Lords Sitting of 17 November 1983

Preamble
The House met at three of the clock: the Lord Chancellor on the Woolsack.
Prayers—Read by the Lord Bishop of Gloucester.
Lord Ashbourne—Sat first in Parliament after the death of his father.

UN Development Programme: UK Contributions
Lord Hatch of Lusby: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what contributions were made by the United Kingdom to the United Nations Development Programme in real terms in 1978, 1982 and 1983.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, our cash contribution to the United Nations Development Programme was £25 million in 1978 and £185 million in both 1982 and 1983. At the annual United Nations Pledging Conference on 8th November, we announced that United Kingdom contribution to UNDP for 1984 would be £19 million. The precise amounts in real terms depend upon which technical definition of inflation is taken, but the earlier figures do of course show a decline. That is why our policy of reducing inflation is so important and why, happily, this problem should be much less marked in future years.
Lord Hatch of Lusby: My Lords, may I ask the noble Lord the Minister whether it is not a fact that British contributions to the UNDP have been reduced by 56 per cent, in real terms since 1978, which is four times the overall reduction in overseas aid? Secondly, may I ask the noble Lord whether it is not the case that there are now one-third fewer specialists employed by the UNDP than there were in 1979? Finally, in view of the last figures he gave, is the noble Lord telling the House that funds for this year will be, broadly speaking, the same as for last year, which in real terms is a reduction?
Lord Trefgarne: My Lords, it is the case that there has been a real decline in the amount of our contribution to this particular programme. We remain a major contributor among those who do make funds available. The Government's policy has been to give greater priority to bilateral aid and, in general, for our contributions to multilateral agencies to reflect more closely our economic strength. That consideration has been reflected in the amount we have been able to make available to this particular programme. As to the second point made by the noble Lord about there being fewer specialists and others employed, I am afraid it was the case that the UNDP devised some
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programmes which were most unlikely to have been met in the light of the money which the programme expected to receive in terms of total funds, and thus some cutback has, I fear, been inevitable.
Lord Paget of Northampton: My Lords, to what extent are we able to follow those contributions and see what goes into real development and what simply goes into what seems to be an endemic African process of making the rich richer and the poor poorer?
Lord Trefgarne: My Lords, generally speaking, we have a good deal of admiration for the work of the UNDP. We have some reservations from time to time, but the work the UNDP does is good, and we should like to contribute to it as much as we can within the resources that we can make available.
Lord Paget of Northampton: But it is not possible to see that work, my Lords.
Lord Brockway: My Lords, may I ask the noble Lord the Minister whether he really thinks that this contribution is adequate in view of the fact that 30 million people die every year from hunger and from a lack of medical supplies? Will the noble Lord not urge upon his right honourable friend that these contributions should be increased in order, perhaps, to salve even our own consciences when this human disaster is taking place?
Lord Trefgarne: My Lords, nobody pretends that the UNDP by itself, less still our contribution to it, will solve the problems to which the noble Lord has referred. But perhaps they need to be considered in the context of our total aid budget, which exceeds £ 1,000 million.
Lord Bishopston: My Lords, did the noble Lord the Minister read those aspects of the Brandt Report and the recommendations which suggested that if we can raise living standards in such parts of the world we shall get rid of some of the tensions which cause us to spend more on negative forms of defence? That would be positive defence rather than negative defence, and is that not an aspect that the Government should consider in their defence policy?
Lord Trefgarne: That is one point of view, my Lords, and a perfectly respectable point of view. But the fact of the matter is that the Brandt Commission was not so clear as to where the large resources for which it called were to come from.
Lord Bauer: My Lords, will my noble friend Lord Trefgarne please inform the House whether the Government regard as sacrosanct participation in the UNDP, remembering that at the height of the Falklands war the programme substantially helped Argentina in face of the unavailing protest of the United Kingdom representative? Is it not the case that under this programme the United Kingdom has no right to veto spending, even expenditure directly detrimental to Britain?
Lord Trefgarne: My Lords, neither the United Kingdom nor any other member of the UNDP has the

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power of veto; nor can we as donors attach special conditions to our contributions. It is a general principle in multi-lateral aid institutions that political considerations should not enter into their decision-making. The programme for Argentina was approved by the UNDP governing council despite United Kingdom objections because the majority of members were in favour of it. Nevertheless, as I have explained already we contribute to UNDP because we believe it to be an efficient and effective channel for multilateral technical co-operation.
Lord Hatch of Lusby: My Lords, may I refer the noble Lord the Minister back to the second answer he gave to my supplementary, concerning the relationship between funding the UNDP and our weak economic position? Is it not the case that we receive back in orders and in fees for training a great deal more money that we contribute to the UNDP? Is it not the case that the rest of our aid is especially monitored through the activities of the UNDP and therefore becomes more effective? Finally, is it not the case that many members of the industrial world, who are also in a world depression—and I could read out a list of them—are increasing their contributions to the UNDP while the British Government are reducing theirs?
Lord Trefgarne: My Lords, with respect to the noble Lord, there is no connection between the size of contribution from a particular country and the amount of money spent in that country by the UNDP. There is a large proportion of UNDP funds spent in the United Kingdom. The reason why there is such a large proportion is because we can offer the services required and offer good value for money.
Lord Oram: My Lords, at the Commonwealth Conference which Her Majesty the Queen is about to open in New Delhi, are we not likely to be faced once again with third world members of the Commonwealth highly critical of our declining aid programme? Would our influence in the Commonwealth forum not be greatly improved if we took a more positive attitude to such questions as the UNDP?
Lord Trefgarne: My Lords, doubtless there will be some people who think we ought to give more, but the fact is that we must cut our coat according to our cloth. If we were to provide a greatly excessive aid programme, like the one foreshadowed when we came into office, we would soon find ourselves beggared and not able to afford anything.
Lord Hatch of Lusby: My Lords, is this not investment rather than giving?

Wages Councils
3.15 p.m.
Lord Boyd-Carpenter: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many wages councils remain in operation; what is their effect on the levels of juvenile unemployment; and what action they propose to take in respect of them.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, there are currently 26 wages councils. It is not possible to quantify their effects on juvenile unemployment, but if the minimum rates are set at a level that the market will not bear, there will be fewer jobs. Our obligations under International Labour Convention 26 preclude abolition of, or major change to, the wages council system before June 1986. All options will be considered the moment the Government are free to act.
Lord Boyd-Carpenter: My Lords, is my noble friend aware, or are the Government aware, of the harm being done to the Government's policies on wages, and in dealing with unemployment, by the activities of some of these councils? Is my noble friend aware, in particular, that the wages council for the catering industry is imposing by law an increase of 68 per cent, in wage levels generally, with a higher rate of increase in the case of those juveniles whom everybody is anxious to see getting into employment?
The Earl of Gowrie: My Lords, I wholeheartedly share my noble friend's misgivings about the wages council system. When I was the Minister responsible for wages councils I sought to take young people out of their remit. That would have required legislative change, which we were not reluctant to undertake but which would have been in default of the ILO treaty. That treaty, as I said, will come to an end in this respect in 1986.
Lord Rochester: My Lords, would the noble Earl agree that the pay of apprentices is fixed at too high a proportion of the adult rate, and that this has contributed to a reluctance on the part of employers to train young people for skills? Is it not desirable that as negotiating opportunities arise we should aim to move closer to the West German system, where the pay of trainees is substantially lower than adult rates?
The Earl of Gowrie: My Lords, it is very welcome to the Government to have from the Benches of the noble Lord so sensible a supplementary question in relation to market clearing prices. I wish that we could hear responses of the same kind from the Benches of the noble Lord's party in another place.
Lord McIntosh of Haringey: My Lords, bearing in mind the noble Earl's answer to the last supplementary question, will the Government produce some evidence to show that employers are taking on fewer apprentices because of the wage levels? All the evidence I have ever seen indicates that it is the prospect of a job at the end of the apprenticeship that counts.
The Earl of Gowrie: My Lords, the Government have very regular contact with employers, both individually and in terms of their organisations, and they have never ceased to make this representation to us.
Lord Orr-Ewing: My Lords, is my noble friend aware that in the catering industry there are very large numbers of part-time jobs, in particular in the summer at seaside resorts, and that almost invariably these are

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filled by students from overseas when they would be very welcome to British young people? Does not this situation have a totally adverse effect on the creation of jobs? If we were to pass legislation now, the moment that we got out of our commitment under the ILO treaty we might be able to bring it into effect immediately our obligation ran out, rather than then have to bring in legislation, so causing further delay.
The Earl of Gowrie: My Lords, since we are signatories to the treaty I think that it would be difficult to pre-empt what happens in June 1986, but I did say to the House that the Government would be ready to consider action the moment that we are released from our binding obligations.
Lord Molloy: My Lords, is the noble Earl aware that the wages councils were introduced during a very painful and shameful period of our industrial history in order to prevent child exploitation? It might well be that parts of their functions are no longer necessary and may be duplicated by bigger organisations. Will the noble Earl and the department bear in mind that many small employers still find the wages councils helpful? Bearing in mind those working men and women who have no trade union to represent them, if and when the wages councils are dispensed with, will some guidance be given to small businessmen on how to get in touch with their chambers of commerce and their sections of the CBI, and will guidance be given to the employees about contacting the trades unions that cover their industries?
The Earl of Gowrie: My Lords, I am, of course, very glad that the noble Lord, Lord Molloy, is recognising that legislation belonging to a previous era is often adverse to the prospects for employment in the present era. May I say to the noble Lord that that is a great step forward for him, I shall, of course, take note of the other points that he made.
Lord Boyd-Carpenter: My Lords, can my noble friend clarify one part of his Answer? Do our obligations to the ILO compel the retention until 1986 of all 26 councils, or are we enabled to abolish some of them? If not, how have we been able to make the very welcome reductions that have been made in recent years?
The Earl of Gowrie: My Lords, the Wages Councils Act 1979 allows for individual councils to be abolished where collective bargaining develops, subject to an investigation by ACAS if there are objections. As my noble friend reminds us, in recent years the system has contracted through abolitions and mergers from the level of 57 councils in 1969.
Lord Cledwyn of Penrhos: My Lords, is not the noble Earl grossly exaggerating the position? Can he say how many more jobs will be provided, to reduce the appalling total of three and a quarter million who are out of work, if these councils are abolished, as he wishes them to be? Will he be straightforward and agree with my noble friend Lord Molloy that the wages councils have, in their day, made an enormous contribution to the social life of this country? If we have now reached the position where they are open to
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criticism, is not the noble Earl exaggerating in saying that their abolition will effect some great change in the disgraceful employment situation from which this country is suffering?
The Earl of Gowrie: My Lords, as I stated in my original Answer, it is not possible to quantify the effects of wages councils on juvenile unemployment. It is simply a matter of common sense that if minimum rates are set, for historical reasons, at a level that the market will not bear, there will in consequence be fewer job opportunities available.
Lord Diamond: My Lords, have the Government made any estimate of the percentage by which rates fixed by the councils would fall if the councils were abolished?
The Earl of Gowrie: My Lords, that would not be at all easy to quantify. We have, of course, some indications of the effects about which the noble Lord is asking in terms of the councils which have already been wound up.
Lord Jenkins of Putney: My Lords, would the abolition of the councils be generally and rightly regarded as part of the Government's policy of hitting the poor for the benefit of the rich?
The Earl of Gowrie: No, my Lords.

Pit Closures
3.22 p.m.
Lord Gridley: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what was the number of uneconomic pits in the coal industry closed in the period 1974–79, and what was the number of such pits closed 1979–82.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, the National Coal Board tell me that between April 1974 and March 1979 32 pits closed, while between April 1979 and March 1983 31 pits closed. The finances of individual pits are, of course, a matter for the National Coal Board.
Lord Gridley: My Lords, I thank my noble friend for that Answer. Is it not a fact that at the present time too much coal is being produced from uneconomic pits at prices which the public and industry are unable to pay? Does this not result in a loss to the National Coal Board of £2 million each day?
The Earl of Avon: My Lords, there is indeed an over-abundance of coal, and it is therefore even more vital for the long-term future of the industry that it should return to profitability. The National Coal Board has made it quite clear that this must mean determined action to deal with the problem of the industry's economic tail. I believe there is now widespread recognition of that fact.
Lord Shinwell: My Lords, when are we going to stop this nonsense of closing down pits that are uneconomic? Is the noble Earl aware that at the beginning of the last world war, in 1940, many pits were closed down on the ground that they were unprofitable? Indeed, there was very little done in the way of geological research to overcome the apparent difficulties. Is he further aware that, as a result, in 1942—I am dealing with facts, not imagination—there was a coal crisis because of the coal shortage? I was made aware of that by Mr. Winston Churchill himself, who was very much disturbed about the situation. Should we not be very careful and think ahead? Because there could unfortunately be a conflict in which we require all the energy that is possible. In those circumstances, therefore, does the noble Earl agree that coal is essential so we must sometimes be prepared to accept a part of industry that is uneconomic and unprofitable because of the dangers that lie ahead if we do not?
The Earl of Avon: My Lords, the noble Lord, in his wisdom, goes back earlier than my statistics, which only start in 1947, when there were 958 pits as opposed to the 259 pits in 1974.The point is, of course, that the new pits coming on stream are producing a lot of coal at a much more economic price. There is, therefore, obviously, a need to close some uneconomic pits. About 12 per cent, of pits are costing £275 million a year. Someone must pay for that. There is a balance to be struck, and we believe that the new management of the NCB is looking at this balance in the right light.
Lord Shinwell: My Lords, if the noble Earl is saying that the Labour Government was also responsible, is he aware that I am ready to accept that? We were as much to blame later on, after the war, in closing down so-called uneconomic pits as the previous Chamberlain Government.
The Earl of Avon: My Lords, I was not trying to put the blame anywhere, but just to get my historical facts right.
Lord Ezra: My Lords, will the noble Earl kindly say, bearing in mind that closures of pits which are past their prime is only one part of the strategy for the coal mining industry, that the Government will maintain the policy of substantial investment in new capacity to replace the capacity which is taken out? Moreover, will the noble Earl confirm that the Government will maintain investment in new and advanced coal mining technology, in which Britain at the moment leads the world?
The Earl of Avon: My Lords, the noble Lord is, of course, the expert in this House on the subject. I am happy to confirm that investment will continue as it has in the past.
Lord Hatch of Lusby: My Lords, will the noble Earl agree that the mountain of surplus coal mentioned from the Conservative Back-Benches is nowhere near as large, or as expensive, as the mountain of grain that the Government are subsidising all over the country?
The Earl of Avon: My Lords, I am happy to cross swords with the noble Lord on coal, but I cannot be drawn on this other subject.

Voluntary Schools: Articles of Government
3.28 p.m.
Lord Taylor of Blackburn: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made in the making of new instruments and articles of government for voluntary schools in accordance with the Education Act 1980.
The Earl of Swinton: My Lords, apart from individual new and reorganised schools which have to be dealt with ad hoc, applications for new instruments of government for voluntary schools are, as far as possible, being handled on a diocesan basis. The Act does not affect articles of government. Two dioceses' applications have been dealt with completely and draft final documents for a further five are currently out for formal consultation. Preliminary work on the other 24 applications received is in hand. Together, these applications relate to about a third of the 8,100 voluntary schools in England. Applications are expected shortly in respect of the remaining schools, including the 320 voluntary schools in Wales.
Lord Taylor of Blackburn: My Lords, is the noble Earl aware that, even though he said that these applications are in hand, there is considerable demand at the moment for the instruments of government to be introduced as quickly as possible? Will he therefore take every possible step to bring them forward as soon as he can?
The Earl of Swinton: Yes, my Lords, I am indeed aware of that. I am sure that the noble Lord, Lord Taylor of Blackburn, will also be aware that his own committee thought that this task would take up to five years. In the light of progress that has been made, the Government are currently consulting on the proposal that all schools should be mandatorily required to have new-style governing bodies by 1st September 1985. An announcement will be made shortly.
The Lord Bishop of London: My Lords, is the noble Earl aware that in many dioceses the Church has been unfairly blamed for the delay? The national press stated that the governors of Church schools were resisting the move for new instruments because they involved parent-governor elections, and that this was the reason why the department is now sending a reminder of the need to get on. Is he aware that the situation is quite the reverse and that the Church has done its utmost to hasten matters, sometimes, I dare say, to the embarrassment of the department? We recognise the considerable burden that is placed on the department in dealing with these proposals. Will the noble Earl confirm that the situation is as I have described it, and not as reported in the press and elsewhere?
The Earl of Swinton: My Lords, I am grateful to the right reverend Prelate for making that point. I do not think that there has been any delay either on behalf of the Churches, if I may say so, or on behalf of the department. Although it sounds as though there may be delay, in fact there is not. Instruments for voluntary schools are made by my right honourable friend the Secretary of State on request by the voluntary body concerned; but subject to the outcome of formal local consultations required under the 1944 Act. This is a long-winded procedure and to make it as straightforward as possible voluntary bodies are undertaking informal consultations prior to making their applications. The general state of preparedness is thus much greater than it seems on the surface.
Baroness David: My Lords, how long does an application to the department for a new instrument take from the time that the department receives it until the time that it is agreed and the answer goes back? Is the department trying to hurry the process up in the light of the Government's strong pressure for parent involvement in every aspect of school life?
The Earl of Swinton: My Lords, I cannot give the noble Baroness a definite timetable of how long it takes. As I said in my last Answer, I think that it rather depends on how much preparation has been done before the application is received. The department is very aware of the need for speed and its staffing has been strengthened appropriately to deal with this substantial task.

Business
3.31 p.m.
Lord Denham: My Lords, at a convenient time this afternoon my noble friend Lord Cockfield will, with the leave of the House, repeat the Chancellor of the Exchequer's Autumn Statement. This will be followed by my noble friend Lord Lucas of Chilworth who will, with the leave of the House, repeat a Statement on the Severn Bridge.

Tourism (Overseas Promotion) (Scotland) Bill [H.L.]
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, I beg to introduce a Bill to enable the Scottish Tourist Board to carry on abroad activities to promote tourism to and within Scotland. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Gray of Contin.)
On Question, Bill read a first time, and to be printed.

Inshore Fishing (Scotland) Bill [H.L.]
Lord Gray of Contin: My Lords, I beg to introduce a Bill to make fresh provision for Scotland as regards the regulation of inshore sea fishing and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Gray of Contin.)
On Question, Bill read a first time, and to be printed.

House of Lords Offices: Select Committee Membership
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, on behalf of the Committee of Selection, That the Earl St. Aldwyn be added to the Select Committee on House of Lords Offices in place of the Earl of Stradbroke, deceased.—(Lord Aberdare.)
On Question, Motion agreed to.

Occupiers' Liability Bill [H.L.]
3.33 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales that they, having been informed of the purport of the Occupiers' Liability Bill, have consented to place their prerogative and interest so far as they are concerned on behalf of the Crown, the Duchy of Lancaster and the Duchy of Cornwall at the disposal of Parliament for the purposes of the Bill.
I move that the Bill be now read a third time. In doing so, I should like to thank all the noble Lords who at one time or another have played a part in the discussion of the Bill. It is a useful little piece of law reform which has been achieved through the good work of the English Law Commission. The Bill has as its principal purpose to redefine the duty to trespassers. I also have to thank noble Lords for one or two improvements both before and during the passage of the Bill in relieving occupiers in suitable cases from the Unfair Contract Terms Act. I repeat my gratitude to them all. My Lords, I beg to move.
Moved, That the Bill be now read a third time.—(The Lord Chancellor.)
Lord Mishcon: My Lords, I think that those of your Lordships who took part in the discussions on this Bill should like to reciprocate the warmness of the noble and learned Lord in expressing his gratitude to those of us who tried to make intelligent contributions and say how much we all appreciated the great courtesy that he extended to us in listening to our arguments and giving the impression that he thought that they were worthy of his consideration.
I have only one comment. The noble and learned Lord is so right when he says that this is a useful little bit of legislation. One hopes that it will lead to more landowners according hospitality to those who wish to go upon their land for recreational and educational purposes. I look straight at the noble Lord, Lord Mottistone, when I mention the words "and educational". It was an amendment that had our

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support and indeed the concurrence of the noble and learned Lord in the end.
I go from that to only one statement of disappointment. I was completely unable, as were other noble and learned Lords who participated in the discussion, to persuade the noble and learned Lord the Lord Chancellor that it might be for the benefit of posterity, and certainly for the benefit of the courts, if the phrase "business purposes" was properly defined in the Bill. He gave cogent arguments as to why that should not take place. I hope that some of us also gave cogent arguments as to why we thought that help ought to be given by a legislative assembly such as ours for the guidance of courts, but more particularly so that we could advise clients who are reluctant to go to court for directions or declarations. I repeat that the noble and learned Lord heard our arguments and resisted them with his usual powers of persuasiveness and clarity. I merely therefore end by saying that, while expressing disappointment at that matter, we are all most appreciative of the way that he dealt with the Bill.
Lord Renton: My Lords, I, too, should like to congratulate my noble and learned friend the Lord Chancellor on the introduction and the passage of this Bill and to thank him for the way in which he handled our amendments. As the noble Lord, Lord Mishcon, said, this Bill will be of great help and a great improvement. It should in general lead to better relations between the public and occupiers in the public's obtaining access to the countryside.
However, there is still in the Bill one impediment to that desirable process. I hope that my noble and learned friend will give further thought to the content of Clause 2 of the Bill before it reaches another place and perhaps inspire the removal of a difficulty which has undoubtedly arisen. I do not go along with the noble Lord, Lord Mishcon, in saying that the terms "business liability" and "business purposes" need to be elaborately defined. But when a farmer—whose business after all is simply that of farming—grants access to people to go on to his land so that they may enjoy it for some limited purpose, that should not, and cannot, be regarded as part of his farming activity. Yet under the Bill as it stands he will incur liability which he should not incur. Therefore I feel that a serious point has still to be dealt with, and I implore my noble and learned friend to see that it is dealt with in another place.
The Earl of Caithness: My Lords, I should also like to express thanks on behalf of my noble friend Lord Stanley of Alderley, who regrettably cannot be here, and myself for the very kind help that my noble and learned friend the Lord Chancellor has given to us during the passage of this Bill. He said on Second Reading that the Bill had roundwheels; at least he hoped it had round wheels. I believe they are a bit rounder than they were, though I think that two wobble. I am very concerned, and despite his help, my advice to occupiers of land is still going to be, "Be careful when you allow somebody on the land because it is not clear whether it is your business or not and whether it can be assessed as your business or not". I
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appreciate that there is the obvious example when the charge is sixpence. If it happens to be £5 and a number of people are involved, then the Inland Revenue may very well say it is a business. As an adviser to occupiers, I should find it extremely necessary still to draw that line; but I should like to thank my noble and learned friend for his help. I hope that he will now look at this aspect.
Lord Mottistone: My Lords, I should also like very briefly to add my unqualified thanks to my noble and learned friend for having accepted the amendment that I had the privilege to move on behalf of industry.
The Lord Chancellor: My Lords, I am very grateful to all the noble Lords who have spoken. I am not now very receptive to their anxieties. I wrote to my noble friend Lord Caithness making the matter, as I thought, crystal clear; but evidently I did not succeed then, so I doubt whether I shall succeed on my feet now.
I think it is obvious, if I may say so to my noble friend Lord Renton, that educational and recreational purposes are not normally the business purposes of a farmer. But I think, with respect, that they have not taken on board either of the two points which I made, which are that the purpose of Clause 2 is to enable farmers to exempt themselves from the provisions of the Unfair Contract Terms Act. My noble friend Lord Caithness will not therefore have to advise them about their fundamental liabilities under Clause 2 at all. All he has to do is to advise them about the extent to which they are free to exclude the provisions of the Unfair Contract Terms Act.
As regards the second point made by my noble friend Lord Renton, I simply do not believe that you can turn what is basically a question of fact, depending on a number of different considerations in individual cases, into a question of law by putting a definition into an Act of Parliament, especially when the clause into which you have to put it is an exemption clause.
On Question, Bill read a third time, and passed, and sent to the Commons.

Merchant Shipping (Miscellaneous Provisions) Bill [H.L.]
Lord Lucas of Chilworth: My Lords, I beg to move that this Bill be now read a third time.
The Lord Chancellor: My Lords, the Question is that the said Bill be now read a third time.
As many as are of that opinion will say, "Content"? To the contrary, "Not-Content"? The Contents have it.
There is an amendment—I am so sorry; I did not see that my noble friend wished to speak.
Lord Balfour of Inchrye: My Lords, I wish to ask the Minister one question. I refer to Clause 17 on page 8, the transitional modifications about licences. I would ask the Minister if he could kindly explain to me——
Lord Lucas of Chilworth: My Lords, I wonder whether my noble friend would give way. I think he is

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a little previous. Although I have two Motions on the Order Paper in my name, I have not yet come to that one. If my noble friend Lord Balfour would like to wait a very few minutes, I promise to give attention to what I know is worrying him.
On Question, Bill read a third time.
Clause 2 [Prohibition notices]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 1:
Page 2, line 40, after ("direct") insert ("(i)").
The noble Lord said: My Lords, with the leave of your Lordships and for the convenience of the House, I should like to speak at the same time to all the three amendments—Nos. 1, 2 and 3—which are in my name on the Order Paper, since they are in fact related.
Amendment No. 2:Page 2, line 42, after ("served") insert (", or (ii) that the ship shall not go to sea, (or both of those things)").
Amendment No. 3: Page 5, line 38, leave out from ("unless") to end of line 41 and insert—

("(a) it appears to him that the direction given in pursuance of section 2(3)(d) above contained any such requirement as is mentioned in sub-paragraph (ii) of that provision; or

(b) it appears to him that—

(i) the inspector was of the opinion that there would be such a risk of injury or pollution as is referred to in the notice if the ship went to sea, and

(ii) the effect of the direction given in pursuance of section 2(3)(d) above was to prohibit the departure of the ship unless the matters, or (as the case may be) the matters and contraventions, referred to in the direction were remedied.")

At the Report stage I accepted on behalf of the Government that Clause 5 of the Bill, as it then was, was too restrictive, in that it did not provide for a liability to pay compensation in the case of a prohibition notice which had the same effect as had that of a detention order issued under the Merchant Shipping Act of 1894, but where, in fact, the notice did not expressly prevent the departure of the ship. I accordingly gave my noble friend, Lord Mottistone, an undertaking that I would table an amendment at Third Reading.
As a result of the discussions we have had with the General Council of British Shipping, I have now tabled these associated amendments, Amendments 1 and 2 and Amendment 3. So far as concerns Amendment No. 3, which is the major amendment, that relates to Clause 5, which extends the liability to pay compensation in cases where it appears to the arbitrator that an alleged risk of serious injury or serious pollution would arise if the ship went to sea and the effect of the direction in the notice was to prevent the departure of the ship unless certain steps were taken. This, of course, relates the liability to pay compensation for the wrongful issue of a notice to the criteria which obtain for the issue of a detention order under the Merchant Shipping Act of 1894. Those are the Sections 459 and 460 to which the noble Lord, Lord Mottistone referred.
In looking at this, we found that it was necessary to make small adjustments to Clause 2, and the amendments here are to remove any doubt that there may be that the departure of a ship is a relevant activity which can be prohibited by a direction in a prohibition notice. The amendment accordingly
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makes specific provision for a notice to direct that a ship shall not go to sea. This is desirable, given that subsection (3)(a) of Clause 5 gives rise to a liability to pay compensation where a notice expressly prohibits the departure of the ship.
My Lords, all three of these amendments are technical. I think that my noble friend will accept that we have met in Amendment 3 the position he was so anxious to retain in this new Bill. My Lords, I beg to move Amendment 1.
On Question, amendment agreed to.
Lord Mottistone: My Lords, may I thank my noble friend very much for the care which he and his officials have taken to resolve this problem and, as far as is possible against the background of this otherwise helpful Bill, to leave the status quo in existence as far as it can be in relation to Sections 459 and 460 of the Merchant Shipping Acts 1894 with regard to compensation for invalid prohibition notices. I thank him very much and it is a happy resolution of a small and, as my noble friend says, technical point.
Lord Underbill: My Lords, may I say how pleased we on these Benches are that the discussions have proved so successful. I also wish to thank the Minister for the attention that he has paid to the matter. The amendments clarify points that the noble Lord, Lord Mottistone, and I raised at the last stage of the Bill. We are happy that the Minister has acted in this way.
On Question, amendment agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 2:
[Printed earlier: col. 1381.]
On Question, amendment agreed to.
Clause 5 [Compensation in connection with invalid prohibition notices]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 3:
[Printed earlier: col. 1381.]
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
An amendment (privilege) made.
Bill passed, and sent to the Commons.

Traffic Areas (Reorganisation) (No. 2) Order 1983
3.51 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth rose to move, That the order laid before the House on 12th May be approved.
The noble Lord said: My Lords, this order was made by the then Secretary of State for Transport on 10th May, and was laid before this House on 12th May. It received the necessary affirmative resolution in another place on 28th July. Subject to the approval of your Lordships' House, it will reduce the number of traffic areas serving Great Britain from 11 to nine, and establish a new pattern of traffic area boundaries set out in the schedule to the order, both with effect from 1st April 1984.
I hope not to detain your Lordships for too long. But it is 50 years this week since your Lordships' House last had the opportunity of debating the boundaries of traffic areas. It may, therefore, help the House if I remind your Lordships of what traffic areas are and what they do before explaining why, after so long an interval, the Government now wish to reorganise them.
Traffic commissioners, and the traffic area offices for which they are responsible, have five main functions, all to do with regulation of the transport industry and, above all, the preservation of road safety. As traffic commissioners they issue licences to bus operators and bus drivers, and for stage carriage bus services. In another guise, as licensing authorities under the Transport Acts, the chairmen of traffic commissioners also licence the operators and drivers of heavy goods vehicles. The commissioners are appointed by the Secretary of State. The chairmen serve from that appointment until they retire. The other commissioners serve for five years at a time and are selected from panels nominated by local councils. They are not accountable to the Secretary of State, except, on a few occasions, on matters of appeal. But their clerks and staff, who are civil servants, also carry out some of the Secretary of State's executive tasks.
The traffic areas were set up, and traffic commissioners first appointed, under the Road Traffic Act 1930, which radically reorganised the previously chaotic system of bus service licensing. They rapidly acquired the confidence both of the industry and of the public. They now employ about 800 staff in support of the commissioners' licensing functions, and have a yearly turnover of some £50 million, almost all of it self-financing through the receipt of fees paid by the users. It is right that I should take this opportunity of paying tribute to the quality of the commissioners' work, for it rarely attracts public attention.
Over the years, the balance of the traffic areas' work has changed. It is no longer so necessary, as it was in 1930, to put some check on cut-throat competition between rival bus operators. This was recognised particularly in the Transport Act 1980, which freed long-distance bus services from quantity licensing and established a presumption in favour of granting licences for local services. This reduced the burden of work on the commissioners and their staff. Meanwhile, the public interest in their responsibilities for licensing lorry operators has increased. Most recently, the Transport Act 1982 empowered them—the commissioners—for the first time to take environmental factors into account in considering proposals for goods vehicle operating centres.
The system of independent licensing authorities has served us well for over 50years. The boundaries of the traffic areas, too, have stood almost unchanged since that pattern in 1930. One area, the Southern, was disbanded only three years later. The two areas in Scotland were combined into one in 1940, with the need for economy in wartime being quoted in support. Some very minor changes were effected by a consolidating Act in 1960. But the boundaries still largely reflect the boundaries of the major bus companies of the late 1920s and early 1930s.
The Government were naturally reluctant to change a system that works. The Government know only too well that any reorganisation imposes certain costs. It is also upsetting to staff. There have to be clear and positive benefits for so doing. As I have said, the work on the bus licensing side had declined, and, for the chairmen at least, it had not been offset by increasing work elsewhere. It was becoming increasingly apparent that we were not making the fullest use of the talents of these able and dedicated men.
Also, when the area boundaries were drawn they did not everywhere follow local government boundaries. Our predecessors regarded it as more important to keep to a minimum the number of bus routes which crossed from one area to another. But bus routes have changed and continue to change. Meanwhile, it has become an inconvenience for many local authorities to have to deal with more than one traffic area.
The Government therefore decided that the time had come to look at the traffic area map afresh. We did not want, though, to pull the organisations up by the roots and start again, risking, as it would have done, serious disruption to the customers, the bus and lorry operators who have to deal with the traffic area offices from day to day, and to the commissioners and their staff. We examined a large number of proposals for reducing the number of areas from 11 to seven, which was the minimum we thought the workload would justify. We looked at eight. We looked at nine. We consulted bodies representing the bus and freight industries, the local authorities, the chairmen of traffic commissioners, and indeed, the staff, modifying our proposals at each stage in the consultation. Finally, we developed the pattern set out in the schedule to the order, which provides for nine areas. This will keep disturbance for users and for staff to an absolute minimum.
It might be useful if I state here that we have no plans to close any of the present traffic area offices. With 11 existing main offices, and only nine new areas, two of the areas each will inherit two offices. The North-Eastern area will have offices in Newcastle and Leeds, and the Eastern area will have offices in Nottingham and Cambridge. It may be suggested that one of the offices in each of these areas should be closed. But closing offices would be very expensive; some staff would have to move at public expense, and others might be made redundant. So even if there were some really quite small gains in efficiency, the closing of offices would only save money in the very long run. Also it is a fact that operators like to deal with their local office, even though the great mass of business is handled by post or telephone. I should like the House to be aware that the Government have made it clear that no offices will close for a minimum of three years, and probably not for much longer than that.
At this stage I should perhaps offer your Lordships a brief guide to the order, which, as so often, looks rather bulky for what I have described as a very simple measure. The meat of it is Article 4 and the schedule, which actually describe the new traffic areas by reference to local authority boundaries. Articles 1 and 3 are the usual preliminaries. Article 5 consigns to the archives the signed maps defining the present boundaries, which are no longer needed now that we are following local government boundaries. Articles 6

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to 9 are transitional matters of internal organisation; and Articles 10 to 17, which make up most of the bulk, are the crucial transitional provisions designed to keep to an absolute minimum any inconvenience to users of traffic area services.
As regards the schedule, the main changes, designed to reduce the number of areas from 11 to 9, are that we propose to combine most of the northern area with most of the Yorkshire area, and most of the East Midlands area with most of the eastern area. Other changes are designed to reduce the combined areas to a manageable size; and, in the rest of the country, to follow county boundaries wherever practicable.
As I said, we consulted very thoroughly. I do not think your Lordships would wish me to enumerate this afternoon all the options that were considered and rejected. We are confident that the pattern proposed here is the one which best meets the conflicting requirements, including the wishes of the bus and goods operators who have to deal with traffic areas. I would most certainly not wish to suggest that your Lordships should not debate the proposition that there should be 5, 15 or 25 areas, or propose shifting this or that parish from one area to another, though I note with some satisfaction that when your Lordships approved the establishment of the original 13 areas in 1930—and the functions laid upon the traffic commissioners then were very much more controversial than they are today—the only amendments tabled represented (as so often they do) second thoughts by the Government. It is a very modest administrative reform, and I commend the order to your Lordships. My Lords, I beg to move.
Moved, That the order laid before the House on 12th May be approved.—(Lord Lucas of Chilworth.)

Autumn Financial Statement
4.2 p.m.
The Chancellor of The Duchy of Lancaster (Lord Cockfield): My Lords, with permission, I will repeat a Statement made in another place by my right honourable friend the Chancellor of the Exchequer. The Statement is as follows:
"With permission, Mr Speaker, I should like to make a Statement.
"As my predecessor did last year, I am laying before the House today an Autumn Statement which brings together certain matters customarily announced at this time of the year. The Statement contains the Government's outline public expenditure plans for 1984–85, proposals for national insurance contributions for next year, and the forecast of economic prospects for 1984 required by the Industry Act.
"In response to firm monetary policies, the past year has seen falling inflation, renewed growth and solid evidence of our continuing recovery from world recession. Progress both on inflation and on growth this year has been better than expected at the time of the Budget.
"Since the low point of the recession in early 1981, output has grown by about five per cent., inflation has fallen from double figures to around
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five per cent., and there have been significant gains in productivity, competitiveness and profitability. Employment appears now to be rising, and unemployment to be levelling off.
"Output this year is expected to be about three per cent, higher than in 1982, and the Industry Act forecast points to continuing growth next year. Recovery in the rest of the world, so far hesitant outside North America, is now widely expected to show some improvement. With higher exports offsetting some slow-down in the growth of domestic demand, overall United Kingdom output is forecast to rise by a further three per cent, in 1984. With inflationary pressures remaining weak, inflation is likely to edge down again next year to a rate of around four and a half per cent, by the fourth quarter.
"Downward pressure will continue to be exerted on public borrowing. Despite the measures I announced on 7th July it is clear that this year's PSBR is likely to be above the £8.2 billion expected at the time of the Budget. The outturn is of course still uncertain but is now forecast to be £10 billion, mainly as a result of public expenditure running higher than expected, as I indicated to the House on 7th July.
"For next year, 1984–85, the forecast makes the conventional assumptions that the direct taxes and excise duties are both revalorised inline with prices, and that the PSBR is held next year to the £8 billion assumed at the time of the last Budget in accordance with the Medium Term Financial Strategy. On this basis the forecast implies the need for some net increase in taxes in next year's Budget. As the House will recognise, this is, of course, at this stage, subject to a wide margin of uncertainty, and will need to be reviewed, with other relevant factors, in the light of more up-to-date information, before I come to make my Budget judgment.
"Following this year's public expenditure review, the public expenditure planning total for next year, 1984–85, will remain at £126.4 billion. The House will recall that that was the provisional figure for 1984–85 published in the public expenditure White Paper in February this year. It is also broadly the same in real terms as the likely outturn for this year, 1983–84. So, with the economy expanding, public expenditure should continue to fall as a percentage of GDP next year.
"Within the unchanged total for 1984–85 there have inevitably been changes in both directions in individual programmes. The details are contained in the Autumn Statement itself. In broad terms, it shows increases in spending for health and personal social services, education, law and order, agricultural support, arts and libraries, and for a number of other programmes. Social security spending will also increase, although there will be reductions in the coverage of help with housing costs, particularly housing benefit. The social security programme provides for an up-rating in November 1984 based on the rise in prices in the 12 months to May 1984.
"These increases are offset by higher receipts from the sale of council houses and the like, and by a reduction in planned spending on home

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improvement grants, defence, employment, trade and industry, and several other programmes —including the aggregate external financing limits of the nationalised industries. Net receipts from special sales of assets are forecast to increase by some £400 million reflecting, among other things, the fact that the privatisation of Enterprise Oil is now expected not this year but in 1984–85.
"As the House will be aware, the February White Paper provided for a provisional contingency reserve of £3 billion. That figure remains intact.
"The 1983 review of expenditure plans has, of course, also covered 1985–86 and 1986–87. Details of the plans for both those years will be published in next years Public Expenditure White Paper.
"The Government have also reviewed their manpower requirements for the years up to 1988. My right honourable and learned friend the Chief Secretary to the Treasury is today publishing details of our new plans for a continued steady reduction in the size of the Civil Service. Numbers will come down to 593,000 by 1988, a fall of six per cent, below the existing target of 630,000, which we expect to be achieved on or before 1st April 1984.
"I come, lastly, to national insurance contributions. As the House knows, these are reviewed every autumn in the light of advice from the Government Actuary on the prospects for the National Insurance Fund in the coming financial year.
"As usual, the earnings limits will need to be increased. The lower earnings limit will rise to £34 a week, in line with the single rate retirement pension, and the upper earnings limit will rise to £250 a week, broadly in line with the increase in prices and earnings. The taxpayers' contribution to the fund—the so-called Treasury Supplement—will be reduced from 13 per cent, to 11 per cent. Finally, in each of the last four years we have had to increase the Class I national insurance contribution rate itself. I am glad to say that we shall not need to do so for 1984–85. So the full Class I rate will remain unchanged at nine per cent, for employees and 10.45 per cent, for employers.
"As is customary, my right honourable friend the Secretary of State for Social Services will this afternoon announce details of the changes in the Social Security (Contributions, Re-rating) Order and will lay before Parliament the accompanying report by the Government Actuary.
"As my right honourable friend the Leader of the House has already announced, the House will have an opportunity next week to debate the Autumn Statement, which is now available from the Vote Office.
"Mr Speaker, for the first time for many years we are now enjoying low inflation combined with steady growth. This is a winning combination. Our task is to keep that winning combination by sticking to—and indeed reinforcing—the policies which have brought it about."
My Lords, that completes the Statement.
Lord Barnett: My Lords, I should like to ask the noble Lord to convey my congratulations to the Chancellor of the Exchequer on having taken creative accounting to new heights, despite his past criticism of my own modest efforts in this direction. Your Lordships will want some time to study this lengthy Statement and, indeed, the public expenditure White Paper to which it refers; but I hope that I shall be allowed to ask just a few questions.
First, can the noble Lord tell us what assumptions have been changed, and why, in order for the Government to arrive at the figure they first thought of? Secondly, with regard to the receipts from the sale of public assets—which I see are scheduled to increase by some £400 million—can we be told whether at least some of this money might be used to increase capital investment above the 6 per cent, that it was planned to increase it by in 1984–85 over and above the 1983–84 level? While I recognise that, under our somewhat quaint accounting principles, the Chancellor can quite properly treat an energy price increase as a public expenditure cut, would the noble Lord care to explain the difference in resource terms between a price increase and an indirect tax increase? For example, although I wish to make it quite clear to your Lordships that I do not advocate an increase in VAT, or the imposition of VAT on energy prices, would that not have at least two advantages: first, not to increase industrial costs; and, secondly, to be rather more honest?
Given the increased burden that the higher fuel costs will mean, in particular to those on the very lowest level of income—and one notes that pensioners will not receive their increase until November 1984, whereas the heating and other energy increases will come into force some months prior to that—will the Minister and the Government consider providing some help with energy costs to those on the lowest levels of income, including pensioners?
Finally, does the repetition by the Minister of this optimistic Statement by the Chancellor—with which I assume he agrees, since he remains a member of the Cabinet—mean that the Government Actuary has been given a lower assumption for unemployment next year; or, is it not true that, even if the most optimistic forecast that the Chancellor is making were to be continued throughout the whole of this Parliament, unemployment would not significantly fall? Indeed, would it not also be the case that output would be lower than it was in 1979, while all this would have been achieved by the very opposite of Government policy; namely, by a reduction in personal savings, and by allowing the nation to live beyond its means from the bonanza of North Sea oil?
Lord Diamond: My Lords, is the noble Lord the Minister aware that when I say I am grateful to him for repeating this long and important Statement it is no mere repetition of a tradition, but is sincerely meant? It is a very important Statement. It is absolutely right that since the Statement affects matters such as social services, this House should have the fullest opportunity of dealing with it. I say this because, of course, it was the noble Lord himself who said on an earlier occasion that these matters were mainly I matters for another place. I understand that, and I am

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grateful to the noble Lord—and I repeat my gratitude to him—for repeating the Statement. It is long, it is vitally important, and I have no doubt that we shall come to debate it in the not too distant future.
Therefore, at the moment one must ask those questions which occur immediately and which will enable us to form a better understanding of the Statement in advance of the debate. I should like to ask the noble Lord the following questions. In the Statement there is reference to the out-turn for the current year being uncertain, but the public sector borrowing requirement is now forecast to be £10 billion. The Statement says that this was mainly a result of public expenditure running higher than was expected. Can the noble Lord explain that? We had all understood that, in order to keep the PSBR figure the same as that originally budgeted, the Chancellor introduced his reduced cash limits on 7th July. Is it the case that those reduced cash limits are no longer being kept? What is the explanation for this substantial 25 per cent. increase in the PSBR, notwithstanding the 7th July Statement?
The Statement says that there might be a need for some net increase in taxes in next year's Budget. Can the noble Lord say whether we are correctly informed that the present total level of taxation in relation to the gross domestic product in this country is the highest it has ever been in our history?
May I also ask him a question with regard to that part of the Statement which refers to a fall in the percentage of public expenditure next year, which we fully understand—a fixed figure of public expenditure set against an increased figure of output? Could the noble Lord tell us what, in terms of percentage, it amounts to for the year under discussion, and what the policy of Her Majesty's Government is for the following years so that we shall have an idea whether, as was announced by the previous Chief Secretary to the Treasury in the last Government, it is the intention of the Government to reduce the percentage of public expenditure year after year after year? May I also ask the noble Minister how much, either in percentage terms or in absolute terms, the expenditure on defence is to be reduced? That is an important figure, and I am sure your Lordships would wish to know it as soon as possible.
May I turn to a point touched on by the noble Lord, Lord Barnett—the increase of some £400 million receipts resulting from the sale of national assets? May I ask the noble Lord whether he is aware that we shall want to look at that in great detail having regard to the fact that many of your Lordships, and a vast number of people outside your Lordships' House, are deeply disturbed at the Government's attitude to good housekeeping; namely, that you sell your national assets and pay no attention to the fact, when you come to make your expenditure, that you have realised assets and that at the end of the period of government, therefore, you will be so much the worse off?
I see that the contingency reserve remains at £3 billion. May I say to the noble Lord how glad I am that a proper reserve has been made in this year, and how interesting it is that it is double the figure that was provided immediately before the general election? May I also ask—and your Lordships will be glad to know it is my final question—about the reference to
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the taxpayers' contribution to the fund, and the Treasury supplement being reduced from 13 per cent. to 11 per cent? Could the noble Lord give us some figures to set that in perspective? Off-hand, it seems a large reduction, and one should want to know whether there is a precedent behind the Government making such a substantial reduction.
4.24 p.m.
Lord Cockfield: My Lords, I am grateful to both noble Lords for their comments. May I remind the noble Lord, Lord Barnett, of the saying, "Beware of Greeks bearing gifts". One should equally beware of members of the Opposition conveying congratulations. I say that because when the noble Lord referred to his own reputation for creative accounting I suspected that there was a sting in the tail somewhere. Nevertheless, I am sure that my right honourable friend will read his remarks and interpret them in the most charitable sense possible.
The noble Lord asked what assumptions have been changed, and why. Whenever the Autumn Statement is prepared, and indeed whenever the Budget is prepared, all the assumptions are reviewed, including of course the economic assumptions which form the basis of the Autumn Statement anyway. One specific example of another assumption which has been reviewed is of course the pay assumption which has been put in at 3 per cent. against the higher figures that had appeared in the estimates made last February. There is a complete review of all the assumptions which go into the make-up of the figures.
The noble Lord referred to the increase of £400 million in receipts from sales of assets. He asked whether further increases in investment would be provided after that figure. The public expenditure figures which appear in the Autumn Statement have of course been drawn up in the light of the £1,900 million—that is the total figure—which is £400 million more than the figure which had appeared at the time of the previous public expenditure White Paper. This has already been taken into account in determining the level of expenditure in each department. As is customary, an analysis of expenditure between current and capital expenditure will appear in the public expenditure White Paper when it is published just before the Budget.
The noble Lord then referred to energy price increases, and he claimed that they were equivalent to taxation. I summarise his argument briefly. I am not in any way trying to put a gloss on it. This is not in fact a true interpretation of the position. What we are doing is following the policy of economic pricing which has now been adopted for many years by successive Governments. I should like to read the following to the noble Lord:
"The principle that prices should reflect the cost of supply on a continuing basis while providing an adequate return on capital is now firmly established".
I did not write those words. They appeared in the Green Paper on Energy published in 1978 during the lifetime of the previous Administration. I am saying that the principle they then laid down was right, and we have continued that principle.
There is no intention that pricing should exceed economic levels. In fact, the noble Lord will be

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interested to know that in the case of gas, for example, the report prepared by Deloitte this year stated:
"In 1982–83 sales of gas in all markets, apart from the interruptable market, were taking place at prices which were insufficient to meet marginal costs and thus the cost of maintaining supply".
So in fact the price of gas is well below economic levels. The price of electricity is at, or below, the levels, and the increases which in the end will of course have to be determined by the industries themselves, not by Government, will not take prices above economic levels.
The noble Lord also referred to the effect of the increases on the lowest incomes. In this connection it is important to bear in mind that the increases will be less than the rate of inflation, and that they represent a reduction in price in real terms. At the same time help of £350 million per annum is given through the social security system to people on the lowest incomes.
The noble Lord then referred to the Statement being an optimistic one. I would agree with him that it shows real hope for the future—a matter that he and I were debating in your Lordships' House yesterday. He asked what assumptions had been made for unemployment next year. I think his suggestion was that a lower assumption for unemployment had been made. In fact, the figures will appear in the Actuary's report which is to be published this afternoon. The figure assumed for 1984 is the same as the figure for 1983. These are assumptions, and the figure is 2.85 million for Great Britain, seasonally adjusted. This is the standard method of doing it, and the figure assumed is the same for both years.
The noble Lord then asked about the future level of unemployment. No Government have ever forecast future levels of unemployment. Of course it is our hope and expectation that as the economy grows—and it is now beginning to grow—it will provide additional employment, and thus ultimately reduce unemployment on a sound and long-term basis.
The noble Lord, Lord Diamond, asked, oddly enough, the same number of questions, at least according to the note that I had taken down. I am grateful to him for what he said at the beginning of his comments. He referred to the fact that the Statement had said that the outturn of PSBR was now estimated at £10 billion and he asked why the figure had increased since the July Statement. The reason for the July Statement was that my right honourable friend realised that the PSBR was running ahead of target and he took some measures to rein it back. There are a number of reasons for this.
Perhaps I should preface what I am saying by this brief comment. As noble Lords will know, the PSBR is the difference between two enormous figures and the forecasting errors in this figure over a number of years have been substantial. Therefore, I do not wish to give the impression that we regard the £10 billion as an exact figure. It is not. It could easily turn out at some other figure. However, the reasons are, first, that what is technically called shortfall is very much less than originally anticipated. Secondly, interest charges have proved to be higher than was expected at the time of the last public expenditure White Paper. Thirdly, there has been some fall compared with estimate in revenues
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from VAT and customs duties due mainly to a lower rate of inflation than was expected at the time of the last public expenditure White Paper. These are all illustrations of the point raised by the noble Lord, Lord Barnett, about the change in assumptions during a year as time goes on.
The noble Lord then referred to the statement that, on the figures that have been given, there might be some need for a net increase in taxes. The position is that the so-called fiscal adjustment is an arithmetical or statistical figure that arises from comparing large flows on both sides of the account. The figure in question is very small, as the noble Lord will see from the detail in the Autumn Statement. Whether the figures turn out like that at the time of the Budget nobody can say. The whole matter of the Budget strategy will need to be decided much nearer the time.
The noble Lord then referred to the statement that there had been a fall in public expenditure as a percentage of gross domestic product. He asked what the fall was. The answer is that it is a fall from 42½ per cent. this year to an anticipated 42 per cent. next year. It is our intention to continue to ensure that the figure comes down year after year. It reached a peak in 1981 which I believe was about 44 per cent. under this Government. It had been higher, of course, under the previous Administration. But it is now on a downward path although the reductions are relatively small.
The noble Lord then referred to reductions in defence expenditure. He asked what they were. There is no reduction in defence expenditure. On the contrary, the figure provided for defence shows an increase in the coming year of £13 billion, or 82 per cent. In real terms that represents a provision for growth of 3 per cent. over 1983–84 with an addition for the Falklands costs. We are, therefore, fulfilling our NATO commitment in this respect.
Lord Diamond: My Lords, I am sorry to interrupt the noble Lord the Minister, but this is very important. I am most grateful to him and many people will be interested in what he has just said. May I read what I understand the noble Lord has repeated in this house?
"These increases are offset by higher receipts from the sale of council houses and the like and by a reduction in planned spending on home improvement grants, defence et cetera".
Lord Cockfield: My Lords, perhaps I might say that I think there is some slight misunderstanding between the noble Lord and myself. There is a reduction compared with the increase that was provided in the public expenditure White Paper last February but it still remains an increase. I am sorry about this. These are complex matters and I think the noble Lord will find a full explanation in the Autumn Statement.
The noble Lord referred also to the question of sales of assets. This is a matter which he and I have debated and no doubt will continue to debate. We have a difference of opinion and approach to this matter which I do not think it would be right to pursue in present circumstances.
The noble Lord expressed satisfaction that the contingency reserve had been maintained at £3 billion. We agree with him that it is necessary to have an adequate provision here and we hope that the maintenance of a reserve of this size will make planning

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next year more efficient than it has been on some occasions in the past. He asked about the reduction in the Treasury supplement. This supplement has been reduced on a number of occasions in the past. We have had Bills before your Lordships' House which we have debated. The reason for it lies in the change in the relative weight of the contributory and non-contributory benefits. The non-contributory benefits have increased substantially. This is ensuring that part of that cost falls on the employed population rather than on the general taxpayer.
Lord Barnett: My Lords, before the noble Lord sits down I should be obliged to have one clarification. He told us that on economic pricing on energy the industries would have increased the prices without any Cabinet instruction. Is that really the case? Were there no discussions and no instructions from the Cabinet to the industries? Would they have made these increases without any dispute between the Secretary of State for Energy and the Chancellor, or without any public expenditure discussions at all?
Lord Cockfield: My Lords, the noble Lord is endeavouring to put words into my mouth. The position, as he well knows, is that the Government are responsible for setting the external financial limits and also for setting targets. Within the figures that have been determined it is a matter then for the industries themselves to decide what tariff increases are required.
Lord Beswick: My Lords, may I ask the noble Minister three questions? The first is: did I understand him to say that it is impossible to estimate unemployment in future years? This being the case, how is it possible to estimate the Treasury liability for funding the unemployment fund? Secondly, I understood him to say that there is an estimated 3 per cent. growth next year. Is that on the assumption that we shall achieve the estimate for this year?
Thirdly, on the question of the sale of the nation's capital assets, as the amount is to be increased by a very considerable sum next year, and I understand that in the year following it is to be of the order of £3,000 million, will the Minister agree that the country will find it inconceivable if, when they are receiving these large sums of money—£1,250 millions this year, £19 billion the year after and £3,000 million the year after—the Government are unable to find the £400 million refundable loan for the launching of the A320 aircraft?
4.40 p.m.
Lord Cockfield: My Lords, so far as the first point raised by the noble Lord, Lord Beswick, is concerned, there is a difference between an estimate and a forecast. The Government Actuary every year prepares a report on the National Insurance Fund. For that purpose he is given certain assumptions. I am not certain whether I used the right word. There is a difference between a forecast and an estimate, on the one hand, and an assumption, on the other. So far as the Government Actuary's report is concerned, the figure included is neither an estimate nor a forecast; it is an assumption which is provided by the Government. This follows what has been done every year under successive Governments.
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If you are going to calculate whether or not the fund has sufficient money and whether or not an increase in contributions is necessary, assumptions must be made. This is the basis upon which this is done. It does not mean that there are, in any way, estimates of unemployment over a run of years in the future. There are not. No Government have ever published estimates or forecasts of unemployment for future years. The noble Lord asked whether the 3 per cent. growth estimated for next year is conditional upon the 3 per cent. growth which has been estimated for the current year. It is not possible to answer that question by a simple, Yes or No. We come back to the point which was raised by the noble Lord, Lord Barnett, at the beginning of his questions; namely, that one is continually having to revise or review economic forecasts as one goes on. One cannot say absolutely that the 3 per cent. will be achieved, whether we will go above 3 per cent, or whether we might even go below it. It represents the best forecast that the Government can make at this time.
There is no doubt at all that conditions in the world generally are looking more favourable. We have, in fact, done rather better over the last two years than we thought we were going to do. The noble Lord will find some comparative figures in the Autumn Statement in detail. I hope that he will derive some comfort from them. I say that sincerely because we all want to see an increase in output. This is not a matter of political debate. As to the final point that he raised, namely, the funding of the A.320 Airbus, that I think goes somewhat outside the scope of the present Statement.
Lord Harmar-Nicholls: My Lords, as far as the implied criticism over the sale of nationalised assets is concerned, should it not be emphasised and re-emphasised that it does not mean that the nation has lost that asset? If it is privately owned, it is just as effective. Perhaps it is more effective, if it is more efficiently run, than merely having the shares and the ownership in the hands of the state.
Lord Cockfield: My Lords, I agree with my noble friend. The reasons for privatisation are not either entirely or mainly financial at all. The objective is to introduce a greater degree of competition, a greater degree of response to market forces and a greater degree of response to the interest of consumers.
Lord Spens: My Lords, can the noble Lord the Minister give some hope to the 2 million self-employed that the unfair tax which is a tax on them alone, the class IV national insurance contribution, may soon be abolished?
Lord Cockfield: My Lords, the noble Lord is a great optimist. He is well aware that I can give him no assurance of that sort. All that I can say is that the rates of contribution are not being increased, although both the lower and the upper earnings—or, in this case, profit—limits are being revised on the basis that I indicated.
Baroness Gaitskell: My Lords, may I ask whether the Minister, despite what he said about privatisation, would agree that the real reason for privatisation is to make the rich richer?
Lord Cockfield: My Lords, no.
Baroness Seear: My Lords, may I ask the Minister to say something about the areas in which he proposes to reduce expenditure? It is very assuring to be told that expenditure is going to be increased on health, the social services and education, but is it really sensible? What is the thinking behind the reduction of the home improvement grant, a method for maintaining the value of capital in housing and also an exceptionally good method, very frequently, of job creation in the private sector which, with the present possible financing increases, could have been expanded rather than reduced? As to the reference to reduction in expenditure on employment, presumably this is not a very optimistic forecast. Does it mean a reduction of the number of people unemployed and therefore of unemployment benefits? Does he imply any cuts in the job creation scheme? What is the thinking behind those two areas chosen for reduction?
Lord Cockfield: My Lords, I think it would be more appropriate to deal with the details of these programmes on another occasion. The noble Baroness will find an exposition in the Autumn Statement itself. In the case of housing, for example, there is an apparent substantial reduction in net expenditure but more than half of that is not a reduction at all. It is a reflection of higher receipts from the sale of council houses. So far as the home improvement grant is concerned, the temporary home improvement grant scheme has come to an end. It was originally a temporary scheme which was due to expire on 31st December 1982 and twice has been extended. The expiry of the scheme has been announced.
Lord Oram: My Lords, may I ask the noble Lord two questions? First, the original Statement said that output had increased over the past year by 5 per cent. I imagine that to be the overall figure for output as a whole. I wonder if that can be broken down and whether the noble Lord can give the House the figure in respect of manufacturing industry. Has that gone up or has it gone down? Secondly, in referring to these programmes for which expenditure will be reduced, the Statement used the phrase "several other programmes". Can the noble Lord say whether or not the overseas aid programme is among those "other programmes" for which reduction is anticipated?
Lord Cockfield: My Lords, so far as the first point is concerned, the increase in output over the last year was 3 per cent., not 5 per cent. The 5 per cent. referred to the increase in output since the low point of the recession was reached in early 1981. The noble Lord asked for an analysis of that increase in output. I am afraid that I could not give that to him without notice. So far as the overseas aid is concerned, the noble Lord will find a complete commentary on all the programmes on pages 19 to 21 of the Autumn Statement itself.
Lord Ferrier: My Lords, is it not three-quarters of an hour since we began discussing the Statement; is it not now amounting to a debate; and is that in order?
Lord Denham: My Lords, I must admit that I was rather looking at the clock myself. But it did occur to
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me that the supply of questions for this particular Statement seemed to have dried up naturally—which is always preferable to any form of artificial curtailment. We have discussed this at great length. Noble Lords will want to have a chance to read the various documents. We are only meant to have brief questions for elucidation after a Statement. I regret to remind the House, and my noble friend behind me, that we have another Statement which is now cleared to be made in your Lordships' House.

The Severn Bridge
4.50 p.m.
Lord Lucas of Chilworth: My Lords, with the permission of your Lordships, I shall now repeat a Statement which has been made in another place by my right honourable friend the Secretary of State for Transport. The Statement is as follows:
"I told the House on 1st November that I considered it prudent to extend the early morning lane restrictions to round the clock, except at weekends, until I received further advice from Flint and Neill. I have now received recommendations from Flint and Neill, agreed by Mott, Hay and Anderson, who carried out an independent check of the former's appraisal of the bridge superstructure. I am satisfied that the crossing will continue to be safe to use, with the adoption of the following three recommendations.
"First, the closing of one lane in each direction every weekday from 4 a.m. to 8 a.m., first introduced in March 1982, will be maintained.
"Second, for eastbound traffic, the M.4 carriage-way will continue to be restricted to a single lane from the Newhouse roundabout, as it has been from time to time since March 1982. Accordingly, one lane each will be available to the M.4 traffic and the traffic from Chepstow.
"Third, for westbound traffic, between 8 a.m. and 4 p.m. on weekdays all goods vehicles in excess of 75 tonnes will be channelled through one toll booth. The purpose of this control is to prevent bunching of heavy vehicles: in most circumstances they should be released without delay.
"Round the clock restrictions will cease as from midnight tonight, and tolls will be reintroduced for eastbound traffic.
"I am instituting careful monitoring of incidents causing, or likely to cause, a traffic jam on the bridge. If there is an incident the following restrictions will be applied until it has been dealt with.
"If the incident is on the westbound carriageway, westbound traffic will be held at the toll booths and eastbound traffic joining the M.4 from Chepstow will be stopped at the Newhouse interchange. Eastbound traffic already on the M.4 will not be affected. If the incident is on the eastbound carriage-way, eastbound traffic joining the M.4 from Chepstow will be stopped at the Newhouse interchange; all westbound heavy goods vehicles will be held at the toll booths.
"A different hazard is wind. Traffic will be prevented from using the crossing when both the

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gust wind speed exceeds 50 miles per hour at deck level of the bridge and the maximum mean hourly wind speed at deck level is forecast to exceed 62 miles per hour. These conditions are expected to occur no more than once in two to three years on average.
"I have set work in hand to improve these systems of traffic control in order to ensure the minimum interference to movement, within the safety limits for the bridge.
"Finally, I will assess with all possible speed the options put forward by Flint and Neill for strengthening the bridge to cope safely with increased loading.
"As soon as I receive the text of Flint and Neill's report on Mott, Hay and Anderson's check, I will place a copy of it in the Library".
My Lords, that concludes the Statement.
Lord Underhill: My Lords, I am certain that the House is grateful to the Minister for repeating this very important Statement. I and my noble friends will support any steps necessary for the safety of the bridge and to ensure the flow of traffic which is so essential for the economic wellbeing of South Wales and of Wales in general. But in the light of the Statement that we have just heard, without "narking" on the issue, I must express on behalf of my noble friends deep regret that action was not taken earlier on the first report in March 1982.
In the light of the recommendations which have been accepted by the Minister, does the Secretary of State now accept that when the issue was first raised in the other place it was not alarmist but it was of extreme urgency? Am I right in assuming that the Minister now accepts the previous report that there has been, and still is, severe danger of bridge collapse unless the appropriate precautions are taken? Would it not be advisable to lift the tolls completely for the east-bound traffic to avoid possible bunching of lorries on the bridge? Surely the amount of money involved is not the essential thing in this matter.
I am pleased to hear that there is to be strict monitoring of incidents and that the Minister has said in the Statement that all possible speed will be taken in the assessment of options for strengthening the bridge. Does "all possible speed" mean a matter of real prior urgency? Will finances be made available for whatever steps may be found necessary for bridge strengthening? Also, when the assessment is completed will a further Statement be made to Parliament?
Finally, will the Government also, in the light of the Statement that we have had today, arrange as a matter of urgency for the assessment of possibilities and of possible alternatives for a second Severn crossing and guarantee that the essential finance will be made available?
Lord Tordoff: My Lords, we are also grateful to the noble Lord the Minister for repeating this Statement. We are also glad that some of the fears have been removed from people using the bridge. Clearly, however, the situation is still not anything like satisfactory. What appeared to be a disaster area has now become merely unacceptable.
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Is the Minister aware of the feeling in South Wales of strangulation of their economy which is caused by the fact that this bridge is obviously inadequate for its purpose? He is obviously aware that the use of the bridge has increased beyond all expectations over the years; and that is something we can all be pleased about because it means that the original decision to build the bridge was a good one.
However, like the noble Lord, Lord Underhill, I must ask him whether the time has not come to examine other possible crossings. Has not the time now come for the Government to take the really important step of convening a feasibility study for the Severn Barrage, coupled with a further crossing of the river? If South Wales is going to be able to take advantage of any economic recovery after the recession then surely the time has come for proper investment to be made in proper river crossings, not tampering with what is clearly a second-rate bridge.
4.58 p.m.
Lord Lucas of Chilworth: My Lords, I am most grateful to both noble Lords for their reception of this Statement. The noble Lord, Lord Tordoff, suggested that what is now proposed is not totally acceptable, and of course we would accept that. But as the noble Lord, Lord Underhill, suggested, there is no cause for alarmist or alarming rumours which have been spreading about. Of course, there is a need for urgency in finishing the assessment of Flint and Neill's original appraisal, which led to the appointment of Mott, Hay and Anderson to check that appraisal: they were, of course, independent engineers. Agreement has been broadly reached between the two sets of engineers, and my right honourable friend very shortly will have before him all the facts to enable him to make decisions as to what should happen in the near future.
The noble Lord, Lord Underhill, asked whether that would be done with all possible speed, and the answer is, Yes. We are talking in terms of, perhaps not days, but certainly not more than weeks. For example, we are not talking about some time next year, or anything like that.
He asked whether it would be sensible to stop the collection of tolls for eastbound traffic. No, my Lords, we do not think that that is necessary. We think that the traffic management systems containing the traffic on the M.4 and from Chepstow will deal adequately with any emergency that might arise. He asked, particularly, whether my right honourable friend will be making a further Statement. Quite obviously, this afternoon I cannot commit my right honourable friend in this direction, but I have little doubt that anything of great importance which should be placed before Parliament will be placed before it by way of a Statement or in some other way.
Both noble Lords asked about a second crossing. I am sure they will accept that a second crossing will not help with present difficulties. In any event, whichever kind of crossing might be decided upon, it would take many years. My right honourable friend is considering the longer-term aspects, which these reports have thrown up, and these will no doubt lead him to make certain recommendations in due course. I am afraid that the barrage is a little outside the scope of the I Statement, since it is an energy-based project, and

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certainly at this time it is not necessarily conceived as providing a second crossing.
Viscount Tonypandy: My Lords, I am grateful to the Minister for the Statement. Is he aware of the increased difficulty in getting investment into South Wales as long as there is fear about the bridge? I join the noble Lord in saying that we do not want people to be alarmed, but they are already thoroughly fed up with the long delays in getting across that bridge and it is a very expensive business for industry in South Wales. May I ask the Minister whether the statement about contingency plans will be forthcoming within the next month, because we need to know about contingency plans if we are to attract industry to South Wales?
Lord Lucas of Chilworth: My Lords, I thank the noble Viscount, Lord Tonypandy, for his comments, which also enable me to take up a point made by the noble Lord, Lord Tordoff, to which I did not respond earlier. We recognise that the use of the bridge has expanded quite considerably in recent years. However, it is interesting that the increased traffic volume across the bridge is in line with increased traffic flows in other parts of the country. Of course, we recognise that it is a vital link into and out of Wales and my right honourable friend will be most anxious to ensure that the commercial life of the Principality is not endangered.
I think that the contingency plans, which the noble Viscount, Lord Tonypandy, mentioned, refer particularly to traffic management schemes which are being considered and which may well have to be introduced while any of the work of strengthening the bridge is undertaken. The exact method by which the bridge might be repaired or strengthened has not yet been determined. That will be considered when all the reports, which are expected shortly, are to hand and the department's engineers have had a chance of making their assessment.

Traffic Areas (Reorganisation) (No.2) Order 1983
5.4 p.m.
Debate resumed.
Lord Underhill: My Lords, may I revert to the order which the Minister moved about an hour ago? I join the Minister in expressing appreciation of the work of the traffic commissioners, as well as of their staffs, in the various area offices. The Minister said that the Government were reluctant to change a system that has worked well and I noted, when the order was discussed in the other place, that the Minister of State said:
"The onus is…on the Government to justify changing a system which has served us well". [Official Report, Commons, 28/7/83; col. 1389.]
In moving the order, the Minister gave reasons for the changes, particularly the changing workload and the desirability of aligning the boundaries of the areas with the county council boundaries. The Minister also referred to the declining workload and pointed out that there was an additional job to be done in the
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environmental control of goods vehicle operating centres. But will not the traffic areas also have supervision of the annual testing of public service vehicles and heavy goods vehicles?
Incidentally, the Government withdrew their proposals to transfer this to the private sector on the very day that this order was being discussed in another place. We are very pleased that they withdrew that decision, on which this House spent many hours when the Government were trying to get the legislation through. Will there not also be the work of enforcement—particularly, I hope, increased enforcement—in connection with the overloading of lorries, of which there have been quite a lot of cases brought to our attention?
On the alignment of boundaries, does the adjustment of boundaries to conform with county council boundaries justify the reduction of traffic areas from 11 to nine? I can see the common sense in believing that parts of Derbyshire, Essex, Surrey and Kent may be better administered in other areas than in those counties, but surely that is no justification for reducing the number of traffic areas.
When we look at what is proposed, and the table to which the Minister referred, we see that the new North-West traffic area will stretch from North Wales across to North Derbyshire and right up to the Scottish border, while the new North-Eastern area will stretch from South Yorkshire around Sheffield and, again, right up to the Scottish border. The Eastern area will take in all the Eastern counties, except for a few district authority areas in South Essex and the whole of the East Midlands, except for the High Peak district of Derbyshire.
What is the advantage in making changes of this sort? The Minister made no reference to the question of service to the public. He argued that most transactions are by post, but I think he will agree that there are times when personal access is important and undoubtedly, in some areas, there will be longer journeys and more travelling time needed in getting to the commissioners' new centres.
There is concern about the possible closure of some local offices. I know that the Minister repeated a guarantee that no office will be closed within the next three years. But I gather that it is possible to deal with this matter by administrative action, so I would ask: what steps are being taken to monitor the whole work and procedures, in the event of any decision being taken after three years to close an office, and will there be a guarantee of consultation with the staff? I mention that because I have with me letters from three trade union organisations which are still expressing concern about the change in the number of traffic areas and the merging of some areas. They are interested not only because of the staff, but because of preserving proper facilities for the public.
In addition to the proposed reduction in the number of areas, there is to be a reduction in the number of chairmen from 11 to eight. As has been clearly stated by the Minister of State in another place, this will entail the same chairman covering the extensive area of the whole of South Wales and the West Midlands. I also understand that since January 1982 there has been one licensing authority chairman covering both the Northern and Yorkshire areas.

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I am informed that, although there have been delays caused by this decision and loss of day to day contact between commissioners and the staff, nevertheless it has got along. If that is so, why now change that joint area and take Cambria out of what are generally recognised as its associations with the Northern area and transfer it to the North-West? What is the purpose of the changes? They surely do not help the public and they are not exactly wanted by the staff.
It has been stated—and I noted that the Minister of State made this quite clear—that there is no certainty whatever that there will be any financial savings. The consultative paper issued in 1982 said that the changes might yield anything from £120,000 to £150,000 per year. But, to their credit, the Ministers are not claiming that; there is no certainty of any financial saving. Why, therefore, are these changes now being introduced? They cannot help the public and the staff can see difficulties with them.
In conclusion, may I ask whether there will be the most careful monitoring of the procedures and the way in which matters are working out before there is any office closure? Will the operation of this order be monitored when it is put into effect? And, if necessary, will revised proposals be brought forward if it is found that we ought to revert to more traffic areas?
Lord Lucas of Chilworth: My Lords, I thank the noble Lord, Lord Underhill, for his response. He asked a great number of questions, and perhaps I may answer them in an order different from that in which he put them to me.
He asked why we wish to make this change when the present system works very well. Frankly, it is because the present system makes extravagant use of the talents and experience of the chairmen of traffic commissioners. Having fewer areas will make for a very much more tightly-run system. As I said earlier, it will enable local authorities to deal with fewer of the traffic areas.
The noble Lord asked me about overloading. The enforcement of regulations on overloaded lorries lies with the inspectorate division of the Department of Transport. It is only when there is a successful prosecution that the result will be communicated to the traffic commissioners, who will bear it in mind when they have regard to the operator's licence renewals.
The noble Lord described at some length the new traffic areas and the distances from one place to another; from near Sheffield, right up to the Scottish Border. This reorganisation has little to do with square miles. It has to do with traffic density. It concerns the need for an area—the need of the traffic in a particular area—to have an office there. It has very little to do with the geographical size or shape, although in reforming the areas we attempted to conform with 1974 local boundary areas. It is a matter of putting the resources where the business is, not maintaining resources where there is no business. That makes good sense.
Certainly the noble Lord is quite right with regard to savings. We do not expect to make any great savings from reorganisation. It is not really a cost-cutting exercise as such; it will establish a much more sensible
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pattern of organisation in the longer term. If I misunderstood the noble Lord, I beg his pardon, but I believe that he also said something about the transport industry having to go to the new offices of the commissioners. That is not so. The commissioners remain in their existing locations.
I believe that I dealt with the point he raised about the enforcement of lorry weights. So far as the annual testing of lorries is concerned, I am sure the noble Lord will recall that it is not one of the responsibilities of the traffic areas.
The noble Lord asked particularly about consultations with the staff if an office is closed. I am sorry that the information he has received gives rise to some doubt as to our intentions. I can only repeat that we have given an assurance that no office will close, certainly not in the next three years. In a changing business such as transport, I cannot be expected to commit my right honourable friend or the present Government—or any other Government—to making a long-term promise that under certain circumstances this may or may not happen. I can go no further this evening than repeat the assurance that we do not envisage any closure of offices; certainly not for three years.
There have to be changes in organisation, in methods and in staffing, even in the newly-created areas. I can certainly give an assurance that staff will be properly consulted through whatever organisation they may choose to represent them. I said earlier that we have had a lot of consultations—and I mean a lot—and we are particularly anxious that the staff should not be upset. I made that point in my opening remarks. It is not just a question of moving filing cabinets from one office to another, or of changing notepaper and addresses on forms. We are conscious of the fact that the great benefit of the work of the traffic commissioners has arisen from the integrity and the willingness of the staff.
Lord Underhill: My Lords, I am sorry to delay the noble Lord, but I have a point concerning the traffic commissioners' centres. He will correct me if I am wrong, but if it is a case of making representations in person, will not the traffic commissioners be based at one particular centre? Where there are two traffic area officers, surely they will not move themselves around from one area office to another—or am I incorrect?
Lord Lucas of Chilworth: My Lords, the noble Lord over-estimates this potential problem. I am not sure of the exact figure, but I recall from my other being of more than a year ago, when I was involved in the haulage industry, that very few licence holders or people who applied for a licence ever applied in person. It was nearly always done on the telephone or by letter. On the very few occasions when it will be necessary for an applicant or a licence holder to go to the office, I imagine that, good sense prevailing, the traffic commissioner will take himself to the nearest office within the area to suit the customer. That is what it is about—suiting the customer. After all, the customer is paying the fees.
On Question, Motion agreed to.

Roads (Scotland) Bill [H.L.]
5.19 p.m.
Lord Gray of Contin: My Lords, I beg to move that this Bill be now read a second time. Almost exactly two years ago my noble friend Lord Mansfield introduced in this House a Bill which became the Civic Government (Scotland) Act 1982. He said then that the Bill marked the beginning of the end of the Burgh Police (Scotland) Acts 1892 and 1911. That corpus of law—or at least a part of it—has been kept alive by the legislative equivalent of a pacemaker because together with the remnants of another venerable statute—the Roads and Bridges (Scotland) Act 1878—it provides the foundation of Scottish roads law.
It is remarkable to think that at a time when a land speed record of more than 600 miles per hour has just been established, there should still be in existence roads legislation which pre-dates the internal combustion engine. There have been later enactments, of course—about 40 in all—which have tried to keep the law up to date. By common consent, however, the time is now overdue for thorough overhaul.
In the summer of 1981, a consultation document was issued on proposals for a Roads (Scotland) Bill. It is right to pay tribute here to the valuable help, before then and subsequently, of local authority highways officials nominated by the Convention of Scottish Local Authorities, in sifting the oldest legislation to see what was worth preserving. Our proposals of course covered recommendations from the committee of inquiry into local government in Scotland chaired by my noble friend Lord Stoddard. I think it right that we should pay tribute to the contribution that Lord Stoddard and his committee have made. We have incorporated certain of their recommendations in this Bill. At that time it was envisaged that, since consolidating legislation could only bring together existing provisions without material change, it would be necessary to have a two-stage process with a first Bill to modernize the ancient statutes and to introduce certain desirable new features in Scottish roads law, followed by a consolidating Bill prepared by the Scottish Law Commission. It was on the proposals for that first Bill that wide-ranging public consultation took place and on which a general welcome was received.
The Government then decided, when the present opportunity for legislation presented itself, to telescope the two stages of the process into one by introducing a codifying Bill, which could at once update existing provisions, embrace innovations and unify the whole. While therefore we now have a somewhat longer and fuller Bill than was originally foreseen, the consultation has not been invalidated, because the additions are essentially re-enactments of existing provisions. In summary, then, the Bill aims to provide in one document a codified, modernized, streamlined and improved body of Scottish roads law.
Having spoken briefly about the objectives of the Bill, may I now sketch broadly its principal provisions. Part I deals with public roads, that is to say those for whose maintenance a roads authority is responsible. The expression "roads authority" replaces "highway authority" and means the Secretary of State or a regional or islands council. Part II contains provisions
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on private roads: that is, roads for whose maintenance someone other than a roads authority is responsible. Both these parts are related separately to Part III which governs the construction of new roads, both public and private. Part IV, on improvement and maintenance of roads, in the main provides powers enabling roads authorities to improve the safety or amenity of their roads, while Part V, which provides controls over works in, and certain traffic on, roads is akin in nature to Part VIII, whose provisions are designed to avoid obstructions and other dangers on roads. Part VI is principally concerned with the stopping-up of roads and accesses which are dangerous or unnecessary. Part VII is mainly about bridges, including transfer of responsibility for them, but it also relates to effects on inland and tidal waters of road construction. Part IX brings together provisions relevant to land acquisition, compensation and certain questions of transfer of property and liability. Part XI sets out offence provisions, while Parts X, XII and XIII contain various miscellaneous, general and supplementary provisions.
I think the House would wish me to make reference to the provisions which contain some innovation. At the risk of appearing perverse, I propose to start at the end. A significant feature of the Bill is that Clause 143 provides a definition of "road" which replaces a multiplicity of expressions such as "highway", "street", "lane", and many others which have further bedevilled understanding of Scottish roads law. There is a price to pay—but the improvement is well worth it—in the form of consequential amendments to many existing enactments, which are set out in Schedule 8.
Furthermore, by disapplying the provision of the Bill from public paths and long distance routes created under the Countryside (Scotland) Act 1967 and from Recreational Land owned or managed by district councils, Clause 143 acknowledges another Stodart recommendation, that responsibilities for footpaths should rest with regions, but not in amenity areas. Clause 143 also makes the distinction which I mentioned earlier between "public" roads and "private" roads.
Perhaps I should just say here, because there tends to be confusion on the issue, that public roads are those which are kept on a roads authority's list of public roads under Clause 1 or 2 of the Bill and that, while a private road is the responsibility of private individuals, it is still a road over which the public has right of access. Whether a road is public or private today is largely a matter of historic accident; but there is provision in the Bill, as in previous legislation, (it is in Clause 15), whereby the status of a private road may be changed when it has been brought to a standard acceptable to the local roads authority. Because of the large amount of public expenditure which would otherwise be required, such change will still have to be mainly at the frontagers' expense.
I think it may also be helpful to explain, since it is not specifically stated in the Bill, that the new interpretation of "road" in conjunction with other clauses has the effect, first, of applying to the whole of Scotland some provisions, such as a right of appeal against a road being taken off the list of public roads, which previously operated only in the former burghs; and, secondly, of enabling roads authorities to

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construct cycle tracks. Previously there was some doubt about their powers to do so. I should also give notice that it is our intention to introduce, later, additional provisions on cycle tracks along the lines of those which I understand are also proposed to be provided for England and Wales by a Private Member's Bill in another place.
Having duly observed Sir Harry Lauder's injunction to "keep right on to the end of the road", I shall now return to the beginning and to Part I. The principal new feature worth mentioning here is that an obligation is placed upon the Secretary of State to keep, and make available free of charge, a list of roads for which he is responsible. Local roads authorities previously had, and continue to have, such a duty in respect of their roads, and it seems appropriate that it should apply to the public roads for which the Secretary of State is responsible.
On Part II, I should draw the Houses's attention particularly to Clause 16, which has its English and Welsh counterpart in the advance payments code in the Highways Act 1980. The clause enables the Secretary of State to make regulations requiring the prior deposit with a local roads authority of a financial security for roads for new private dwelling houses. My right honourable friend, the Secretary of State, is aware of considerable administrative problems for local authorities and of financial problems for private individuals through housing developersfailing—perhaps because of bankruptcy or other default—to complete roads for which the house buyer has paid in the purchase price of the house. The new provision is to ensure that a security, commonly known as a "road bond", is deposited to guarantee completion of the new road whatever fate may befall the developer. The requirement is not expected to add greatly to house building costs and should represent no hardship to any developer who is confident of completing the roadworks required. Improvements to the scheme may become necessary with the passage of time and in the light of experience. It is proposed in the Bill to provide for the "road bond" scheme by regulations. To be effective, the scheme will require a powerful sanction, perhaps a fine in the region of £1,000 per building. Because of the unusual nature of the regulations and the necessary severity of the sanction, Clause 135 provides that the regulations shall be made only if approved by resolution of each House of Parliament. It is also our firm intention, which has been conveyed to those concerned, to consult interested bodies such as the Convention of Scottish Local Authorities, the Scottish Housebuilders' Association, the Building Societies' Association and The Law Society of Scotland on the proposed content of the regulations.
Two aspects of Clause 20 in Part III of the Bill may be of interest. First, while the construction consent required by anyone other than a roads authority for a new road is not a novel concept, the conditions which a local roads authority may attach to such consent will now enable it to insist on the provision of street lights, where appropriate, by the developers. This is in line with a recommendation by the Stodart Committee. Secondly, the appeal which can be made against the refusal, or the conditions, of a consent will in future be made to the Secretary of State, instead of to the Sheriff.
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The technical factors likely to surround such an appeal, which has a certain kinship with a planning appeal, make this change appropriate. Clause 131 of the Bill enables the Secretary of State to make procedural regulations for appeals and under these he may delegate decisions to an appointed person. In passing, I should mention that the same change in appeal provisions is made for the same reason in Clause 13 which enables a local roads authority to require a private road to be brought up to standard.
Part IV introduces new provisions in Clauses 32 and 33 (which I believe are both novel to United Kingdom roads statutes) and in Clauses 47 and 53. Clause 32 enables roads authorities to provide snow gates, such as noble Lords may have seen on the A9, where snow is liable to make conditions dangerous. At present there is a view that an order under road traffic legislation is necessary before such gates can be closed and there is some doubt as to who is responsible for closing them. The clause confers responsibility clearly upon the police and enables them to act instantly, as is right where safety is at stake. It also gives them a discretion to allow passage to emergency services vehicles.
In Clause 33 a new statutory duty is imposed in Scotland on roads authorities to take such steps as they consider reasonable to prevent snow and ice endangering safe passage over public roads. It implements a recommendation of the Stodart Committee and reinforces an existing common law duty.
Clause 47 extends an existing provision under Section 3 of the Agriculture (Improvement of Roads) Act 1955, whereby roads authorities may enter into agreements with anyone prepared to contribute to the improvement of a private or unclassified road of benefit to agriculture or forestry, so as to enable agreements to be made for construction or improvement of any road. This arrangement, permitting voluntary joint funding of a project mutually beneficial to private and public interests, seems entirely sensible.
Clause 53, which has a precedent in the Highways Act 1980, will enable the Secretary of State to provide picnic sites and associated facilities in the vicinity of a trunk road. The Secretary of State will not himself provide meals or refreshments, but he may arrange for their provision by private enterprise. By virtue of Clause 4(2) he may delegate his picnic site functions to a general or district planning authority, and under Clauses 100 and 105 he may acquire land for the picnic sites either compulsorily or by agreement.
Part V contains new provisions in Clauses 56, 58, 59 and 61. Clause 56 in effect transfers to local roads authorities the powers of control over deposit of building materials in roads previously exercised by building authorities under Section 8 of the Building (Scotland) Act 1959, which is consequently repealed by Schedule 10 to the Bill. The vesting of control in the authority most directly concerned seems to us a sensible move. Clause 58(l)(a), read with 58(5), enables the Secretary of State to make regulations requiring items, such as builders' skips, which are placed on roads to be suitably marked so as to be immediately visible to oncoming traffic. With an increasing number of skips on our roads, this is a safety

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measure which I hope may commend itself to the House.
In Part VII, Clause 74 is completely new. It enables the Secretary of State, by order, to amend or repeal any enactment so that the opening of a swing bridge may be ceased or restricted if he feels that the number of passing ships has so declined as to warrant his taking such action. The clause attracts notice and objection procedures in Schedule 1 to the Bill, and provision is made for special Parliamentary procedure if a navigation authority lodges, and does not withdraw, an objection to an order.
Clause 94 in Part VIII has its provenance in the Highways Act 1980. The intention of the clause is to enable roads authorities to exercise a degree of control over roadside trading on trunk and principal roads. It does not apply to well-established open-air fetail activities like licensed markets nor to milk or newspaper selling.
As regards the rest of the Bill, Schedule 7 may present a formidable aspect in the number of offences which it lists. It needs to be said that it would have been much longer if all punishable actions in the codified acts had been included. It will, for example, no longer be heinous for a blacksmith to have his shutters open after twilight descends. Those who do not possess a tumble drier will no longer be open to prosecution if they hang linen on a hedge. These and other offences more appropriate to the age of the horse and carriage are not being saved. In passing, I would make a respectful bow to paragraph 96 of Schedule C to the Roads and Bridges (Scotland) Act 1878, dealing with offences, which in its original form consisted of a single sentence—in the grammatical, not the penal sense—of 981 words. It is not mentioned in the Guinness Book of Records, perhaps it should have been.
On the subject of omissions, I should draw attention to the repeal, in Schedule 10, of Section 3 of the Roads Act 1920 which requires my right honourable friend to report annually on his proceedings under Part II of the Development and Road Improvement Funds Act 1909, which enables the Secretary of State to construct roads and to make grants and loans to local highway authorities. This requirement, imposed in the days before rate support grant replaced specific grants, appears to have outlived its usefulness. It involves the publication of a report which is expensive for its size, which has a very low sale and which contains information which can fairly easily be obtained elsewhere by anyone interested. I doubt whether anyone will mourn the passing of such a document.
I have I believe now covered the points of principal interest in the Bill. Those involved in Scottish roads administration have long desired a single container, as it were, for the tools of their trade. I hope that, after its consideration by this House, they will find that this Bill gives them one. Accordingly, I commend the Bill to the House. I beg to move.
Moved, That the Bill be now read a second time—(Lord Gray of Contin.)
5.40 p.m.
Lord Hughes: My Lords, I wish to thank the noble Lord the Minister for having so helpfully gone through
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the whole of this long Bill in a matter of 20 minutes. To a certain extent that has tempered what I was about to say. When it was stated that we were now to proceed to the Bill, I was tempted to ask for the Second Reading to be deferred. I object to this Bill being taken on a Thursday, and on a Thursday when it must have been known to the authorities that it would not come up early in the afternoon. For more than a fortnight now it has been predicted that the mini-Budget Statement was to be made this afternoon. It was obvious that that would take up quite a bit of time in your Lordships' House. I did not object at the beginning because, had I wanted to carry through my objection seriously, I could have divided the House and there would have been a grave danger that the noble Lord the Minister would not have been able to muster 30 votes to keep the House sitting. I did not do it then for that reason.
However, I point out that anyone who wants to get back to Scotland, for instance, on the last plane for Edinburgh will have to leave the House in the next 30 minutes. Anyone who had not made arrangements to go by air but had hoped to go on the sleeper train would have little chance of finding a vacant sleeper to Edinburgh or Glasgow at this time on a Thursday afternoon. I hope that this fact will be taken into account by the Minister in the future. I used to object—and I had the support of my noble friend Lord Ross of Marnock when he was Secretary of State—to Scottish business coming on either on a Monday or a Thursday because of the difficulties that arise on Monday in getting down and on Thursday in getting away. But, as I say, my comments on this were tempered by the way the Minister dealt with the Bill.
I have not gone through all the 147 clauses and 10 schedules to the Bill in detail. I got my copy of the Bill only a week ago today. Had I attempted the whole job I should have had to devote the whole of every working day in the last week to the purpose, which I was neither able nor willing to do. I found that a useful approach was to look at the explanatory and financial statements at the front of the Bill. In looking at them, I found that of the 147 clauses 93 are specified as merely codifying other provisions of the Bill. Another 13, Clauses 34 to 46, may also fall into that category. When the Minister replies I should like him to assure me and the House that I am correct in assuming that all the clauses which are said to be codifying only do not make any change in existing law. It will then be easier for us at future stages of the Bill to confine ourselves to the remaining clauses where some change or other is noted. Three of the schedules are similarly stated to be codifying.
I turn now to the explanatory memorandum, I have referred to the fact that many of the clauses are codifying. I looked up the word "codify" in the Shorter Oxford Dictionary. It is defined as:
"to reduce (laws) to a code".
The Bill is supposed to be codifying in modern language, but I wish that the Minister had been able to provide a clue to the code. The Bill is far from easy to understand. To do one's job properly, one would have to look up every one of the Acts being incorporated in the Bill. On that basis, the noble Lord the Minister would have been lucky to get the Second Reading of the Bill this time next year.

1409
I looked at the 1878 Act, which, incidentally, was the one to which the noble Lord made reference and which is one of the ones which is being repealed in its entirety. One useful thing that I found in it was that in those days it was the practice to put the interpretation clause at the beginning of the Bill. That is worth looking at. It is much easier to turn to Clause 3 to find out what something means than to go to Clause 145. I do not know why the practice was changed.
I also looked at the 1949 Act relating to special roads. The definition in the Bill took me nowhere. I read the 1949 Act through in its entirety just after lunch today. The noble Lord, Lord Stodart of Leaston, took it from the shelf, had a preliminary look at it and said that he would leave it to me. I read it through; it was not a long Act. This may be a confession of stupidity but I must admit that I am no wiser about what a special road is after reading the Act than I was after reading the definition in the Bill. Perhaps the Minister will tell us what a special road is. The term obviously does not relate to the type of vehicle allowed on the road, because it seems to cover everything from a juggernaut to a bicycle. Presumably the term relates to the purposes of the road. I think that we should all be grateful if the noble Lord could tell us exactly what it means.
May I say in passing that putting the Bill into modern language obviously does not include putting it into a better form for easy reading? Although the noble Lord the Minister has not managed to get a clause of over 900 words without a full stop, quite a number are much in excess of 100 words without a full stop. If you were listening to the minister in the kirk uttering such a long sentence without a full stop, you would go to sleep sooner than you do at present.
I come to some questions on various parts of the Bill. My first point relates to Clause 1, but the same applies in a number of other places. I know that this is not a new procedure. I am certain that I have put Bills before your Lordships' House which included this provision, but we are supposed to be putting the Bill into more modern language. Why in lines 13 and 14 of Clause 1 do the words appear:
"(and without prejudice to this subsection's generality)"?
I do not know what that means, unless it is put in on the belt and braces principle. The clause seems to cover everything that a local authority might want to do. If the phrase has any meaning at all—and I do not necessarily assume that it has—it must be so that something which has not been foreseen and covered in the Bill may be brought in. I do not think that is desirable. It means that to some extent we are legislating in the dark: we are legislating for something to be done which is not laid down. I mention Clause 1, but, as I say, the phrase appears throughout the Bill in a number of other places. It is perhaps draftsman's shorthand for, "If I have omitted anything, this brings it back in".
There is provision for roads either to be deleted from or added to the list of public roads. The procedure is laid down. It is possible, however, that a road might be accidentally omitted from this present list which is in either the list or the register which is presently maintained under existing legislation. I do not see any procedure in the Bill for remedying such a
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deficiency if it should arise. I think it is something which is most unlikely to arise, but it is possible. We see from time to time how somebody going over a list is interrupted and resumes perhaps at the wrong place. This could happen and I think there ought to be some provision to enable it to be dealt with if it should take place. That query arises on Clause 1 and obviously the same point arises in relation to Clause 5, which deals with the Secretary of State's list.
In Clause 5, subsection (2), line 27, the words "in that regard" appear. One of the things we try to do here is to reduce any unnecessary wording. I just wonder, in passing, what these words add to the value of this particular clause. I do not expect the Minister to answer it. He can perhaps tell me some time afterwards what the thing does, and I wonder whether it would cause any difficulty if these words were left out.
Much more important, Clause 5(9), says,
"A local roads authority may contribute towards the costs incurred by the Secretary of State in the construction or improvement of any trunk road".
The Minister will know how often in Parliament when the word "may" appears in a Bill people try to alter it to "shall". The argument which is always used by the Minister, whatever the Government, is that in legislative terms "may" can include "shall". I want to be quite certain that in this case "may" does not include "shall" and that the opportunity for a local authority to contribute to the Secretary of State's expense is something which remains as a voluntary matter for them so that, if they do not wish to contribute to the Secretary of State's expense, they are under no obligation to do so. I hope the Minister can confirm that this is a matter which is entirely within the discretion of the roads authority because, if not, then this is bound to be the subject of an amendment to the Bill.
I turn now to the financial section of the Bill. It is stated in relation to Clauses 1,19,29,32 and 143, that the expense of carrying out these functions by the roads authorities will be met within existing capital provision. What is intended by that? We know how tightly the authorities are being controlled at the present time and, if new functions are being placed on them which involve expenditure, and which may involve expenditure of a capital nature, if it is intended that this will be carried out within existing capital provisions, what other provisions are going to be cut out to make it possible?
Alternatively, does "within existing capital provision" cover the possibility that the Secretary of State will have increased in a future year the capital provision to take account of any extra expenditure in that direction?
Then we come again to the same sort of thing. In Clause 15, the statement is made that,
"no noticeable increase in local authority expenditure is expected."
Of course, it depends what is meant by "a noticeable increase." The Secretary of State seems to have been able to have noticed an awful lot of expenditure being carried out by Scottish local authorities of a fairly small nature but what he has been interested in is what they amount to in the aggregate. I think the authorities are in the same position. Any increase, whether

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noticeable or not, which is added to the expenditure, adds to their problems at the end of the day in a period when the Minister is being so tight on what is regarded as reckonable expenditure by the authorities concerned.
Then the Minister has referred to Clause 20, where the conditions for the construction of a private road will include the developer having to provide lighting. In most authorities, or in many authorities in Scotland, while the developer had to provide the road at his cost, the lighting was regarded as a function of the local authority, so this, of course, is a matter where expenditure, in some cases at least, is being transferred from the public authority to the developer and obviously at the end of the day that must result in an increase in the price of houses which are being constructed. Given the Government's desire that as much as possible should be done for people purchasing houses rather than renting houses, I should have thought it was hardly in their interests to take yet another step to increase the cost of houses to the purchaser.
The Minister also referred to Clause 33, which deals with snow clearing, and it is said that this also will result in expenditure to a minimal extent. It certainly will increase expenditure in Edinburgh where up to the present by their by-laws they have thrown the cost of clearing the snow off the pavements on to the frontages. This, in fact, will make it a rate-borne burden in Edinburgh. One knows, of course, that in Edinburgh the interpretation of their motto was, "Only God can get anything done in Edinburgh", and it may be that Edinburgh, whose reputation is not amongst the most generous of authorities (they would say they were the most careful of authorities), will perhaps not clear snow off the pavements as fast as they have required other people to do it in the past.
I have reached the sort of time that the Minister took in dealing with the Bill, and other things which I might have said I will leave for saying at another time. I welcome the Bill in its entirety. It is a good thing that all these various pieces of roads legislation should be brought together and those parts which I may not like about the Bill, depending on what the Minister has to say in elucidation, depend on the extent to which the Government are creating responsibilities for the local authorities without necessarily undertaking to make provision to avoid them becoming yet another burden on local ratepayers. With these comments, I am quite happy to support the Second Reading of this Bill.
5.59 p.m.
Lord Stodart of Leaston: My Lords, my intervention will be brief, for a reason which will enable the House to see that I cannot but agree with the comments made by the noble Lord, Lord Hughes, about the timing of this debate. Owing to an engagement that has long been made I have already had to ask the indulgence of my noble friend because I may not be present to hear his reply. I shall also, I am afraid, have to say that to the noble Lord, Lord Ross, and also possibly to others of my noble friends.
My excuse for intervening at all lies in the fact that three years ago I chaired the committee to which my
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noble friend has referred, which examined the functions of regions and districts in the two-tier system of local government in Scotland which has operated since 1975; and various responsibilities in respect of roads occupied quite a lot of our time. I hope that I am not being guilty of being smug or self-satisfied when I express pleasure at some of our recommendations appearing in this Bill, as certain others did in the Local Government and Planning Bill and the Civic Government Bill.
Several clauses of the present Bill have a familiar look about them. My noble friend has referred to them. I would merely say how encouraging it is for those who give up their time to sit on a committee to see so many of their recommendations adopted by the Government, with unusual speed, in legislation.
Most points to be made about the Bill are for the Committee stage. I wish, however, to raise a point about the part that is headed "Private Roads". I wish to ask my noble friend whether anything in Clauses 13,14 or 15 remedies what my committee regarded as an extraordinary situation when we were told about it. According to the interpretation clause, a private road means,
"any road other than a public road",
and a public road is,
"a road which a roads authority have a duty to maintain"
We were told of a stretch of road which, if my memory is correct, is in the county of Fife. I think that I can go even further and say that it was in a village that is possibly known to my noble friend as he speeds from the city of Edinburgh to play golf at St. Andrews. The village is called Largo. We were told of a stretch of road in that village which was a private road in that the frontagers had the duty of maintaining it, but along which cars and heavy traffic rumbled every day as it was part of the direct route from, I suppose, Kirkcaldy to St. Andrews. We put a question to the Scottish Development Department, and we received an answer which I have with me. The answer was:
"A road becomes a highway when the local highway authority takes it onto the list of roads to be maintained. It then becomes the direct responsibility of the authority. All roads are therefore considered to be private until adopted by a Highways Authority, and this could include the main street of a village. There is a difference in legislation between urban and rural areas. Within burghs if the frontagers bring a road up to the required standard and ask the Highways Authority to adopt it, then the Authority is required to do so. However, there is no such obligation on Authorities in the landward areas".
Largo, I am fairly certain, is in a landward area. A further fact, which the answer did not reveal but which we subsequently ascertained and reported, is that both within the old burgh areas and outside them, frontagers could be required to bring private roads up to standard and local authorities had discretionary powers to pay part or even all of the cost. But not all authorities did. This caused us to recommend with some strength that it should be a clear duty of highway authorities to bring up the standard and maintain all public thoroughfares which are an integral and essential part of a recognised road system. We excluded, understandably, any roads that were private accesses or dead ends. Can my noble friend say, in his reply, whether the problem that I have adduced will be solved by the Bill?

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Secondly, I wish to deal with lighting as referred to in Clause 34. Hitherto, regional councils have had permissive powers to light roads for which they are the highway authority. District councils in areas covered by the Burgh Police Acts and local legislation have been obliged to light all streets and other places where lighting is necessary. Now the new roads authority is having its permissive power exchanged for a mandatory one. That is a very good move.
I intend to make one oft-repeated moan about the drafting of the Bill. I agree with much of what the noble Lord, Lord Hughes, says. The Bill starts by saying that it codifies and modernises the statutes embodying Scottish roads law. My noble friend made the point that we have at least got the definition of what is a road. I can remember that in the sittings of my committee we took a long time in trying to discover the difference between a street and a road, and where a road turns into a street. I went back to the Local Government and Planning Act, where I found the definition of a street. It was very long. It seemed that provided it was composed of every conceivable material that one could think of, it was a street. But now a street has become a road—and very good luck to it!
If we are codifying and modernizing, I wonder whether it would not be possible—if modernization is the objective—to use in the Bill the language that all of us use every day. I hardly ever urge my wife to walk on the footway rather than the middle of the road. Is a footway the same as a pavement? That is very difficult to discover. I think, but only by looking back to Section 25 of the Local Government and Planning Act, where "street" is defined and from what I read and interpret there, that a footway in this Bill is what most of us call a pavement.
One really has to scour the pages of this Bill to get any help. Footpaths are mentioned several times in Clause 17. Footpaths, footways and verges get a part to themselves, with a nice little heading in Clauses 61 and 62. But what is a footpath, and what is a footway? One turns to the interpretation clause, but it contains practically nothing positive. All one finds is that on page 92 the Bill states, in subsection (2):
"Where over a road the public right of passage referred to in the definition of 'road' in subsection (1) above—

(a) is by foot only, the road is in this Act referred to—

(i) where it is associated with a carriageway, as a footway; and

(ii) where it is not so associated, as a footpath".

I cannot think that the draftsmen, so clever as they are, could not find it simple to make these matters positive, at the end of the clause or the end of the part, rather than indulge in what seems to me to be their favorite delight—about three double negatives in every description. With those encouraging words, I give my blessing to the Bill.
6.9 p.m.
Lord Strathclyde: My Lords, I am sure that we are all grateful to the Minister for the trouble he has taken in going over the Bill with us. We are equally keen to congratulate my honourable friend. He does not like me to call him that but we worked amicably together for a number of years. He was my friend during that time and remains so, although he is certainly on the opposite side of the fence to me. I shall not worry your
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Lordships by going over at great length the contents of the Bill. I only want to ask one simple question to which I should like an explanation; namely, is there anything in the Bill or in existing legislation which makes it the duty of road authorities to provide kerbstones along the verges of our main roads? That is something which presents very great danger to traffic moving along the roads at the speeds which are allowed by legislation today. It is a very dangerous business. So far as I can discover there is nothing about it in the Bill, but I thought that the Minister might be able to explain the situation to us.
I do not want to say any more. Discussion of the contents of the Bill should be dealt with at the Committee stage and not today. Therefore, thanking again both the Minister and my noble friend who has spoken for the Opposition, I will resume my seat.
6.11 p.m.
Lord Ferrier: My Lords, I should like to begin by expressing sympathy and agreement with what the noble Lord, Lord Hughes, said about the timing of this debate and how it is carried on. It is only the statutory 12 days since the Bill received its First Reading. Therefore, it is manifest that amateursor people who are not official or who are not attuned to the type of subject that we have listened to for an hour from people who know the business inside out, have difficulty finding anything to say without risking the feeling that what they say need not be said at all.
Let me begin my remarks by formally welcoming the noble Lord, Lord Gray. I have not seen him before at the Dispatch Box. I will say no more than that because we must get on with this discussion—we can leave that matter to another time. I give my support in general terms to the Bill. It is manifest from what we have heard in the last hour that there is a great deal still to be done on it. It is also manifest that there has been a definite misjudgment in the timing of its discussion in this House. Indeed, had I not had my name down to speak in this debate I would have intervened earlier during the mini-debate on Lord Cockfield's Statement which seemed to me to be a bit of a trial in that one cannot face up to affairs like that without seeing them in black and white. We shall all be able to see the Chancellor's figures when we see Hansard in the morning.
I have skimmed through the Bill—indeed, that is all that I can do. I have also taken the advice of the Chief Whip as regards the points I wish to raise. There is one particular point which I want to raise which I do not see covered by the Bill. I wonder whether the existing provisions now embodied in the Bill provide adequate powers to the Secretary of State in respect of road planning by local authorities which may involve environmental considerations or considerations of overall policy for purposes other than those of purely local relevance. It is to that end that I consider it prudent to take account of the present problem in Edinburgh. I say that because at this particular time a storm is brewing in respect of road planning.
A proposal to proceed with the construction of what is called the "western relief road" has been mooted by the existing local authority involving expenditure of something like £28 million on a plan which does not appear to many people as having taken into account

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all the relevant issues and all the relevant alternatives, particularly on the question of timing. I have just been talking to the secretary of the Cockburn Association on the telephone who tells me that the Lothian Region Structure Plan of August 1982, which was approved by the Secretary of State in October 1982, already clearly gives priority to the by-pass road in paragraphs 77 and 78, which also set out the reasons for his decision in that respect.
I make no apology to your Lordships for mentioning the by-pass because your Lordships know quite well that I have mentioned it off and on for the last quarter of a century. In fact, if it were not for the patience which has been imposed upon me by a quarter of a century of endurance I might have been more impatient than I am today. I only hope that I do not delay your Lordships too long; I personally am booked to go back to Scotland tomorrow!
A protest group in Edinburgh whose title and watchword is "Beware" organised a public meeting on the subject last Sunday. I attended that meeting and, indeed, addressed it. I also listened carefully to the views of the people who were there, and it seemed to me that the great majority of those taking part had come to protest that the proposal of the western relief road had not been thought through sufficiently. Indeed. The Scotsman headed its report with the words:
"Anti-road campaign 'may be making headway' ".
That certainly seemed to me to be the burden of those proceedings and individuals were urged to demand that there should be a public inquiry on the subject and that is the matter that I should like to raise tonight. I put down a Question for Written Answer to that effect some time ago and I received a reply on the 10th saying that it was a matter for the local authority and therefore not one in which the Secretary of State felt disposed to interfere. That is what he has said about my letters for 25 years. Therefore, it was no surprise to me. At the same time I could not resist chuckling that the Member for Leith, Mr. Ron Brown, received the same type of reply to a similar question. It seemed to me that the Secretary' of State was finding it difficult to know what to say when protests reach him from individuals who are so completely, utterly and absolutely at the opposite ends of the political spectrum. That is why I appreciate the difficulties of the Secretary of State.
However, I have burdened your Lordships for years with pleas about the by-pass and I believe that the city should have a by-pass. We all know that. There is no need for me to go on about it unless it is to draw attention to the new circumstances arising out of this Bill and the new circumstances arising out of the completion of the by-pass at Berwick. It is now a fact that Edinburgh is the only town between London and Inverness which has no by-pass. That is a very serious matter. As my noble friend Lord Lucas of Chilworth said earlier, all over the country the volume of traffic is continually increasing.
My second point, which I think is a new one, is that out of a total of about 11 miles, which is its total length, only three miles of the by-pass has been built and at the western end it is not in any way connected
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with the existing road system, although it does connect at the A702. It is now carrying 15,000 vehicles a day which are obviously relief vehicles from the internal traffic in Edinburgh. The route is not readily accessible for the carriage of through traffic which is what this Bill should enable the country to provide.
The meeting to which I have referred appeared to be satisfied that the pattern of Edinburgh's traffic will significantly alter when the by-pass is completed in 1990, which I gather is the target date. Alas! no longer is it possible for an adequate road system in Edinburgh to be available for the Commonwealth Games in 1986. Incidentally, I see from Hansard of 4th November 1959 that I was assured that the by-pass road was included in "the 20–year plan". Those 20 years were up five years ago. The fact is that the Scottish Office seem consistently to have been unable to face the situation. On one occasion in 1961 I was chided with suggesting my by-pass road because it would cost between £2 million and £4 million. The Minister went on to ask: "Would it be worth while?" I think that £78 million is the present estimated cost of the completion of half of it. I shall resist the temptation to go on binding about this and will stick to the Bill, which is what we are worrying about. I hope that the Secretary of State will have power to take charge when a local authority tends to take in hand some road works which are out with the needs of the local authority for purely local purposes and which, by their construction or otherwise, interfere with the planning appreciation of a city as a whole.
There remain two ways whereby the current relief road problems may be further examined. Perhaps my noble friend Lord Gray will be able to advise me of these at some later date. I am advised that when a planning application reaches the local authority the authority can hold its own inquiry by appointing a reporter. Alternatively, the local authority can reject the application out right, thereby bringing the Secretary of State into it willy-nilly. Therefore, perhaps my noble friend can confirm to me that his right honourable friend has something of that sort in mind.
Whatever is the case, it is proper that we should place on record that this bitter dispute exists arising out of the planning allowed by present legislation and that the wider question of Edinburgh's environment is involved. I believe that it might be wise to tighten up this Bill in this respect. Further, it should be on record that there exists a genuine and outspoken feeling that all is not well and that long-term judgments in the present instance may be influenced by short-term considerations with the approaching local elections.
The noble Lord, Lord Hughes, drew attention to the word "speical" in relation to special roads. It is inevitable in considerations of the Bill and the by-pass that inevitably the by-pass will be "trunked". As soon as it is completed, it will inevitably become a trunk road and part of Euro Route 15. As such, Clause 5(2) may want examining.
I conclude by repeating what I said earlier. I should like to thank my noble friend Lord Gray for introducing the Bill with such care. It is quite impossible to understand all he said until we have more time to consider it. I should like to thank the

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noble Lord, Lord Hughes, for what he said about the difficulties of our present situation.
6.26 p.m.
The Earl of Selkirk: My Lords, I should like to thank my noble friend for the clarity and the brevity with which he introduced a very long Bill. It was quite impossible to go into all the details, but he emphasised those of great importance. It is, of course, correct procedure to amend a Bill first and, if necessary, to consolidate it afterwards, because consolidation gives extremely little liberty to change matters, and I am certain that that is right. I am not quite certain that the word "codify" is correct. I believe that it is a question of amendment and re-enacting and I do not know whether any of the clauses stand exactly as they did before.
The phrase "modern terminology" which has been used lacks at least one element and that is brevity. Modern terminology has a great way of saying things at immense length which in many cases could be said a good deal shorter. I agree with my noble friend Lord Stodart that in this House we can never stop trying to persuade the draftsmen to use the language which the people of this country fully and completely understand, so we always try to impress this on them.
The noble Lord, Lord Hughes, became entrenched in that dangerous ground of "shall" and "will". I rather congratulate the Government here; on quite a number of occasions they have used the word "shall", which means a duty. They have imposed duties on the Secretary of State so that we can say that the Secretary of State has failed in his duty. That is a very useful and valuable power. We have a duty to maintain the roads, to light the roads and, most difficult of all, to remove the snow. This is a duty which must concern a great many local authorities. There are no duties concerning obstruction of view, to which I shall draw attention, referred to in Clause 80. That falls in the "may" category, but I believe that it should be transferred to the "shall" category. Indeed, I go further and say that I should like to see a general obligation that whoever is in charge shall ensure that the roads are safe. The most important duty with regard to roads is to ensure that they are safe for traffic to pass through them. I should like my noble friend to consider whether that cannot be transferred to the slightly higher category.
Perhaps I could give an example of which I happen to know. Sometimes local authorities dig ditches. Where do they put the soil when they dig the ditches? I know of cases where they have put it on the side of roads, dangerously, or moderately dangerously, obscuring the view. A proper procedure should be a clear duty.
I should like to raise another point on branches. I am not very clear about the position of branches and whether the onus falls on the owner of the land on which the tree is growing or whether the local authority is supposed to take action. If the onus falls on the owner of the land, it is more difficult to get action taken. I am not sure whether in certain cases it should not be directly the responsibility of either the local authority or the Secretary of State himself.
There is nothing here about signposting. Signposting is important, particularly in a country which is dependent on, or at least is very much indebted to, the
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tourist industry. I should have thought that there ought to have been some obligation in that respect.
I should like one other obligation possibly associated with it, and that is to state the authority responsible for the road. This is a confused matter. With the passing of a recent local authority Act people in many cases are confused as to who really is responsible for the roads. It would be a valuable reform. If it is a good road, then the authority, whoever it be—the Secretary of State—can be proud of the road, and why should he not be?
There is one clause which is extremely good, and that is Clause 93. The ratepayers may serve notice on the local authority if they are dissatisfied. I do not know whether that is new or not, but it is proper that the ratepayers should be free to do that. It is a complicated Bill. I do not know whether my noble friend would think of letting us have Notes on Clauses. It is not a controversial Bill. Many of us would be glad and pleased just to have a little help on it.
I agreed with one point that my noble friend Lord Strathclyde mentioned. Why do we have vertical kerbs at the sides of these roads? They are dangerous. I do not know why this is universal practice. I have raised this point once before in Parliament. Why not have a curved or slanted edge to the kerb so that if you hit it you do not hit yourself so hard that you might have an accident? I do not know why these kerbs are shaped in this way, but it is only rarely that you see one with a sloped side. I do not know whether it is possible that we can deal with this as it does not actually come within this Bill.
Lord Ferrier: My Lords, may I suggest that a bevelled kerb is regular in a number of English counties, and I think in parts of Lanarkshire. Bevelled. They call it a bevelled kerb.
The Earl of Selkirk: My Lords, I am sure that the noble Lord is correct in what he says, but it is not common in this country. May I perhaps slightly improperly ask the noble Lord a question? When was the last M road completed in Scotland? Can he tell us when the next road will be physically started? It is a disgraceful situation.
I say that tourism is important. You travel up the M.6 until you nearly reach Gretna Green and then the M road stops, and you go into what might be thought of as a land of savages where they have not learnt to build roads properly. It is a little harsh that in passing that boundary you should see a sharp distinction, because tourism is immensely important. We have suddenly realised in recent years just how important it is. I think I am right in saying that Sir Frederick Ogilvie, who was one of the governors of the BBC, was the first man to write a book on the economics of tourism. That was only about 50 years ago. It is now recognised as an immensely important industry. Although I must admit that the western entry into Scotland is a good deal better than the eastern one into Scotland, I think that if we get away from that sharp division between the two that would be anadvantage.
6.34 p.m.
Lord Ross of Marnock: My Lords, this is a formidable and fascinating Bill, and I think we have

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been a bit unfair to the Government by suggesting that this was an unfortunate time to proceed with it. I want to congratulate them on the improvement in the handling of Scottish affairs. The last time we had a Scottish debate it was midnight—and that was only just over a week ago. I am glad to hear noble Lords laughing. They were not here that night; but, sadly, I was.
I say that it is a formidable Bill, and it is an important one. There are 147 clauses and 10 schedules. That is no mean Bill. When we heard this was coming we asked what kind of Bill was it. The whisper went, "Oh, it is just consolidation". It is not consolidation. This is explained in the Explanatory Memorandum. It,
"codifies and modernises, with certain innovatory' provisions"—
I gather they mean new provisions. This is one of the matters that I want to come to.
For part of my time during the war I was deluged with codes and codifications. Of course the whole purpose of codifying is to make obscure, so that the ordinary person cannot understand the message that is being passed from the one area to the other. I have to congratulate the Government again: they have succeeded in this particular Bill, because I defy anyone to understand a great deal of it. I must say that the noble Lord, Lord Stodart, was terribly wrong when he came to the question of footpaths and footways. It is clearly defined as to what a footway is and what a footpath is. One of the troubles about it is why should we bother? One of the reasons is to comply with the Countryside Commission because there are footpaths there where there are no carriageways, and so they are going to be footpaths. Anywhere else they are footways.
We should have told the person who wrote the Explanatory Memorandum, because he uses "footpaths" when he really means "footways". That is on the front of the Bill. That is not the only thing. Incidentally, when I was a young Back-Bench MP, I used to say. "There are four errors in this Bill; four mistakes in this Bill". I proceeded to tell them two of them, and made them search for the rest. There are errors in this Bill. I am not going to mention the number; but I trust that the civil servants will now get busy looking for these errors. I am less generous than I used to be in respect of helping them in that particular way.
There are 40 Acts, and 14 of them are being wiped out. It is amusing the ones that are being kept. I should have thought that the Tramways Act 1870, and more especially the Military Tramways Act 1897 may have been due for the scrap heap. But no, we are just making changes in respect of them. Not to mention, of course, the Railway Clauses Consolidation (Scotland) Act 1845. It evidently has an important and useful piece of work still to do.
Codifying, modernising and introducing new provisions is not the kind of thing that we used to know as consolidation, and of course you cannot amend a Consolidation Bill. Every single clause in this Bill can be amended. Not only that, but we can dredge up out of our own imaginations other changes to all these other 36 Acts which are mentioned and put them
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forward. There is an infinite possibility. I can see the noble Lord. Lord Gray, smiling. It is because he knows quite well that after tonight he is not going to be handling the Bill. He is going to leave it to the noble and learned Lord the Lord Advocate. Wise man!
When I hear the noble Lord, Lord Strathclyde, moved to talk about the dangers of the present kerbs, and the noble Earl, Lord Selkirk, as well, I do not know whether they have been on the Ayr to Glasgow road in the past two or three years, or looked to see what has been happening. The kerbstones are being replaced with the ones that the noble Earl, Lord Selkirk, suggests should be used. That is a trunk road—and that is under the management of the Secretary of State for Scotland—so, the Government are doing one or two quite good things.
What surprises me is that it is just a single carriageway, albeit with four lanes, and has not been made a dual carriageway. That should have been done a long time ago. When the noble Lord, Lord Ferrier, talked about the Edinburgh-Leith Road and the by-pass, and said that he was going up to Scotland tomorrow, I felt that I would need to cancel my night sleeper; but he was quite kind to us. I shall leave him to sort that out, and I am sure that the noble Lord, Lord Gray, will be able to tell him the powers in respect of inquiries that are in this Bill. Not that it would help many people there. But we are not doing this because suddenly modernisation is long overdue, to get rid of the turnpikes, road commissioners from the last century and all the business of nailing notices on church doors and toll bars. We are doing it for the simple reason that we reorganised local government 10 years ago.
The Bill and the need to do this has been lying around for some time. A lot of work has been done on it. That is why the dust was blown off this preparatory work that has been piling up on the shelves of the Scottish Office. Some of the Acts under which some of the powers exist are due to end next year, so this must be done by next year. To think that those sleuths of draftsmen have been combing through all these Acts and wherever they found a "street" out it went! They are all now "roads".
I notice that one of the Acts is called the Public Utilities Street Works Act. Every reference to a "street" in that Act has been taken out but it is still being called a street works Act. We need to change the title now to a road works Act. Even the Minister said that he had talked to "highway officials". They are no longer highway officials under the Bill, they are road officials. "Highway" goes. This is where we carry this modernisation so stupidly far. Everyone knows what a highway authority is, but now they will be "roads authorities" or "local roads authorities". "The road authority" will be the Secretary of State. I think they have overdone it in respect of some of the things that have been done.
The schedule changing the Public Utilities Street Works Act 1950 contains about six or seven pages. There is page after page getting rid of the words "highway" and "street". It will be fascinating to find how many mistakes have been made in that schedule. I hope that we shall be given a little more time for consideration of what we wish to do with this Bill before we get to the Committee stage than we have had between the printing of the Bill, which was on 3rd

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November, and its becoming available to most of us four days thereafter just over a week ago. I hope that there will be more time between this stage and the next stage of the Bill. I like to read and understand a Bill and decide what I want to do.
Although there is codification and modernisation, there are very important changes in the Bill. I have counted about 31 new provisions. We should bear in mind that giving new powers and new provisions to the Secretaries of State and to local authorities means they are being given power to spend money. We must watch it very carefully. If power is given to spend money on useful things, one wonders whether there is any hope of their ever being able to do those things, be it kerb stones or picnic areas. We are kidding ourselves, taking pride in having brought the legislation up to date and standard and then denying the roads authorities the money to do these desirable things.
I am glad to see that the noble Lord, Lord Ferrier, is back in his place. I do not think there will be very much hope in the speeding up of the Edinburgh by-pass arising from the Statement we have had today, so his 20 years will probably be further extended. Still I hope he lives long enough to see it, when we consider the speed with which Glasgow got their trunk and ring roads, that shows the difference between the two cities in respect of road works. I appreciate, however, that Edinburgh has considerable problems with its link road and trunk road.
I am glad that we have got rid of some of the confusion that was brought to our notice by my noble friend Lord Stoddart of Swindon and his committee of inquiry and that the Bill deals with such questions, albeit those of footways and footpaths, and the other question of street lighting and other developments. Two important matters raised by Lord Stoddart's committee were questions of snow clearance and snow gates. We now have a statutory obligation upon roads authorities for road safety and handling these hazards. We do not need it, because it is already there in common law. But we know that throughout the whole of Scotland a fall of snow takes people by surprise. It is not supposed to snow in the cities in wintertime. I wonder why Edinburgh city council did not appreciate the fact that the Scottish Rugby Football Association, with good reason, put under-pitch heating into Murrayfield. But if one tries to get through Edinburgh roads in the wintertime, quite apart from snow there is just pure ice, and one discovers just how dilatory some local authorities can be. I do not just speak of Edinburgh, I can mention many another place which pays no attention to the hazards of roads and does nothing about them. Now, it is a statutory obligation.
That must be followed up, because to get grit or salt on roads requires expenditure of money. When we read these things we say, "That is fine, now the obligation is on them", but then we read the financial memorandum and we find that there will be no additional monies available, whether for capital or current expenditure. This is not really good enough. I trust we shall go into this a bit more when we come to the Committee stage.
Someone asked about special roads and I was as mystified as anyone else. I was going round with the 1949 Act and did not get any greater elucidation from
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that. Then I realised the one way to get elucidation: ask the Minister. Where are the special roads in Scotland? How many of them are there? When were they built? Are there likely to be any more built? The next thing will be that, if there is none, if there have been none and are not likely to be any, let us scrub the thing altogether.
There is a provision giving power to stop up roads. I do not disapprove of that, but then we come to this question of the taking over of private roads. I have a very good recollection of Mr. Emrys Hughes in another place on a Bill in the Scottish Grand Committee speaking for about two days on the subject of giving the right to frontagers for the taking over of a private road and maintaining it thereafter, it having been brought up to standard. His main concern seemed to be one noble Lord, whose name I shall not mention, but he spoke about it for two or three days. I do not know whether the noble Lord, Lord Strathclyde, remembers that occasion. But it is an important point and an important point was made by one noble Lord opposite. If private roads are part of the ordinary ongoing thoroughfares of a town, they should be maintained in the same way as the rest. Normally with a new development the people living there have paid for the road. It is right that they should contribute and pay for the road and bring it up to standard before it is taken over. The question, at their discretion, is: what is going to be paid by the local authority? I do not necessarily object to that. But I am glad to see that that has been clarified not only for the old borough areas, for it was always there in respect of the boroughs, but now has been extended to the landward area. I think that was a point on which one noble Lord sought enlightenment.
There were two points raised by my noble friend Lord Hughes. There was the point about the obligation which is now going to be placed upon a developer opening up a new private housing scheme to make a deposit in respect of the road works. This is virtually an insurance against something happening so that they failed to do the work. It has happened in Scotland but not an awful lot. I can remember it happening in a particular part of Ayrshire, where it created tremendous problems not just in respect of the roads but in respect of people whose houses were not completed or whose houses were completed but whose garages were not completed. I remember one house which was only half built but was more than half paid for when suddenly the person building it went bankrupt. I think it is sensible that we should do this.
When it comes to the other question, that of making it an obligation on the developer to pay for street lighting, I do not know what has been the reaction of the construction industry, but it will mean an increase in the cost of building; it will mean that houses are going to cost more. I have to be careful about this because I remember being concerned with an Act of Parliament which did the same thing in respect of main drains and sewers. What we did in that Act was to put in a provision ensuring that it did not apply immediately on the passing of the Act but that there was a right of the Secretary of State to introduce it by order. We may well do the same thing here if this is not a convenient time from the point of view of wanting to encourage people to get their houses and to get them as

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reasonably priced as possible. We could look at that. It is a very important aspect of the change that is being made.
Let us not think that this is an unimportant Bill. From that point of view, it is a very important Bill indeed. There is also the question of the roads authority and the owner or occupier in respect of a crossing, and of vehicles being driven across a footway. Does that just mean across a pavement into their own homes? I see it happening more and more that people get rid of their front garden, they concrete it, and, instead of building a garage (or perhaps they cannot build a garage), they drive across the pavement and leave the vehicle at the front of the house. Is this what is in mind here? Very often, they have to jump the kerb and there is no proper replacement of the kerb. Is that what is intended in Clause 61?
The question of the picnic area arises. Did I understand the Minister of State to say that the Secretary of State is not going to provide food but that he is going to pass it over, or could pass it over, to somebody else to do a bit of catering on the side—with further building, no doubt, some distance from the trunk road? Is that the intention there? I do not necessarily object to it, but I want to know what is going to happen. I think we have to be pretty careful about licensing people in respect of sale of goods just off a trunk road. I do not know how far off the trunk road it is going to be. We have always been concerned about limiting trunk road entrance and egress as much as possible.
We will give the Bill a welcome at the moment. We hope that it is passed on to the Lord Advocate that we are just not going to take it for granted. I know that we are going to be very busy and that another two Scottish Bills got their First Reading today. The fact is, of course, that we can handle it here. In the other place, the Government cannot man two Scottish Committees. There are so few Members of the Conservative Party in another place because the Labour Party has an overwhelming majority. I do not want to make the Minister of State blush in respect of this but he knows the reasons why they cannot man the committees. One of the reasons, of course, is that he is not there now. We look forward to an informative and creative Committee stage. I am sure the Government will bear in mind what we have said about the time of the bringing on of Scottish business so that, suitably chastised by what has been said by Members from this side and from their own side, they will do a little better next time.
6.57 p.m.
Lord Gray of Contin: My Lords, I am grateful to all noble Lords who have taken part in this debate not only for their interesting and constructive contributions but for the welcome which they have given to the Bill. There will be things about which we shall wish to talk further but the principle is accepted on all sides of the House, and for that I am very grateful.
The noble Lord, Lord Hughes, after welcoming the Bill, raised the question of the timing of the Bill. That point was also raised by a number of other noble Lords. They will all appreciate that that is not a matter
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for me; but I have no doubt that those whose responsibility it is will note the remarks that have been made. For the interest of noble Lords I would mention that there is in the Printed Paper Office a table of derivations which noble Lords may find useful and that before Committee stage we shall be producing Notes on Clauses which will also be helpful to noble Lords. We hope to produce them towards the end of next week.
The noble Lord asked about lighting by private developers and suggested that this might add considerably to the cost of new houses. That point was also raised by the noble Lord, Lord Ross of Marnock. We do not anticipate that this is going to be a major item. The estimate which I have been given is approximately £120 to £140 per house. So far, objection to this has not been taken by the construction industry; although it is true to say that they have not been consulted individually on this. Nevertheless, we believe that it is a step forward. I also agree with the comments which the noble Lord, Lord Ross of Marnock, made—I will deal with them later—on the other requirement which we have so far as private house building is concerned, particularly in relation to lighting. I do not think that any of us who in another place took part in debates or represented constituencies there did not at some time during our parliamentary careers come across the frustration caused to house builders who found that certain aspects, either of road building or lighting, were not completed because the developer had gone bankrupt or for some other reason. So I believe this is a major step forward in the Bill.
The noble Lord, Lord Hughes, also asked me in a question on the codifying clauses whether I could give him an assurance that where a clause was described as codifying there would be no change in the law. I cannot give him that absolute assurance. The language is "modernised" and "other minor improvements incorporated". But I can give him an assurance that there is no substantial new law included in any of those clauses.
Lord Hughes: My Lords, there are some cases where the reference is to codifying and to minor improvements. When I listed those which had no change I excluded from my list any which had a reference to "minor improvements"; and those which I listed relate to the clause only being codified in modern language.
Lord Gray of Contin: My Lords, yes; I would not go so far as to give the noble Lord an absolute assurance because I do not feel qualified to do so. What I can say is that there is certainly no new substantial law where there is a change in codification. Without consultation, I would not care to commit myself to an absolute assurance; I would rather check the matter first. But I can give him the assurance that certainly no substantial new law is involved.
Lord Hughes: My Lords, I am sorry to interrupt again. I think that what the noble Lord has said is perfectly reasonable, but if there are any of the clauses related to "codifying" only where there is any change in the law, can he perhaps write to me before the Committee stage and let me have details of which the clauses are—with of course a copy to my noble friend?
Lord Gray of Contin: My Lords, I will do that with pleasure. What I was really trying to do was to avoid a pitfall for myself where the change, for instance, of one word might slightly change the meaning. I therefore did not want to commit myself, but I will certainly write to the noble Lord. He also asked me what a special road was. Again, his noble friend raised this question. Most special roads are motorways, though not all. The Edinburgh outer city by-pass is also being built as a special road. A special road is intended for limited classes of traffic. In addition, electricity boards or telecommunication boards have no automatic right to dig up these roads to lay apparatus.
The Earl of Selkirk: My Lords, may I interrupt? If you are talking about an Edinburgh by-pass, surely that will include lorries? Special roads very often may not always include lorries but I assume that all lorries and such traffic could go by them?
Lord Gray of Contin: My Lords, I see no reason why they could not. That is not one of the principal qualifications of the special road. The noble Lord asked, as did others, about public expenditure. We believe that roads authorities will welcome the additional powers in the Bill, but they realise that they cannot escape the government's overriding need to control public expenditure. As regards the extra powers in the Bill, we believe that local authorities will welcome them. The noble Lord also asked whether, if a local authority missed a road from its original list, this would have an effect. If the original list ought to have included the road, the local authority will be able simply to add it to their list. There is no difficulty about that, and perhaps it is inevitable that at some time there may be somewhere an error of some sort; but it can be easily rectified.
The noble Lord drew attention to Clause 5 and local authority contributions to trunk roads. We anticipate that this will be a rare occurrence. For example, the inner relief road in a town, carrying a lot of local traffic, will be used only where the regional council agree to contribute. That is the answer to that query.
The noble Lord also asked the meaning of the phrase:
"(and without prejudice to this subsection's generality)".
This refers to Clause 1(1). The words are intended to show that the powers referred to thereafter are illustrative examples of what is encompassed within "maintenance" and that they are not exhaustive.
The noble Lord, Lord Stodart, who explained to me his reason for not being able to be with us this evening, drew attention to the vexed question of maintenance of private roads. In their report, the noble Lord's committee acknowledged that it would be an intolerable burden for roads authorities to be obliged to assume maintenance responsibility for all such roads. No matter how one tries to qualify such an obligation, however, it inevitably carries the risk of an unacceptably high level of public expenditure. The noble Lord mentioned a particular road: he referred to a road in Fife. While the Bill cannot meet the Committee's recommendations, it tries at least to address the problem and thus continues the discretionary powers of local roads authorities to contribute to the cost of making up a private road and to take over
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responsibility for a private road. Even if it has not been brought up to standard, that would be the case. The Bill also now makes it obligatory for a roads authority, on request, to take over a private road which has been made up to standard. Previously, in the landward areas, it was at the authority's discretion where to do so and frontagers who had made the road up could still find themselves responsible for the future upkeep. Also, Clause 16 of the Bill, requiring a deposit of securities for new private road associated with housing, should ensure that the problem will diminish in the future.
The noble Lord, Lord Stodart, also asked me a question regarding lighting. I have to tell him that therecommendation on lighting was one which we felt unable to accept. We discussed the matter with COSLA and they were not at all happy with the Stodart recommendation. We considered all the existing statutory provisions and we felt on balance that the existing provisions were satisfactory.
The noble Lord, Lord Strathclyde, and the noble Earl, Lord Selkirk, raised the question of kerbstones. The noble Lord, Lord Strathclyde, asked me a direct question on that subject and I have to tell him that Clause 27(a) allows a roads authority to provide and maintain raised paving between a footway and carriageway for the purpose of safeguarding persons using a public road. A footway includes what is known as a pavement in urban areas. On some busy rural roads a narrow side-strip of tarmac, separated by a white line from the carriageway, is also sometimes preferable to a kerb. I think the noble Lord was suggesting that in fact that would be the case.
The noble Lord, Lord Ferrier, whose interest and efforts over many years in connection with the Edinburgh by-pass and the western relief road we are all aware of and very much appreciate, raised the question of those roads with me. I have to say to him that so far as both roads are concerned, these are local projects. The Edinburgh outer city by-pass, being local, has a timetable for constructing each of the four remaining sections and this is a matter for the Lothian Regional Council. The Government, however, recognise the benefits that the completed by-pass will bring to through traffic on the trunk road network, which is estimated to form about a third of all traffic on the by-pass. Financial assistance is therefore being provided to Lothian with the aim of enabling them to complete the project broadly within the decade—
Lord Ferrier: High time!
Lord Gray of Contin: The Government are not aware of any other local authority road projects in Scotland which have the same significance for through traffic on the trunk roads. If any are put forward which meet this test, they will certainly be considered on their merits for financial assistance at that time.—
Lord Ferrier: My Lords, may I interrupt the noble Lord? He mentioned the power of the Secretary of State to control the outlay of finance. What is he going to do about the proposed outlay of £28½ million which is contemplated by the Edinburgh District Council for the western relief road?
Lord Gray of Contin: My Lords, I was just coming to the western relief road, if my noble friend will wait

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for one moment. The proposed western relief road clearly raises issues of considerable local importance for Edinburgh, but they are not national issues which would warrant the intervention of my right honourable friend the Secretary of State. The road would not directly affect the fabric of the historic centre, whatever indirect effects it might or might not have on traffic congestion. Unlike the outer city by-pass, it does not provide a link in the national road network and its construction is not a precondition for the eastward extension of the M.8 to join the by-pass.
The Government, of course, are in full support of the completion of the by-pass so soon as resources and procedures allow, and because 33 per cent, of the estimated traffic will use it to move from one trunk road to another, we have agreed to pay 33 per cent, of the cost. Because the issues raised by it are local ones, we consider that it would be inappropriate for the Secretary of State to call in the planning application for the western relief road. But that does not rule out the possibility of the Secretary of State holding an inquiry at a later stage in the possible event of Lothian Regional Council appealing against the district council's planning decision, or in the context of objections to compulsory purchase orders by those whose land might be affected.
A propos of what was said by my noble friend Lord Ferrier, perhaps I should clarify the question of the power to hold inquiries. Under Clause 130, the Secretary of State may hold inquiries in connection with any matter under the Bill where he is authorised to act; as well as under planning Acts and land acquisition statutes where necessary. My noble friend Lord Selkirk asked whether roads authorities have a duty to keep roads safe. This duty already exists in common law. They have a duty to take reasonable steps for this purpose, but this Bill gives them the powers which they need.
My noble friend asked me when the last motorway was completed in Scotland. The M.8 at Baillieston, east of Glasgow, was completed in 1980. The next one due for completion is the M.74 Gratton to Millbank section, starting this winter. My noble friend also referred to Clause 93 and asked whether the power given to ratepayers to complain is new. This power was previously in the Barbed Wire Act 1893, but was in a different form; so it is not absolutely new.
In his speech, the noble Lord, Lord Ross of Marnock, made a number of very useful and interesting observations. He raised the question of special roads, with which I have dealt, and also the question of lighting, with which I have also dealt. I have no further notes on the noble Lord's comments, but I think that, since he was winding-up the debate, a great many of the points which he touched upon had been dealt with by earlier speakers, and I believe that I have dealt with them in my remarks.
I am very grateful to all those noble Lords who have taken part in the debate for their contributions, and I know that we look forward to making progress with the Bill through your Lordships' House in due course.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Petroleum Royalties (Relief) Bill
7.14 p.m.
The Earl of Avon: My Lords, I beg to move that this Bill be now read a second time. It is one of the charms of this Palace that one can switch so quickly from the roads of Scotland to the rather bigger fields of the North Sea. I should like to start by welcoming the noble Lord, Lord Stoddart of Swindon, to the Front Bench opposite on what I believe is the first occasion that he will be speaking on energy matters, and I look forward to hearing from him on many future occasions.
I should like, first, to describe the background to the Bill, its purpose, and its intended effect. The House will be aware of the importance of the United Kingdom continental shelf to the national economy. In 1982, it accounted for almost 5 per cent, of the gross national product. Total proceeds from the sale of oil and gas produced on the UKCS in 1982 are estimated to have been £14.3 billion and £1 billion respectively. Oil production in 1982 topped 100 million tonnes. It is a reliable source of supply from a politically stable area. It has a major, positive impact on our balance of payments: £8½ billion worth of oil was exported in 1982. It has helped to create employment both offshore and in the supply industries. In 1982, the value of orders reported by operators for oil and gas development work on the shelf was £2.26 billion. The United Kingdom's share of this was 73 per cent. Moreover, by their successful efforts in solving the many problems of extracting oil and gas in the very arduous conditions of the North Sea, the companies have built up a highly exportable technological base.
Your Lordships will know that my right honourable friend the Secretary of State for Energy recently returned from a visit to China, where he was able to identify the enormous range of opportunities for this technology to be exploited by British companies. My department will be following up the requirements of the Chinese authorities with a view to establishing contacts between British suppliers and the Chinese purchasing agencies.
But there are high risks in undertaking exploration and development in such a hostile and challenging environment. The oil companies have to overcome great economic, technical and logistical problems. Most of the companies are international corporations with interests in other parts of the world. However strong their links with this country, we must recognise that it is entirely proper for them to seek to direct their activities to those parts of the world which offer them the best return. It is also entirely right for them to tell Her Majesty's Government if, in their assessment, the risks of further developing the United Kingdom continental shelf are beginning to outweigh the foreseeable benefits.
From the end of 1980, the companies, and the United Kingdom Offshore Operators Association, began to tell the Government that the prospects were starting to look uninviting. During the following year, they strengthened their arguments, making plain their view that, despite their wish for a stable fiscal régime, the existing régime was likely to prove too onerous to encourage them to undertake further significant exploration and development. This took into account

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their assessment of the fields that they had been finding. The Treasury, the Inland Revenue, and my department undertook a thorough review in the latter part of 1982, running into earlier this year.
In that review, the Government collected from the companies, in commercial confidence, details of the fields which the companies had studied and judged most likely to be developed over the next five to ten years. These fields were generally smaller—in some cases very much smaller—than, for example, the fields we know, such as Forties, Brent and Ninian.
Because the review was conducted on the basis of real fields known to the companies, we cannot say whether they are typical of the future Of the shelf in the longer term; it may be that there is another Forties-size field somewhere waiting to be found. But the consensus is that future fields will be smaller and more difficult to exploit.
We necessarily conducted the review on the basis of those fields for which sufficient detail was available to enable expected profitability and rates of return to be calculated, both under the then fiscal regime, and under possible changes. It became clear that, under the then existing régime, the companies could reasonably see at least some of the fields concerned as economically uninviting. There was a real risk, therefore, that the fields would go undeveloped, at least until there was a significant rise in the price of oil, which is an uncertain factor in itself.
It was also clear that, with a number of relatively minor changes to the fiscal régime, the whole economic prospect changed; the fields could become profitable and worthwhile to develop, thus enabling the oil and gas to be won. There would also be a Government fiscal take. It would be lower, perhaps, than on existing fields. But, as was pointed out in another place, a reasonable percentage of something is better than a high percentage of nothing.
A package of such changes was, therefore, announced in the 1983 Budget. The Finance Act 1983 carried through some of them, including the doubling of the oil allowance for relevant new fields and the right to offset exploration and appraisal costs anywhere in the United Kingdom continental shelf against the petroleum revenue tax on fields in production there. Another change then announced—the abolition of royalty on future fields—is incorporated in this Bill; and the rest of the changes, which are mainly to encourage the sharing of assets, are in the Oil Taxation Bill which comes before us next Monday. That, then, is the background.
To turn to this Bill, its particular purpose, as part of the package of changes announced in the spring, is to help give sufficient economic incentive for companies to develop and to produce oil and gas from the sorts of fields on the shelf which seem likely to predominate in the foreseeable future, while still securing a fair return for the nation. For this purpose, the effect of the Bill is to relieve from royalty payments all relevant new fields as defined in the Finance Act 1983—that is, all those fields outside the Southern Basin to which development, consent or approval was given on or after 1st April 1982.
In another place, the point was made that a royalty is a rent paid for use of a nation's property. Certainly
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royalty is a long-standing institution in the fiscal régime for oil. It was provided for by the Petroleum (Production) Act 1934. It is now, however, only one aspect of the fiscal régime. And the fact that it is levied on production from the beginning—that is, as soon as the companies are starting to recover their huge investments—means that it significantly slows down that recovery and so has a disproportionately greater effect on the rate of return to the companies than would the same rate of levy applied when the investment has been paid back.
In pressing for a change in the fiscal régime, the United Kingdom Offshore Operators Association adopted an approach which the Government were not able wholly to accept. First, it proposed that the study be based on some hypothetical fields which it considered representative of the future. This approach stemmed I think from the companies' wish to keep their prospects confidential from each other. Instead, the Government judged it right, as I have explained, to base the review on actual fields which the operators had been appraising, and of which they were willing to let the Government have details in confidence.
Secondly, the association asked that royalties should be refunded rather than abolished for future fields; but to have refunded royalty would have had two disadvantages for Government. It would have required extra work to take the money in and then pay it back. But far more important, the association argued that the refunds should be made free of PRT and corporation tax; in effect, the royalty would remain offset against those taxes, reducing them both. So, when royalty was remitted, the companies would have had the benefit of a full 12½ per cent, reduction in overall payments.
If however royalty on these fields is simply abolished, as proposed in the Bill, it is no longer there to be offset against PRT and corporation tax. So those taxes are paid in full. The effect in this case is to reduce a company's marginal fiscal régime payments, once allowances have been exhausted and costs deducted, by only about 1½ per cent., from roughy 89½ per cent. under the present régime to 88 per cent.if royalty is abolished. The review showed that this, combined with the doubled PRT oil allowance, was enough incentive for the fields studied. The abolition of royalty for future fields is thus both easier to administer and more in the national interest than the association's proposal.
Thirdly, the association wanted the concessions to apply to the Southern Basin as well as to the rest of the shelf. The Government have not rejected this; but they do not propose to give such a concession in this Bill. I now turn briefly to the text of the Bill. It is short and simple, and comprises two clauses:
Clause 1 provides the petroleum won and saved from a relevant new field (as defined in Section 36 of the Finance Act 1983) shall be disregarded in determining the amount of royalty payable to the Secretary of State or the quantity of petroleum to be delivered in lieu of royalty (that is, royalty in kind). It also specifies the licences to which the Bill applies; namely, seaward production licences which incorporate all or any of the model clauses mentioned in it. Finally, it ensures that should the definition of "relevant new fields" in Section 36 of the Finance Act

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be amended by later legislation, following any decision to extend the tax concession to, for example, future fields in the Southern Basin of the North Sea, which are excluded at the moment, such an amendment would apply for the purpose of this Bill.
In effect, the clause abolishes royalty on future oil and gas fields lying wholly offshore, wholly outside the Southern Basin of the North Sea (denned in the Finance Act Section 36 as an area to the east of the United Kingdom and between latitudes 52° and 55° north, and no part of which has before1st April 1982 been served with a development programme or received development consent or approval of a development programme.
Clause 2 gives the short title, commencement and extent of the Bill. The provisions of the Bill apply to England and Wales and to Scotland; but not to Northern Ireland, because the Petroleum (Production) Act 1934, under which licences are granted, does not itself apply to Northern Ireland.
As I have said, the Bill provides relief only for those areas defined. I have explained our position on the Southern Basin, and that if, as a result of the present review, we were to be persuaded that similar reliefs should be given for new fields in the Southern Basin it could be achieved by amending the definition of a relevant new field in Section 36 of the Finance Act.
We have also excluded existing fields, developments approved prior to 1st April 1982, and satellites within such fields. This is because the evidence produced during our studies suggested that in general terms these remain reasonably profitable under the existing arrangements.
The Government are satisfied that this Bill is an essential element in the provision of a fiscal régime under which the development of oil and gas reserves on the continental shelf can proceed with the greatest benefit to our country's economy. I therefore move that this Bill be read a second time.
Moved, That the Bill be now read a second time.—(The Earl of Avon.)
7.26 p.m.
Lord Stoddart of Swindon: My Lords, first I should like to thank the noble Earl the Minister for this kind welcome to this Front Bench in this noble House. I only wish that I could have made my Front Bench maiden speech on a non-controversial basis, but I am afraid that this Bill is one that positively invites controversy, and is therefore a measure which my noble friends and I find quite disagreeable.
The Bill, though short on words, and containing only two clauses, is far from being a small, modest measure. Indeed, in our view the Bill strikes at the fundamental principle of ownership and the control of one of this nation's most potent and precious assets. For that reason alone, the Labour Party is totally opposed to this measure.
It has long been held that the right to royalites establishes without any shadow of doubt where the right of ownership belongs. For so long as royalties are payable, there can be no doubt in the mind of any one that ownership of the precious assets of the North Sea lies with the British people and nowhere else. This Bill
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is bound to raise questions in the minds of some as to whether North Sea oil belongs to the British people, or to the multinational oil companies.
With this Bill, the Government are saying in effect that in future, the British people must forgo their right of royalites in respect of the exploitation of the oil resources of the North Sea. This is a major departure from the approach hitherto adopted, of obtaining a proper return for the nation from North Sea oil; an approach which has been adopted by all Governments up to the present time. Furthermore, it upsets the balance between a fair return for the nation and the proper encouragement of future exploration and development.
As we have heard tonight, it is the Government's contention that through this Bill, and by the abandonment of the right to royalties from fields outside the Southern Basin, additional encouragement will be given to oil companies to embark upon earlier development of marginal oil fields with greater alacrity than they have shown hitherto. However, it is my submission that it is not necessary, and it is indeed undesirable, that complete remission of royalties should be applied even when such remission cannot be remotely justified.
We are entitled to ask why it is necessary to remit royalties on larger oil fields when the problem exists only as it affects small oil fields. Why remit royalties on fields producing, say, 60,000 barrels a day, when it may be necessary to remit only on fields producing 20,000 barrels of oil a day? As the noble Earl the Minister knows, the power to remit royalties already exists unde the Petroleum and Submarine Pipe Lines Act 1975. All an oil company has to do is to prove that remission of royalties is necessary if the field is to be developed.
Frankly, I was not convinced by the noble Lord's argument that it would be administratively difficult for this to be achieved by his department, or for that matter by the Treasury, or any other department. The very fact that that Act was passed by a Labour Government is proof enough that the LabourParty understands the problem over the development of marginal fields and was prepared to be flexible when in office.
That, however, is quite a different matter from writing out a blank cheque for the remission of royalties, irrespective of the scale of marginality of any particular oilfield. If the Bill was really concerned with better management of North Sea oil supplies, there might be just something to be said for it, but in my view it is not. It has been brought forward because of the Government's profligate use of North Sea oil revenues to prop up its damaging medium-term financial strategy. In consequence, a sensible long-term depletion policy which would conserve our oil supplies and obtain for Britain the most beneficial period of self-sufficiency has been sacrificed to the desperate need of the Government to maximise revenue in the short term to make up for the enormous loss of industrial output since 1979, to pay for the flood of imported manufactures and to finance the 3 million people put on the dole by the Government's crazy and outdated economic policy. Indeed, it seems to the Labour Party that the Government are embarked upon a veritable Rake's Progress with this

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country's assets and resources. In the same way as profitable and valuable publicly owned industries which are excellent long-term investments are being sold off to finance current expenditure, so, too, is the great but finite asset of North Sea oil being wasted in propping up a discredited economic policy which has severely eroded this country's industrial base over the past 4½ years, and indeed is continuing to do so.
At the present rate of extraction it is estimated that oil supplies from the North Sea will peak in 1985–86, and from then on it will be downhill all the way. Had we conserved our oil supplies instead of exporting a large percentage of them, particularly at a time of oil glut, we could have maintained a plateau of self-sufficiency well into the next decade; marginal fields could have been developed at a much more leisurely pace, and this Bill would never have seen the light of day.
But we are also concerned that in promoting this Bill the Government have made no attempt to assess the cost to the Exchequer in lost revenue. During the long debate on this Bill in another place continual efforts were made to obtain from the Secretary of State information as to the cost in lost revenue, but to no avail. The Secretary of State was either coy about giving the information because he feared the adverse impact on public opinion, or he simply did not know the extent of revenue which would be lost. Either way it is totally reprehensible that on a Bill of this kind Parliament is denied information as to the revenue consequences of the measure, particularly since such information is vital if a proper and considered judgment is to be made as to the desirability or otherwise of consenting to the measure.
The Secretary of State said that the change in the Government's take from future fields will be the difference between 88 percent. and 89.5 percent., and the noble Earl the Minister repeated that tonight. Indeed, the Secretary of State appeared to believe that that difference of 15 per cent. was marginal and not significant. However, that apparently small percentage difference when translated into money terms could well amount to hundreds, perhaps thousands, of millions of pounds lost to the Treasury and indeed to the British people. He estimated that this percentage difference of total Government take arising from loss of royalties would transfer some 3 per cent. of total net revenue to the oil companies if applied to a medium-sized field with reserves of 55 million tonnes, a life of 12 years, and a total net revenue of just under £6 billion, at 1980 prices. In money terms I calculate that the loss to the Treasury will be nearly £180 million, and that is for just one field.
By no stretch of the imagination can such an amount, £180 million, be considered insignificant. Some services are being cut to save much less than £ 180 million. It is hard to understand why the Government are so relaxed about the potentially huge losses of revenue as a result of this Bill. I would ask the noble Earl the Minister for an estimate, if only approximate, of the likely loss to the Exchequer and the British people as a result of loss of royalties, and I hope he will be able to produce such an estimate tonight, an estimate which the Secretary of State was unable or unwilling to give in another place.
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I believe we should consider whether by passing this Bill we are assisting this Government in avoiding the urgent necessity to reappraise current and future levels of oil production in the North Sea and to adopt a depletion policy which is sensible both in the short run and in the long run. If we decide that we are so assisting the Government to evade their proper responsibilities, we should consider carefully whether this Bill should pass through this House unamended. Much as I personally dislike this Bill and would like it to proceed no further, I am cognizant of the fact that it was given a Second Reading in the other place by a very substantial margin indeed. I cannot, therefore, recommend my noble friends and noble Lords to vote against this Bill at the conclusion of this debate. However, we shall table amendments for Committee which will seek to improve the Bill and limit the damage which it will undoubtedly cause.
7.37 p.m.
The Earl of Avon: My Lords, I much enjoyed the noble Lord's maiden speech from the Box, and he will not be surprised if I say that I did not quite agree with everything he said. The noble Lord made a point specifically on the term royalties, and the fact that this was the right of a country. I would like to suggest that royalty is not a tax, but is part of the consideration for the grant of a licence. The liability to pay royalty arises under the clauses called "model clauses" set out in such specific sets of regulations made under the 1934 Act and incorporated in licences granted under that Act. The current regulations are, of course, the Petroleum Production Regulations 1982, which include the model clauses. I would suggest to the noble Lord that nowadays the term royalty, as I tried to explain earlier, is much more absorbed into the general taxes than being a term which might make people feel that they were losing something.
The noble Lord made quite a lot about a fair return and asked about the margin of 1½ per cent., and he asked whether we have a depletion policy or a policy at all. I would suggest to the noble Lord that after a very careful look at this particular problem we decided that exploration would not continue in the North Sea without some help of a fiscal nature. After a very delicate balance we came to the conclusion that the easiest and simplest way was to produce a Petroleum Royalties (Relief) Bill. This means that we are not looking at the moment towards limiting depletion. I would like to say at once that that is not being considered by the Government. On the contrary, we are looking forward to renewed activity in the North Sea and a continuing amount of revenue coming from the North Sea.
At one stage the noble Lord said that we should not have exported the oil, and I presume he means that we should have kept it so that we could go on using it for ourselves. But in the spirit which he mentioned I should like to ask: how could the Government have paid even the interest on the debts we inherited from the previous Administration in 1979 had we not had the revenue from the oil fields? If the Labour Government had not borrowed against —
Lord Stoddart of Swindon: My Lords, I am grateful to the noble Earl for giving way. I trust he will accept,

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in talking about the debts which he says were left to his Government by the Labour Government, that in fact the whole of the capital development costs of the North Sea were paid during the Labour Government's term of office and that the Conservative Government have derived, since they came to office, some £20,000 million of revenue from the investment which was made by a Labour Government?
The Earl of Avon: My Lords, the investment was made on borrowed money and it was on borrowed money that we had to pay interest.
The noble Lord also asked a much more tricky question about the loss of revenue and how we work out what the 1½ per cent. would either gain or lose. The difficulty here is that one must balance whether one believes that there would be no more exploration, in which case the revenue would obviously go down because we would not be getting it in, or whether one believes that what we are suggesting will produce new oil fields and, therefore, increased revenue. That is what makes this a crystal-gazing operation. The noble Lord said that we would lose £180 million in revenue. I say to the noble Lord that we must see what actually happens, which I believe will prove him wrong. The proof of this particular pudding is whether what we have suggested will extend exploration to the degree we believe it will. That I think is why in the other House they had such difficulty in giving a figure.
We shall have more talk on this in Committee. The noble Lord, Lord Stoddart, and I could go on for a long time but I think that from the size of the House at the moment noble Lords would prefer we did not. Therefore, I suggest that the Bill be read a second time.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
House adjourned at eighteen minutes before eight o'clock.