldier on the principle that if you did something it was sometimes wrong, but if you did nothing, it was always wrong.
I should like to start by considering the Short Title, which I think is misleading. It is not the data that we wish to protect, but the individuals and organisations from the misleading use of those data. Throughout the considerations on this Bill we must remember that the object is to protect the individual.
I should now like to mention one or two points which concern local authorities—large users of computers—and in particular the Association of County Councils. It will not surprise your Lordships that I start with the financial and manpower implications. The Explanatory and Financial Memorandum envisages implementation costs for local authorities and other public bodies of £9-£11 million in each of the first two years. Our professional advice is that £8-£10 million will be spent by local authorities alone. Again, running costs are estimated in this Bill at £13 million, including those for public bodies; whereas we estimate £16 million for local authorities alone. There is a very considerable gap in these estimates and it is important to be realistic about costs, as otherwise the job will not be done properly.
The Explanatory Memorandum suggests that additional duties generated by responding to requests for access should be met within existing manpower limits. Is that realistic, while local authorities are continually being exhorted to reduce manpower? The changes in the software of computers take a lot of time and employ experts whose skills are much in demand. Other computer programmes will inevitably suffer. Part IV deals with the important subject of exemptions', in particular Clause 29 empowers the Secretary of State to make orders exempting certain categories of data. I trust that the Minister can assure us that local authorities will be consulted before these orders are laid.
I am afraid that I find the effects of this Bill very difficult to assess and I must agree with the reservations of the noble Lord, Lord Wigoder. I only trust that the detailed discussion at Committee stage will reveal more about the practical implications of this Bill. I think that we all have our reservations, but the protection of the individual must be paramount, so I support the Bill.
6.16 p.m.
Lord Mottistone: My Lords, I find this Bill an interesting one because it is one which has been written about by almost more people than any other similar sort of legislation, raising so many small detailed queries, comments and criticisms. The larger organisations, like the CBI, the Retail Consortium and the consumers' associations, have all said in their opening statements that they welcome the Bill, but they then go on to list a whole range of reservations of quite a complicated sort, and I shall not even attempt to bore your Lordships with them.
However, one point seems to stick out and it has been represented to me from several quarters. It is that the registrar initially will require only 20 staff and that seems to be a remarkably small number for what will be a very difficult task. I suppose the Government will say that because the Bill says, "initially", that may be true, because they might just be needed to set up the computer to enter the people on the staff" on to their own computer. The noble Lord, Lord Hankey, is right in describing it as a huge quango, because I am afraid that it must be huge. The registrar is a single person, and in my book quangos consist of lots and lots of people on the committee doing the job. So my first point is that the number of 20 staff appears to be very small if the registrar will be expected to identify and admonish those data users who are not operating in accordance with the principles set out in Schedule 1.
The number also appears to be small if the registrar is to be expected to give constructive advice to data users, particularly the smaller ones, in order to help them improve the standard of their operations to acceptable levels. So I should like a small comment, if my noble friend Lord Elton can make it. on that particular point; and in so doing would he perhaps advise or tell me whether he or his Minister will be advising the registrar that his role should be more admonitory or more advisory?—what I think the noble Lord, Lord Hankey, called the "carrot or the stick".
It would also be helpful to know, in the absence of clear guidance in the Bill, whether it is the Government's intention that the registrar will be required to issue an enforcement notice to a data user before a deregistration notice can be issued. I quote that as just one example of a whole range of matters of detail which we shall have to try to unearth at the Committee stage. My own reading of the situation is that there will be a great many amendments and a great deal of your Lordships' time will be occupied on that task.
Having dealt with the fact that the staff is too small, one then wonders whether the task is not too big. My noble friend Lord Colville made the point that there must be some sorts of data, like payrolls, which really could be not subject to registration. I understand that universal registration is not required by the Council of Europe Convention, and indeed that many other countries that have some sort of registration do not have it universally but have a selective system. I should have thought that this might be a better method of handling things. It will be interesting if my noble friend can say anything at this stage, but I shall quite understand if he would like to write to me later on that sort of point.

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Finally in a concluding area of points of detail, because so far as I can tell it has not been mentioned, the retailers, through the Retail Consortium, are concerned about two areas which they feel may be difficult. One is the potential for the control of information used for mail shots. They do not quite see how the Bill is going to apply to that. The second is information collected for credit reference purposes. That point was touched on by, I think, the noble Lord, Lord Hankey.
The problem is that under the Consumer Credit Act 1974 consumer credit businesses and credit reference agencies are licensed and controlled by detailed regulations. The licensing and the introduction of regulations has been a time-consuming and complicated process that has brought about comprehensive controls over the credit business. That is the situation now. What the Retail Consortium are saying on behalf of their members is that the provisions of this Bill that we are now discussing for rights of access to data should be made compatible with the Consumer Credit Act 1974, so that the work that has been done already is not all wasted and does not have to be done all over again. It would be helpful to have a comment on that.
I shall not weary your Lordships with more of these detailed points. One could go on indefinitely. Most of them are more suited in any case for inquiry through the processes of the Committee stage of the Bill. I shall therefore have to serve an awful lot of warning to my noble friend that there will be many rather tedious little amendments to extract information from him if he cannot give us a comprehensive answer at the end of this debate.
6.23 p.m.
Lord Kennet: My Lords, we have to remember what this Bill is about. It is, if I understand rightly, simply about people sending each other information about other people who do not want them to. If the people to whom the information relates do want people to send each other that information, then there is no need for this Bill and there is no need for the convention—and, after all, that is something that people have always done and will continue to do.
It is a Bill to protect the right of the citizen not to have information about him given by someone who holds it for a good reason to someone who would hold it either for another good reason or for a bad reason. That is all it is really about. The points I want to make are probably concerned mainly with regulations that the Secretary of State may be making later, and possibly with the codes of practice which many people still hope will emerge, and in the approval of which the registrar, many people hope, will have a role.
As it stands, the Bill still allows third party access where it denies subject access. That is to say, it allows disclosure in certain circumstances where the subject of the information is not allowed to see the information. Prima facie that is wrong. The Bill looks closely, therefore, at the circumstances in which there is something which would override that and make it an OK thing to do. The House will certainly want to look most closely at those circumstances too. This is all in
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Part IV of the Bill, mainly in Clause 28, the exemptions from access.
I hope that the following points can be dealt with either by regulation by the Secretary of State or possibly in the code of practice, but preferably in regulation by the Secretary of State. On the question of police files, there is a verbal matter here which may be a matter for amendment of the Bill itself before it becomes law. It says that you may be denied access to your police file if it is held for the purpose of the prevention and detection of crime. If it is held for the purpose of the detection of crime, in hot pursuit of a suspected offender, as it were, then it is right that you should be denied access.
However, supposing the state. Big Brother, simply turns round and says, "This information about you is being held for the prevention of crime", in case it may come in handy at some time or another, that is another matter altogether. I would also draw the attention of the House to the fact that the word "prevention" is not in the international convention. The word used internationally is "supression". That is a very different matter. I think that the ordinary citizen would be justified in feeling that the words "prevention", "suppression", and "detection" go in an increasing order of acceptability as reasons for the maintenance of secrecy in spite of direct personal requests to see the records.
On immigration, the Bill gives the Secretary of State power to exclude immigration from subject access. I am puzzled by this because in what circumstances would one wish immigration records to be kept secret from their subject except for the detection of crime? Evading immigration regulations is a crime, and it is already covered by that. In all other circumstances the layman would have thought that anybody should have access to his own record on request.
I come now to the most difficult records of all; that is, health and social services. Health is a matter where of course doctors have got so used to not having the duty to reveal to a patient what they are saying about him that it is very little questioned in this country. I believe I am right in saying that in Sweden they now have a law guaranteeing the patient access to his own medical records except in the most exceptional circumstances, which are closely laid down, or possibly not even with any exceptions. They have had it for some years and it works perfectly well, and nobody objects except when he finds that his address or telephone number is wrong, which of course is what one would like to have subject or patient access for. This is the sort of reason for which it should exist. Maybe I am wrong about that, maybe I have heard exaggerated accounts, but it seems to me that, except in the case of one doctor passing clinical observations about the citizen to another doctor when both are engaged in treating him, there is really no reason why medical records should be concealed from their subject by anybody. I hope that the regulation will reflect that principle.
As for the social services, the principle seems to me even clearer. I would lay it down as a general observation that it is unconscionable for the employees of local authority or central Government social services to write secret observations to each other about people. They are interested in the real

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condition of people, and people are interested in informing social workers of their real condition and their real views.
On subjective judgments, I know that social workers in general tend to say, "This will stop us writing down subjective judgments, and it will hamper our freedom of work." Well, would it? It will not hamper two social workers talking to each other about the citizen. It will not hamper them in passing private notes to each other about the citizen and about what is best to do next. It will hamper them only in putting on permanent record their subjective opinions at a given date, which maybe they themselves would not wish to see maintained for ever and ever. That point should be looked at with a very beady eye indeed.
In his admirable speech, the noble Lord, Lord Wigoder, raised the question of handwritten records, and I agree with him that it is absurd that simply because there is a new technology—of putting the matter on computers—we should exempt the old technology from the same adjustment of the relationship between the state and the citizen, the company and the client, which we are taking the opportunity of introducing in the Bill. It is simply that technological change has given us the opportunity to increase ordinary justice between human beings in our country. The point is often made that if one includes handwritten records, one knocks out a lot of simple address lists and so on. That is already being coped with in the Bill in the case of computer-held records, so why not with manuscript and transcript ones as well?
As for the registrar, I hope it may be possible to give him the duty of approving the code of practice which is adopted by this or that data utiliser. That would seem an admirable way of putting him to a positive use as well as a merely negative one. He could simply say to the police or Messrs. Smith and Jones, Merchants, or whoever it might be, "Send me your draft code of practice". Then he could go on to say, "It seems to be wrong in this or that respect: let us have a discussion", and finally, when he was satisfied with it (operating, presumably, under regulations given him by the Secretary of State) he would register it and it would then enjoy the protection of the Bill and those registered on it would also enjoy the protection of the Bill.
People—by which I mean not so much Government departments as business in general—may be worried by the colossal load of work the registrar is supposed to carry out on Day One when the Bill comes into effect. He must register everything. The Bill does not say that he may phase the operation of registration, though perhaps it would be a good thing if it did say that. If it did, the registrar would be able to say, "We will take, first, the dangerous and difficult ones"—the police first, health second, and so on, or whatever it might be—and then he could say to industry and commerce, "You all can relax for a few months. I shall be calling you by categories on such and such an approximate date". I think that would hold off a lot of alarm and despondency and enable commercial enterprises to prepare in the ordinary way, knowing what to expect and when.
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The whole Bill is a fascinating example of the practices followed in the, shall we say? more developed or modern societies, having a direct effect on us and forcing our somewhat sluggish political process to gird its loins and face the difficult problems which many of them have faced already. Needless to say, we on these Benches wish the Bill good luck and hope to play our part in improving it on its way through the House.
6.34 p.m.
Lord Mishcon: My Lords, in attempting to wind up, on behalf of my noble friends in the Opposition, what has been a most entertaining and. I hope, constructive debate, I would make two preliminary observations. The first is that I promise to try to abide by the rule which, I thought, guided this House; that on Second Reading one debated the general principles of a Bill and left it to other stages to move amendments, be they about criminal or civil offences or whether the registrar should employ 20 or 30 people.
My second observation has been made before, and I do not apologise for repeating it. It is that your Lordships' House is at its best when attempting to deal with the defence of the private rights of citizens and embarking on the campaign to defend those rights, which is common to all the democratic parties in this House and certainly is a principle shared by those who sit on the Cross-Benches. I hope, therefore, that there will be a unified attempt to look at the Bill objectively and to join with those who manage to prove that there are lacunae in the measure which should be filled.
I must say at the outset—and, I hope, in that objective spirit—that this is a quarter-baked Bill. I had in my notes when I prepared them last night the description of a half-baked Bill, but my noble and learned friend Lord Elwyn-Jones convinced my by his eloquent and remarkable speech that I had overestimated the degree of culinary skill of the Government and that the fraction should be one-quarter and not one-half. In so far as it is quarter-baked, we support it. In so far as there is three-quarters yet to be dealt with by your Lordships in your cooking capacity, I hope that in Committee we shall be able to do that and make of a defective Bill a very much better one.
There are clearly set out in regard to the defence of the private rights of the citizen dangers which exist in this field, and I could not put them better than the Government did in the White Paper, Cmnd. 6353, issued in December 1975, in which in paragraph 8 they said:
"The principal potential dangers to privacy come from three main sources: first, inaccurate, incomplete or irrelevant information; secondly, the possibility of access to information by people who should not or need not have it; and, thirdly, the use of information in a context or for a purpose other than that for which it was collected".
They are dangers that should be looked at most carefully by your Lordships' House, not just in the commercial field, to which much attention has been given in this debate, but in the sphere of Government, where the major usage of computers takes place and where there is the possibility of one department passing on to another information collated on a computer to such a complete degree that if ever this country had the misfortune—which all your Lordships, with myself, hope will never happen—of

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having an extreme Government (be it the extreme of the Left or Right) there would be ready-made, without your Lordships having given proper protection, such a collation of information, undefended and unprotected, as would amount to a complete menace for those whom might suffer under such a régime. I hope your Lordships do not think I am being dramatic in saying that. It is the duty of a democratic Government and Parliament to point out those dangers, and they do exist.
In the general terms of principles—with which, as I said, we should be dealing in a Second Reading debate—I wish to emphasise some of the main criticisms one would have as to what is omitted from the Bill. The noble Lord, Lord Wigoder, in my view, so correctly drew attention to the omission of manual records. One does not want to have in this Bill necessarily the requirement that all manual records should be registered with the registrar. If I may, I shall come very quickly, I hope, in a moment, to the point of the registrar, of the authority, the powers and the duties. What ought to happen is that at least embodied in this Bill are the principles which are set out in the first schedule, which occur in the convention and which were built up by the history (to which my noble and learned friend Lord Elwyn-Jones referred) of our dealing with this matter Government by Government. At least those principles should be made to apply in a statute; and the availability of those records, the protection of those records, should at least be referred to and certainly in the public sector. The noble Lord, Lord Wigoder, referred to the nonsensical position of a file of written records, be it in BUPA or in some such other organisation not coming within the ambit of this Bill at all; but the moment it finds itself in a computerised machine, then all these provisions apply. That is the first point that one makes.
The second point that one makes is this. As my noble and learned friend Lord Elwyn-Jones has said, with some speed, an awful lot of haste, without even a draft Bill being presented to organisations that might have had so much to say—and I include the Law Society and those who administer the affairs of the Bar and who are so capable of giving advice on these matters—action has been taken. No draft Bill was sent to them. There was a White Paper, which is not necessarily consistent with some of the provisions of this Bill. The whole idea in all the recommendations that were made, the original reports, the Lindop Committee, was that there should be set up, in order to deal with the progressive computer industry which sends out its tentacles—and I do not use that term in any vituperative sense—in so many different areas and in so many ways, some form of control, and that there should be some research, some guidance, that there should be an inspectorate; and therefore it was necessary to have an independent authority.
The mountain laboured and brought forth the mouse of the registrar; and the mouse of the registrar is somebody who is going to register, is going to have 20 by way of staff. My word! Will he be inflicted with hosts of applications for registration at the very start! The registrar is somebody, I suppose, who will have the same sort of duties as the Registrar of Business
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Names used to have, and as the Registrar of Companies has, with the same sort of staff.
I can remember standing here, and my noble friends stood with me, saying, "Please don't take away the Registrar of Business Names". We were told by the Government that it was mere registration, an administrative department, useless for any practical purpose. We debated the registrar. The noble Lord, Lord Mottistone, has a sense of humour and a sense of truth. Therefore he is both laughing and, I hope, nodding his head. The Registrar of Companies was attacked when we were dealing with the Companies Bill. It is a nonsense, said the Government, to have somebody merely registering. You have to have either a proper department, you have got to have inspectors, you have got to investigate; or you are doing something which is absolutely futile. The Government themselves are trying to do something absolutely futile. As has been pointed out, there are no duties but there are powers; there is no inspectorate, no little inside police force (if you like), but the registrar is supposed to carry out all this superintendence of the great computer industry and all this great principle of defending the privacy and the private rights of the individual citizens of this country.
In the final observations which I promise your Lordships I am now going to make, I am not going to refer in any detail to this wicked—as I would respectfully call it, if I may use that adjective and still talk about being respectful—Clause 28. It is dreadful, quite dreadful, when you are thinking in terms of the police, who deserve the support of every single Member of this House but who have to be watched as every other branch of our Administration has to be watched, when it comes to protecting the rights of the individual.
There are too many cases of late—and we are only referring, it may be, to a minority of the police force, and the Metropolitan Police force—where things have gone wrong with regulations and with the rights and duties of the police which have to be properly performed if the subject is to be properly protected and if this country is to have the name it has had for centuries, the name of law and order properly and justly administered.
Are we going to be told in the course of this debate or in the further proceedings on this Bill what really happens by way of superintendence of police records? To whom are they given, and on whose authority? And what is the procedure in regard to superintendence, for example, of the records kept by the Department of Health and Social Security when the police ask for details from that department about the health of a national health patient, or the records of a national health doctor saved in the computer machinery? What is the superintendence? What is the procedure? Have we protected the situation in the light of what we know by Clause 28, or as my noble and learned friend Lord Elwyn-Jones has said so sensibly, in my view and, I believe, in your Lordships' view: Ought there to be the protection of a judge's order?—not difficult to obtain. That is what our judges are there for, to see that there is an independent, objective, judicial mind brought to bear, seeing the need for the enforcement of law and order, the

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prevention and detection of crime, on one side, the liberty of the subject on the other and the presumption of innocence of everybody until he is proved guilty.
In these essential respects—and one could mention others, but one would not be very popular if one continued to do so at this hour of the evening with another debate to follow—we have to be very vigilant at the Committee and Report stages. Could we—I ask this rhetorically, but with a plea in my voice—unite as a House to try and better this Bill in doing this terribly difficult balancing act of protecting those in industry and in Government who ought to be protected in regard to the computer records that they have and, at the same time, carry out our duties in this balancing act to protect those private rights that seem to be eroded with the passage of time but which ought never to be neglected by your Lordships' House?
6.50 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, today's debate, which I hope to conclude in a manner satisfactory to my noble and learned friend, marks the beginning of a long and important discussion of a measure that concerns us all very closely. In fact, the noble and learned Lord, Lord Elwyn-Jones, said that it would be a long and anxious discussion. What we know about other people is always a matter of compelling interest; but this is about something even more compellingly interesting—it is about what they know about us. That, at least, is the point of view from which most people first approach it—and it is itself a response to that approach.
The gathering, collating, transmission and application of information has been hugely altered over the past two or three decades. Time was when whatever was recorded about a person was set down in writing and transmitted by post. But now pages of type and card indexes have been overtaken first by mechanical and then by electronic devices, and transmission is over the wires or even over the air. The information is held in a new, elusive and highly transmittable form.
Noble Lords who could once measure their stature by the length of their entries in Who's Who—rightly referred to by the noble Lord, Lord Hankey—can certainly still find themselves in those august pages; but, simultaneously, they have seen themselves reduced to a magnetic wave on a floppy disc. It sounds like a picture by Salvador Dali. It is in fact invisible to the naked eye and illegible without specialist equipment to translate it for them, yet capable of almost instant transfer on to another floppy disc in the office of they know not whom, in a city they know not where.
It is not just your Lordships, of course. Every private citizen can be, and almost every private citizen is, catalogued in one place or another, indeed in many places at once, against a variety of characteristics that may be true or false, accurate or imaginary. That has been a matter of growing public concern over a number of years. That concern does not arise from anything peculiarly secretive in the British character. On the contrary, it is shared by people in many other countries and several of them have resorted to
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legislation ahead of us. The noble and learned Lord, Lord Elwyn-Jones, has regretted this. But this has, indeed, been to our advantage since, as my noble and learned friend has told your Lordships, we have been able to see their legislation at work and we were able to draw on their experience in drafting the Bill.
Noble Lords of a sporting turn will know full well that, while it may be great fun to lead the field, those who are a little behind the first flight are far less likely to come to grief, and among them they will find the noble Lord, Lord Mishcon, for he was castigating us at the end of the debate, in which his noble and learned friend had said that we have gone too slowly, by saying that this was done in unseemly haste.
We also had to hand the European Convention. The convention enshrined a set of principles, which we have reproduced in Schedule 1 to the Bill. It is useful not only as a reference point and a yardstick but also as a passport. Countries which subscribe to the convention apply the principles. There is therefore an assurance as to how any information about individuals—or "personal data" as we should call it in this Bill—which is passed from our country to any of theirs will be treated and a reciprocal assurance concerning any such data passed from any of those countries to ours.
The noble and learned Lord, Lord Elwyn-Jones, painted a lurid picture of the economic consequences of not having legislation on data protection. I am less than sure that Lloyd's would in fact collapse under those circumstances; but the Government fully accept that the free international flow of personal data to and from this country is of prime importance to our trading position. Nevertheless, let our concern on this point not blind us to the other reason for the Bill, the protection of the individual citizen. It is for both economic and privacy reasons that we are legislating on this subject.
Since much of this information is commercially useful, it is clearly in the interests of trade that we should comply with the convention. The convention sets out to ensure that personal data are properly handled—that is to say, that they are obtained and processed fairly and lawfully, for instance, and that they shall be held only for specified and lawful purposes—and it is also in the interests of the individual that we should do so.
The need for the Bill is therefore, I think, clear—and most of your Lordships have accepted this—and the next question we must ask ourselves is the rather more thorny one: will it work? Many of your Lordships have presumed to leap to the wrong answer to that. I would however want to enter a modest reservation ahead of general claims. The material—the data—we are dealing with is. as I earlier described it, comparatively new. It is somewhat elusive and highly transmittable. I would not pretend that what we now put before your Lordships will see that it is controlled absolutely. But what it does do is to set out the rights of individuals, the rights of society and the rights of agencies and establish an authority to oversee their application.
Some of your Lordships have said that it is too big, an enormous quango. Then the figure of a registrar and a staff of 20 was berated as derisively small. We have had the advantage of seeing what other countries

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manage to get along with effectively. What we propose is not significantly smaller than that and we believe that it is adequate. From our investigation of the different schemes in Europe we concluded that data protection legislation should have four principal aims.
First, it should oblige data users to review the purposes for which they hold data, to whom they disclose data, and their operational practices—in other words, it must establish user discipline. Secondly, it should set up an overall code of practice for users that they all know they must abide by—in other words, it must establish public standards. Thirdly, it should reassure the ordinary citizen that he is not defenceless among the information greedy but inscrutable machinery of data banks—in other words, it must establish subjects' rights. Fourthly, it should provide an effective means of bringing to book those users who transgress—in other words, it needs to establish sanctions. We have provided user discipline by requiring users to register. By that process we are obliging them to submit themselves to the discipline of defining their purposes, analysing where they get data from and to whom they disclose them, and stating this on a public register. The noble Lord, Lord Mishcon, who I regret to say was wrong in many things, was right in pointing out to my noble friend Lord Colville of Culross that Clause 9 refers to that register only and does not give access to the public to the contents of individual computer tapes registered on the register. That preparation to register is not an onerous task but it is an invaluable one in establishing the right general atmopshere.
We then move on to ensure public standards by setting out the eight principles, drawn from the European Convention, that users must abide by. Here is a general code of practice with which users must conform. This, together with the discipline of registration, will ensure that the vast majority of personal data processing is not only beyond reproach—but accepted as being so.
We establish subjects' rights in the Bill in two different ways: on the one hand, we provide the right of subject access, which can both reveal to the subject what data are held about him, and enable him to discover if the user is falling short of the public standards for the holding of data; in addition, by setting up the registrar, we are providing a central authority to whom subjects can go in the event of difficulty or dispute. In the fourth area of sanctions we again have a dual approach: civil remedies to ensure adequate redress where damage has been caused; but above all, a registrar who can respond appropriately to the vast range of circumstances that may arise—from consultation and informal advice to users, at one end of the spectrum (which for the noble Lord, Lord Hankey, is a carrot), to the issuing of notices and the possibility of criminal prosecution if the notices are defied, at the other end. That, for my noble friend Lord Mottistone, is the stick. We do not expect these latter cases to be anything but rare but, where they occur, they can be dealt with.
We therefore believe that the Bill will work and it will work within a framework which is balanced, flexible, sensitive to the needs of both users and subjects and, where need be, tough. But we do not
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believe that we have somehow created a new Utopia where absolute standards unfailingly prevail and mistakes can never be made. Whatever scheme is introduced, it cannot ensure that data in every case carries a copper-bottomed guarantee of accuracy. We all rely heavily on information given to us by others, whether we hold that information on a computer, in a manual file or even in our heads. We can get it wrong and we can do so quite innocently. I am sorry that my noble friend Lord Mowbray and Stourton is not here, because he knows that for a number of years I thought he was not one person but two! That was an innocent mistake, but it was not culpable.
The recipient of data therefore cannot always be 100 per cent. certain of the accuracy of data he receives. That is true even if he receives it from the subject itself. If that were obligatory, the vast majority of data could not be held at all. We recognise in the Bill that limitations are both necessary and desirable. What we are seeking to achieve is a realistic scheme that ensures that, where computers are used, reasonable standards are maintained, data subjects are adequately protected, but that data users are not faced with unrealistic or impossible demands, such as was feared by the noble Lord, Lord Hankey, among others.
May I now deal with some of the more particular points that have been raised. First, exemptions from the Bill. I will not dwell long here because my noble and learned friend has already said most of what there is to be said. The Government firmly believe not only that the scheme in the Bill strikes the right balance between user and subject, in a field where that balance is of particular importance, but also that it compares well with the standards that apply in most European countries.
We make no apology for exempting national security data from the Bill. We have to deal with the world as it is and not as we might wish it to be. We cannot submit these data to the provisions of the Bill; but let me say that the Government take, and will continue to take, every step to ensure that personal data, held for reasons of national security, are themselves subject to the highest possible standards of security against improper or unauthorised access or disclosure. By the very nature of things, it is in the Government's own interest, as well as that of data subjects, to apply the most stringent standards to data of this kind.
Noble Lords spoke at some length on the exemptions, particularly from the first principle in Clause 28, and I would not want to spend too long on this since I have had ample notice that we shall be dwelling on it repeatedly and—as the noble Lord, Lord Hatch of Lusby, would say if I were to go on long enough for him to return to attend the close of this debate—even longer. It is perhaps a pity that he has threatened us with such a late sitting and cannot be here at this moment to defend that position—my Lords, he is with us and I withdraw most, but not all, of what I have said.
Speaking of Clause 28, I would say that the first principle derived from the European Convention requires data to be collected fairly, This is an imprecise term, liable to subjective interpretation, and there are unfortunately occasions when the effective pursuit of the prevention and detection of crime and of the other

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purposes set out in Clause 28 dictate that information must be collected in a manner that might be regarded as not being fair, and thus it may prove necessary to collect information by covert observation of the data subject or by listening to other people's conversations—a method which the registrar might conceivably be forced to conclude was not fair.
But the Bill must not put at risk essential information collected by these necessary means; nor must it exclude, for instance, information about the contents of one malefactor's dwelling revealed by another malefactor subsequent to his arrest or about his intended or already-committed nefarious activities. Therefore, in effect Clause 28 exempts data held for the various purposes set out in the clause from the first principle, where those purposes would be prejudiced by the application of that principle.
I should like to make one other point regarding exemptions. The very limited exemptions in Clause 28 are all subject to what may, for convenience, be called "the prejudice test". They apply only if it is necessary for them to apply in order to avoid prejudice to crime prevention or the other matters mentioned in Clause 28(1). The registrar can form his own view of whether that prejudice test has been passed, and this is important in two ways. It reflects the Government's view, which I am confident will be shared by the vast majority of your Lordships, that, important though data protection is, it must not diminish or prevent the protection of the public from crime; and of course the authors of the European Convention accepted that, too.
But over and above that, the inclusion in the Bill of the prejudice test, with the independent registrar invigilating over its application, is an assurance that crime detection and the other Clause 28(1) matters will take precedence only when it is essential for them to do so. They are policies which we have to have, and there is no point in having them if they do not work. This part of the Bill will apply only if the effect of not applying it would be that they did not work. The prejudice test is an important matter—more important than some early commentaries on the Bill have recognised. Taken together with the limits on the provisions from which exemption is permitted, it is what ensures that there is no blanket exemption from the regulatory régime established in the Bill.
If I may now pick up other points made by your Lordships, I would say, referring to the subject access to health and social work data, we have not reached a final view on the appropriate restrictions upon subject access to health and social work records. In these areas it is essential that there should be full consultation with the medical and other professions involved. Those consultations are going on now. Clearly the restrictions on the right of access must be kept to a minimum, consistent with protecting the subject himself from coming up against information which could be seriously harmful to him. I am sure noble Lords would agree that we ought only to decide where that frontier of discretion lies in the light of the fullest discussion.
Personal data are held by a very large range of users for a very wide range of purposes. The Lindop Committee thought it would take more than 50
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separate codes of practice to cover the field. When we attempted to draft some experimental codes to give ourselves some idea as to what they might contain, we found it quite remarkably difficult to do if they were to have legal effect and be applicable to all users in each of the various sectors—for though two users might operate in the same sector they might use quite different kinds of data in quite different circumstances. That is not to say that voluntary codes of practice, drawn up perhaps by representative bodies, will not prove extremely useful as guides to data users; but I think it is an additional reason why we were right not to delay the publication and enactment of the Bill in order to get this very large range of detailed provisions perfected in advance. That might have satisfied the noble and learned Lord, Lord Elwyn-Jones, but would have annoyed the noble Lord, Lord Mishcon, unconscionably.
We have certainly not ruled out the possibility of setting up an advisory committee, which some of your Lordships suggested, made up of people with experience in various fields. That committee might advise the Government not only on data protection matters, but could also advise the registrar on particular issues or subject areas, and in this I would recall that the noble and learned Lord, Lord Elwyn-Jones—my Lords, I am sorry: I am confusing two ideas. I will revert to the noble and learned Lord, Lord Elwyn-Jones, in a moment. It is always an agreeable thing to do towards the end of a debate.
The registrar, of course, in any event will be free to seek advice from wherever he wishes, but in the interests of maximum flexibility and given the doubtful desirability of the committee advising, as it were, in two directions, we tend to the view that it would be best established on an extra-statutory basis. However, we shall be interested to hear views on this.
What the noble Lord, Lord Elwyn-Jones, mentioned was the area where advice will certainly be needed and that is in crime prevention. If I might ask the noble and learned Lord to look at Hansard, I think he will find that my noble and learned friend the Lord Chancellor has already said that Her Majesty's Inspectorate of Constabularies of both England and Wales and Scotland are prepared to give exactly that expertise.
I do not want to follow too closely behind my noble friend Lady Trumpington in her proposals to introduce an intervening tier of law between civil and criminal, but I will say that we will look at it. I do not think we ought to look at it in the narrow confines of this Bill since it applies across the whole spectrum of interests.
I would like to reassure both my noble friend and the noble Lord, Lord Hankey, of our intentions in the Bill as regards the carrot and the stick. I have already referred to that earlier. There is a progression of steps that the registrar can take to influence what is done. The Bill is constructed so that he will normally operate by consultation and advice and persuasion. The issue of notices will be a much later and a much rarer step, and deregistration will be rarer still. If he does have to exercise those powers he must have some penalty beyond the civil remedy to back them up. It is simply as a back-up to the notices that the criminal offences

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are included. The experience of the earlier steps and the existence of the later steps will. I think, amount to an educative process desired by both him and my noble friend Lord Mottistone.
If your Lordships will indulge me for about three minutes longer I think I can avert some of these dreadful threats of things being brought up in Committee because they were not mentioned in the wind-up. Although, as the noble Lord, Lord Mishcon, has rightly said, we should be addressing ourselves only to principle, some of them relate to principle; for instance, the principle of whether a public and powerful figure such as the registrar should be bound more by duty or by power. We see that discretion, which is what is involved in power as opposed to duty, as a virtue and not a weakness. We believe in allowing the registrar to react with common sense, flexibility and pragmatism to the particular cases he confronts—and do not forget that the variety of cases will be enormous, as your Lordships have all been at pains to remind the House. It would surely be quite unreasonable for him to have to issue an enforcement notice on every occasion he found a breach of principle, however minor or however serious; if he had to issue or start an investigation when he received any complaint, however frivolous or tendentious. I think we have the balance between powers and duties right, because the expectations of the Government of this new and powerful official will be reinforced by the requirement to make reports to Parliament, which will be subject to public and detailed criticisms, no doubt, if your Lordships have a hand in it.
I have already touched on the question of orders under Clause 29, but I think it was my noble friend Lord Digby who was anxious about the question of consultation. The Government are actively consulting the various professional groups most closely involved with the health and social work data, he is concerned with. We will decide the precise contents of orders under Clause 29 after these consultations with the doctors. The other health professions are also being consulted; and the noble Lord, Lord Kennet, will be reassured to hear that on the social work side the professionals will be consulted too. They include the social work departments of the local authorities. I think that was his particular concern.
I do not think I should go on longer. I should like to conclude, therefore, with one point only which was raised by a number of your Lordships. Several of your Lordships have wanted the Bill to embrace written material. The noble Lord, Lord Wigoder, wanted this. The noble Lord, Lord Hankey, said it was absurd not to have it. The noble Lord, Lord Mishcon, threatened us with totalitarian repression if we did not get it.
Lord Hankey: My Lords, will the noble Lord give way? I do not think I wanted to include written material. I blanched when the noble Lord, Lord Wigoder, mentioned it.
Lord Elton: My Lords, I was not observing the noble Lord's complexion at the time but I understood that he thought there was an absurdity—I think he was referring to Who's Who—when he said it would be a written biography at one minute, outside the law, and
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a computerised biography the next minute, inside the law. He saw an absurdity in that and I am sorry if I misrepresented him. The noble Lord, Lord Smith, and the noble Lord, Lord Hunt, shared that anxiety in a medical context. Of course, I agree that individuals can be damaged by the misuse of information about them, regardless of whether it has come from a computer, from an ordinary manual file or, indeed, from a malicious gossip. But what we are discussing today is not a measure for the general protection of personal information, nor indeed is it intended to replace the Hippocratic Oath, as the noble Lord, Lord Hunt, would have us do. It is a measure specifically designed to meet the particular threats, actual or perceived, which derive specifically from the use of computers.
I must say that there would be very considerable practical difficulties if we sought to cover manual data in the same way as computerised data. Just consider the amount of personal data that exist in manual form in almost every office—far too much. How would the principles of data protection be effectively applied to such an enormous, diffuse and disparate collection of information? How would subject access be given to manual data held by governmental or commercial institutions of any size? There is a potential data bank in the office of every employer and librarian in the country, including this House. For all these reasons the Government have restricted this Bill to automatically processed data. To do otherwise would require a huge bureaucracy such as some of your Lordships have said they fear and that would place intolerable burdens on users—and even then there would be grave doubts as to whether it would be enforceable. It would certainly require a scheme totally different from that contained in the Bill, so let us not overreach ourselves unnecessarily.
Some of your Lordships called this a white mouse among the white tape. I thought it was a white mouse among red tape, but I got it wrong. Other noble Lords have referred to it as a jelly fish, a pig in a poke, and none of your Lordships has rung the bells of welcome that the Bill rightly deserves. But we are setting out to do something which the British people have basically wanted for some time: to reassure the British people—and that is us, my Lords, as well as the public outside—that the information held about us has been fairly and lawfully gained; that it is properly handled, that it is not mischievously used; that it is not put in the wrong hands, and that if it is inaccurate it can be put right. That is what the Bill does. It does not set out to do more. I think it has set out in the right direction to achieve a limited but extremely important aim. I beg to move.
7.19 p.m.
Lord Hatch of Lusby: My Lords, before the noble Lord sits down I have already made my apologies to him and I repeat them now. But I was here when he made a particular issue of the question of the prejudice towards the carrying out of the law. Will he help the Committee stage by telling us why it is necessary to include control of immigration when already there is, in the exemptions, any breach of law? Is this not saying in effect that we are lumping together in these exemptions people who are suspected of being criminals and coloured people?
Lord Elton: My Lords, I really do not like responding to this, because I had sat down, we have other business before us and the noble Lord asked me to justify myself in Committee. But what the noble Lord imputes to the Government is so damaging that I must reply. This is not a racially prejudiced piece of legislation. I was at pains—and the noble Lord was already in the Chamber when I did so—to say that the powers to which he refers and to which he takes exception would be used only subject to the prejudice test exercised by the registrar; in other words, if they were prejudicial to the operation of the policy in one of those five areas endorsed by Parliament.
If they will stop the will of Parliament, the policy of the Government endorsed by Parliament, from operating, then, if they are prejudicial, they pass the prejudice test and the power can be used. I am not going further. I have gone that far only to try to disabuse the noble Lord, and whom he may converse with, of the idea that the Government are pursuing a vindictive or racist attitude towards one section of the community. That is not the intention of the Bill and it is very harmful to suggest that it is.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Merchant Shipping Bill [H.L.]
7.21 p.m.
Lord Lyell: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Lyell.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD NUGENT OF GUILDFORD in the Chair.]
Clauses 1 to 4 agreed to.
Clause 5 [Separate register for small ships]:
Lord Lyell Lord Lyell moved Amendment No. 1:
Page 4, line 39, leave out from ("are") to end of line 41 and insert ("so registered in the United Kingdom").
The noble Lord said: I hope it will be for the convenience of the Committee if I speak to Amendments Nos. 1 and 3, both of which stand in my name. The purpose of these two amendments is to achieve the same object as we originally proposed, but, we hope, by a simpler and more appropriate procedure. In practice, the need is likely to arise infrequently, but some owners of small ships which are registered under Part I of the 1894 Act may wish to close that registration and to apply for registration in the small ships register instead.
The Part I register records title and mortgages, and it is therefore necessary to safeguard the interests of owners and mortgagees under this procedure, so that a person who claims to be the owner of a small ship, but is not, cannot effect its removal from the Part I register by registering it in the small ships register, and neither can a genuine owner remove the protection enjoyed by a mortgagee by similar means.
In the Bill as drafted, subsections (5) and (6) of Clause 5 achieve this purpose by means of the issue of a certificate of conditional closure. This certificate will have been granted by the registrar of the ship's port of registry, provided only that he was satisfied that the applicant was, indeed, the registered owner and that no mortgage was outstanding. Armed with this certificate, the owner could then apply for registration under the small ships register, and when the new registration had been achieved the Part I registration would be cancelled.
Under the proposed new procedure in subsection (5), the owner would first apply for registration to the small ships registrar in the normal way. Paragraph (a) provides that, under regulations which we will make under subsection (1) of Clause 5, the small ships registrar would so inform the registrar at the ship's port of registry. That registrar would close the registration in accordance with those regulations, if he had no reason to doubt that the applicant was the beneficial owner and that no mortgage was outstanding on the ship.
Your Lordships will see that paragraph (b) of the amendment provides that registration under the small ships register cannot take effect until the Part I registration is closed, and that if that registration is closed the registration under the small ships register shall take immediate effect. The intention here is to ensure that there is no period during the transfer from one register to the other when the ship is unregistered, so that owners wishing to travel abroad with their ships during that period will not be inconvenienced.
Paragraph (c) of Clause 5(1) of the Bill, as amended, removes all references to conditional closure as a consequence of the words in the new subsection (5). As such certificates would not have been granted in respect of ships registered outside the United Kingdom, it is necessary to insert the words "so registered in the United Kingdom", in order to maintain the original limitation which paragraph (c) was intended to provide. I am afraid that my explanation of these two amendments has, of necessity, been detailed and, possibly, a little convoluted, but we have attempted to make the process a little simpler. I beg to move.
Lord Ponsonby of Shulbrede: I think that one could describe these two amendments as tidying up amendments, and we certainly have no objection to them.
On Question, amendment agreed to.
7.27 p.m.
Lord Green way Lord Green way moved Amendment No. 2:
Page 4, line 41, at end insert—
(" ( ) Except as may be provided in regulations made under this section, the registration of a ship under this section and the contents of any certificate or document compiled in connection with such registration shall not be evidence of the title of any person to the ship and shall not be treated as a representation other than by the applicant for registration of the title to the ship.")
The noble Lord said: On Second Reading, I voiced one or two concerns about part of this Bill. My main concern lay in Clause 5, which sets up a simplified registration procedure for pleasure craft based on

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length rather than tonnage, with a minimum limit of 13.7 metres. As I said on Second Reading, this registration will also have to apply to owners who wish to visit France, where the authorities are shortly going to insist on the owner of a yacht producing a valid registration document.
I accept the need for the applicant under this Bill to show a bona fide link with the craft in question, but I am concerned that under Clause 5, as presently drafted, such a link could also be used for other purposes and by third parties with no claim to the title of the yacht, and that such a link might give rise, in due course, to the body who are to run the registration scheme being sued for negligently issuing an incorrect certificate in the first place.
This loophole, if I may call it that, could bring into the Bill the very complicated procedure of investigating title, which is incorporated in existing legislation, thus destroying the very simplicity which is its very welcome purpose. I have brought forward this amendment in order to rectify what I see as a defect in Clause 5, as presently drafted, and if it were to be accepted it would, in effect, add a new subsection (2) to the clause. I beg to move.
Lord Lyell: I am sure that the Committee will appreciate the swift and clear way in which the noble Lord has moved his amendment. We appreciate the motive behind the amendment, but I have to say that the Government cannot agree to recommend its acceptance. We believe from the outset that it is accepted that the ownership qualification for a British ship must be identical, whether it is registered under the small ships register or under Part I of the 1894 Act, in order that the expression "British ship" is capable of only one interpretation. The noble Lord's amendment, which proposes that a certificate or document under the small ships register shall not be treated as evidence or representation of title to the ship, undermines this positon.
The intention of the Bill, as drafted, is to introduce regulations which provide that the certificate of registration will clearly display the rubric, "This is not a document of title". Any potential purchaser of a ship may well ask to see this document, in the same way as the intending purchaser of a car may inspect a log book. Both would be unwise to rely upon either as evidence of title. But let us suppose that a potential purchaser did so. Let us suppose, in other words, that he did rely upon the certificate of registration as evidence of title and, having acquired a ship, subsequently discovered, when the real owner came to repossess the ship, that he did not have a good title. Could the potential purchaser then reasonably claim that it was the fault of the organisation which had registered the ship? We believe, in the light of the words on the certificate of registration, that it is unlikely that any court would attribute the prime cause of the damage suffered by the purchaser to the organisation which had registered the ship.
In so far as there is a possiblity that such an organisation could be found guilty of negligence, I should have thought that the best course would be for that organisation to take out the appropriate insurance cover to deal with this contingency. We believe that it
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would be anomalous to include in the Bill words which indicate that any claim to title made by an applicant to the small ships register should not be taken seriously and at the same time to create the offence contained in Clause 3(1)(b) of the Bill concerning false statements for the purpose of securing registration.
Although I believe that the amendment should not be accepted, I am sure the Committee is very grateful to the noble Lord, with all his expertise, for drawing attention to this potential problem. May I suggest to him that we should meet in order to explore the problem further, in the hope of being able to find a possible solution? With, I hope, the utmost courtesy which is customary in your Lordships' House, I have to say to the noble Lord that we cannot accept his amendment as it stands this evening.
Lord Greenway: I am most grateful to the noble Lord, Lord Lyell, for his lengthy explanation of why he cannot at present accept my amendment. I was becoming a little disheartened as he spoke, but was extremely gratified to hear his final remark that his department would be very happy to look again at the matter. With that proviso and reserving the right to bring forward a further amendment, if necessary, at Report stage, for the time being I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Lyell Lord Lyell moved Amendment No. 3:
Page 5, leave out lines 14 to 26 and insert—
("(5) Where an application for the registration under this section of a ship registered under Part I of the 1894 Act is granted—

(a) the registrar of the ship's port of registry may, if the requirements of regulations under this section as to the closure of registration under that Part are met. close the registration of the ship under that Part by entering the closure in the register book; and

(b) the registration under this section shall not take effect unless the registration under that Part is closed under paragraph (a) above and, if it is so closed, shall take effect at the time of closure.").

The noble Lord said: I spoke earlier to this amendment. It is part of a package. I beg to move.
On Question, amendment agreed to.
Clause 5, as amended, agreed to.
Remaining clauses and schedule agreed to.
House resumed: Bill reported, with the amendments.

Energy Costs to Industry
7.36 p.m.
Lord Mottistone Lord Mottistone rose to ask Her Majesty's Government what action they are considering to relieve industry of the present high costs of energy with particular reference to electricity.
The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. My Question is: To ask Her Majesty's Government what action they are considering to relieve industry of the present high costs of energy, with particular reference to electricity. If I had thought more carefully, I should perhaps have been more polite to the Government and said: To ask Her Majesty's Government

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what further action they are considering to relieve industry, et cetera. It being a Question, I shall be unable at a later stage to thank those noble Lords who are to take part in the debate. At this stage, therefore, I should like to do so. In particular, may I thank my noble friend Lord Avon who is to answer the Question, and at the same time congratulate him on being in a position so to do, and to be doing so on behalf of his own department. It is a great pleasure to me and, I am sure, to your Lordships to see my noble friend in this position.
I have to declare an interest. This Question was put down at the request of the CBI, with whom I am closely associated. It is mainly their view which I shall be putting to your Lordships. Both they and individual sectoral organisations have made consistent representations over the last two years regarding the level of United Kingdom energy prices and the threat which they pose to international competitiveness. It is this particular point, the threat to international competitiveness, which I shall seek to make the most important. It is very important for us that everything which can be done to make it possible for industry to be competitive in the world today should be done. Large organisations which have their eyes cast inwards, as some of our energy-producing industries have, should be aware of the absolutely vital effect that they have not only on the companies which produce goods for export, but also on the multifarious other companies which support the major ones. There has been some relief in certain respects. We acknowledge and welcome the £250 million assistance given to industry in the 1981 and 1982 Budgets. I hope that in the Budget which is about to be presented the same tendency can be continued, with particular emphasis on the points which I shall make later.
The CBI also welcomes the gas freeze and the electricity prices standstill envisaged for 1983. However, problem areas remain—particularly for electricity intensive industries, and the CBI continues to seek further relief from the severe burden borne by such industries and continues to drive for competitive United Kingdom energy prices. United Kingdom electricity prices to energy intensive users is now the main area where significant price disparities exist in comparison with some of our European competitors. At the December NEDC meeting the Secretary of State for Energy presented a paper which constituted the results of his department's review of electricity pricing, and particularly the CEGBs bulk supply tariff. The department's paper endorsed the long-run, marginal cost approach to electricity pricing, and also broadly endorsed the existing tariff structures—particularly as they applied to large and intensive users. However, a number of changes in the BST have been proposed in the light of the supply industry's service capacity, which has enabled the Secretary of State to announce that there will be no increase in the average level of prices in 1983.
Clearly, the CBI welcomes that, but it is very concerned that the effects of these changes are likely to be such that the electricity intensive industries will be those subjected to actual price increases. This is the very sector on whose behalf the CBI has been campaiging for lower prices. The CBI supports long-
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run marginal costs as the theory for electricity pricing, but by its nature it is very imprecise when applied in practice; it involves a whole range of assumptions. As a result, there are inevitable large margins for ever as far as individual companies are concerned.
Turning now to comparisons, the CBI is still completing agreed, updated energy price comparisons for October 1982 but based on electricity council figures for 1st October 1982. The level of prices to high load factor industrial consumers in England and Wales is higher by up to 25 per cent. than in Western Germany; 30 per cent. than in Belgium; 40 per cent. than in France; and 50 per cent. than in Italy. Although there have been considerable exchange rate fluctuations since October, these cannot erode the differentials of this order of magnitude—and indeed, they have not done so. The CBI has always acknowledged that for the majority, numerically, of industry United Kingdom electricity prices are broadly in line with Continental levels, with the exception of France, where industrial prices tend to be lower at all levels of consumption.
The problem area is the large and high load factor users who are among the 1 per cent. of industrial users who account for 50 per cent. by volume of industrial electricity consumption. The sums of money involved in helping these consumers are not large. For example, £200 million would go a considerable way towards bringing their prices closer to those of their Continental competitors. The ramifications go beyond the confines of the intensive industries themselves and include the knock-on effect on other sectors of manufacturing industry which are dependent upon some of these energy intensive processes, as I indicated at the beginning of my speech. For these reasons the CBI continues to press for further action.
I do not propose to talk about gas because it is getting late, but I should like to make mention of oil. United Kingdom oil product prices, inclusive of tax and duty, have remained higher than the weighted average EEC level throughout 1982. United Kingdom heavy oil prices, inclusive of duty, have been higher than those of major EEC countries throughout 1982; the major element of disparity being the higher level of duty levied in the United Kingdom. Comparable figures, which I will not read out to your Lordships, show that Britain has a higher pound per tonne cost for heavy oil than any other of the European countries, with the exception of Denmark and Ireland, with which we compete so closely.
While we are talking about oil, I should remind your Lordships that oil required for heating in the horticultural industry over the past year, and in particular for the growing of tomatoes, was higher in cost than that for the Dutch, with whom we are in strong competition, because the Dutch heavily subsidise their oil. Indeed, this caused the European Commission to take them to court; but by the time that the European Commission had got around to taking the Dutch to court, and by the time the Dutch had done anything about it, the damage was done and many tomato processors in this country went out of business as a result. By the time they had done so, the Dutch had achieved their object. I mention that as an example of where, although it is contrary to the Treaty of Rome and the Dutch were at fault, we in this country really

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must look to the needs of particular people along a narrow front, in order to ensure that competition is fairly conducted and is not unfairly created by Government action in being slow to realise what is going on in the world outside.
I turn now to a letter I have received from my noble friend Lord Drumalbyn, who wrote to me saying he was sad he could not be here this week and asking me to make two points to my noble friend Lord Avon; one for consideration and the other for investigation. My noble friend Lord Drumalbyn writes:
"It really is time that the Government stopped pussy-footing about this. The very least they can do is to appoint a committee of chartered accountants, or even a single firm, or even a single person, to establish the true costs of supplying electricity to large industrial users and to recommend a properly graded scale of charges related to costs of supply and to consumption by industrial users".
The Government might care to give serious thought to this approach; setting up a body perhaps only temporarily, to look at the problem of competition with our neighbours.
My noble friend Lord Drumalbyn adds as a postcript, and maybe the noble Lord, Lord Kirkhill, will be interested to lean this:
"The Scottish electricity boards have been behaving particularly badly. I understand that in response to the Government's express wishes they have offered reductions of charges less than half as great as those offered by the English authorities in return for undertakings by customers to reduce or interrupt consumption at the bidding of the supplier".
Perhaps the noble Lord, Lord Kirkhill, would care to comment on that. If it is so, then I hope he can see a way of putting this right.
In conclusion, there has been a measure of success in the concerted campaign that has been conducted by industry, and the individual sectors of industry concerned, over the past couple of years. There is greater recognition of the need for competitively priced energy. The assistance given in the last two Budgets, the continued gas price freeze and the 1983 average electricity price standstill are all to be welcomed—but despite these achievements, the largest single problem area remaining, and the one to which I hope my noble friend Lord Avon will particularly reply, is electricity prices to high load and high load factor users.
7.50 p.m.
Lord Kirkhill: My Lords, the issue we discuss this evening is a matter on which many of our leading industrialists have voiced public disquiet in recent months, and Lord Mottistone has, therefore, performed a signal service in initiating this debate. Incidentally, in congratulating the noble Earl, Lord Avon, upon his becoming an Under-Secretary of State at the Department of Energy, with the consequence that that department will now have a most compelling voice in this House, it may nevertheless be pertinent to remark that there will soon be more partisan occasions when his considerable talents and debating fortitude will perhaps be tested rather more than may be the case this evening.
My contribution to your Lordships' conclusions tonight will be brief; I have an inescapable—one always says that, but it is true—dinner commitment which I must attend, and I apologise in advance that I
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shall therefore not be present at the winding-up. But until the end of last year I was chairman of the Hydro Board, so the problem has been claiming some of my attention in recent months.
Discussions on industrial electricity prices usually focus on large high load factor consumers. While electricity charges undoubtedly constitute a significant part of the costs of those consumers, they in fact affect only a very small number of industrial consumers. For example, in England and Wales, of 200,000 industrial consumers just over 3,000 have demands of over 1 Mw and only 170 of those have load factors over 70 per cent., which is the generally accepted percentage defining a high load factor. In Scotland there are approximately 375 industrial consumers who have demands of over 1 Mw and of those 18 have load factors over 70 per cent. Within that group only 45 have demand in excess of 6 Mw and only three of those have load factors over 70 per cent. I would, therefore, point out to your Lordships that the largest 1 per cent. of the loads account for about 50 per cent. of industrial electricity consumption, and it is, of course, in this area that problems have arisen.
In 1980 the National Economic Development Council formed a task force to examine the reasons for price disparities within the EEC, and the task force reports subsequently showed that on the lower loads and load factors British prices are comparable to those in Belgium and Germany, cheaper than those in Italy or the Netherlands but more expensive than those in France. Moreover, I should particularly stress that prices in France are considerably below those in all other European countries. For very large loads at high load factors, with the exception of Italy in one special case, the French prices are the cheapest in Europe.
The outlook for British prices is now becoming favourable because the devaluation of sterling since October last has improved the relative position. Another helpful factor is that France, Germany and Italy are all expected to raise their prices by about 10 per cent. in 1983, whereas our prices, as Lord Mottistone has just mentioned, are going to be held at the same general level as pertained in 1982.
I should perhaps emphasise to your Lordships that the task force indicated the main reasons for price disparities as being exchange rate movements, the natural endowment of some countries with cheap fuel sources, and price concessions or subsidies to certain industrial sectors and/or consumers. In France cheap prices are attributable to the significant proportion of hydro-electric generation which occurs and the major nuclear programme developed there, which accounted for nearly 38 per cent. of French production in 1981. One other factor which is not insignificant is that the French electricity utility lost 8 billion francs in 1982, which does amount in effect to some sort of subsidy. In Germany lower prices can be attributed to the availability of brown coal, special accounting provisions particular to that country and preserved arrangements for certain groups of consumers, which, as I understand it, are generally in the process of being phased out.
Finally, it is worth my mentioning that the range of prices in industrial Europe is fairly narrow in an international context. The range found in Germany

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alone encompasses that for the industrial areas of the EEC, while in the United States industrial prices in the most expensive areas—for example, New York—are four times those of the hydro-electric based utilities of the North West. Nevertheless, although I have just indicated that there is considerable evidence to show that the British price position is becoming more favourable vis-à-vis the EEC, the present Government's somewhat oppressive view of the nationalised industries, emphasised by their manipulation of the cash limit not only this year but in previous years, does not augur well for the prospect of that more substantial redress which many industrialists consider to be imperative.
Lord Bruce of Donington: My Lords, before the noble Lord sits down, would he clarify one point? When he said 8 billion in the case of France, was he referring to francs or pounds or dollars?
Lord Kirkhill: My Lords, perhaps I did not speak as clearly as I should have done, but certainly I was referring to francs.
7.58 p.m.
Lord Tanlaw: My Lords, I am very grateful to the noble Lord, Lord Mottistone, for drawing the attention of the House to this complaint—which it is—from industry about making us uncompetitive with our overseas competitors. I have already given the noble Earl my congratulations rather hastily during the flurry of Question Time, but, if I may repeat them again in the calmer waters of the evening and an Unstarred Question, I look forward to some interesting debates on his new subject.
I have taken at random evidence, of which there is plenty, in support of the kind of plea being put forward by Lord Mottistone. The evidence I have taken is that of the British Paper and Board Industry Federation on the EEC Commission's communication, Investment in the Rational Use of Energy. I think that it is fairly representative of the kind of views put forward by British industries which are heavy users of electricity. It would seem that the overall concern is that there is no clear or consistent Government policy vis-à-vis energy, which leaves the industry—in this case, the paper and board industry—in a permanent state of uncertainty.
This, of course, applies to all heavy users of electricity. They get little consolation from the Government's attitude that market forces should be allowed to dictate events. As we have heard from Lord Mottistone, the market forces are negative, in the sense that their competitors have access to cheaper electricity. Therefore, if one takes the Government policy to its final conclusion, the market forces encourage paper and board to be made in Europe or in those areas where there is cheap electricity, and not in the United Kingdom. That is absurd and obviously not practical.
Thirdly, there is the problem that the Department of Energy has implied on many occasions, as well as stating publicly, that its primary concern is for the energy supply industry and not for the energy consumers. This is another plea from industry. It does
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not know to whom it should turn for advice and guidance on the cost of energy for its future plans. This concern, coupled with the lack of a consistent Government policy—those are the industry's words, not mine—regarding the pricing and marketing of all forms of energy, is often cited as a major reason for hesitation in making energy project investment, especially by those companies which have to commit themselves to a one-fuel policy.
Perhaps I may hesitate here for a moment and consider the position of industry not knowing where to turn. If industry goes to the CEGB it is told quite clearly that the CEGB's role is to supply electricity generation as cheaply as possible to the area generating boards, whose responsibility it is to market electricity at varying prices which depend on their own economic situation. The noble Lord, Lord Kirkhill, has already indicated how this is done. Therefore, industry can get such information as generation costs from the accounts of the CEGB, and it would appear that nuclear electricity at Heysham I can be produced at 2·59 pence per kilowatt hour, while it is intended to be produced from Drax B, a coal-fired power station, at 3·84 pence per kilowatt hour. The only trouble is that if one asks the CEGB what electricity will cost from the Sizewell B PWR reactor, it appears not to know the answer. It seems a little late in the day not to know what the CEGB hopes for from the PWR reactor at Sizewell. I shall be quoting briefly from the CEGB statement of case for this inquiry which gives some indications that are not very encouraging.
Industry may also go to the Electricity Council, which has been quoted, for help; but its role is only to co-ordinate electricity supply. It does not have the power to set the price for electricity generation or to market electricity to the consumer. It just has an advisory role. Therefore, what body, if any, can industry approach in order to obtain some sensible answers about making long-term investment in an industry that will demand heavy calls on electricity? The answer is, none. Therefore, the CBI and other interested bodies are right to worry about the Government's view—and this applies to successive governments—on how to be guided on investment when large amounts of electricity are required.
My first question to the noble Earl, therefore, is: can he clear up the matter and state quite categorically whether he can give a price per kilowatt hour for electricity produced from the PWR reactor at Sizewell B? We hope to get that information this evening.
I come back to the suggestion that I made during the recent debate on the fast breeder reactor. Is there not a case for giving some powers to the Electricity Council, which is either the ultimate quango or has a real job to perform in stabilising the situation, with the ability to produce long-term contracts for industry with reassurances on energy prices? Why not give the Electricity Council the powers of the old Heat and Power Board which could at least spread across the country a unanimity of prices? It is here that I must disagree with the noble Lord, Lord Kirkhill. From the evidence submitted by the British paper and board industry, it would appear that the United Kingdom, in European terms, has the highest cost for energy, which went up as far as 5 pence per kilowatt hour. Prices

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varied from 5 pence per kilowatt hour to 2·75 pence per kilowatt hour. This referred to purchased electricity in Europe and we did not compare at all well with our competitors. I believe that competitors in Holland, France, Germany, Finland, Canada—which is not in Europe, I agree—had the lowest purchased electricity cost at under one penny per kilowatt hour. This is why it is very important, not only for us on these Benches who have an interest in energy, but for all industry, to know the Government's and the CEGB's targets for the production of electricity and at what cost.
I turn now, because I could not get an answer from the CEGB on the intended price of electricity from the Sizewell B power station, to the CEGB statement of case, appendix L, on the Sizewell B public inquiry. This contains a graph which shows that in 1990, under various scenarios, the cost per kilowatt hour, which will be sold at 1982 monetary values, will be in the region of 4 pence per kilowatt hour—that is, from 1990 to the year 2010. This is still considerably in excess of the charges made by our European competitors for electricity today. This target is put forward for a future which has a high nuclear content of electricity generation.
Referring to the statement of case, Appendix D, table D6, may help the noble Lord, Lord Mottistone, in some of his answers to the CBI. This gives the United Kingdom fuel prices to final users in the year 2000. This is compared with the price of electricity to industrial users in 1979–80. This is where I can set an easy problem for the noble Earl. The price is given as 91 pence per therm. I am not very good at mathematics, but could the noble Earl ask the experts who are at his disposal, but not at mine, what that is in terms of pence per kilowatt hour? We can then debate this using the same units. I am sure that, whether it is in the submission of evidence or in the CEGB accounts, pence per kilowatt hour is used as the yardstick for assessment. Unfortunately, with the Sizewell B power station the CEGB seem to be being difficult by switching to pence per therm. If that can be converted, we can all talk about the same comparative unit costs.
At 1979–80 prices, the cost of electricity to the industrial sector is still nearly seven times higher than coal. According to this table, given in evidence by the CEGB in its case for Sizewell B, the price of its electricity—against a high nuclear background—will still be three times more expensive than coal. It is still considerably more expensive than gas, whether of the interruptible or uninterruptible sort. It is two and a half times more expensive than gas and three times more expensive than interruptible gas and five times more expensive than coal.
The worry which I have is that, if electricity is to replace gas as the main space heater in the year 2,000, for which it is designed and for which this whole programme of electricity generation has been designed, it will be very difficult, at the prices shown in the case, to support the CEGB's case for more nuclear power.
Therefore, I should like to ask the noble Earl one final question which concerns the price of coal. The
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price of electricity today from coal-fired power stations is clearly dependent upon the price which the CEGB can negotiate from the Coal Board—that is, it is dependent upon the price of coal. The question which I want to ask the noble Earl—and it is very important and extremely relevant to the future and to Lord Mottistone's Question—is: why should the CEGB have to buy coal from the Coal Board at an average price which includes the very high cost of keeping uneconomic pits open? There is an artificially high price which contains an element—indeed, a large element—of subsidy.
If there is a vast surplus of coal, which there is at present, and there is a need to maintain electricity at a low cost, is there not a very strong case for allowing the CEGB to purchase coal from the pithead at the best price it can? I believe that it would be able to do so very economically and, indeed, in direct and profitable competition with its other choice, which is importing coal from Poland or Australia. In my view this may make a major contribution towards bringing down the cost of coal-fired electricity and possibly giving an extension of period to the coal-fired power stations—including the new ones like Drax B which I have already mentioned. I believe that the answer to these questions will be most helpful not only to myself and my party but also to the noble Lord, Lord Mottistone, and the whole of British industry, which does not know where it stands. Indeed, we none of us know where we stand about the future price of electricity. That is why the Unstarred Question that has been raised this evening is relevant and requires an answer.
8.12 p.m.
Lord Boardman: My Lords, like other noble Lords who have spoken in this debate, I am most grateful to my noble friend for raising this Unstarred Question because it goes to the heart of industrial costs. I must begin by declaring an interest because I am chairman of a company which is a very large consumer of fuel, or at least it is in my view. It spends some £30 million a year on fuel and for certain operations the fuel cost, the energy cost, represents sometimes as much as 40 per cent. of the total costs of production as regards certain products. Therefore, the price at which energy is available, relative to the price at which it is available to our overseas competitors, is critical.
Along with my noble friend I acknowledge what has been done so far. But I must say that it is not yet enough. I shall avoid swapping statistics or perhaps even following the noble Lord, Lord Tanlaw, on his costing information. From my experience when I was the Minister responsible for the energy industries, I find that one can become very lost in the figures and the variety of ways in which they can be presented. However, my noble friend put his finger on what I consider to be the central matter when he referred to the comparison of the costs of some of our major competitors. I believe he said that in October the United Kingdom costs were 25 per cent. higher than those of West Germany; 40 per cent. higher than those of France; and 50 per cent. higher than those of Italy. Those are very frightening figures and they are certainly not under-estimates because they were provided by the electricity industry itself and they were certainly borne out by my own experience of our

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operations in this country and in some of the other countries. Of course, the gap is even wider in North America. Yet it is with those countries with much cheaper energy costs that we have to compete in world markets.
I remind your Lordships that the high energy users also tend to be the high employers, whether they be the steel industry or some other industry. Indeed, if one looks at what I think are called the "Energetic Gang of Seven" who got together on prices—namely, the British Manmade Fibres Federation; the British Independent Steel Producers' Association; British Paper and Board Industry; the British Steel Corporation; the Chemical Industries Association; the Glass Manufacturers' Federation; and the National Federation of Clay Industries—one finds that they are industries which are very severely affected by energy costs. As your Lordships will have noted from the list that I have read out, they are also very high employers of labour. I fear that high energy costs have meant a fairly dramatic loss of jobs and the knock-on effect of that is not inconsiderable.
Over the years when I have pursued this question in various capacities, one tends to receive a variety of excuses and I should like to refer to one or two of those and to comment upon them. The first and most common one is that the other countries will catch up. They are always going to catch up, but somehow they never do so—the others always seem to have an advantage. I hope that my noble friend when he replies will perhaps avoid some of the excuses that I have been given in the past or perhaps put them over more effectively.
The second excuse is that the rate of exchange affects comparisons and, in fact, whatever figures you gave before the rate of exchange altered, they are completely invalid now. But the unfortunate aspect of that is that it seems to be used whether sterling is high or whether sterling is low. The result on industry is just the same: we are paying more than our competitors.
We are also told that we are bound by obligations to others. An example of that is the heavy oil fuel duty where we are paying £8 per tonne against many other countries who are paying nothing—Italy pays 0·44p a tonne; Germany £3·85; Belgium nothing, and so on. We are told that we are committed to pay this level of heavy oil fuel duty because of contractual arrangements. That may be so, but I cannot believe that it is past the wit of Government to make some other adjustments to compensate for this burden which industry is bearing.
We are reminded, and no doubt rightly, of our EEC obligations and the fact that we should charge prices comparable with market prices. The absurdity of some of that was illustrated in a leader in the Financial Times last month when it criticised and said that it was an absurd argument for the CBI to ask for energy prices comparable with its overseas competitors and that France with its hydro power had natural advantages which should be reflected in its relative costs. What about our natural advantages? What about our North Sea oil and gas? Should they not too be reflected in our relative costs? The argument about our obligations with regard to price parity with our
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European partners and the like does not seem to me to hold up very well.
The noble Lord, Lord Tanlaw, referred—and in my view rightly so—to the coal industry and coal prices which form an enormous part of the electricity generating boards' bill. One of the reasons that one is sometimes given for high electricity prices is that they are necessary to protect our coal industry. Are miners' jobs more important than the jobs of my employees in making magnesia in Hartlepool or refractories in Worksop?—because the price of electricity and the price of energy have been putting them out of their jobs. I ask why I should be forced to make men redundant in Hartlepool or Worksop in order to keep miners producing uneconomic coal at expensive pits in, for example, Kent. I wonder whether that argument can be sustained or should be sustained.
One is then told that another reason is that the Government are precluded from showing undue preference to any class of persons. That is a matter of apportionment of the costs—indeed, once you are satisfied that the costs are necessarily and properly incurred—between the various users. I know from my experience as Minister for Industry of the great variety of choices there were on how to apportion costs, and one could perfectly well and properly justify a lower level of costs on our industrial base.
The differential between our domestic and our industrial prices of energy seems to me to be quite a nonsense. The price of electricity to heavy energy users is much too high and if that price has to be recovered elsewhere, the right place to look is the domestic consumer. If we contrast the gap between our industrial prices and our domestic prices with comparable figures overseas, I believe that it will underline the disparity that is to be found in our apportionment system. We provide cheap energy for people to boil eggs and then we kill off the industrial goose that lays those very eggs. I am sorry, but I believe that this is a nonsense.
The other problem against which one comes up is what I call the "passing-of-the-buck" problem. Industry complains to the Department of Industry and is promptly referred to the Department of Energy which, after due consideration, passes the problem on to the Treasury, and the Treasury then pass it back to the Department of Industry. Perhaps the Ministers in these departments might get together and have a concerted policy. We have great advantages in this country. We are self-sufficient in energy. Why not use it to the advantage of our country and of our industry? I believe that we should adopt the slogan of that very famous firm of private retailers: "We are never knowingly undersold". I see no reason why we should not have that as part of our industrial energy policy. Then industry can compete on fair and equal terms with that overseas. We can use the very great industrial skills of this country free from the burden of costs which are being generated by something of a monopolistic bureaucracy.
8.23 p.m.
Lord Swinfen: My Lords, most of what I wanted to say has already been said by other noble Lords and said very much better than I can. But I should still like

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to make a couple of points which I think are important. The energy-intensive industries in this country are those that produce the raw materials for very many other industries. So if their costs are high, the base costs for other industries are high and this, in turn, puts up the cost of products that we have for export and for our own home consumption. When the cost of electricity is high in comparison with the cost of electricity to similar manufacturers abroad which are feeding their own final industries, it means that their final products are cheaper than ours and enter this country at a lower price than similar products that we produce ourselves.
It is extremely important to keep the price of electricity as low as possible to aid our own exports, which will help to provide employment. The more we export, the more employment we shall have. At the same time, if we can keep the cost of consumer products which are produced in this country low, that will push out similar products that are currently being imported. This will assist our balance of payments; it will also give more work in the industry that is producing goods for sale in this country as well as abroad.
I understand that the average price of electricity will not be increased in 1983. However, I was rather surprised to find on inquiry that, despite this, the price to intensive industrial consumers will increase by 3 per cent. this year, which means that their costs will go up. Inevitably, they will have to put up the cost of their products to our other industries and, therefore, reduce competitiveness all round. If the Government can arrange that the cost of electricity to high users is maintained at the same price throughout the year, I think that this will be of inestimable value to the country as a whole.
I realise that the price of electricity will need to be revised at the end of 1983 because, unfortunately, inflation has not come down to zero, although the Government are working in that direction and are, I think, doing a good job on it. But, if they can arrange for there to be no increase at all in the price of energy to high users in industry for, say, the next two or three years, this will improve our competitive position with our overseas competitors. But, if they find that that is totally impossible and unacceptable because of rising costs of production, they should ensure that any increase is held to a minimum, and preferably not more than 50 per cent. of any inflation.
8.27 p.m.
Lord Bruce of Donington: My Lords, the House will be most grateful to the noble Lord, Lord Mottistone, for having introduced this Unstarred Question, because the noble Lord always speaks with authority in conveying to your Lordships the broad and general views of the Confederation of British Industry on these and kindred matters. Before making the few remarks that I shall make, I should like officially to offer my felicitations to the noble Earl, Lord Avon, on his new governmental position. We wish him well in the task that he has to carry out, and although we shall be in disputation from time to time, we have no doubt that the noble Earl will pursue his debates in this House in the very pleasant and constructive way which has been his custom in the past.
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This debate on the costs of energy for industry takes place at a most critical time. Your Lordships will have seen the article in the City section of The Times of yesterday. It may not have attracted all that amount of public attention because, as usual, it did not feature in the popular dailies. It stated that industrial output is now at its lowest level for 17 years. This is the context within which this Unstarred Question should be considered, because industry at its present low and depressed level—and on this occasion I shall refrain from dealing with the broad reasons as to why this disaster has occurred—makes it very necessary for any Government of any political complexion whatsoever to do all that they possibly can to assist what remains of British industry at this time.
As the noble Lord, Lord Boardman, pointed out, the industries which are the very large energy consumer industries are some of the basic and fundamental industries of this country. To the list that he mentioned the food manufacturers should also be added as being very large consumers of energy. In fact, according to the EEC papers that have been put out on this, 30 per cent. of all energy consumption in this country is consumed by industry.
I was a little surprised that the noble Lord, Lord Mottistone, expressed his gratitude for the freeze that was anticipated for 1983, particularly after his pungent reference to the fact that 50 per cent. of industrial consumption of electricity was in the users of the high load factor. We are indebted to the noble Lord, Lord Swinfen, who made a speech of some brevity but also of some pungency, for the information that in those cases the rise is going to be 3 per cent. during the current year. Not exactly a freeze!
What really can be done? Sometimes we have the impression—and we are deliberately given the impression—that the Government are committed to the free play of market forces. Members on both sides of the House will have listened to the admonitions, some of them pontifical and some of them urbane, that have come from the Government Benches concerning the basic validity of market forces. But of course in the field of energy, as we well know, this has never applied since this Government has been in office, or more particularly since 16th January 1980, almost exactly three years ago. Your Lordships will recall that the noble Earl, Lord Gowrie, who at that time was speaking on electricity matters, announced the Government's direct intervention into prices in the energy industry.
He announced direct intructions as to the financial targets which in future would have to be adhered to by both the gas industry and the electricity industry by setting down certain returns on capital employed, based on some mythical concept of current cost accounting and expressed as a percentage thereof. This was a device which was denounced some time later by the noble Lord, Lord Weinstock, as a lot of mumbo jumbo. It insisted at any rate on a 9 per cent. return on net assets on a curent cost accounting basis, and on a similar basis for gas.
He announced at the time that this would result in price levels being set for the next succeeding years at 10 per cent. above the rate of inflation. No option was given to the electricity industry, no option was given to

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the gas industry, to let market forces operate and to enter into their own independent contracts within what they considered to be financially feasible rates of return, and which they considered proper. They had no option at all. If the noble Lord wishes to question that, I have the speech here.
They were told at the time that it was the gentlemen of Whitehall who knew best as to what return should be obtained; what capital should be invested; what return on capital should be required. Both the gas and electricity industries were given instructions to adapt their tariff rates accordingly. There was no free play of market forces at all. It was a complete violation. I have no doubt that had the noble Lord, Lord Cockfield, been on the Front Bench at the time, he would almost have had apoplexy listening to that. I can only assume that he did not read afterwards the speech of his noble friend Lord Gowrie. It was a blatant intervention. So for the Government to sit back and wring their hands over the matter and to disclaim responsibility is completely unjustified.
What, after all, is the Department of Energy for? According to its official description:
"The Department of energy is responsible for the development of national policies in relation to all forms of energy, including energy conservation and the development of new sources of energy".
I have been in your Lordships' House for a long time now, but during the last three years it has seemed to me that the greater part of the energies of the Department of Energy have been spent in flogging off national assets to the City friends of their party. This is where the most time has been spent. All the energy of the Secretary of State has been devoted to selling off assets. Not to make a profit out of them, but in point of fact so that they can add to the ordinary income cash flow of the Government. This is what has been done.
Where has the preoccupation been by the Department of Energy with the problems of industry? Or should there be any preoccupation by the Department of Energy with the problems of industry? Is industry a sufficiently important economic segment of the country, as against the City of London and the landed estates and the farms? Is it of sufficient significance to be given serious assistance and serious constructive thought by the Department of Energy? It is no mean department. It costs the country £14 million a year, and it employs 1,140 people, with an average salary bill of rather over £11,000 per person. That goes right down to the doorman. What are they doing to help industry?
These questions are not put offensively to the noble Earl at all. But every now and again surely we in this country can take a step back away from the cocoon of Westminster and ask ourselves: just what are these people there for? Just what are they doing? If they are not helping industry, what useful purpose do they serve? They can enunciate very learned documents and advice, and even give financial assistance towards the conservation of energy. But, as the noble Lord, Lord Boardman, will know, and the noble Lord, Lord Mottistone, will know just as well, because they both have experience of industry, there are many firms in this country that could adopt energy-saving methods and fuel substitutions if they in fact had the finances to
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do so. But these require considerable investment, and the investment climate is not suitable at this time, still bumping along at what is euphemistically called the trough of the depression. Now is not a time when this can be done.
In any case, such energy conservation measures as may be suggested by the Ministry relate mainly to the environmental aspects of industry—the temperature within the works, savings due to climatic losses and so on—but they do not relate in the main to the basic consumption of primary electricity driving the machines themselves.
The case was made out formidably by my noble friend Lord Kirkhill, but more particularly by the noble Lords, Lord Mottistone, Lord Boardman and Lord Tanlaw, that there are considerable price differentials between ourselves and Europe. In my experience—and I have questioned Ministers frequently in the past three years on the subject—any time it is suggested that the prices of British energy are uncompetitive compared with those on the Continent, that is denied or side-stepped. But the figures produced today by Lord Mottistone, reinforced by Lord Boardman and added to by Lord Swinfen, surely prove the case.
Why are the Government so reluctant to do what other countries, particularly in Europe, do in setting, as a deliberate act of subsidy, the prices of energy to industry? Is it because it is against a particular economic principle? They do not have one. On the one hand, they say they are all in favour of market prices exerting the level, and on the other they promptly go against that by fixing their own prices, irrespective of market forces. So that principle will not stand.
I commend to the Government a different kind of principle altogether, one touched on by the noble Lord, Lord Boardman, who really asked why the Government did not fix price levels, or at any rate establish the parameters within which they may move, in the best interests of industry as a whole. In fact, he made the entire case when he pointed out the complete irrationality of the situation in view of the considerable energy resources we have in stark distinction to many other countries in Europe, whose energy prices, mysteriously, are much lower.
I do not think I misrepresent the noble Lord, Lord Boardman—I am not trying to inveigle him into being responsible for views he did not articulate—when I say that he put forward the irrationality of having no policy for energy prices that would be of assistance to industry. He might reflect a little more ruefully that such a state of mind does not apply when it comes to agriculture, where everything must be planned; no farm income can be lower than a certain point and everything is fixed in complete contradiction to market forces.
I will not—I cannot—anticipate what the Minister will say in reply, but he will have to address himself sooner or later to the essential question whether the Government will give some practical and rational assistance to industry by fixing the parameters within which energy costs may move, thereby giving a certain flexibility to the producers of energy, in such a way that at least our main industries can be put on the same footing of those in Italy, France, Germany and

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elsewhere, rather than languish at the top with grave consequences to industry and unemployment in this country, due almost entirely to a dogma that was established three years ago in arbitrarily setting out policies which bear no relevance to the real industrial requirements of the time, a dogma that has since been entirely discredited by events and has been wholly discredited by the contributions made to this debate.
8.46 p.m.
The Earl of Avon: My Lords, as noble Lords have stressed, the question of industrial energy costs is a matter of very great importance, not only for industry but for the nation as a whole. I wish, therefore, to add my gratitude to my noble friend Lord Mottistone for giving the House the opportunity of discussing this vital subject.
Before going into the matter in detail, I wish to thank all noble Lords who have been kind enough to welcome me at the Dispatch Box in this capacity, even if they went on to tell me that my department was not very good. Added to that, I thought the noble Lord, Lord Bruce, almost abolished my department before I had even got into it; and I thought he might have waited a little while. Having been in the department for nine days, I have enjoyed it immensely and have found the people there keen and extremely active, both in ideas and in projects.
Industrialists quite rightly attach considerable and particular importance to the cost of their energy. This is for two main reasons. First, the world price of crude oil has risen by 14 times in real terms since 1972, and in every country all other fuel prices have risen dramatically in its wake. Secondly, there continues to be considerable uncertainty over the future of the world energy market; it is not possible to predict with confidence what future prices will be, and to a great extent future market developments are outside our full control.
I thought the noble Lord, Lord Tanlaw, was very brave to reach the year 2,000 in his synopsis, but I realise that he was quoting other figures. The noble Lord asked specifically who industry could turn to for advice on electricity prices. No one can predict energy prices; events in the world energy market over the past 10 years must teach us that. The electricity supply industry will advise potential customers to the best of their ability, but it can be to no one's advantage to pretend that there is certainty where there is none. Our objective is to generate electricity as cheaply as possible.
The recession which has hit the world economy has very largely been caused by the rising cost of world energy supplies. The recession has led to smaller markets, both at home and abroad, and has meant that, even as energy prices have continued to rise, our industry has had to work especially hard at maintaining and improving its competitive position. However, for United Kingdom industries energy is, of course, only one of a whole number of operating costs which every industrial and commercial firm has to meet and which must be kept as low as possible if maximum competitiveness is to be achieved. Indeed, for the average manufacturing firm in the United Kingdom energy accounts for only some 4 per cent. of
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total operating costs, although in the case of some energy intensive sectors this proportion can rise to 20 per cent. or even higher, as my noble friend Lord Boardman stressed.
The Government have been much aware of industry's concerns over energy costs and have taken a number of direct measures to give real and positive help. In his Budget in 1981 my right honourable and learned friend the Chancellor of the Exchequer announced measures worth some £118 million to help industry with gas and electricity prices. Further assistance, worth over £150 million, was announced in last year's Budget. This included, first, the freeze, until the end of 1982, on the price of industrial contracted gas supplies; secondly, new consumer contracted load management arrangements, which should bring price reductions of up to 16 per cent. for the largest electricity users; and thirdly, continued assistance to the National Coal Board to enable them to keep down foundry coke prices.
In total, in the past two years the Government have introduced measures worth over £¼ billion to help industry with its energy costs. And a good deal of this assistance has been aimed principally at the very intensive energy users, who have found rising energy prices to be a particular problem. I take the point of my noble friend Lord Boardman about the next Budget, but I am sure he woud not expect me to comment on that.
In addition to measures of financial assistance, the Government have also taken other steps to help. In July 1980 we asked the electricity supply industry to conduct a review of its bulk supply tariff, and we subsequently sought comments upon it from industrial consumers and engaged consultants to help us look at this very complex subject. If I may say so, I am pleased that my noble friend suggested electricity as his major point, as part of my remit in my department is electricity and also energy conservation as well as the renewables. Following this review, the Government agreed with the industry that there would be no increase in the average level of electricity prices in 1983. This was announced by my right honourable friend the Secretary of State for Energy in another place on 12th November. Details of the actual tariffs which will apply from 1st April will be announced by the industry in due course. Some consumers may see small increases and others receive small reductions, but, on average, prices will remain unchanged: this means an overall reduction in electricity prices in real terms.
My noble friend Lord Swinfen referred to reports that heavy industrial users face tariff increases of 3 per cent. this year and further increases as from next January. I think I should make it clear to my noble friend that the detailed level of tariffs is a matter for the area boards and they have not yet finalised their tariffs which will apply from next April. However, I have no reason to believe that the tariffs will result in an increase as high as 3 per cent. for industrial users. Furthermore, the price standstill which he mentioned is to April 1984 and not to January. There was more good news last November about energy costs for industrial users.
On 1st November the National Coal Board increased industrial coal list prices by a modest 7·9 per cent. and expressed the hope that there would be no

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further increases for 12 months. Almost all coal sold to industry is supplied under contract at a discount below the list price. And since coal now accounts for over 80 per cent. of fuel used in power stations, this is welcome news for all electricity consumers, too. Also on 8th November the British Gas Corporation announced a 9-month continuation, until 1st October 1983, of their freeze on the price of contracted gas supplies.
The recent announcements about fuel prices for the coming year, together with the measures of help which the Government have given, are, and will be, of significant help to British industry and commerce, who have warmly welcomed them. Nevertheless, as noble Lords have said, some large users of electricity have claimed that the electricity price structure in this country puts intensive users of electricity at a disadvantage by requiring them to pay substantially more than their European competitors. The facts, however, as I understand them, are these.
A special task force (which was mentioned by the noble Lord, Lord Kirkhill, in a most erudite speech) was set up in 1981 under the auspices of the National Economic Development Council to establish the position on comparative energy prices. It found that, for the great majority of industrial electricity consumers, prices were broadly in line with those elsewhere in Europe. The Electricity Council has been updating these figures, and the general picture, we believe, has not changed. Electricity prices in France remain substantially lower than elsewhere in Europe. They have the advantage of generating over 50 per cent. of their electricity from relatively low-cost nuclear and hydroelectric power. But our prices compare well against other countries such as Germany, Italy and the Netherlands.
It is true that our prices are towards the top end of the range of European prices for those few consumers whose electricity demand is virtually constant over the year and who thus have a load factor of 80 per cent. or more. But it would be wrong to put excessive weight on this. Only a small minority of consumers, as we have heard, come into this category. These figures are not relevant to the large majority of intensive users of electricity, such as those in the steel industry, who necessarily operate at much lower load factors.
The Government are indeed concerned that the electricity tariff structure should give proper recognition to those users whose pattern of demand makes them cheaper to supply. Under existing tariffs, intensive users already pay up to 40 per cent. less per unit than the average consumer. We have examined carefully the claims made by some consumers that the tariff structure is biased against intensive users of electricity, but our studies have not substantiated them.
Today energy everywhere is an expensive commodity. But as the NEDC task force reports made clear, for the vast majority of industrial users, energy prices in the United Kingdom are no higher than on the Continent. Differences between energy prices in different countries can occur, either for short-term reasons or because markets have different structures. In the shorter term, as exchange rates fluctuate, so
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relative energy prices, like the prices of all other goods, will change. For much of last year sterling had a relatively high value, so that overseas prices were lower when expressed in sterling terms. Since the autumn, however, European currencies have risen by around 13 per cent. against Sterling. Consequently United Kingdom energy prices have fallen significantly in relation to those of our competitors. I noted that my noble friend Lord Boardman forbade me to mention this topic, but I hope he will forgive me for stating just that.
The case of electricity prices in France, to which I have already referred, is a good example of how prices are affected by the structure of a market or supply system. A country which is able to produce electricity at a lower cost will always have an advantage over high cost producers. This is something we need to achieve for the United Kingdom, for the benefit of industry and all other consumers. I can assure my noble friend Lord Mottistone that it is the Government's intention that United Kingdom energy prices should be as competitive as possible.
I believe that we have gone a long way. I must emphasise, however, that subsidisation of energy costs is no answer. I noticed here that the noble Lord, Lord Bruce, in a way called for subsidisation; whereas I did not think that the noble Lord, Lord Tanlaw, did so. Although I was not quite sure what his solution was, I believe that he called for a reorganisation of the electricity industry.
As other Administrations have found to their cost, subsidisation, sometimes euphemistically called price control, only breeds a false sense of security and inevitably leads in the longer run only to even higher prices and to the unpleasant necessity of coming to terms with reality. The primary aim of the Government in the energy sector is to set a framework which will ensure that the market operates with a minimum of distortion and that energy is produced and consumed efficiently. The fulcrum of economic efficiency in any market is, of course, the price, so it is essential that energy is priced on a realistic and economic basis.
The importance of market forces in the energy sector is not a phenomenon which has been created or developed by the Government, as it sometimes seems. As the events of the past decade have shown, it is an inescapable fact of life. Energy is largely, and increasingly, an internationally-traded product. Even if it were possible or economically sound to do so, the United Kingdom could not insulate itself from the effects of the market. We import gas and both import and export crude oil and refined petroleum products, all at world market prices. The price of coal is also determined by the prices of competing fuels, including fuel oil and coal imports. And, of course, the price of coal in turn affects the price of electricity. Subject to the need, therefore, for the energy utilities to cover their long-term costs of supply, the market mechanism should work so as to allow our energy prices to be as competitive as possible. And we believe that economic pricing which provides the right market signals will help us to reduce our dependence on oil and achieve the most economic balance of energy supply and demand. It should also ensure that large industrial consumers, whose demand results in lower unit costs

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of supply, should pay prices which reflect those lower costs.
Of course, with the significant exception of oil and oil products, available energy resources are largely concentrated in the hands of public sector monopolies, with the result that the influence of competition and free market forces is muted. The noble Lord, Lord Bruce, touched on this. Where possible, we have tried to open the energy sector up to greater competition. The Oil and Gas (Enterprise) Act 1982 brought to an end the virtual monopoly held by the British Gas Corporation over the purchase and sale of gas. Greater competition in the longer term in the supply of gas to large industrial users will mean a better deal for the customer.
A Bill is also currently before Parliament which would allow the private generation of electricity as a main business. This should encourage combined heat and power schemes by allowing the private sector to invest with greater confidence where economic projects exist, and open the electricity market to greater competition. In the past three years we have also commissioned independent scrutinies, by the Monopolies and Mergers Commission or by external consultants of the Central Electricity Generating Board, the British Gas Corporation and the National Coal Board and also one area electricity board.
In addition to these specific measures, we discuss energy prices with the nationalised industries on the basis that prices should be on an economic basis, reflecting market pressures where reasonably open markets exist, or supply costs in other cases. This is one of the important factors we take into account when agreeing financial targets and limits with those industries. The purpose of the approach which I have outlined is to ensure that the right conditions exist for energy prices to industry to be as competitive as possible.
I should like to say a few words about energy efficiency in industry. There is a good deal that industry can do itself to reduce energy costs. A report by the consultants Armitage Norton last year concluded that a large number of energy efficient investments were already cost effective. I hope that managers in industry will realise that those opportunities are there to be taken. Indeed, there are many firms which have made considerable progress in this area. This has been most encouraging. The report also concluded that realistic energy pricing and clear market signals were the most efficient way of securing efficient and rational energy use.
I said earlier that it was essential for British industry to maintain and improve its competitive position. Recent economic signs have indicated that good progress is being made: our balance of payments has been growing increasingly strong; British goods are becoming more competitive; inflation is well under control, and it is clear that the Government's policies are putting the economy back on a sound footing.
If I may take up one or two specific points which were made during the course of this short debate, my noble friend Lord Mottistone mentioned higher heavy fuel prices. As the two Neddy task force reports showed, differences between net oil product prices in
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the United Kingdom and those on the Continent can emerge because of the United Kingdom's distance from the Rotterdam spot market, and because price fluctuations are dampened by the predominantly contractual nature of the United Kingdom market. I take my noble friend Lord Boardman's point on this topic.
My noble friend Lord Mottistone also asked about horticultural heavy fuel oil being higher in cost here than in the Netherlands. My understanding is that the Dutch horticulturalists use mainly gas rather than fuel oil in greenhouse heating. The rest of the European Community countries, including the United Kingdom, use mainly fuel oil. The preferential gas tariff which the Dutch made available to horticulturalists will be phased out at the end of March this year. Since March 1980, the European Commission has allowed adaptation aid in other member states to help horticultural oil product users during this transition period. This aid has been paid in the United Kingdom to help British consumers. The action by the European Commission in the Dutch case was taken forward substantially at the encouragement of the United Kingdom Government.
The noble Lord, Lord Tanlaw, asked how much electricity at 90 pence per therm would be in pence per kilowatt hour. The answer is roughly 3 pence per kilowatt hour. The noble Lord asked why the CEGB had to pay average prices for NCB coal. The price that the CEGB pays is the result of direct commercial negotiations between the two boards. In general, this is no greater than the price that the CEGB could import the coal for, as I believe he suggests. He also asked about cheaper electricity in the paper industry. The British Paper and Board Industry Federation has participated fully in the comparative price works by the CBI to which my noble friend Lord Mottistone referred. We look forward now to seeing the new results of this work, which I believe will be coming out towards the end of the month. The noble Lord, Lord Tanlaw, referred to electricity prices in the Nordic countries and parts of North America. Consumers in those countries benefit from low cost electricity generated by hydropower or cheap strip mine coal. There is little, I am afraid, that we can do to compete with that.
I should say to the noble Lord, Lord Bruce, that financial targets are not instructions; they are agreed with the industries who recognise the need to operate as businesses. Just because they are in the public sector, they cannot abrogate financial responsibilities, as I am sure the noble Lord will agree. The noble Lord, Lord Tanlaw, asked about the CEGB and the statement that they provided of case and proof of evidence figures for the lifetime availability and load factor of Sizewell B. The Government agree with the CEGB view that the appropriate methods of appraising new power stations is to assess the costs against the total benefits to the system as a whole of building the station. This must take into account the new station's operating costs and the costs saved by the displacement of other more expensive plants. Because of different lifetime operating régimes, these system savings are not identical for nuclear and coal plant. Neither the CEGB nor the Government consider that analysis on the basis only of cost per unit produced is an appropriate method to assess new investment in

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power generation. In order not to disappoint the noble Lord too much, I understand that the type of figures that he is asking for may be coming out in the not too distant future.
My noble friend Lord Mottistone quoted from a letter from my noble friend Lord Drumalbyn calling for an accounting appraisal. I was pleased to hear the noble Lord, Lord Bruce, give a loud "hear, hear" to that suggestion. I shall of course take it on board. Before I close, I should like to say to my noble friend Lord Boardman that I much appreciated his wide-ranging and fascinating speech, which I thought went to the heart of this particular matter. I shall read it again tomorrow with great interest.
I reaffirm that the Government are determined that energy prices to British industry should be as competitive as possible, and competitive energy prices can be secured only by allowing market forces to operate freely and by improving competition and efficiency in the energy sector. The Government will do what they can to ensure that energy is produced as cheaply as possible and prices are set accordingly.
In concluding, I am happy that tonight, rather than saying that I will take this back for my Secretary of State to look at, I can say that I will take it back and look at it myself.
House adjourned at eight minutes past nine o'clock.